birla sunlife insurance 100

M P BIRLA INSTITUTE OF MANAGEMENT 1

A REPORT ON

ORGANIZATIONAL STUDY IN

Birla Sun Life Insurance Limited Submitted in partial fulfillment of the requirements of

the M.B.A Degree Course of Bangalore University

By

Mr. Rama Krishna Raju T Register Number: 06XQCM6101

Under the Guidance and Supervision Of

Mr. Rudra Murthy Professor

M.P.BIRLA INSTITUTE OF MANAGEMENT

Associate Bharatiya Vidya Bhavan

# 43, Race Course Road

Bangalore-560001

July - August 2007


PRINCIPAL’S CERTIFICATE

This is to certify that the organization study on Birla Sun Life Insurance,

Bangalore has been prepared by Mr. Rama Krishna Raju T bearing the

registration no. 06XQCM6101 under the guidance and supervision of Mr.

Rudra Murthy, Professor, MPBIM, Bangalore.

PLACE: Bangalore Dr. N S Mallavali

DATE: (Principal)


GUIDE’S CERTIFICATE

This is to certify that the organization study on Birla Sun Life Insurance,

Bangalore, prepared by Mr. Rama Krishna Raju T bearing the

registration no.06XQCM6101 is a bonafide work done, carried under my

guidance and supervision during the academic year 2006-08 in partial

requirement for the award of MBA degree by Bangalore University. To the

best of my knowledge this report has not formed the basis for the award of

any other degree or diploma.

PLACE: Bangalore Mr. Rudra Murthy

DATE: (Professor)


COMPANY CERTIFICATE

Birla Sun Life Insurance Limited

This is to certify that Mr. Rama Krishna Raju T has completed his

project, under my guidance during Jul& Aug 2007on the topic titled

“Organization study” His Conduct was Good during this period.

Place: BANGALORE

Date: Signature

Name

Designation

of the guide

Office Seal


DECLARATION

I hereby, declare that this internship report entitled. An Organization Study at Birla Sun Life Insurance Limited, Bangalore submitted in partial

fulfillment for the award of Master of Business Administration of

Bangalore University is a record of independent work carried out by me

under the guidance of Prof. Rudra Murthy faculty member, M. P. Birla

Institute of Management Studies, Bangalore.

I also declare that this report is a result of my own effort and has not been

submitted earlier for the award of any degree or diploma of Bangalore

University or any other University.

Place: Bangalore Rama Krishna Raju T

Date: REGD.NO: 06XQCM6101


Acknowledgement

At the outset, I would like to express my deep sense of gratitude and sincere

thanks to Dr. Mallavali, Principal, M.P.BIRLA INSTITUTE OF MANAGEMENT, Bangalore, for providing an opportunity to discover the corporate world, from a

close perspective.

Prof. Rudra Murthy, my professor and internal guide for this project to whom I

am deeply grateful for his constant support and guidance without which it would

not have been possible for me to complete this project in time.

I take this opportunity to extend my sincere gratitude to Mr. Ranjan Anand, Agency Manager, BSLI for giving me an opportunity to undertake internship

training and the project on the topic .Competency Mapping. in the esteemed

organization.

I would also like to express my heartfelt wishes to BSLI, for making these 2

months a stepping-stone for my career.

I convey my gratitude to all the staff members of Marketing Division for their

kind cooperation through out my project.

Finally, I thank my dearest Parents for their continued support.


Executive Summary

Birla Sun Life Insurance pioneered the unique Unit Linked Life Insurance

Solutions in India. BSLI has cemented its position as a leading player in the

private life insurance industry within 4 years of its inception. Its main focus

on investment linked insurance products supported its leadership in product

innovation. Its multi-dimensional channels offered convenient channels for

sale of the products to customers. It had been maintaining corporate

governance and a high degree of transparency in all business practices and

procedures. It had a strong fundamentals based on Aditya Birla Group’s

local insight and sun life financials global expertise.

The company chosen was Birla Sun Life Insurance ( BSLI) . The reason

behind this was to understand the expertise it has developed and skills it has

owned, especially in the field of marketing its products as it is the booming

industries in India.

Learning really takes place outside the classroom. I stand a witness to this

statement. The in sight of knowledge that I acquired in the two months of

internship with BSLI was quite impressive. The opportunity I received to

apply my knowledge and skills in the organization gave me a practical view

point to the whole system of learning.


The main objective of the internship was to imbibe a practical approach in

the students towards the knowledge gained at the classroom level. The

internship at BSLI has given me the right perception and has had a positive

effect on the kind of learning that I got at the M.P. Birla Institute of

Management, Bangalore.

It was a very good experience for me to work during this tenure. I am glad

that I have learnt so much in such little time. It has boosted my confidence

and has raised my spirits. I can confidently say that my knowledge has

improved in a very short time I would like to thank the entire Marketing

department at the BSLI for their constant support.


Contents

CHAPTER-1 THEORYTICAL SETTING

CHAPTER-2 ORGANISATION STRUCTURE

CHAPTER-3 OPERATIONAL FUNCTIONAL

DEPAREMENTS AND

PERFORMANCE EVALUATION

CHAPTER-4 AWARDS AND ACHIVEMENTS

CHAPTER-5 RECOMMENDATIONS AND

SUGGESTIONS

CHAPTER-6 CONCLUSIONS


Chapter 1

INTRODUCTION

Organizat ion s t ructure involves formal and recognized

st ructure where in each and every ind iv idual and group

have a def in i te re lat ionship wi th each other , have a

speci f ied area to ex is t , funct ion to per form, author i ty to

mobi l ize resources, obl igat ion to act , responsib i l i ty for

achiev ing the object ive and accountabi l i ty for the i r

per formance. I t is ar rangement of act iv i t ies and

ass ignment of personal to the i r act iv i t ies in order to

achieve the organizat ional goal .

Organizat ion s t ructure encompasses s ix

Major areas wi th in organizat ion. These are

Work specia l izat ion

Depar tmenta l izat ion

Chain of command

Span of contro l

Centra l izat ion and decentra l izat ion

Object ives of the study: 1) To understand the organizat ion s t ructure/h ierarchy of

the company

2) To ident i fy var ious depar tments in the organizat ion

and the funct ion ing of the same.

3) To understand the var ious responsib i l i t ies and dut ies

carr ied out by each depar tment .


4) The study is a imed at understanding how an

organizat ion pract ica l ly works in the real s i tuat ion.

5) To under take a smal l ass ignment in order to know

the percept ion and at t i tudes of the people towards Bi r la

sun L i fe Insurance pol ic ies.

6) To of fer suggest ions based upon the f ind ings.

Scope of the study: The study is l imi ted to Bi r la Sun L i fe Insurance

Company L imi ted Bangalore branch.

Source of data: Pr imary data: One to one in terv iews wi th depar tmenta l

heads and few subord inates.

Secondary data: Secondary data are co l lected f rom the

company’s websi te , newspaper ar t ic les and magazines.

LIFE INSURANCE Li fe insurance is a contract prov id ing for a payment of a

sum of money to the person assured or fa i l ing h im to

the person ent i t led to receive the same on the

happening of cer ta in event . Uncer ta inty of death is

herent in human l i fe . I t is th is r isk , h igh g ives r ise to the

necessi ty for some form of protect ion against the

f inancia l loss ar is ing f rom death. Insurance subst i tu tes

th is uncer ta inty by cer ta inty . The object ive of insurance

is normal ly to prov ide: a. Fami ly protect ion and

b. Prov is ion for o ld age.


THERE ARE 3 TYPES OF LIFE INSURANCE POLICIES: i ) Term insurance plans: Pure l i fe covers where pol icy holder pays for the r isk

cover and do not expect to receive anyth ing e lse in

return. Term insurance is now avai lab le in Ind ia. Opt ing

for such pol icy wi l l improve the ef f ic iency of the pol icy

premium and enable pol icy holder for a b igger r isk

cover for the same cost . These are term insurance

p lans wi thout in terest .

i i ) Whole l i fe insurance plans: Whole l i fe pol ic ies requi re the pol icy holder to pay

premium throughout h is /her l i fe and cover r isk for the

whole l i fe . The pol ic ies wi thout prof i ts are cheaper .

i i i ) Endowment insurance plan: Endowment pol ic ies are cost l iest and among th is group,

money back pol ic ies involve paying h ighest premium.

They g ive customers matur i ty benef i ts (normal ly , sum

assured) and addi t ional prof i ts by way of bonus,

guaranteed addi t ions, loyal ty bonus, etc


DEFINITION OF SOME TYPES OF POLICIES :

1) Annuity An annui ty is a s teady st ream of equal payments that

one receives every year , or every month e i ther for l i fe

or a f ixed number of years, as return af ter making an

investment e i ther as a lump-sum or through insta l lments

paid over a cer ta in number of years, speci f ic sum Upon

the death of the annui tant , or a t the expi ry of the per iod

f ixed for annui ty payments, the invested annui ty fund is

refunded usual ly a long wi th a smal l bonus. Annui t ies

d i f fer f rom al l o ther forms of l i fe insurance in one

fundamenta l way. They do not prov ide any insurance

cover but of fer a guaranteed income for a cer ta in per iod

or for l i fe .

Typica l ly annui t ies are bought to generate income

dur ing one’s ret i red l i fe , which is why they are a lso

ca l led Pension Plans. Annui t ies prov ide a so lut ion to

the b iggest f inancia l insecur i ty of o ld age af ter one

ret i res and the income f rom salary ceases.

2) Endowment: Endowment pol ic ies cover the r isk for a speci f ied per iod

at the end of which the sum assured is paid back to the

pol icyholder a long wi th the bonus accumulated dur ing


the term of the pol icy. The payment of the endowment

to the pol icy holder depends upon the complet ion of the

pol icy ’s term which r ight ly accounts for the popular i ty of

endowment pol ic ies. Typica l ly , one’s responsib i l i ty for

the f inancia l protect ion of the fami ly reduces

s ign i f icant ly once the ch i ldren are grown up and

independent ly set t led. The focus then shi f ts to

managing a smal ler fami ly perhaps only onesel f and

one’s spouse af ter ret i rement . This is where the

endowment . The or ig inal sum assured and the

accumulated bonus, received back comes handy.

3) Money back: Unl ike endowment p lans, in money back pol ic ies, the

pol icyholder gets per iod ic surv iva l benef i ts dur ing the

term of the pol icy and a lump sum amount on surv iv ing

i ts term. In the event of death dur ing the term of the

pol icy, the benef ic iary gets the fu l l sum assured,

wi thout any deduct ions for the amounts paid t i l l date,

and no fur ther premiums are requi red to be paid.


Industry Prof i le A brief history of the insurance industry:

The insurance sector in Ind ia has become a fu l l

c i rc le f rom being an open compet i t ive market to

nat ional izat ion and back to a l ibera l ized market again.

Trac ing, the developments in Ind ian insurance sector

reveals the 360-degree turn wi tnessed over a per iod of

a lmost two centur ies.

Life insurance industry:

The business of l i fe insurance in Ind ia in i ts

ex is t ing form star ted in the year 1818 wi th the

establ ishment of the Or ienta l l i fe insurance company in

Calcut ta.

