CHAPTER 1

INTRODUCTION
INTRODUCTION OF INSURANCE

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange
for payment. It is a form of risk management primarily used to hedge against the risk of a
contingent, uncertain loss. An insurer, or insurance carrier, is a company selling the insurance;
the insured, or policyholder, is the person or entity buying the insurance policy. The amount
of money to be charged for a certain amount of insurance coverage is called the premium. Risk
management, the practice of appraising and controlling risk, has evolved as a discrete field of
study and practice.
The transaction involves the insured assuming a guaranteed and known relatively small loss in
the form of payment to the insurer in exchange for the insurer's promise to compensate
(indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract,
called the insurance policy, which details the conditions and circumstances under which the
insured will be financially compensated.

HUMAN RESOURCE MANAGEMENT

Human resource management (HRM, or simply HR) is a function in organizations designed to

maximize employee performance in service of an employer's strategic objectives.HR is primarily
concerned with the management of people within organizations, focusing on policies and
systems.HR departments and units in organizations typically undertake a number of activities,
including

employee recruitment, training and

development, performance

appraisal,

and

rewarding (e.g., managing pay and benefit systems).HR is also concerned with industrial
relations, that is, the balancing of organizational practices with requirements arising from
collective bargaining and from governmental laws.
HR is a product of the human relations movement of the early 20th century, when researchers
began documenting ways of creating business value through the strategic management of the
workforce. The function was initially dominated by transactional work, such as payroll and
benefits administration, but due to globalization, company consolidation, technological
advances, and further research, HR as of 2015 focuses on strategic initiatives like mergers and
acquisitions, talent management, succession planning, industrial and labor relations, and
diversity and inclusion.

In startup companies, HR duties may be performed by trained professionals. In larger companies,

an entire functional group is typically dedicatedto the discipline, with staff specializing in
various HR tasks and functional leadership engaging in strategic decision-making across
the business. To train practitioners for the profession, institutions of higher education,
professional associations, and companies themselves have created programs of study dedicated
explicitly to the duties of the function. Academic and practitioner organizations likewise seek to
engage and further the field of HR, as evidenced by several field-specific publications. HR is
also a field of research study that is popular within the fields of management
and industrial/organizational psychology, with research articles appearing in a number of
academic journals, including those mentioned later in this article.
In the current global work environment, most companies focus on lowering employee
turnover and on retaining the talent and knowledge held by their workforce. New hiring not only
entails a high cost but also increases the risk of a newcomer not being able to replace the person
who was working in that position before. HR departments also strive to offer benefits that will
appeal to workers, thus reducing the risk of losing corporate knowledge.

IMPORTANCE OF HRM IN INSURANCE SECTOR

Human resource is one of the natural resources of any country's economy. It is the wealth of the
country. In the context of insurance, human resource is of greater importance. The deployment of
human resource through proper and efficient selection, training and development, is called
Human Resource Management.

The success of any insurance company largely depends on efficient human resource
management, apart from operations, marketing and sales, the HR department manages all the
efficient people working in operations and marketing divisions in any organization.

ABOUT THE REPORT

Title of the study: - The present study is titled as A PROJECT REPORT

ON HRM IN INSURANCE SECTOR.
Objective of the study:- The following are the objective of the study:
To understand the existing HRD climate prevailing in the
Insurance sector.
To study the policy of training and development and its
Effectiveness of insurance sector.
To evaluate the practices regarding human resources in
Insurance companies.
To analyze the methods used to appraise the performance of
the employees in the insurance organization.

Period of the study:-The period of the present study is from DEC 2014MARCH 2015.

Limitations of the Study:-The present study has got all the limitations of
explanatory study method.

Data and Methodology:-For the purpose of the present study I had referred
internet, books, newspaper to collect information.

PRESENTATION OF THE STUDY:

The Present Study is arranged as follows:

Chapter 1 : Gives an introduction to the title

And to the report.
Chapter 2: Deals with profile of LIC.

Chapter 3: Theoretical View.

Chapter 4: Case Studies.

Chapter 5: Conclusion.

CHAPTER 2
PROFILE
INTRODUCTION TO LIFE INSURANCE COPORATION IN INDIA

The Life Insurance Corporation of India (LIC) is the largest life insurance company in India and
also the country's largest investor. It is fully owned by the Government of India. It also funds
close to 24.6% of the Indian Government's expenses. It was founded in 1956.
Headquartered in Mumbai, which is considered the financial capital of India, the Life Insurance
Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different
parts of India, at least 2048 branches located in different cities and towns of India along with
satellite Offices attached to about some 50 Branches, and has a network of around one million
and 200 thousand agents for soliciting life insurance business from the public.
The corporation is an autonomous and has necessary to run on sound principles. The corporation
has been carrying out the role assigned to it and justifying confidence of public by offering
adequate security at reasonable cost, dependable service, economic management and favorable
returns to the nation at large.
In the year 1956, LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart
from its corporate office. Re-organization of LIC took place and large number of new branch
offices was opened. As a result of re-organization, servicing functions were transferred to the