Important milestones in the l i fe insurance business in India:

1912: The Indian l i fe assurance companies ’ act enacted

as the f i rs t s tatute to regulate the l i fe insurance

business.

1928: the Ind ian insurance companies act enacted to

enable the government to co l lect s tat is t ica l in format ion

about both l i fe and non l i fe insurance businesses


1938: Ear l ier leg is la t ion consol idated and amended to

by the insurance act wi th the object ive of protect ing the

in terest of the insur ing publ ic .

1956 : 245 Indian and fore ign insurers and prov ident

soc iet ies taken over by the centra l government and are

nat ional ized. LIC formed by an act o f par l iament , which

is LIC Act , 1956, wi th a capi ta l contr ibut ion of Rs. 5

crore f rom the government of Ind ia.

Insurance Sector Reforms:

In 1993, Malhotra commit tee, headed by former

F inance secretary and RBI governor Mr. R.N. Malhotra,

was formed to evaluate Ind ian insurance industry and

recommend i ts fu ture d i rect ion.

The Malhotra commit tee was setup wi th the

object ive of complement ing the reforms in i t ia ted in the

f inancia l sector , the reforms were a imed at “creat ing a

more ef f ic ient and compet i t ive f inancia l system sui tab le

for the requi rements of the economy keeping in mind

the st ructura l changes current ly underway and

recogniz ing that insurance is an important par t o f the

overa l l f inancia l system were i t was necessary to

address the need for s imi lar reforms…”


V) Customer service:

1. LIC should pay in terest on delays in payments

beyond 30 days.

2. Insurance companies must be encouraged to

set up uni t l inked pension p lans.

3 . Computer izat ion of operat ion and updat ing of

technology to be carr ied out in the insurance

industry .

The commit tee emphasized that in order to improve

the customer serv ices and increase the coverage of the

insurance industry should be opened up to complet ion.

But at the same t ime, the commit tee fe l t the need to

exerc ise caut ion as any fa i lure on the par t o f new

p layers could ru in the publ ic conf idence I the industry .

Hence, I was decided to a l low compet i t ion in a

l imi ted way by s t ipu lat ing the min imum capi ta l

requi rement of Rs. 100 cores, The commit tee fe l t the

need to prov ide greater autonomy to insurance

companies in order to improve their per formance and

enable them to act as independent companies wi th

economic mot ives .For th is purpose, i t had proposed

set t ing up an independent regulatory body.


L i fe Insurance Industry: Present context :

The l i fe insurance industry has rebound,

demonstrat ing a growth rate of 51% in new business

premium in the th i rd year of pr ivat izat ion.

L i fe insurance premiums rose to Rs 18,710 core

(Rs 187.10 mi l l ion) in f isca l 2006 f rom Rs 12,300 core

(Rs 123 b i l l ion) in 2004-05.

The massive growth comes chief ly on the back of

sa les of un i t - l inked p lans, group pol ices and pension

p lans.

The Indian insurance sector has wi tnessed new

premium income of Rs 34,828 core (Rs 348.28 b i l l ion) in

f isca l 2006. This ref lects a growth rate of 33% over

f iscal 2005’s aggregate f igure of Rs 26,203.8 core (Rs

262.03 b i l l ion) . Against a growth rate of 51% for l i fe

insurance business, non- l i fe insurance premiums rose

by 16% to Rs 16,118 core (Rs161.18 b i l l ion) in f iscal

2006.

A s igni f icant share of the new business has come

on the back on sale of group pol ic ies.

The L i fe Insurance Corporat ion of Ind ia, L IC, a lone

mopped up Rs 2,332.85 crore (Rs 23,32 b i l l ion) as i t

insured over 30 lakh l ives under the var ious group

schemes. LIC’ s group business reached new heights

dur ing the year , record ing a 119% growth in new


premium income and 50% increase in the number of

l ives covered.

Today, the tota l fore ign d i rect investment in the

Indian insurance sector is pegged at Rs 1,021 crore (Rs

10.21 b i l l ion) whi le the paid-up capi ta l o f the insurance

sector s tands at Rs 5,518 crore (Rs 55.18 b i l l ion) .

Present ly there are 13 L i fe Insurance companies in

the Indian market , out of which, only LIC and SBI L i fe

Insurance are government organizat ions and the

remain ing are pr ivate p layers.

The fo l lowing is the l is t o f l i fe insurance companies

in the Ind ian market :

1) L i fe insurance Corporat ion of Ind ia

2) Al l ianz Baja j L i fe Insurance

3) HDFC Standard L i fe Insurance

4) TATA AIG Insurance

5) ING Vysya L i fe Insurance

6) ICICI Prudent ia l L i fe Insurance

7) Bi r la Sun L i fe Insurance

8) Met L i fe Ind ia Insurance

9) AMP Sanmar

10) SBI L i fe Insurance

11) Aviva L i fe Insurance

12) Max New York L i fe

13) OM Kotak Mahindra l i fe Insurance


The Insurance Regulatory and Development Authori ty:

Reforms in the insurance sector were in i t ia ted wi th

the passage of the IRDA Bi l l in Par l iament in December

1999. The IRDA s ince i ts incorporat ion as a s tatutory

body in Apr i l 2000 has fast id ious ly s tuck to i ts schedule

of f raming regulat ions and regis ter ing the pr ivate sector

insurance companies.

The other decis ions take s imul taneously to prov ide

the suppor t ing systems to the insurance sector and in

par t icu lar the l i fe insurance companies were the launch

of the IRDA’s onl ine serv ice for issue and renewal of

l icenses to agents.

The approval o f inst i tu t ions for impart ing t ra in ing to

agents has a lso assured that the insurance companies

would have a t ra ined workforce of insurance agents in

p lace to se l l the i r products, which were expected to be

in t roduced by ear ly 2001.

S ince being set up as an independent s tatutory

body the IRDA has put in a f ramework of g lobal ly

compat ib le regulat ions. In the pr ivate sector 12 l i fe

insurance and 7 genera l insurance companies have

been regis tered.


Company Prof i le:

B i r la Sun l i fe Insurance Company is head quar tered

at Mumbai and has establ ished a s t rong presence in the

c i t ies of Ahmedabad ,Baroda, Bangalore Chandigarh,

Chenni , Gurgaon, Hyderabad, Indore, Ja ipur ,

Kanchipuram, Kanpur, Kolkata, Lucknow, Meerut ,

Mysore, New Delh i , Noida, Patna, Pune, Rajkot , Surat ,

Varanasi and Visakhapatnam.

Background and inception of company: Sun Life Financial

Sun L i fe F inancia l is a leading in ternat ional

f inancia l serv ices organizat ion. Wi th a h is tory that dates

back to 1871, Sun L i fe F inancia l has evolved f rom a

s ing le mutual l i fe insurance to one of the most h ighly

rated insurance and weal th management inst i tu t ions in

the wor ld , Sun L i fe F inancia l knows i ts va lue l ies in

more than assets and h is tory, I t a lso l ies in the cu l ture

of in tegr i ty and the pursui t o f excel lence that have

marked a l l o f the organizat ion ’s endeavors. Today, the

sun l i fe f inancia l Group of companies and par tners are

represented g lobal ly in Canada, the Uni ted States, the

Phi l ipp ines, Japan, Indonesia, Ind ia and Bermuda.


Sun Life in India: Sun l i fe ’s Ind ian insurance operat ions wi th the the

A.V. Bi r la group may be just four years young, but i t

was more than100 years ago-- -110years to be prec ise—

that sun l i fe insurance appointed i ts f i rs t agent in

Mumbai ( then of course known as Bombay) , a

gent lemen by the name of I ra B. Thayer . In May 1892,

Sun L i fe issued i ts f i rs t po l icy, there in the pol icy

number 23200, and soon opened i ts f i rs t o f f ice on

Esplanade Road. The Canadian Company has never

looked back ever s ince.

The foundat ion of the aesthet ic Canada Bui ld ing

was la id in May 1902, when the board of Di rectors

approved the purchase of a bui ld ing to house Sun L i fe ’s

operat ion in the subcont inent . A year la ter , Lot 71 on

Horns by Road was purchased to bui ld the st ructures. A

popular archi tectura l f i rm, Gost l ing, chambers and

Fr i tchely , was pressed in to act ion and Canada Bui ld ing

wi th i ts awe- inspi r ing yel low and whi te s tone façade

came into being in 1905. in t r icac ies l ike the maple leaf ,

beaver and r is ing sun logo couples wi th the char io t o f

the Sun logo added to the beauty of th is grand

st ructure.


Expansion Times :

When the Pr ince of Wales v is i ted in 1921 i t was the

Canada Bui ld ing that greeted the royal ty in regal

sp lendor – the of f ic ia ls had i l luminated the bui ld ing at a

cost o f Rs.1000. In 1925, Sun L i fe expanded operat ions

by set t ing up d is t r ic t o f f ices in Calcut ta and Madras, in

addi t ion to the Bombay branch. Two years la ter , the

Lahore of f ice in to being, fo l lowing which operat ions at

Dacca were k icked of f .1929 saw an of f ice in Luck now,

fo l lowed by Colombo a year la ter . I t was only in 1952

that the New Delh i o f f ice was establ ished.

Aditya Bir la Group – The Indian MNC: Adi tya Bi r la Group is Ind ia ’s second largest

business house. I t en joys a dominant posi t ion in a l l the

sectors in which operates. The Adi tya Bi r la Group is

- The wor lds largest producer of v iscose staple

f iber

- The largest s ing le locat ion ref iner of pa lm o i l ,

- The wor ld ’s largest producer of carbon b lack.

In Ind ia the group is the s ingle largest producer of

- V iscose f i lament yarn

- A luminum

- Grey cement


- Whi te cement and

- Rayon grade pulp

- Petro leum (HINDALCO)

The group is a lso

- The only producer of l inen in the text i le

industry in Ind ia.

- The leader in the ready- to-wear branded

appare l .

For severa l decades now, the Adi tya Bi r la Group

has won the t rust and respect of i ts 72,000 employees

and 8 lakh investors. The group’s turnover exceeds

Rs.260 b i l l ion and has an asset base, which is in

excess of Rs.257 b i l l ion.

The Adi tya Bi r la group has over 75 business uni ts

in Ind ia and overseas. I t has operat ions in Canada,

U.S.A; U.K, Thai land, Phi l ipp ines, Malays ia and Egypt .

I ts in ternat ional operat ions contr ibute great ly to Ind ia ’s

growth and to that o f South East Asia, making i t Ind ia ’s

f i rs t t ru ly mul t inat ional conglomerate.

The f lagship companies of the Adi tya Bi r la Group

inc lude some of the largest and wel l known companies

in Ind ia such as Grasim Industr ies Ltd;

Hindalco Industr ies L td; Ind ian Aluminum Company

Ltd; Ind ian Rayon Industr ies Ltd, Indo Gul f Corporat ion


Ltd, Global F inance Ltd. The group has forged power

re lat ionships wi th large corporat ions l ike Hindustan

Petro leum, Tata and powergen PC and AT & T.

Growing Financial Services Clout: Bir la Sun L i fe jo in t venture par tner , Sun L i fe

F inancia l is one of the largest g lobal insurance and

weal th management organizat ions. Sun L i fe has been

of fer ing l i fe insurance in Canada s ince 1871, whi le MFS

i ts subsid iary created the f i rs t US mutual fund in 1924.

Sun L i fe has operat ions around the wor ld in Uni ted

States, Uni ted Kingdom, Canada, Phi l ipp ines, Hong

Kong, Bermuda and Indonesia and of f ices in 21 key

markets throughout the wor ld.

I t has tota l assets under management CDN$328 b i l l ion

as on December 31, 2002. I t has employees wor ld wide

and g lobal d is t r ibut ion network of over 1,00,000

d is t r ibutors.

Sun L i fe has a g lobal reputat ion as top

insurers wi th h igh prof i tab i l i ty , pers is tency And

product iv i ty rat ios, which in turn ref lect the underwr i t ing

exper t ise of the company.

The turnover of the group is growing at a s teady

rate and is current ly est imated to be in excess of


Rs.260 Bi l l ion. The group has a s t rong asset base

valued at Rs.180 b i l l ion. The group is wel l respected in

the f inancia l markets and a l l the group stocks command

a heal thy market va luat ion – the tota l market

capi ta l izat ion being near ly Rs.150 b i l l ion.

Nature of business carr ied: Whi le the Adi tya Bi r la Group contr ibutes i ts

knowledge of the Ind ian market , Sun L i fe F inancia ls

of fers i ts g lobal exper t ise in the areas of protect ion of

weal th management serv ices. Both the par tners are

a l ready engaged in the business of asset management ,

re ta i l d is t r ibut ion and stock brok ing. This par tnership

has been now extended to L i fe Insurance af ter

Pr ivat izat ion of th is sector .

A jo in t venture between the Adi tya Bi r la Group and

Sun L i fe f inancia l , B i r la ’s sun l i fe insurance forayed in to

the l i fe insurance and ret i rement p lanning business by

p ioneer ing the unique uni t - l inked solut ions in Ind ia. In

just 2 years of i ts launch the company has catapul ted to

second posi t ion in new business premium in the h ighly

compet i t ive pr ivate l i fe insurance industry based on i ts

s t rategy of uni t - l inked p lans.


Vision ,Mission, Qual i ty Pol icy :

Vision:

“To be prov ider of f inancia l secur i ty to ind iv iduals and

corporate” . Mission: To be the f i rs t preference of our customers as a leading

in tegrated insurance prov ider of Insurance solut ions

super ior va lue creat ion and technology.

Qual i ty Pol icy: Bir la Sun L i fe has put in carefu l ly des igned st rategies to

move to the leading posi t ion in the l i fe insurance

industry through product innovat ion, customer focus,

and cut t ing edge technology.


Product Prof i le: Bir la Sun L i fe insurance was the f i rs t in Ind ia to

in t roduce Uni t –L inked L i fe Insurance p lans. INDIVIDUAL LIFE PLANS

1) F lex i L i fe L ine Plan

2) F lex i Save p lus Endowment Plan

3) F lex i Cash Flow Money Back Plan

4) Bi r la Sun L i fe Term Plan

5) Class ic L i fe Premier

1) Flexi Li fe Line Plan: Unique Features:

a) The p lan is a uni t l inked non-par t ic ipat ing p lan which

g ives ef f ic ient earn ings in the long term.

b) L i fe long Insurance cover t i l l age 100 years in addi t ion

to other durat ions avai lab le.

c) A choice of three Investment Fund Opt ions: Protector ,

Bui lder and enhancer , wi th the f reedom to swi tch

between the Investment Fund opt ions anyt ime dur ing

the pol icy tenure.

d) F lex ib i l i ty to make addi t ional lump sum investments

( top ups) to increase the savings por t ion of pol icy.


e) Min imum Guaranteed returns of 3% p.a. on premium

and any top up amounts, net of a l l Pol icy Charges.

More important ly the ent i re upside in the per formance

of the Investment Fund is passed on to customer.

f ) Opt ions to make tax f ree Par t ia l Wi thdrawal f rom fund

Value anyt ime af ter three years.

g) Surrender the pol icy wi thout penal ty any t ime af ter 4

pol icy years.

h) Increase the Sum Assured dur ing the premium-paying

per iod depending on l i fe insurance requi rements.

i ) Convenient premium payment opt ions: Shor t or

Regular paying per iod. 2) Flexi Save Plus Endowment Plan:

Unique Features :

a) The p lan is a uni t l inked non par t ic ipat ing p lan g iv ing

ef f ic ient earn ings in the long term.

b) A choice of three Investment Fund Opt ions:

Protector , Bui lder and Enhancer , wi th the f reedom to


swi tch between the Investment Fund Opt ions anyt ime

dur ing the pol icy tenure.

c) F lex ib i l i ty to make addi t ional lump sum investments


d) Min imum Guaranteed returns of 3% p.a. on premium

and any top up amounts, net o f a l l Pol icy Charges. More

important ly the ent i re upside in the per formance of the

Investment Fund is passed on to customer.

e) Opt ions to make tax f ree Par t ia l Wi thdrawals f rom

fund Value, any t ime af ter three years.

f ) Surrender the pol icy wi thout penal ty any t ime af ter 4

pol icy years.

g) Increase the Sum Assured dur ing the premium paying

per iod depending on your requi rements.

3) Flexi Cash Flow Money Back Plan: Unique Features: a) The p lan is a uni t l inked non-par t ic ipat ing p lan to g ive

ef f ic ient returns.

b) Tax f ree lump sum pay-outs, to take care of recurr ing

needs.


c) A choice of three Investment Fund Opt ions:

Protector , Bui lder and Enhancer , wi th the f reedom to

swi tch between the Investment Fund Opt ions anyt ime

dur ing the pol icy tenure.

d) F lex ib i l i ty to make addi t ional lump sum investments


e) Min imum Guaranteed returns of 3% p.a. on premium

and any top up amounts, net o f a l l Pol icy Charges. More

important ly the ent i re upside in the per formance of the

Investment Fund is passed on to customer.

f ) Opt ions to make tax- f ree Par t ia l Wi thdrawals fund

Value anyt ime af ter three years.

g) Surrender the pol icy wi thout penal ty af ter 4 pol icy

years) Increase the Sum Assured dur ing the premium

paying per iod any t ime depending on needs.

4) Bir la Sun Life Term Plan: Unique Features:

a) The p lan has been designed for people who want to

avai l o f the benef i ts of l i fe insurance at low cost . I t is a

low premium, pure r isk coverage p lan which takes care


of f inancia l commitments towards fami ly or dependants,

should anyth ing unfor tunate happen to customer.

b) Riders - Acc identa l Death & Dismemberment Rider ,

Cr i t ica l I l lness Rider , Waiver Of Premium Riders

avai lab le a long wi th the p lan, one can avai l o f r iders

even in the case of S ingle Premium Pol icy.

c) Favorable Term - Favorable Premium Rates for

Female Cl ientsd) Age Benef i t - Maximum age for

matur i ty is 70 years

5) Classic Li fe premier: Unique Features :

a) The p lan is a uni t l inked non par t ic ipat ing p lan

b) One has the choice of s ix Investment Fund Opt ions

wi th the f lex ib i l i ty to a l locate the premiums in vary ing

propor t ions in to the d i f ferent Fund Opt ions or even

swi tch f rom one or more Investment Fund(s) to other

Investment Fund(s) .

c) One can top up Fund Value whenever one has

addi t ional sav ings. The min imum amount of top ups

wi l l be Rs. 10,000

d) The p lan of fers fur ther benef i ts in the form of

addi t ional uni ts , which wi l l be added to the Fund


Value at the end of the 10th pol icy year and at the ed

of every 5th year thereaf ter

e) There is h igh l iqu id i ty in the form of Par t ia l

Wi thdrawals and surrender benef i ts . f )

Death benef i ts , which wi l l be h igher of the Fund Value

or Sum Assured, reduced by the appl icable par t ia l

wi thdrawals

Areas of Operat ion: B i r la Sun l i fe Insurance is present in Ind ia and

spread across 1000 towns in Ind ia. Apar t f rom th is i t ’s

do ing business even in the rura l segment .

Ownership pattern: The Adi tya Bi r la group holds 74% of the equi ty in

Bi r la Sun L i fe Insurance whi le the Sun L i fe group holds

the balance 26%. Both the companies are commit ted to

enhance the capi ta l o f the p lan pro ject ions.

Competi tors’ information: The company faces two types of compet i tors :

• D i rect Compet i tors

• Ind i rect Compet i tors


Direct ly the company shal l have to face the

onslaught of L IC, the large customer base, accumulated

funds, wel l -establ ished market ing machinery etc .

This is just one hal f o f the s tory; there would be

the recent ly “of f – the- b lock insurers” who would be

coming out wi th a var ie ty of product var ia t ions and

many of them wi th para l le l f inancia l act iv i t ies and

s imi lar products. Just to name few: ICICI – Prudent ia l ,

HDFC-Standard L i fe , TATA-AIG, OM-Kotak, Max-New

York, SBI L i fe , e tc .

These newer compet i tors are l ike ly to be

aggressive and innovat ive. Th is d i rect compet i t ion, on

the f l ip s ide, could resul t in market expansion. The

Company shal l a lso be fac ing compet i t ion is more

damaging. Ind i rect compet i t ion shows up in terms of

o ther f inancia l inst ruments l ike Bank FSs, PPF, NSCs,

ULIP, Stocks land other s imi lar sav ings inst ruments.

In v iew of the changing scenar io as wel l as the

nature of the market we operate in , the task of

establ ish ing a dynamic, progress ive and a successfu l

company is both qui te daunt ing and chal lenging. Some

of the chal lenges current ly faced and to be faced in

fu ture are:

1 . F inding a su i tab le, mot ivated team

2. Tai lor ing an innovat ive product mix

3. Ident i fy ing a potent ia l market n iche’


4. Serv ic ing the c l ient to the c l ient ’s complete

sat is fact ion

5. Designing a h ighly ef f ic ient system of contro ls ,

analys is and t rouble-shoot ing

6. Managing the funds bet ter to consis tent ly outper form

the market

Infrastructure Faci l i t ies :

1 . A l l branches are computer ized and l inked in a wide

area network

2 . There is in ter branch connect iv i ty a wel l as

connect iv i ty wi th the head of f ice

3 . The main back and pol icy adminis t rat ion is a

Rs.6000 based COBOL- java system running on AIX wi th

DB2 database and a HTML f ront end

4. The sales i l lustrat ion system is an in ter face system

wi th Java c lasses. The account ing system used is Sun

Account ing system, which in ter faces wi th the Rs.6000

5. Bi r la Sun L i fe would prov ide Sales I l lust rat ion

Systems to every d is t r ibutor and i t can be loaded on

laptops a lso.

6. BSLI would be harnessing the IT advantage for

improving the ef fect iveness and ef f ic iency of i ts

d is t r ibut ion channels .