branches, and branches made accounting units. It worked wonders with the performance of the
corporation.
It may be seen that from about 200 crores of new business in 1957 the corporation crossed 1000
crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000 crore mark of
new business. But with re-organization happening in the early eighties, by 1985-86 LIC had
crossed 7000 crore sum assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal
offices and the corporate office. LICs wide are network covers 100 divisional offices and
connects all the branches through a Metro Area Network. LIC has tied up with some banks and
service providers to offer on-line premium collection facility in selected cities. LICs ECS and
ATM premium payment facility is an addition to customer convenience. Apart from on-line
kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmadabad, Bangalore,
Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policy holders, LIC has launched SATELLITE SAMPARK
OFFICES. The Satellite offices are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate anywhere servicing and many other conveniences in
the future.
LIC continues to be the dominant insurer even in the liberalized scenario of Indian insurance and
is moving fast on a new growth trajectory surpassing its own past records; LIC of India traversed
its long and illustrious journey and now has a vision to emerge as a world class customer centric
organization.

OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the

country and providing them adequate financial cover against death at a reasonable cost.
Maximize mobilization of people's savings by making insurance-linked savings

adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive

return.
Conduct business with utmost economy and with the full realization that the moneys

belong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities.
Meet the various life insurance needs of the community that would arise in the changing

social and economic environment.

Involve all people working in the Corporation to the best of their capability in furthering

the interests of the insured public by providing efficient service with courtesy.
Promote amongst all agents and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.

HISTORY OF LIFE INSURANCE CORPORATION

 Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and
Indian natives were not being insured by these companies. However, later with the efforts
of eminent people like Babu Muttylal Seal, the foreign life insurance companies started
insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy
extra premiums were being charged on them. Bombay Mutual Life Assurance Society
heralded the birth of first Indian life insurance company in the year 1870, and covered
Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives,
insurance companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi movement
of 1905-1907 gave rise to more insurance companies. The United India in Madras,
National Indian and National Insurance in Calcutta and the Co-operative Assurance at
Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company
took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath
Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later
Bombay Life) were some of the companies established during the same period. Prior to
1912 India had no legislation to regulate insurance business. In the year 1912, the Life
Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance
Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated

between foreign and Indian companies on many accounts, putting the Indian companies
at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business.
From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176
companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming
of insurance companies many financially unsound concerns were also floated which
failed miserably. The Insurance Act 1938 was the first legislation governing not only life
insurance but also non-life insurance to provide strict state control over insurance
business. The demand for nationalization of life insurance industry was made repeatedly
in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance
Act 1938 was introduced in the Legislative Assembly. However, it was much later on the
19th of January, 1956, that life insurance in India was nationalized. About 154 Indian
insurance companies, 16 non-Indian companies and 75 provident were operating in India
at the time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill. The Parliament of India passed the
Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance
Corporation of India was created on 1st September, 1956, with the objective of spreading
life insurance much more widely and in particular to the rural areas with a view to reach
all insurable persons in the country, providing them adequate financial cover at a
reasonable cost.

 LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long term contracts
and during the currency of the policy it requires a variety of services need was felt in the
later years to expand the operations and place a branch office at each district headquarter.
Re-organization of LIC took place and large numbers of new branch offices were opened.
As a result of re-organisation servicing functions were transferred to the branches, and
branches were made accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200.00 crores of New Business in 1957 the
corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years
for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening
in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on
new policies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices,
8 zonal offices, 992 satallite offices and the Corporate office. LICs Wide Area Network
covers 109 divisional offices and connects all the branches through a Metro Area
Network. LIC has tied up with some Banks and Service providers to offer on-line
premium collection facility in selected cities. LICs ECS and ATM premium payment
facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS,
Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing
easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices.
The satellite offices are smaller, leaner and closer to the customer. The digitalized records

of the satellite offices will facilitate anywhere servicing and many other conveniences in
the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records.
LIC has issued over one crore policies during the current year. It has crossed the
milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our forefathers to bring insurance into existence in this country inspire us
at LIC to take this message of protection to light the lamps of security in as many homes
as possible and to help the people in providing security to their families.

SOME OF THE IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS

IN INDIA ARE:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.