Chapter 2 Organizational structure:

ORGANISATION CHART

CEO

VP

MKT DSF

CFO

VP

GROUP

VP CHANNEL

SALES

REGIONA

L

MANAGE

R BRANCH

MANAGER BRANCH

MANAGER

BRANCH

MANAGER

MARKETING

MANAGER

MARKETING

MANAGER

MARKETING

MANAGER

AGENCY

MANAGER

AGENCY

MANAGER

AGENCY

MANAGER


Work Flow Model:

APPLICATION

ADDITION OF RIDERS

REQUIREMENT

ADDITION OF RIDERS

CHEQUE DISHONOUR

DISPATCH

REFUND

CLIENT SERVICES ID

COMMUNICATION CELL


1) Appl icat ion:

I t conta ins a l l the in format ion of proposer .

2) Addit ion of r iders:

The customer i f needed can take addi t ional

insurance cover by tak ing a term r ider , i f he wants ext ra

coverage for acc idents he could take acc identa l r ider

and i f he wants to be covered for cr i t ica l medical

operat ions he could take cr i t ica l i l lness r ider . This is

termed as addi t ion of r ider .

3) Requirement:

I t is the job of the underwr i ter that whenever a new

appl icat ion is received by h im, he evaluates the

customer based on the informat ion prov ided by h im

through the appl icat ion and decides whether he could

be g iven insurance coverage or not . The in format ion

which he would c losely observe is sum assured and

premium proposes medical h is tory, h is habi ts , k ind of

organizat ion he is work ing etc . I f the underwr i ter is not

sat is f ied wi th the avai lab le in format ion he could demand

for addi t ional in format ion before issuing the pol icy.


4) Cheque Dishonor: I f due to insuf f ic ient funds or due to s ignature

mistake or due to d i f ference between words and

f igures , i f the cheque g iven by the customer bounces

then organizat ion can not proceed wi th issue of po l icy.

Then in that case a new cheque needs to be issued by

customer a long wi th cer t i f icate of insurabi l i ty .

5) Dispatch:

When the underwr i ter is fu l ly sat is f ied wi th the

customer, he decides that he could be g iven insurance

cover . Then the pol icy document s tat ing that c l ient is

insured by Sun L i fe is sent to the c l ients mai l ing

address. This is termed as d ispatch.

6) Refund: Once the c l ient receives the pol icy document he is

g iven 15 days of t ime cal led “Free look per iod” ,dur ing

which he could g ive a second thought for h is decis ion

and i f he th inks that he doesn’ t requi re the pol icy ,he

could return back the pol icy document .Then h is ent i re

money that he ahs paid to the company would be

returned to h im .This is termed as refund.


7) Cl ient Services ID :

I f the customer doesn’ t re turn the pol icy document

wi th in the f ree look per iod, then i t means that he has

accepted the pol icy and therefore h is log in ID and

password required to access h is po l icy deta i ls on l ine is

sent to h is mai l ing address.

8) Communicat ion Cel l :

B i r la Sun L i fe has a ca l l center which the customer

can cal l anyt ime to get any in format ion regard ing h is

pol icy.

Future Growth and Prospects: The Bi r la Sun L i fe Company is expanding i tse l f a l l

over Ind ia through i ts branches. I ts a l ready present in

more than 1000 towns in Ind ia. I t has a huge

recru i tment p lan to meet i ts growing demand for

manpower. Through the k ind of business that the

company has done t i l l now, i t is becoming the f i rs t

insurance company in Ind ia to achieve break even point .


Chapter 3 Operational Departments &

Performance Evaluation Performance evolut ion of concerned departments FUNDAMENTAL DEPARTMENTS OF THE ORGANISATION:

ACTUARY: An ef f ic ient and successfu l l i fe insurance business

is dependent on key funct ions of r isk management . Our

team of profess ional actuar ies is among the best in the

industry and is dedicated to create sound r isk

assessment and pr ic ing st ructure.

MARKETING AND COMMUNICATION: I ts object ive is to br ing the la tent need of l i fe

insurance in to the conscious awareness of the Indian

Diaspora and bui ld ing a brand that people of Ind ia can

t rust and invest in .


UNDERWRITING: The underwr i t ing team per forms the key funct ion of

assessing the r isk on wor ld c lass underwr i t ing

s tandards. The team along wi th a nat ionwide panel of

Medical Ev idence Prov iders acts as the backbone of the

company.

CLIENT SERVICING:

I t serv ices an ex is t ing base of over 1 lakh

pol icyholders which is constant ly growing at a

compounding rate. The team is cont inuously evolv ing

ef f ic iency levels n order to meet i ts commit ted

standards.

PRODUCT DEVELOPMENT:

A team dedicated to conceptual iz ing, product

features, set up the implementat ion and lead i t to the

product launch wi th the act ive suppor t o f the other core

funct ions.

HUMAN RESOURCE:

In an ever growing and expanding company the key

ro le of recru i t ing and reta in ing the r ight ta lent and

ef f ic ient per formance management system is a cruc ia l

d i f ferent ia tor between a leader and any other company.


IMPLEMENTATION ADMINISTRATION & CONTROL: BSLI is the f i rs t company in the insurance industry

to implement “BCP – Business Cont inu i ty Plan” to take

care of any d isaster which can st r ike the organizat ion.

Under th is p lan, a l l the cr i t ica l bus iness data is mapped

of f -s i te to another Bi r la Sun L i fe Insurance locat ion in

another c i ty . In case of any d isaster , the BSLI team can

be up and running in less than 12 hours.

INFORMATION TECHNOLOGY:

BSLI boasts of the most advanced sof tware

technology in the L i fe Insurance industry . Being a uni t

l inked product of fer ing wi th customizat ion, the

technology and back- end processing is done on the

universal p lat form on the wor ld c lass ingenious system.

Wi th th is technology, customers can even t rack thei r

po l icy and fund deta i ls on the in ternet .

INVESTMENT:

The uni t l inked products of fer the f lex ib i l i ty of

choosing f rom var ious investment opt ions. An ef f ic ient

investment s t rategy wi th in the f rame work of the IRDA

guidel ines is a cruc ia l factor contr ibut ing to the success

of uni t l inked products in the market p lace.


LEGAL AND COMPLIANCE: Being a good corporate c i t izen and being compla int

is a work s tandard at BSLI . The compl iance Process is

embedded in the work f low across the company.

FINANCE AND PLANNING:

A team dedicated to handle the day to day Finance

& Accounts operat ions of BSLI , in addi t ion to the cruc ia l

funct ion of MIS and st rategic p lanning enabled by the

top three pr ivate l i fe insurance companies in Ind ia.

Ski l l : Off the job training: In Insurance industry i t ’s the customer who is

supreme and company’s revenue would d i rect ly depend

on i t . So i t requi res the Di rect Sales force of the

company to have good communicat ion sk i l ls , s ince they

d i rect ly in teract wi th the customer. To cater to th is need

the organizat ion prov ides for exc lus ive communicat ion

sk i l l improvement t ra in ing f rom reputed organizat ions so

that the i r Di rect Sales Force would in teract in a bet ter

way wi th the customers and emerge successfu l in

get t ing business f rom him.

BSLI would be harnessing the IT advantage for



dist r ibut ion channels . At the same t ime i t uses IT

technology to meet the people. This requires i ts d i rect

sa les force to be wel l versed in usage of computer and

Microsof t o f f ice products .Hence a complete t ra in ing

cater ing to the IT needs of Di rect Sales force is

prov ided by the organizat ion.

On the job training: Af ter complet ion of o f f the job t ra in ing, the

advisors would accompany agency managers for a few

meet ings wi th the customer, so that the advisor could

understand the way he needs to put for th the product to

the customer. In the same way the new agency

managers would accompany the senior managers in

the i r c l ient meet ings to know how best they could se l l

the product .

Style: Top down Part icipat ive Decision Making:

In Bi r la Sun L i fe the decis ion regard ing products,

company pol ic ies etc . is taken by the top level

management which wi l l have to be fo l lowed by the low

level management namely branch mangers, agency

managers and advisors in a l l the branches. The

decis ion could be taken at the star t o f every f inancia l


year and a lso whenever a cr is is ar ises in any

depar tment .

In Bi r la Sun L i fe the top level management , before

tak ing the decis ion would conduct a lo t o f meet ings

involv ing employees f rom al l depar tments which would

be af fected by the decis ion. From al l these meet ings

they would gather as much in format ion as possib le and

la ter on ly top level management would come up wi th a

f ina l decis ion.

Strategies:

B i r la Sun L i fe has put in carefu l ly designed

st rategies to move to the leading posi t ion in the l i fe

insurance industry through cont inuous product

innovat ion, customer focus, cut t ing edge technology and

pr ic ing st rategy.

A. Product Innovation: a) New product to be launched: Bi r la Sun L i fe is

p lanning to Launch a product which as 100% equi ty

exposure.

b) Customizat ion of products: B i r la Sun L i fe has

under taken Customizat ion of products to meet the

vary ing needs of d iverse customers.


B. Customer Focus: a) Medical underwr i t ing: I t comes under the basis of

sum assured, premium, age, habi t , medica l h is tory

of the customer. Company may ask customers to go

for medical check up.

b) Automat ic premium loan: Before 1s t Ju ly , 2006

automat ic premium loan was there. But now

accord ing to new IRDA guidel ines th is feature has

been removed.

c) Anyt ime premium: Dur ing the f i rs t 3 years of the

pol icy per iod the customer has to pay premiums

regular ly . But af ter 3 years he could pay premiums

for every 2 years to keep the pol icy in force.

d) Web based serv ices: Bi r la Sun L i fe has i ts own

websi te namely www.Bi r la Sun L i fe .com which

conta ins a l l the in format ion regard ing i ts insurance

products, the norms in the insurance industry , da i ly

uni t va lues of i ts var ious funds etc . Every customer

is prov ided wi th a log in id and password through

which he could get to know his pol icy s tatus any

t ime any where in the wor ld.


e) Cal l center based serv ices: Bi r la Sun L i fe has their

own cal l center known “TRANS WORKS” which

handles a l l types of quer ies which could come f rom

customer or of f ice adminis t rat ion. This ca l l center

could be reached by d ia l ing 1800227000.

f ) Free look per iod: Bi r la Sun L i fe was the f i rs t

company in Ind ia to in t roduce the concept of f ree

look per iod in which the customer upon receiv ing

the pol icy document is g iven t ime of 15 days,

dur ing which he could return the pol icy to Bi r la Sun

L i fe , i f he changes h is mind . In that case the ent i re

money what the customer had paid to company wi l l

be paid back to h im.

g) Sales process safeguard ing against wrong sel l ing:

Whenever an advisor f rom Bir la Sun L i fe would

meet the customer, he is expected to reveal a l l the

in format ion to the customer regard ing the product ,

i ts charges, medical norms etc. He is a lso expected

to show the pol icy i l lust rat ion to the customer

Later , the Agency Manager ,would check up wi th

the customer to know whether h is advisor has

revealed h im a l l the deta i ls or not . This is the

measure taken to prevent wrong sel l ing f rom the

advisor .