INSURANCE PLANS OF LIC

As individuals it is inherent to differ. Each individual's insurance needs and requirements are
different from that of the others. LIC's Insurance Plans are policies that talk to you individually
and give you the most suitable options that can fit your requirement.
ENDOWMENT PLAN
LIC's SINGLE PREMIUM ENDOWMENT PLAN
LIC's Single Premium Endowment Plan is a participating non-linked savings cum
protection plan, where premium is paid in lump sum at the outset of the policy. This
combination provides financial protection against death during the policy term with the
provision of payment of lumpsum at the end of the selected policy term in case of his/her
survival. This plan also takes care of liquidity needs through its loan facility.
LICs NEW ENDOWMENT PLAN
LIC's New Endowment Plan is a participating non-linked plan which offers an attractive
combination of protection and saving features. This combination provides financial
support for the family of the deceased policyholder any time before maturity and good
lump sum amount at the time of maturity for the surviving policyholders. This plan also
takes care of liquidity needs through its loan facility.
LIC's NEW JEEVAN ANAND
LIC's New JeevanAnand Plan is a participating non-linked plan which offers an attractive
combination of protection and savings. This combination provides financial protection
against death throughout the lifetime of the policyholder with the provision of payment of
lumpsum at the end of the selected policy term in case of his/her survival. This plan also
takes care of liquidity needs through its loan facility.
LIC's JEEVAN RAKSHAK

LIC's JeevanRakshak Plan is a participating non-linked plan which offers a combination

of protection and savings. This plan provides financial support for the family in case of
unfortunate death of the policyholder any time before maturity and a lump sum amount at
the time of maturity for the surviving policyholder. This plan also takes care of liquidity
needs through its loan facility.
LIC's Limited Premium Endowment Plan
LIC's Limited Premium Endowment Plan is a participating non-linked plan which offers
a combination of protection and savings. This plan provides financial support for the
family in case of unfortunate death of the policyholder any time before maturity and a
lump sum amount at the time of maturity for the surviving policyholder. This plan also
takes care of liquidity needs through its loan facility.
LIC's JEEVAN SANGAM
LICs JeevanSangam is a participating, non-linked, savings cum protection single
premium plan wherein the risk cover is a multiple of single premium. The proposer will
have an option to choose the Maturity Sum Assured. The single premium payable
(exclusive of service tax) shall depend on the chosen amount of Maturity Sum Assured
and age of the life assured.
The plan will be open for sale for a maximum period of 90 days from the date of launch.
LIC's JEEVAN LAKSHYA
LIC's JeevanLakshya is a participating non-linked plan which offers a combination of
protection and savings. This plan provides for Annual Income benefit that may help to
fulfill the needs of the family, primarily for the benefit of children, in case of unfortunate
death of Policyholder any time before maturity and a lump sum amount at the time of
maturity irrespective of survival of the Policyholder. This plan also takes care of liquidity
needs through its loan facility.

MONEY BACK PLAN

LIC's NEW MONEY BACK PLAN-20 YEARS
LIC's New Money Back Plan-20 years is a participating non-linked plan which offers an
attractive combination of protection against death throughout the term of the plan along
with the periodic payment on survival at specified durations during the term. This unique
combination provides financial support for the family of the deceased policyholder any
time before maturity and lump sum amount at the time of maturity for the surviving
policyholders. This plan also takes care of liquidity needs through its loan facility.
LIC's NEW MONEY BACK PLAN-25 YEARS
LIC's New Money Back Plan-25 years is a participating non-linked plan which offers an
attractive combination of protection against death throughout the term of the plan along
with the periodic payment on survival at specified durations during the term. This unique
combination provides financial support for the family of the deceased policyholder any
time before maturity and lump sum amount at the time of maturity for the surviving
policyholders. This plan also takes care of liquidity needs through its loan facility.
LIC's NEW BIMA BACHAT
LIC's New BimaBachat is a participating non-linked savings cum protection plan, where
premium is paid in lump sum at the outset of the policy. It is a money-back plan which
provides financial protection against death during the policy term with the provision of
payment of survival benefits at specified durations during the policy term. In addition, on
maturity, the single premium shall be returned along with Loyalty Addition, if any. This
plan also takes care of liquidity needs through its loan facility.
TERM ASSURANCE PLAN
LIC's AnmolJeevan - II Plan

LICs AnmolJeevan - II is a protection plan which provides financial protection to the

insureds family in case of his/her unfortunate demise.
LIC's AmulyaJeevan - II Plan
LIC's AmulyaJeevan - II is a protection plan which provides financial protection to the
insured's family in case of his/her unfortunate demise.
LIC's NEW TERM ASSURANCE RIDER
LIC's New Term Assurance Rider provides for life cover in case of unfortunate death of
the insured during the cover period. It can be attached with a basic policy to provide addon benefit at a nominal cost. This rider shall only be attached with Non-Linked plans at
the inception of the base policy.

AWARDS OF LIC

The IndiaThe Indian Insurance Awards 2013 - Claims Service Company

The Indian Insurance Awards 2013 Claims Service Company

The Indian Insurance Awards 2013 - Best Product Innovation

Outlook MonIndian Life Insurance Award - Best Life Insurance Provider

Indian Life Insurance Award

Outlook Money AWARD FOR BEST LIFE INSURER 2012

My FM Stars of the Industry Award for Excellence in Life Insurance (Gold)

CHAP 3
THEORETICAL VIEW
INSURANCE DEFINITION

A promise of compensation for specific potential future losses in exchange for a periodic
payment. Insurance is designed to protect the financial well-being of an individual, company or
other entity in the case of unexpected loss. Some forms of insurance are required by law, while
others are optional. Agreeing to the terms of an insurance policy creates a contract between the
insured and the insurer. In exchange for payments from the insured (called premiums), the
insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event.
In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays
the rest. Examples include car insurance, health insurance, disability insurance, life insurance,
and business insurance.