C. The technology edge: a) Al l branches are computer ized and l inked in a wide

area network

b) There is in ter branch connect iv i ty a wel l as

connect iv i ty wi th the head of f ice

c) B i r la Sun L i fe would prov ide Sales I l lust rat ion

Systems to every d is t r ibutor and i t can be loaded

on laptops a lso.

d) BSLI would be harnessing the IT advantage for


d is t r ibut ion channels .

D. Pricing strategy:

a) Bi r la Sun l i fe has in t roduced a new product

ca l led “Class ic L i fe Premier” which has the least

po l icy charges among a l l i ts compet i tors and

hence the return f rom th is product is very good.

b) Bi r la Sun l i fe products have the least morta l i ty

charges in the market .


c) B i r la Sun l i fe has the least Fund Management

charges in the market . Systems in BSLI: Inventory control System in BSLI:

From the head quar ters s i tuated at Mumbai , to

every branch in Ind ia, inventory l ike product brochures,

appl icat ions, etc . , are d ispatched. At the local level a

count of a l l these is mainta ined to min imize wastage.

Meri t Rat ing System in BSLI:

For each ind iv idual in the organizat ion there is a

par t icu lar team in Human Resource Department which

moni tors every ind iv idual per formance on cer ta in

parameters. Based on that the ind iv idual is promoted or

demoted.

Underwrit ing System in BSLI: Introduction:

To underwr i te means to assess and approve an

appl icat ion for coverage thus accept ing l iab i l i ty should

a loss occur?

The f i rs t s tage of Underwr i t ing begins wi th c lass

se lect ion, which means the insurance company decides

to whom i t is prepared to se l l i ts products or how i t


sel ls . For example the company may decide that i t

would canvass business f rom high net wor th ind iv iduals

or employees of corporate bodies. The second stage is

when the agent approaches a potent ia l c l ient and

completes the appl icat ion for coverage which would

inc lude personal deta i ls of the proposed c l ient , p lan and

amount appl ied for ; deta i ls of occupat ion, avocat ion,

income benef ic iary , p lus medical in format ion such as

bui ld fami ly h is tory and medical h is tory. The th i rd s tage

is when the insurance company actual ly receives the

appl icat ion forms. The company may obta in deta i led

in format ion about the l i fe to be insured, h is age, fami ly

h is tory of i l lness to f ind any heredi tary d isorders,

personal heal th h is tory and f inancia l in format ion to

check the appropr ia teness of the chosen l i fe cover

amount and other benef i t cover sought .

Based on the in format ion, the insurance company may

take the fo l lowing decis ions –

1. Accept the proposal at the company’s publ ished rates for the plan and term OR

2. Accept on modif ied terms subject to addit ional f inancial or more detai led medical examination OR


3. Postpone the considerat ion of the insurance proposal OR

4. Decl ine the case.

Staff in BSLI: ACTUARY:

An ef f ic ient and successfu l l i fe insurance business

is dependent on key funct ions of r isk management .

Out team of profess ional actuar ies is among the

best in the industry and is dedicated to create sound

r isk assessment and pr ic ing st ructure.

UNDERWRITING: The underwr i t ing team per forms the key funct ion of

assessing the r isk on wor ld c lass underwr i t ing

s tandards. The team along wi th a nat ionwide panel of

Medical Ev idence Prov iders acts as the backbone of the

company.

CLIENT SERVICING: I t serv ices an ex is t ing base of over 10 lakh

pol icyholders which is constant ly growing at a

compounding rate.

PRODUCT DEVELOPMENT: A team dedicated to conceptual iz ing, product

features, set up the implementat ion and lead i t to the


product launch wi th the act ive suppor t o f the other core

funct ions.

HUMAN RESOURCE: In an ever growing and expanding company the key

ro le of recru i t ing and reta in ing the r ight ta lent and

ef f ic ient per formance management system is a cruc ia l

d i f ferent ia tor between a leader and any other company.

IMPLEMENTATION ADMINISTRATION & CONTROL: BSLI is the f i rs t company in the insurance industry

to implement “BCP – Business Cont inu i ty Plan” to take

care of any d isaster which can st r ike the organizat ion.

Under th is p lan, a l l the cr i t ica l bus iness data is mapped

of f -s i te to another Bi r la Sun L i fe Insurance locat ion in

another c i ty . In case of any d isaster , the BSLI team can

be up and running in less than 12 hours.

INFORMATION TECHNOLOGY: BSLI boasts of the most advanced sof tware

technology in the L i fe Insurance industry . Being a uni t

l inked product of fer ing wi th customizat ion,

the technology and back- end processing is done

on the universal p la t form on the wor ld c lass ingenious

system. Wi th th is technology, customers can even t rack

thei r po l icy and fund deta i ls on the internet .


INVESTMENT: The uni t l inked products of fer the f lex ib i l i ty of

choosing f rom var ious investment opt ions. An ef f ic ient

investment s t rategy wi th in the f rame work of the IRDA

guidel ines is a cruc ia l factor contr ibut ing to the success

of uni t l inked products in the market p lace.

LEGAL AND COMPLIANCE: Being a good corporate c i t izen and being compla int

is a work s tandard at BSLI . The compl iance Process is

embedded in the work f low across the company.

FINANCE AND PLANNING: A team dedicated to handle the day to day Finance

& Accounts operat ions of BSLI , in addi t ion to the cruc ia l

funct ion of MIS and st rategic p lanning to enable BSLI in

the top 3 pr ivate l i fe insurance in Ind ia.

Shared Value:

B i r la Sun L i fe Insurance was the f i rs t pr ivate l i fe

insurer in Ind ia to in t roduce Uni t -L inked l i fe insurance

p lans. A Uni t -L inked p lan is an auspic ious coming

together of secur i ty f rom l i fe insurance and earn ings

f rom investments. Which means, apar t f rom secur ing

one’s fu ture, i t o f fers ef f ic ient returns.


4) Swot Analysis:

Strengths: 1) Bi r la Sun L i fe Insurance is the only company to g ive

3% guarantee on investments in ULIPS.

2) The large product l ine of BSLI cater ing to the needs

of customers of d i f ferent age and r isk appet i te has been

st rength of BSLI For example,

a) People who are look ing for more returns can invest

maximum percentage in equi t ies.

b) People who are look ing for safe returns can invest

in to govt . secur i t ies and nominal percentage of

equi t ies.

c) As BSLI invest the i r fund in d ivers i f ied por t fo l io so

the r isk is low.

3) Bi r la Sun L i fe is the only company to g ive ULIP

pol icy for term of 100 years.

4) Bi r la Sun L i fe Insurance is the only one company in

INDIA to ask CRISIL to rate i ts funds.


5) The name “BIRLA” is a house hold name in Ind ia and

hence people have t rust over here.

6) BSLI would be harnessing the IT advantage for

improving the Ef fect iveness and ef f ic iency of i ts

d is t r ibut ion channels. A l l branches are computer ized

and l inked in a wide area network.

There is in ter branch connect iv i ty a wel l as connect iv i ty

wi th the head of f ice. This g ives the company an added

advantage to serv ice i ts large customer base.

Weaknesses: 1) In th is industry customer is supreme and revenues

are d i rect ly dependent on the number of customers BSLI

can get insured. This requires BSLI to have very

ef fect ive adver t is ing st rategy so as to popular ize the i r

products among the masses. BSLI is found lack ing in

th is domain where even though thei r po l ic ies are as

powerfu l as any other compet i tors , the i r adver t is ing

st rategy is not at a l l e f fect ive.

2) The company should extend thei r serv ices to

corporate employees where i t is found to be lack ing.

3) Bi r la Sun L i fe doesn’ t have a fund that invests 100

percent in to equi t ies. So a customer who would l ike to


take maximum advantage of equi t ies would f ind i t hard

to invest here.

Opportunit ies: 1) Only 7% of Ind ian populat ion is insured t i l l now. This

means that there is a great oppor tuni ty for the company

in coming years to capture the market .

2) The growing IT sector of INDIA would prov ide for an

excel lent oppor tuni ty for BSLI to increase i ts sa les

3) The growing knowledge about ULIPS among people

would only mean that BSLI has grater oppor tuni t ies to

grow in coming years.

Threats: 1) Di rect ly the company shal l have to face the onslaught

of L IC.The large customer base, accumulated funds,

wel l -establ ished market ing machinery etc .

2) This is just hal f o f the s tory; there would be the

recent ly “of f – the- b lock insurers” who would be coming

out wi th a var ie ty of product var ia t ions. Many of them

wi th para l le l f inancia l act iv i t ies and s imi lar products.

Just to name few: ICICI – Prudent ia l , HDFC-Standard

L i fe , TATA-AIG OM-Kotak, Max-New York, SBI L i fe , e tc .


These newer compet i tors are l ike ly to be aggress ive

and innovat ive. This d i rect compet i t ion, on the f l ip s ide,

could resul t in market expansion. The Company shal l

a lso be fac ing compet i t ion is more damaging. Ind i rect

compet i t ion shows up in terms of other f inancia l

inst ruments l ike Bank FSs, PPF, NSCs, ULIP, Stocks

land other s imi lar sav ings inst ruments


Learning Experience: The in p lant t ra in ing gave me an oppor tuni ty to

know about money saving inst ruments in INDIA,

especia l ly INSURANCE INDUSTRY.I could learn about

format ion of L IC, i ts hold on Indian market t i l l year

2000. I came to know about the format ion of IRDA and

subsequent ly the advent of pr ivate p layers in to India in

2001. In par t icu lar I came to know much about Sun L i fe

F inancia l Inc. , i t ’s operat ions around the wor ld etc . I

could a lso learn much about Bi r la Group, the var ious

f ie lds in to which they have entered and become market

leaders in those f ie lds etc . In par t icu lar I could develop

a very good understanding of Bi r la Sun L i fe Insurance,

i ts emergence in Ind ian market and a lso came to know

that i t was the f i rs t company to in t roduce ULIPS into

Ind ian market . I could have a thorough understanding of

how ULIPS operate and how they g ive bet ter returns

than t radi t ional po l ic ies by tak ing the advantage of

share market . I could gather a lo t o f in format ion about

the var ious products of fered by Bi r la Sun L i fe to i ts

customers, the features of those products. I came to

know that many of the features in t roduced by Bi r la Sun

L i fe to i ts products l ike:


Chapter 4 Achievements:

1) Best Private Sector Li fe Insurer-outlook money awards 2) Among Tops 5 Contenders for Li fe Insurance Company of the year’ of 8 Asia Insurance Industry awards 3) Ranked 23r d in the best employer’s survey by Hewitt Associates among top 25 best places to work for 2n d year. 4) Among top 3 Contenders for `Strategy to Execution’ of the 5 t h Aditya Bir la Awards for outstanding achievements, 2006.


Microscopic Study Of

Human Resource

Department


HUMAN RESOURCE Human Resource Department has mul t ip le goals . These

inc lude employee competency and employee mot ivat ion

and organizat ional c l imate development . Employees

requi re a var ie ty of competencies to per form di f ferent

tasks or funct ions requi red by thei r jobs. The nature of

jobs is constant ly changing due to changes in the

envi ronment , changes in organizat ional pr ior i t ies, goals

ands st rategies, changes in the prof i les of fe l low

employees, changes in technology, new oppor tuni t ies,

new chal lenges, new knowledge base etc . , such

changes in the nature of jobs requi re cont inuous

development of employee competencies to per form the

job wel l .