INDIAN INSURANCE INDUSTRY

The insurance industry of India consists of 52 insurance companies of which 24 are in life
insurance business and 28 are non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life
insurers there are six public sector insurers. In addition to these, there is sole national re-insurer,
namely, General Insurance Corporation of India. Other stakeholders in Indian Insurance market
include Agents (Individual and Corporate), Brokers, Surveyors and Third Party Administrators
servicing Health Insurance claims.

Out of 28 non-life insurance companies, 5 private sector insurers are registered to underwrite
policies exclusively in Health, Personal Accident and Travel insurance segments. They are Star
Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max
Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK
Health Insurance Company Ltd. There are two more specialised insurers belonging to public

sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and
Agriculture Insurance Company Ltd for Crop Insurance.

Insurance penetration of India i.e. Premium collected by Indian insurers is 3.96 % of GDP in FY
2012-13. Per capita premium underwritten i.e. insurance density in India during FY 2012-13 is
US$ 53.2.

FUNCTION OF HRM
MANAGERIAL FUNCTIONS
Planning
This function deals with the determination of the future course of action to achieve
desired results. Planning of personnel today prevents crises tomorrow. The personnel
manager is expected to determine the personnel programme regarding recruitment,
selection and training of employees.
Organising
This function is primarily concerned with proper grouping of personnel activities,
assigning of different groups of activities to different individuals and delegation of
authority. Creation of a proper structural framework is his primary task. Organising, in
fact, is considered to be the wool of the entire management fabric and hence cannot
afford to be ignored.
Directing
This involves supervising and guiding the personnel. To execute plans, direction is
essential for without direction there is no destination. Many a time, the success of the
organisation depends on the direction of things rather than their design. Direction then

consists of motivation and leadership. The personnel manager must be an effective leader
who can create winning teams. While achieving results, the personnel manager must,
invariably, take care of the concerns and expectations of employees at all levels.
Controlling
Controlling function of personnel management comprises measuring the employees
performance, correcting negative deviations and industrial assuring an efficient
accomplishment of plans. It makes individuals aware of their performance through
review reports, records and personnel audit programmes. It ensures that the activities are
being carried out in accordance with stated plans.
OPERATIVE FUNCTIONS
Procurement function
The first operative function of personnel management is procurement. It is concerned
with procuring and employing people who possess necessary skill, knowledge and
aptitude. Under its purview you have job analysis, manpower planning, recruitment,
selection, placement, induction and internal mobility.
Development
It is the process of improving, moulding, changing and developing the skills, knowledge,
creative ability, aptitude, attitude, values and commitment based on present and future
requirements both at the individuals and organisations level.
Motivation and compensation
It is a process which inspires people to give their best to the organisation through the use
of intrinsic (achievement, recognition, responsibility) and extrinsic (job design, work
scheduling, appraisal based incentives) rewards.
Maintenance

It aims at protecting and preserving the physical and psychological health of employees
through various welfare measures.
Integration function
This tries to integrate the goals of an organisation with employee aspirations through
various employee-oriented programmes, like redressing grievances promptly, instituting
proper disciplinary measures, empowering people to decide things independently,
encouraging a participative culture, offering constructive help to trade unions etc.
Emerging issues
Effective management of human resources depends on refining HRM practices to
changing conditions. Hence the need to look at other important issues that can motivate
people to give their best in a dynamic and ever-changing environment.

ADVISORY FUNCTIONS
Human resource manager has specialised education and training in managing human resources.
He is an expert in his area and so can give advise on matters relating to human resources of the
organisation.
He offers his advise to:
1. Advised to Top Management:
Personnel manager advises the top management in formulation and evaluation of personnel
programs, policies and procedures. He also gives advice for achieving and maintaining good
human relations and high employee morale.
2. Advised to Departmental Heads:

Personnel manager offers advice to the heads of various departments on matters such as
manpower planning, job analysis and design, recruitment and selection, placement, training,
performance appraisal, etc.

RECENT TECHNIQUES OF HRM

The field of Human Resource Management is developing very fast & every department of human
activity is realizing its importance in the smooth functioning of the organization. Innovative

techniques are developed to improve the work culture, so that the employees are motivated to
give in their best to the organization. There is tough competition everywhere & to survive with
grace, one will have to accept the changes in this modern world and adopt the latest human
resources practices. Those who refuse to change will be left behind & will have to accept defeat.
So it is imperative to implement the latest human resource practices in the organization.
The latest techniques in the field of Human Resource Development are:
Employees for Lease
Sometimes the organizations depend upon consultancy agencies or individual consultants
for their expertise to tap and utilize their expert knowledge. The consultancy agencies
offer expert advice and the execution of the advice is left to the employees of the
organization. The employees may in some of the cases fail to covert the know-how into a
project. Under such circumstances, new types of organizations will emerge, which would
be called as Employee Leasing Organization. These leasing organizations will be
principal employers and send the required number and kind of employees to various
organizations on lease basis. They collect the fee & other charges from various industries
& pay the salaries, provide benefits to the employees. The Leasing company will pay
complete salary and benefits to the employees irrespective of the number of days that the
employee is sent to various organizations on lease.
This type of agreement is beneficial to the leasing company, specialist employees and the
industry. The industry with limited budget can utilize the expert advice & service of most
competent human resources.
Moonlighting by Employees

This is a situation, which arises among employees on account of dissatisfaction from

present wage & salary structure. They feel that employer enjoys the increased profit and
that they are being exploited by the employer. Consequently they agitate for hike in
wages or take up another part-time job or business simultaneously with that of the
original job. This is also known as Double Jobbing.
Moonlighting by employees affects almost all the functions of Human Resource
Management. The effects of Moonlighting would be mostly negative & it poses
challenges to the personnel manager. Presently very limited number of employees does
moonlighting, but the number of employees will go on increasing due to change in
employee values & expectations. Management will have to take all possible care in
selection process about the possibility of moonlighting by the prospective candidates.
Dual career Groups: There has been a tremendous increase in the number of female

employees in all types of organizations due to: increased career orientation among women in recent years.
creation of variety of jobs.
higher level commitment
better performance.
Less demanding & agitative oriented.
Economic Freedom.

Better Social Status.

Aspirations for quality of work life.

Due to dual career groups, both wife & husband will be loaded with grievances &
problems as both of them share their problems, both at work and off the job. In view of
overloading of the problems to both the members in dual career groups, they spend heir
time and energy in solving the problems or in getting the grievances redressed for both
the parties. So, there will be possibility of less commitment to the work in the
organization by both the parties.

Due to this new trend in HR, in a nutshell, the HR manager should treat people as
resources, reward them equitably, and integrate their aspirations with corporate goals
through suitable HR policies.
Flexi-time & Flexi-work
The number of hours in a day, number of days in a week and work schedule when the
worker has to perform is normally stated in the Job Description. The concept of Flexitime has been introduced in order to suit the convenience of the workers without affecting
the organizational functioning. Flexi-time is a program that allows flexible entry and
leaving times for employees. Flexi-time increases productivity, decline in absenteeism,
and reduction in employee turnover & increase in morale.
Flexi-work
It is a program that allows flexibility in handling the type of work in

various

departments of the organizations in systematic way by the employee during his tenure of
employment in an organization. For example, a candidate may be selected as a clerk in
the Personnel Department and after two years he may be allowed to take up work in any
other department of the organization.
Training & Development
Organizations spend a lot of time and resources in training, developing and educating
their employees in tune with the job awareness and organizations' requirements. This is
mostly due to the absence of linkage between the industry and universities. Organizations
in future will establish their own educational institutes. These institutes will frame their
course curriculum to suit the requirements of various jobs in the organization as a whole.
These institutes will go on changing the course curriculum depending upon the changes
in technology, work methods, production process, activities and so on. The intake of these

institutes depends on exclusive requirements of organization. After the completion of the

course, the candidate will be awarded a diploma and absorbed by the organization. This
management arrangement will automatically take care of the problem of unemployment
and underemployment. This arrangement will also minimize the duration of time to be
spent by the candidate in his educational process.
Management Participation in Employees' Organizations
With the formation and recognition of employees' organizations, the management cannot
make unilateral decisions those affect employee relationship directly or indirectly.
Decisions relating to policies on employment, training, transfer, promotion, adoption of
latest technology etc. are no longer determined by unilateral action of management and
must now be discussed with the representatives of employees' organizations. Decisions
on the policies and administration may still rest with management, but they are frequently
subject to question and criticism by union representatives under a formal grievance
procedure. This technique enables the two parties to exchange ideas, opinions,
information and knowledge to understand each other's viewpoint, with an open mind and
thereby avoid all misunderstandings. Thus, the management representatives may provide
effective plans, suggestions, advice organization and directions for sound management
and functioning of federations and unions for the common good of both the parties.
Collective bargaining
It is an institutional process for solving problems arising directly out of employeremployee relationships. Through collective bargaining the two parties become responsive
to each other. Employees ventilate their problems relating to wages, employee benefits
etc. while the management puts forth its demands regarding employee co-operation and
commitment so as to maximize its profits. Thus, the two parties discuss the problem and

each party tries to solve the problems of the other. The scope of collective bargaining is
wider as the solutions for common problems can be found directly through negotiations
between both the parties.
Collaborative management
It is the general practice that the owners and/or their representatives manage the
organization. But most of the organizations have started allowing their employees to
participate in management. It is viewed that different parties concerned with the
organizational activities will manage the organization through participation. Such type of
management system is referred as 'Collaborative Management'. Employee's participation
in management was initiated to satisfy workers' psychological needs, to develop a sense
of belongingness and loyalty to the organization.