Human Resources Depar tment a lso a ims at prepar ing

people for per forming ro les, jobs, tasks, funct ions which

they may be requi red to per form in the future as they go

up on the organizat ion h ierarchy or as the organizat ion

takes up new tasks through d ivers i f icat ion, expansion,

modern izat ion, economizat ion etc .

Human Resource Department t r ies to develop potent ia l

o f employees for fu ture l ike ly jobs in the organizat ion.


The success of any organizat ion in the long run

depends very much on the qual i ty of i ts human

resources. Human Resources compr ise the aggregate of

employee at t r ibutes inc luding knowledge, sk i l l ,

exper ience and heal th , which are present ly and

potent ia l ly avai lab le to an organizat ion for the

achievement of i ts goal . Of a l l the pr ime resources of an

organizat ion, men, mater ia ls , money and machine the

human resources is recognized as the most v i ta l and

the most va luable .For i t is the qual i ty of manpower that

u l t imate ly determines the success of an organizat ion.

HRD prov ides the p lat form for super ior performance in

organizat ion s ince the success of organizat ion depends

upon i ts employees and i ts re lat ion wi th i ts in ternal and

external customers, So HRD must keep a l l such factors

ins ight before formulat ing any st rategy.

Human Resource Depar tment is one of the core

depar tments of an organizat ion and i t a lso p lays a v i ta l

ro le in the development of the organizat ion ICICI

Prudent ia l considers i ts human resource as the most

va luable asset of i ts organizat ion.

Human resource pol icies :

Pol icy is a course of act ion or s tatement of in tent ion

commit t ing the management to genera l course of act ion

when the management draf ts a pol icy s tatement to


cover some features of i ts personal programme’s of the

s tatement may of ten conta in an expression of

phi losophy and pr inc ip le as

Wel l ICICI has severa l po l ic ies regard ing the fu l f i l lment

of goals set by the management such as:

1) Recruitment pol icies: The recru i tment is carr ied out f rom both external &

in ternal are:

1 . Present employees

2. Employee referra ls

3. Former employees.

External Sources: The fo l lowing external sources are:

1. Campus recru i tment

2. Pr in t media

3. E lect ronic media

2) Select ion Select ion is carr ied out in three major s tages:

1. Pre l iminary in terv iew

2. Select ion test

3 . HR Interv iew


3) REMUNERATION AND INCENTIVES The organizat ion of fers at t ract ive remunerat ion and

incent ives to at t ract the budding youngsters and to

mainta in i ts present employees.

4) SALARY Att ract ive salar ies and other ext ra incent ives based on

thei r per formance.

5) Reimbursement pol icy Reimburs ing the te lephone and , e lect r ic i ty b i l ls etc .

6) Leave pol icy Giv ing leaves in cer ta in occasions and even tour of fers

to employees to foster in terest in them for organizat ion.

OTHER HUMAN RESOURCE POLICIES Goal set t ing

Medi c la im pol icy

Company accommodat ion pol icy

Mobi le Phone pol icy

Credi t card pol icy

Travel po l icy


Human Resource Planning Human Resource Planning inc ludes the est imat ion of

how many qual i f ied people to carry out the ass igned

task, how many people wi l l be avai lab le, and what i f

anyth ing ,must be done to ensure that personnel supply

equals personnel demand at the appropr ia te point in

fu ture. Speci f ica l ly Human Resource Planning is the

process by which an organizat ion ensures that i t has

the r ight no. and k ind of people, a t the r ight p lace, at

the r ight t ime, capable of e f fect ive ly and ef f ic ient ly

complet ing those tasks that wi l l he lp the organizat ion to

achieve i ts overa l l ob ject ives. Human Resource

Planning t ranslates the organizat ional ob ject ives and

p lans in to the number of workers

Needed to meet those object ives .Wi thout a c lear-cut

p lanning and est imat ion of organizat ion ’s human

resource need is reduced to more guesswork

Recruitment process Right people at the r ight p lace at the r ight t ime p lays a

major ro le in the recru i tment process in any

organizat ion. Because of ext reme compet i t ion in today’s

wor ld , organizat ions need to have a very ef f ic ient and

ef fect ive recru i tment process, which saves t ime and in

turn resul ts in reducing the cost of recru i tment process.


Many Internal and External Factors govern the recruitment process. Five stages of recruitment process : are

1 Planning

2 Strategy Developments

3 Searching

4 Screening

5 Evaluat ions and Contro l

Methods of recru i tment process l ike Web recru i tment ,

Appl icant Track ing system and Outsourc ing can be used

to cut down the cost and t ime involved.

Accord ing to the rev iew of l i terature successfu l

recru i t ing involves three steps:

1 Def in ing the needs

2 Spreading the word

3 Using the Internet .

I t is possib le to improve the current s tatus of the

recru i tment cyc le t ime by

1. Conduct ing a l l the in terv iew rounds in two or three

rounds

2. Making candidates to jo in ear ly .

3 . Improving the var ious steps in the process.

4. removing the non- va lue adding act iv i t ies.


Type of recruitment :

How to look How to look refers to the methods or

sources of recru i tment . These are severa l sources and

they may be broadly categor ized in to

1) Internal 2) External Internal recruitment In ternal recru i tment seeks, appl icants for the posi t ions

those who are current ly employed. In ternal sources

inc lude present employees, employee referra ls , former

employees and former appl icants .

There are three major advantages of in ternal

recru i tment .

1 F i rs t ly , i t is less cost ly that external recru i tment .

2 Secondly, organizat ions typ ica l ly have a bet ter

knowledge of the in ternal candidate ’s .sk i l ls and

abi l i t ies than the ones acqui red through external

recru i t ing.

3 Thi rd ly , an organizat ion pol icy of promot ing f rom

wi th in can enhance employee’s morale, organizat ional

commitment and job sat is fact ion. Good per formance is

rewarded

There are few d isadvantages of in ternal recru i tment .


1 One theory is that the method s imply perpetuates the

o ld concept of do ing th ings that creat ive problem

solv ing may be h indered by the lack of new ta lents.

2 Some organizat ions compla in of un i t ra id ing in which

d iv is ions compete for the same people.

3 Thi rd ly , po l i t ics probably has a greater impact on

in ternal recru i t ing and select ion than does external

recru i t ing.

4 Candidate ’s current work may be af fected.

External recruitment External sources far outnumber the in ternal methods.

Speci f ica l ly sources external to an organizat ion are

profess ional or t rade associat ions, ads, employment

exchanges, co l lege/univers i ty / inst i tu te p lacement

serv ices, walk ins and wr i te ins, consul tants,

contractors, d isp laced persons, radio and te lev is ion,

acquis i t ions and mergers and compet i tors .

There are three advantages of external recru i tment :

1 Benef i ts of new sk i l ls and new ta lents and new

exper iences to organizat ions

2 Compl iance wi th reservat ion pol icy becomes easy

3 Scope for resentment , jea lousies and hear t bum are

avoided

There are few d isadvantages a lso of external

recru i tment as:


4 Bet ter morale and mot ivat ion associated wi th in ternal

recru i t ing is denied to the organizat ion

5 I t is cost ly

6 Chances of creeping in fa lse posi t ive and fa lse

negat ive errors. Adjustment of new employees to the

organizat ional cu l ture takes longer t ime.

Orientat ion Orientat ion is a lso cal led induct ion, is designed to

prov ide a new employee wi th the in format ion he or she

needs to funct ion comfor tably and ef f ic ient ly in the

organizat ion . Purpose of or ientat ion Organizat ions are of ten known to spend few weeks or

even months on or ientat ion programme the idea is to

make the employee feel a t home. In the new

envi ronment i t is wel l known fact that employees feel

anx ious on enter ing in organizat ion, induct ion is a

method to reduce th is anxiety .

Training and development I t wi l l be company’s endeavor to recognize the value of

i ts human resources for the ir growth. The company is

commit ted to prov ide adequate oppor tuni ty to

employees to neigh thei r knowledge sk i l ls a t t i tudes,

contr ibut ing to s teady growth of the company and


fee l ing proud of work ing for the company. Methodica l ly

ident i fy ing needs for employees to upgrade thei r

knowledge sharpen sk i l ls and improve at t i tude for

improving per formance at the i r present and future

funct ion.

Impart ing such t ra in ing to employees af ter assessing

thei r capabi l i t ies and potent ia ls , var ious types of

t ra in ing techniques are employed

FEEDBACK is one s igni f icant method for evaluat ion.

Training may be under taken on the basis of career

development p lans. Tra in ing can be par t o f Qual i ty of

Work L i fe programmers and organizat ion Development .

Tra in ing can be used as a reward.

Inputs in t ra in ing and development are

1 Ski l l

2 Educat ions

3 Developments

4 Business Eth ics

5 At t i tude change

6 Enhancement of dec is ion-making and problem -

so lv ing sk i l ls .

Methods of t ra in ing:

1. Lecture

2. Audio-v isuals

3. On-the- job t ra in ing


4. Programmed inst ruct ion

5. Computer ass is ted inst ruct ion s imulat ion

6. Case study

7. Role p lay ing

8. Vest ibu le t ra in ing

9. Sensi t ive t ra in ing, etc .

Human Resource Development: Human Resource Development is sa id to be the core of

a larger system known as Human Resource System

(HRS), wherein Human Resource Development is main ly

concerned wi th prov id ing learn ing exper ience for the

people associated wi th an organizat ion through a

behaviora l approach adopt ing var ious processes. In a

broader sense, the term Human Resource Development

means those learn ing exper iences, which are organized

for a speci f ic t ime and designed to br ing about the

possib i l i ty of f behaviora l change.

Human Resource Development goals include 1) Develop the ind iv idual to real ize h is potent ia l as an

ind iv idual to the maximum extent ; 2) Develop the ind iv idual ’s capabi l i t ies to per form his

present job bet ter ;

3) Develop the capabi l i t ies to handle fu ture l ike ly ro les;


4) Develop and mainta in a h igh mot ivat ion level o f the

employees; s t rengthen super ior . Subord inate

re lat ionships;

5) Strengthen team spi r i t among d i f ferent teams;

6) Promote in ter team col laborat ion: and promote

c l imate development and organizat ional heal th

development .

7) Human resource management v iews people as an

important source or asset to be used for the benef i t

o f organizat ions, employees and society . I t is

emerging as a d is t inct phi losophy of management

a iming at po l ic ies that promote mutual i ty , mutual

goals , mutual respect , mutual rewards and mutual

responsib i l i ty . The bel ie f is that pol ic ies of mutual i ty

wi l l e l ic i t commitment , which in turn wi l l y ie ld both

bet ter economic per formance and greater human

resource development . Though a d is t inct ph i losophy,

human resource management cannot be t reated is

iso lat ion. I t is be ing in tegrated in to the overa l l

s t rategic management of business.