METHODS OF TRAINING FOR MANAGERS, METHODS OF MANAGERIAL

DEVELOPMENT/EXECUTIVE DEVELOPMENT
Various methods are used to train personnel for managerial level jobs in the company. These
methods can be explained with the help of following diagram:

ON THE JOB TRAINING METHODS

On the job method refers to training given to personnel inside the company. There are different
methods of on the job training:
1. Job rotation
This method enables the company to train managerial personnel in departmental work. They are
taught everything about the department. Starting from the lowest level job in the department to
the highest level job. This helps when the person takes over as a manager and is required to
check whether his juniors are doing the job properly or not. Every minute detail is studied.
2. Planned progression
In this method juniors are assigned a certain job of their senior in addition to their own job. The
method allows the employee to slowly learn the job of his senior so that when he is promoted to
his senior job it becomes very easy for him to adjust to the new situation. It also provides a
chance to learn higher level jobs.

3. Coaching and counseling

Coaching refers to actually teaching a job to a junior. The senior person who is the coach actually
teaches his junior regarding how the work must be handled and how decisions must be taken, the
different techniques that can be used on the job, how to handle pressure.
There is active participation from the senior. Counseling refers to advising the junior employee
as and when he faces problems. The counselor superior plays an advisory role and does not
actively teach employees.
4. Under study
In this method of training a junior is deputed to work under a senior. He takes orders from the
senior, observes the senior, attends meetings with him, learns about decision making and
handling of day to day problems. The method is used when the senior is on the verge of
retirement and the job will be taken over by the junior.
5. Junior board
In this method a group of junior level managers are identified and they work together in a group
called junior board. They function just like the board of directors.

OFF THE JOB TRAINING METHODS

Off the job training refers to method of training given outside the company. The different
methods adopted in off the job training are the following:
1.Classroom method
The classroom method is used when a group of managers have to be trained in theoretical
aspects. The training involves using lectures, audio visuals, case study, role play method, group
discussions etc. The method is interactive and provides very good results.
2. Simulation
Simulation involves creating atmosphere which is very similar to the original work environment.
The method helps to train manager handling stress, taking immediate decisions, handling
pressure on the jobs etc. An actual feel of the real job environment is given here.
3. Business games
This method involves providing a market situation to the trainee manager and asking him to
provide solutions. If there are many people to be trained they can be divided into groups and
each group becomes a separate team and play against each other.
4. Committee
A committee refers to a group of people who are officially appointed to look into a problem and
provide solution. Trainee managers are put in the committee to identify how they study a
problem and what they learn from it.

5. Readings
This method involves encouraging the trainee manager to increase his reading related to his
subject and then ask him to make a presentation on what he has learned. Information can be
collected by trainee manager from books, magazines and internet etc.

HRM PRACTICES
The District's human resource management policies and practices pose the greatest potential for
illegal discrimination. Human resources policies and practices normally are not intended to
discriminate or somehow have a disparate impact on women, people of colour, people with
disabilities, or other protected groups. It should be noted, however, that systemic discrimination,
while unintentional, is most often the major barrier to equal employment opportunity; yet, it is
the most difficult to detect. That is the reason human resource policies and practices must be
reviewed and corrective actions taken when they are found to inadvertently discriminate or offer
less than equal opportunity to women, people of colour, or people with disabilities.
Responsibility for human resource management includes all officials, administrators, and
supervisors in addition to the staff of the Human Resources Department.

1. Recruitment, Examination and Selection

Recruitment, examination, selection and placement procedures will be continuously reviewed for
all licensed, classified and administrative positions. From the initial contact with potential
applicants to the final interview and selection of employees, the Human Resources Department
and its practices will address the following:
Recruitment and Selection Process will not have the effect of blocking people of colour,
women, and people with disabilities from district employment and promotions. Where
blockages, or potential blockages, are identified, corrective actions will be taken to make
the process more inclusive to diversity.

 Targeted Recruitment, as described in Section 6.2, will be undertaken to address areas of

under representation. This expanded recruitment is to be focused on increasing the
number of people of colour, women, and people with disabilities who apply for
employment; and, thus increasing the probability of qualified candidates from
underrepresented groups being selected to fill vacant positions. Recruitment activities
will be inclusive rather than being exclusive.
Selection Criteria to be used in candidate recruitment, screening, interviewing and
selection should reflect the essential functions of the job. All selection criteria are to be
job-related, pre established, and applied consistently. Additionally, in the selection of
teachers, administrators, and professional staff the district will give priority consideration
to relevant, specialized, and qualitative training and experience that demonstrates ability
to work with diverse populations. This consideration will include, but not be limited to,
such factors as:
Ability to relate to diverse student, parent and community groups;
Experience in working with children and parents from different racial/ethnic minority
groups;
Experience and training in multicultural education programs;
Evidence that applicant is aware of and sensitive to the changing roles and perceptions of
women, people of colour, and people with disabilities in our society.
Applications, Tests Or Examinations for employment and promotion, including oral
interviews, will be monitored to ensure that they are unbiased and do not have adverse
impact on people of colour, women, the disabled or other protected groups. Reasonable
accommodation will be made available upon request to ensure that persons with
disabilities are not excluded from the application and examination process.
Selection Committees will include people of colour, people with disabilities, and gender
balance to the extent possible. Parents of students with disabilities will be included in the

selection of special education teachers to the extent feasible and practical. Selection
committees will be made aware of the district's Work Force Diversity goals.
Selection and Appointment of an employee will be based on job-related qualifications,
merit, district goals, and program needs.
2. Targeted Recruitment Process
Where the district has determined that people of colour, women, or people with disabilities are
significantly underrepresented in relation to their availability for specific job groups, the district
will initiate a targeted recruitment approach that includes, but is not limited to, the following
steps:
Request to Post a Vacancy
The request to post a vacancy will be submitted to the appropriate HR administrator by
the principal or supervisor.
HR Review of Request
The appropriate HR administrator will review the request to post a vacancy to determine
if it is in an identified focus job group. A focus job group is one in which women (and in
some case, men) or minorities are determined to be significantly underrepresented in
relation to their availability in the relevant labour market.

3. Selection Committees
The district supports broad-based involvement in the hiring and selection process. Principals and
department directors are encouraged to use staff, parents, community, and students as appropriate
in the screening and interviewing process to fill position vacancies.
4. Affirmative Action

Affirmative action does not end when the employment process has resulted in placement.
Although the major thrust of affirmative action is the identification and elimination of barriers
that preclude the hiring of women, people of colour, and other disadvantaged persons, its
subsequent and logical efforts must be directed towards fair and equitable treatment of all
employees, the application of consistent human resource management practices, and the
provision of equal opportunities for promotion and advancement. The administration of sound
and equitable human resource policies and practices in a consistent manner will contribute
greatly toward accomplishing the goals of workforce diversity.
5. Job Classification
Job classification is the organization and grouping of similar positions in the district into groups
or classes on the basis of similar, or related, duties, responsibilities, and qualification
requirements. The need for job classifications is apparent not only in connection with equitable
compensation levels but also in matters of selection, placement, promotion, transfer, and training.
The general objective of job classifications and the job classification plan is for efficient
management of functions, but just as important is the equal treatment of employees in terms of
appointments, pay, opportunities for training and advancement.
Job classifications will continually be reviewed and modified to ensure qualification
requirements are job related and are not barriers to qualified people of colour, women, and
people with disabilities in seeking employment and promotions, and that selection criteria are
consistent.
6. Compensation and Benefits

The Equal Pay Act requires that equal wages and salaries be paid for substantially equal or
similar work performed by men and women. Title VII requires equal pay regardless of race,
national origin, religion, or sex. The more subtle type of pay discrimination is perhaps the most
difficult to deal with because of its historical entrenchment in the personnel and pay system, as
well as stereotypical value judgments placed on the type of work and who does it.
It provides that all benefits and conditions of employment shall be equally available without
discrimination to all employees - male and female. This includes medical, hospital, accident and
life insurance, retirement benefits, leaves and other terms or conditions of employment.
7. Training and Development
Training helps to equip employees for higher responsibilities or to diversify their skills.
Administration and employees share responsibility for the learning experiences that are
presumed to develop from training. As the demographics of the district and community continue
to change, it is important that all employees, but especially those in supervisory and managerial
roles, be provided training in cultural competence, and combating prejudice, racism and
harassment.

CHAP 4
CASE STUDY
EVOLUTION OF INSURANCE SECTOR
Insurance, Worldwide, is one of the most potent financial sectors. The risks are inevitable being
an indispensable part of human life and cannot be thrown out of life, hence the risk management

and risk transfer become one of the basic requirement . The Insurance is the only answer to the
solution.
Triton Insurance Co. Ltd. was the first general insurance company to be established in India in
1850, having Britishers as major shareholders. The first general insurance company to be set up
by an Indian was Indian Merchantile Insurance Co. Ltd., established in 1907.This was the
opening of the gates of one of the most greatest & prosperous industry of the present times.
The Government initiative, in the sunrise sector, led to nationalization of the industry after the
promulgation of general Insurance Business (Nationalisation) Act, 1972. The post nationalization
general insurance business was undertaken by the General Insurance Corporation of India (GIC)
and its 4 subsidiaries :1. Oriental Insurance Company Limited
2. New India Assurance Company Limited
3. National Insurance Company Limited
4. United India insurance Company Limited
Towards the end of 2000, the relation ceased to exist and the four companies are, at present,
operating as independent companies.
The next milestone in the path of development of the industry was initiation of life insurance.
The Life Insurance Corporation (LIC) was established on 1.09.1956. The Industry further draws
the attention of Indian Government and Insurance Regulatory and Development Authority
(IRDA) Act, 1999 was implemented, which further leads to foundation of Insurance Regulatory
and Development Authority to safeguard the interests of policyholders as well as to regulate,
promote and ensure orderly growth of the insurance industry and for matters connected therewith
or incidental thereto.
A new era begins for the Indian Insurance industry when the Insurance Regulatory &
Development Authority invited the applications for registration as insurers in August, 2000. With
the liberalization and opening up of the sector to private players , the industry turned to be a

shining

segment

of

the

economy,

promising

golden

prospects

for

tomorrow.