HRD Instruments, Processes and Outcomes

There are many inst ruments that can be used to

fac i l i ta te Human Resource Development . These

inst ruments may be cal led sub-systems or methods or


techniques or a ids. Each inst rument or sub-system

focuses on some aspects of human Resource

Development . To have a comprehensive HRD many of

these inst ruments may needed to be used

s imul taneously. Human Resource Development in the

organizat ion context re fers to the process whereby the

employees are cont inuously helped in a p lanned way to:

Acqui re or sharpen capabi l i t ies requi red to per form

var ious tasks and funct ions associated wi th the i r

present or fu ture expected ro les;

� Develop thei r genera l enabl ing capabi l i t ies as

ind iv iduals so that they are able to d iscover and explo i t

the i r own inner potent ia l for the i r own and or

organizat ional development purposes;

� Develop an organizat ional cu l ture where super ior .

Subord inate re lat ionships teamwork and col laborat ion

among d i f ferent sub-uni ts are s t rong and contr ibute to

the profess ional wel l be ing, mot ivat ion and pr ide of

employees.

Human Resources Information System Human resources in format ion or Management

In format ion systems (MIS) helps in determin ing

organizat ion ’s major human resources needs st rategies

and phi losophies.


The inst ruments of Human Resources Development are

many. Human Resource Development inst ruments

should lead to the generat ion of Human Resource

Development processes l ike ro le c lar i ty , per formance

p lanning, and development c l imate, r isk- tak ing and

dynamism in employees. Such a Human Resource

Development process should resul t in more competent

sat is f ied and commit ted people who, by thei r

contr ibut ions, would make the organizat ion grow. A

model expla in ing the l inkages between Human Resource

development inst ruments, processes outcomes and

organizat ional e f fect iveness is presented.

HR PRINCIPLES The organizat ion bel ieves that development of employee

is in i ts own in terest . The organizat ion wi l l prov ide

oppor tuni t ies and condi t ions for the development and

opt imizat ion of human resources.

1. The management is wi l l ing to invest adequate t ime

and resources for the development of the employees

and personal ly par t ic ipate in the development .

2 . Managers have concern for growth of subord inates.

3 . Employees are wi l l ing to avai l o f g iven oppor tuni t ies

for growth and receive such help f rom the managers as

may be necessary for th is development and improving

per formance.


The main object ive of the HRD depar tment is to create a

learn ing envi ronment and development c l imate in the

organizat ion. By learn ing envi ronment is meant a

cu l ture where employees cont inuously learn f rom thei r

own exper ience and the var ious learn ing oppor tuni t ies

the organizat ion prov ides. The HRD department should

create an .enabl ing Cul ture cal led Appolo Cul ture where

the employees are able to make th ings happen and in

the process d iscover and ut i l ize the i r potent ia l .

The most f requent ly used inst ruments are the fo l lowing:

Performance Appraisal Performance Appra isa l data forms basis for decis ions

for developing the potent ia l employee for h igher . Level

jobs and is basis for feedback and counsel ing.

Per formance Appra isa l data ind icates the job t ra in ing

needs of each ind iv idual the main appra isa l method

used by Bi r la Sun L i fe is 360 degree

There are two major ways of per formance appra isa l

1) Past-or iented methods

2) Future-or iented methods

Each group has severa l techniques. Some of them are

expla ined in the fo l lowing Sect ion.

The term used to descr ibe a per formance rat ing that

focuses on speci f ic behaviors or sets as ind icators of

e f fect ive or inef fect ive per formance, rather than on


broadly s tated adject ives such as "average, above

average, or below average". Other var ia t ions are:

1) Behaviora l observat ion scales

2) Behaviora l expectat ions scales

3) Numer ica l ly anchored rat ing scales

System of appraisal

In 360 degree system of appra isa l , ra t ing is done by the

employee’s immediate superv isor , h is or her immediate

subord inates etc . , Ar thur Anderson survey reveals that

20% of the organizat ions use the 360 degree system to

assess the ta lents , behaviora l aspects, va lues, e th ica l

s tandards, temper, loyal ty by the people who are the

best p laced to do i t .

Employee benefi ts: Employee benef i ts and serv ices inc lude any benef i ts

that an employee receives in addi t ion to d i rect

remunerat ion. Employee benef i ts embrace a broad

range of benef i ts and serv ices that employees receive

as a par t o f the i r local compensat ion package. Pay and

d i rect ly compensat ions i t is based on cr i t ica l job factors

and per formance. Benef i ts and serv ices, however , are

ind i rect compensat ion because they are usual ly

in tended as a condi t ion of employment and or not


direct ly re lated to per formances. Few benef i ts are as

fo l lows:

1) Leal ly requi red payments as unemployment payment

and worker ’s compensat ion

2) Cont inent and deferred benef i ts as pension p lans,

group l i fe insurance, prepaid legal p lans, and mi l i tary

leave and pay.

.

Potential Appraisal Development (PAD) Potent ia l Appra isa l Development is based on career

p lans and career p lans are prepared by us ing Potent ia l

Appra isa l Development data.

Tra in ing may be prov ided to develop candidates wi th

potent ia l .

Feedback Performance Coaching (FPC) Feedback and Per formance Data can be used to moni tor

ind iv idual development and the data can be used for

ident i fy ing t ra in ing. Career counsel ing and verbal

rewards can be par t o f feedback.

Career Planning (CP) Career Planning data are used for human resources

audi ts and career p lanning and help in conduct ing

research on promot ion pat terns for Organizat ion

Development programmers.


Employee Welfare and Qual i ty of Work Life Group ef for ts can be rewarded through qual i ty of work

l i fe measurers. Qual i ty of work l i fe improvements can be

par t o f organizat ion Development act iv i t ies.

Rewards Performance Data is used for rewards and reward data

are entered for development

Grievance Grievance procedure is one of the techniques of

resolv ing d isputes. A l l labor agreements conta in some

form of gr ievance procedure. And i f people fo l low i t

s t r ic t ly any d ispute can be resolved very easi ly . Terms

which g ive r ise to gr ievances is :

1) Vio lat ion of law

2) Vio lat ion of company ru les

3) Vio lat ion of heal th and safety measures

4) A change in work ing condi t ion or past company

pract ices

5) Vio lat ion of the in tent of the par t ies as s t ipu lated

dur ing contract negot ia t ions.

There are few other techniques avai lab le as col lect ive

bargain ing and code of d isc ip l ine.


Challenges faced by Human Resource In and organizat ion l ike Bi r la Sun L i fe ; i t is a very b ig

chal lenge to handle a l l the HR re lated issues. Here the

ro le of a HR manger and h is personal ins ight to tack le

s i tuat ion comes in to p ic ture. There are few chal lenges

faced by the HR manger in Bir la Sun L i fe

1) Department outsourc ing HR act iv i t ies

2) BPO and cal l centers

3) To balance workers work- l i fe

4) To make HR act iv i t ies eth ica l

5) To manage d ivers i ty

6) At t i tude towards d i f ferent work groups

7) Global izat ion

8) Organizat ional rest ructur ing

9) Changing demographics of workforce

10) Changed employee’s expectat ions

11) chal lenges

PERFORMANCE APPRAISAL Performance appra isa l may be def ined as a s t ructured

formal in teract ion between a subord inate and

superv isor , that usual ly takes the form of a per iod ic

in terv iew (annual or semi-annual ) , in which the work

per formance of the subord inate is examined and

d iscussed, wi th a v iew to ident i fy ing weaknesses and

st rengths as wel l as oppor tuni t ies for improvement and


sk i l ls development . In many organizat ions - but not a l l -

appra isa l resul ts are used, e i ther d i rect ly or ind i rect ly

to help determine reward outcomes. That is , the

appra isa l resul ts are used to ident i fy the bet ter

per forming employees who should get the major i ty of

avai lab le mer i t pay increases, bonuses, and promot ions.

By the same token, appra isa l resul ts are used to

ident i fy the poorer per formers who may requi re some

form of counsel ing, or in ext reme cases, demot ion,

d ismissal or decreases in pay. Whether th is is an

appropr ia te use of per formance appra isa l - the

ass ignment and just i f icat ion of rewards and penal t ies -

is a very uncer ta in and content ious mat ter .

Basic Purposes Effect ive per formance appra isa l systems conta in two

basic systems operat ing in conjunct ion: an evaluat ion

system and a feedback system.

The main a im of the evaluat ion system is to ident i fy the

per formance gap ( i f any) .

This gap is the shor t fa l l that occurs when per formance

does not meet the s tandard set by the organizat ion as

acceptable. The main a im of the feedback system is to

in form the employee about the qual i ty of h is or her

per formance.


(However , the in format ion f low is not exc lus ive ly one

way. The appra isers a lso receive feedback f rom the

employee about job problems, etc . )

One of the best ways to apprec iate the purposes of

per formance appra isa l is to look at i t f rom the d i f ferent

v iewpoints of the main s takeholders: the employee and

the organizat ion.

Employee Viewpoint :

From the employee v iewpoint , the purpose of

per formance appra isa l is four- fo ld :

(1) Tel l me what you want me to do

(2) Tel l me how wel l I have done i t

(3) Help me improve my per formance

(4) Reward me for doing wel l .

Organizat ional Viewpoint :

From the organizat ion 's v iewpoint , one of the most

important reasons for having a system of per formance

appra isa l is to establ ish and uphold the pr inc ip le of

accountabi l i ty .

For decades i t has been known to researchers that one

of the ch ief causes of organizat ional fa i lure is "non-

a l ignment of responsib i l i ty and accountabi l i ty . "

Nonal ignment occurs where employees are g iven

responsib i l i t ies and dut ies, but are not held accountable


for the way in which those responsib i l i t ies and dut ies

are per formed. What typ ica l ly happens is that severa l

ind iv iduals or work uni ts appear to have over lapping

ro les. The over lap a l lows - indeed act ive ly encourages -

each ind iv idual or business un i t to "pass the buck" to

the others.

Ul t imate ly , in the severe ly non-a l igned system, no one

is accountable for anyth ing. In th is event , the pr inc ip le

of accountabi l i ty breaks down complete ly . Rganizat ional

fa i lure is the only possib le outcome.

Formal versus Informal appraisal Formal appra isa ls usual ly occur at speci f ied t ime

per iods-once or twice a year . Ormal appra isa ls are most

of ten requi red by the organizat ion for the purpose of

employee evaluat ion. In formal per formance appra isa l

can occur whenever the superv isor fee ls the needs for

communicat ion. Many organizat ions encourage a f ix ture

of both formal and in formal appra isa ls . The formal

appra isa l is most of ten seed as pr imary evaluat ion.

However , the in formal appra isa l is very helpfu l for more

per formance feedback. In formal appra isa ls should not

take p lace of formal Per formance evaluat ion


Whose performance should be rated? To the quest ion as to whose per formance should be

rated, the answer is obvious employees. When we say

employees, is i t ind iv iduals or teams? Speci f ica l ly , the

team may be def ined as the ind iv idual , work group,

d iv is ion, or organizat ion. I t is a lso poss ib le to def ine

the rate at mul t ip le levels . For example, under some

condi t ions, i t may be desi rable to appra ise per formance

both at the work-group level for mer i t -pay increases and

at the ind iv idual level to assess t ra in ing needs.

Who are raters? Raters can be immediate superv isors, specia l is ts f rom

the HR depar tment , depar tment , subord inates, peers,

commit tees, c l ients , se l f .appra isa ls , or a combinat ion

of severa l .

Problems of rat ing Performance appra isa ls are subject to a wide var ie ty of

inaccurac ies and b iases referred to as . rat ing errors. .

These errors occur in the rater ’s observat ions,

judgments, and in format ion processing, and can

ser ious ly af fect assessment

Resul ts : The most common rat ing errors are

1) Leniency or sever i ty

2) Centra l tendency


3) Halo ef fect

4) Rater ef fect

5) Pr imacy and Regency ef fects

6) Perceptual set

7) Per formance d imension behaviors

8) Spi l l over ef fect

9) Status ef fect

Solving raters problems The best way to overcome these problems is to

prov id ing t ra in ing to the raters. From a pract ica l po int o f

v iew, severa l factors, inc luding the extent to which pay

is re lated to per formance rat ings, union pressure,

turnover rates, t ime constra ints and the need to just i fy

rat ings may be more important than t ra in ing, in f luencing

the rat ings that raters actual ly g ive. This means that

improving rat ing systems involves not just t ra in ing the

raters but rect i fy ing outs ide factors such as union

pressure. And i t means that a rater t ra in ing, to be

ef fect ive, should a lso address real - l i fe problems such

as the fact that union representat ives wi l l t ry to

in f luence superv isors to rate everyone h igh. Tra in ing

helps to improve the appra isa l system by overcoming

d is tor t ion that occurs due to the raters, er rors such as

halo, len iency, centra l tendency and b ias. Tra in ing of

raters must help s t rengthen the factors that tend to


improve accuracy of rat ings and weaken those that

lower the accuracy of the per formance measurement .

What should be rated?

One of the s teps in designing an appra isa l programme

is to determine the evaluat ion cr i ter ia . I t is obvious that

the cr i ter ia should be re lated to the job. The s ix cr i ter ia

for assessing per formance are:

1) Qual i ty

2) Quant i ty

3) T imel iness

4) Cost ef fect iveness

5) Need for superv is ion

6) In terpersonal impact

Methods of Appraisals The last to be addressed in the process of des igning an

appra isa l programme is to determine method(s) of

evaluat ion. Numerous methods have been devised to

measure the quant i ty and qual i ty of employee’s job

per formance.

Each of the methods d iscussed could be ef fect ive for

some purposes, for some organizat ions. None should be

d ismissed or accepted as appropr ia te except as they


re late to par t icu lar type of employees. Broadly a l l

approaches can be c lass i f ied in to:

1) Past-or iented methods

2) Future-or iented methods

Each group has severa l techniques. Some of them are

expla ined in the fo l lowing sect ion.

Behavioral Anchored Rating Scales The term used to descr ibe a per formance rat ing that

focuses on speci f ic behaviors or sets as ind icators of

e f fect ive or inef fect ive per formance, rather than on

broadly s tated adject ives such as "average, above

average, or below average". Other var ia t ions are:

1 . Behaviora l observat ion scales

2. Behaviora l expectat ions scales

3. Numer ica l ly anchored rat ing scales

Checkl ists The term used to def ine a set of ad ject ives or

descr ip t ive s tatements. I f the rater be l ieves the

employee possessed a t ra i t l is ted, the rater checks the

i tem; i f not , the rater leaves h im i tem blank. Rat ing

score f rom the checkl is t equals the number of checks.

Cri t ical Incident Technique The term used to descr ibe a method of per formance

appra isa l that makes l is ts of s tatements of very


ef fect ive and very inef fect ive behavior for employees.

The l is ts are combined in to categor ies, which vary wi th

the job. Once the categor ies are developed and

statements of e f fect ive and inef fect ive behavior

prov ided, the evaluator prepares a log for each

employee. Dur ing the evaluat ion per iod, the evaluator

records examples of cr i t ica l behaviors in each of the

categor ies, and the log is used to evaluate the

employee year end.

Forced Choice Method This appra isa l method has been developed to prevent

evaluators f rom rat ing employees to h igh. Using th is

method, the evaluator has to se lect f rom a set of

descr ip t ive s tatements, s tatements that apply to the

employee. The statements are weighted and summed to

at , e f fect iveness index.

Forced Distr ibution The term used to descr ibe an appra isa l system s imi lar

to grading on a curve.

The evaluators are asked to rate employees in some

f ixed d is t r ibut ion of categor ies. One way to do th is is to

type the name of each employee on a card and ask the

evaluators to sor t the cards in to p i les corresponding to

rat ing.


Graphic Rating Scale The term used to def ine the o ldest and most widely

used per formance appra isa l method. The evaluators are

g iven a graph and asked to rate the employees on each

of the character is t ics. The number of character is t ics

can vary f rom one to one hundred. The rat ing can be a

matr ix of boxes for the evaluator to check of f or a bar

graph where the evaluator checks of f a locat ion re lat ive

to the evaluators rat ing.

Narrat ive or Essay Evaluat ion This appra isa l method asks the evaluator to descr ibe

s t rengths and weaknesses of an employee's behavior .

Some companies s t i l l use th is s method exc lus ive ly ,

whereas in others, the method has been combined wi th

the graphic rat ing scale.

Management by Object ives The management by object ives per formance appra isa l

method has the superv isor and employee get together to

set object ives in quant i f iab le terms. The appra isa l

method is worked to e l iminate communicat ion problems

by the establ ishment of regular meet ings, emphasiz ing

resul ts , and by being an ongoing process where new

object ives have been establ ished and o ld object ives are

modi f ied as necessary in l ight of changed condi t ions.


Paired Comparison The term used to descr ibe an appra isa l method for

rank ing employees. Fi rs t , the names of the employees

to be evaluated are p laced on separate sheets in a

predetermined order , so that each person is compared

wi th a l l o ther employees to be evaluated. The evaluator

then checks the person he or she feels has been the

bet ter of the two on the cr i ter ion for each compar ison.

Typica l ly the cr i ter ion is the employees over a l l ab i l i ty

to do the present job.

Ranking The term ranking has been used to descr ibe an

a l ternat ive method of per formance appra isa l where the

superv isor has been asked to order h is or her

employees in terms of per formance f rom highest to

lowest .

Weighted Checkl ist The term used to descr ibe a per formance appra isa l

method where superv isors or personnel specia l is ts

fami l iar wi th the jobs being evaluated prepared a large

l is t o f descr ip t ive s tatements about ef fect ive and

inef fect ive behavior on jobs.


Performance Interview Performance Interv iew is another s tep in the appra isa l

process. Once the Appra isa l has been made of

employees, the raters should d iscuss and rev iew the

per formance wi th the rates, so that they wi l l receive

feedback about where they s tand in the eyes of the

super iors. Feedback is necessary to ef fect improvement

in per formance, especia l ly when i t is adequate.

Speci f ica l ly Per formance Interv iew has three goals

1) To change behavior of employees. Whose

per formance does not meet Organizat ional

requi rements or the i r own personal goals?

2) To mainta in the behavior of employees who per form

in an acceptable manner,

3) To recognize super ior per formance behavior so that

they wi l l be cont inued.

Use of appraisal data The f ina l s tep in the evaluat ion process is the use of

evaluat ion data. The HR depar tment must use the data

and in format ion generated through per formance

evaluat ion. In one way or the other , data and

in format ion outputs of a per formance appra isa l

programme can cr i t ica l ly in f luence employer-employee

reward oppor tuni t ies.


Speci f ica l ly the data and in format ion wi l l be usefu l in

the

1) Fol lowing areas of HRM

2) Remunerat ion adminis t rat ion

3) Val idat ion of se lect ion programs

4) Employee t ra in ing and development programs

5) Promot ion, t ransfer and lay-of f dec is ions

6) Gr ievance and d isc ip l ine programs

7) HR planning

Performance Management verses Performance Appraisal The shi f t f rom per formance appra isa l to per formance

management requi res a sh i f t in focus f rom a s ingle

event to a cont inuous process. The process prov ides

employees wi th d i rect ion and suppor t v ia a deta i led

per formance p lan composed of goals , act ion s teps,

measurements, and coaching throughout the year long

cyc le. Per formance management is d i f ferent f rom the

s ingle appra isa l because i t :

1) Begins wi th p lanning at the beginning of the year to

c lar i fy job expectat ions and accountabi l i t ies between

employee and manager

2) El iminates current employee concerns that

expectat ions are vague or not ar t icu lated


3) Turns the appra isa l document and appra isa l meet ing

in to the year-end feedback summary and prev ious

meet ings on per formance

Findings of the Study 1) I t can be in ferred by the study that the employees are

aware of the present Per formance appra isa l System

fo l lowed in the company.

2) Most of the execut ives are sat is f ied wi th the

per formance appra isa l system fo l lowed in the

company. This shows that the present per formance

appra isa l system is sat is factory

3) Fur ther improvement in the system can be made in

order to at ta in fu l l sat is fact ion of the

employees/execut ives of the company.

4) Greater par t agrees that the per formance standards

set are c lear and achievable. .

5) Major i ty of the employees favored t ra in ing for the

appra isers to carry appra isa l programme..

6) In response to the company spending of considerable

t ime and at tent ion for the per formance appra isa l

system, most of the employees fe l t that the company

spends the necessary t ime and at tent ion in fo l lowing

the Per formance appra isa l System,


7) Most of the execut ives surveyed are sat is f ied wi th the

Sel f -Appra isa l process being fo l lowed in the

company.

8) I t can be said that the present system of per formance

appra isa l is e f fect ive in br ing ing out the per formance

feed back by the rev iewing and repor t ing of f icers.

9) Most of the employees agree that the help and

guidance prov ided is suf f ic ient ind icat ing that the

management spends considerable t ime on prov id ing

employees wi th help and guidance.


Chapter 5 Recommendat ions & Suggestions:

IRDA use t radi t ional mode of t ra in ing and

market ing which should be replaced wi th the use of

la test emerging technologies.

Regular feedback is recommended to know the l ike

& d is l ike and a lso expectat ions of the Customers.

Proper weightage should be g iven to improve the

communicat ion sk i l l o f the advisors so as to

improve customer re lat ions.

Dur ing t ra in ing to advisors importance should be

g iven to prov ide the most important in format ion to

them l ike making wel l aware about the products of

the i r organizat ion.

Market ing mater ia ls received before the advisor

reaches the customer should add value to the

product prepar ing more awareness in customers.


Chapter 6 Conclusion

In present scenar io, there is a cut - throat compet i t ion

among the companies to get more and more prospects

to buy thei r var ious products. The only way to achieve

the target is t ra in the insurance advisors in the best

poss ib le way.

Birla Sun Life Insurance uses a l l those possib le

too ls and la test techniques l ike sof tware for ca lcu lat ing

premiums, etc which helps the i r insurance advisors to

se l l more of the i r products. They have shown a lo t o f

creat iv i ty and innovat ion in the i r t ra in ing programs and

have succeeded in achiev ing the desired outcome.


BIBLIOGRAPHY 1. COMPANY BROUCHURES AND PAMPHLETS

2. COMPANY ANNUAL RECORDS

3. www.bi r lasunl i fe .com

4. www.google.com

birla sunlife insurance 100

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