The insurance sector plays a very vital role in the process of economic development of any
country. It acts as mobiliser of savings, as financial intermediary, as promoter of investment
activities, as stabilizer of financial markets and as a risk manager. Insurance services lead to
efficient and productive allocation of capital resources, facilitate growth of trade and commerce,
substitute for governments social security programmes, and assist individuals and firms in
efficient management of risks. The liberalization phase of the Indian economy has come a long
way over the last decade. Though there have been hick-ups during this phase we have seen a
movement towards market and customer oriented approach in every sector with insurance sector
being no exception. Globalization will certainly increase insurance penetration and all members
should equip themselves to exploit the opportunities offered by this sector.

CASE STUDIES

1) FUTURE GENERALI INDIA LIFE INSURANCE

The company chosen for the project is FUTURE GENERALI INDIA LIFE INSURANCE.
The head office of the company is located in Mumbai.
ABOUT COMPANY:
Future Generali India Life Insurance Co. Ltd. is one of the rapidly growing Insurance
companies in India. The Company is a joint venture between the India-based Future Group and
the Italy-based Generali Group. Future Generali group is present in both the Life and Non-Life
businesses in India as Future Generali India Life Insurance Co. Ltd. and Future Generali India
Insurance Co. Ltd.
Generali Group was established in Trieste on December 26, 1831. It is an international group
working in more than 40 countries with insurance companies, financial companies and real estate
sectors. After doing business in Central Eastern Europe, Generali Group has started to develop
business in the principal markets of the Far East, including China and India. Generali Group
ranks among the top three insurance groups in Europe and the 30th largest company in the
Fortune 500 international ranking.

RECRUITMENT & SELECTION PROCESS:

Their recruitment process includes both internal and external methods.

INTERNAL METHODS:The company uses: -

EMPLOYEE REFERRALS- It is a recruitment method in which the current employees are

encouraged and rewarded for introducing suitable recruits from among
the people they know. The logic behind employee referral is that it takes one to know one. The
post for which they prefer this process is SALES MANAGER, SENIOR SALES MANAGER,
and ASSISTANT SALES MANAGER. Benefits of this method are as follows:

Quality Candidates

Cost savings

Faster recruitment cycles.

Incentives to current employees

On the other hand it is important for an organization to ensure that nepotism or favoritism does
not happen, and that such aspects do not make inroads into the recruitment process.

JOB POSTINGFor job posting they use Intranet.

Job Posting is an arrangement in which a firm internally posts a list of open positions (with their
descriptions and requirements) so that the existing employees who wish to move to different
functional areas may apply. It is also known as Job bidding.
It helps the qualified employees working in the organization to scale new heights, instead of
looking for better perspectives outside. It also helps organization to retain its experienced and
promising employees.
EXTERNAL METHODS:

1. FORMER EMPLOYEES-The company hires back its best ex-employees especially for
Senior Sales Manager post.

2. COLLEGES-From colleges they recruit candidates for Sales Manager & Sales
Executives posts. The minimum salary package for the freshers is 1.8 lacs for Area Sales
Manager,2.5lacs for Sales Manager,3.5 lacs for Senior Sales Manager.

3. JOB FAIR-Recruiting method engaged in by a single employer or group of employers to

attract the large number of applicants to one location for interviews.

4. ADVERTISING-Advertisements are the most common form of external recruitment.

They can be found in many places (local and national newspapers, notice boards, recruitment
fairs) and should include some important information relating to the job (job title, pay package,
location, job description, how to apply-either by CV or application form, etc). Where a business
chooses to advertise will depend on the cost of advertising and the coverage needed i.e. How far
away people will consider applying for the job. Advertising can be through both PRINT and
ELECTRIC MEDIA.

The company uses PASSES technique for selection.

P-Prospect
A-Approach
S-Seminar
S-Screening
E-Evaluation
S-Selection

PROSPECT-They check whether the candidate is fit for the job or not.

APPROACH-The Company approaches with the candidates through emails or

telephone.

SEMINAR-The Company then conducts seminar. For major seminars they hire hotels
but for small ones they prefer companys training room.

SCREENING-They communicate the job profile to the filtered candidates.

EVALUATION-They give them basically the sales target, or evaluate them on the basis
of experience, age factor, communication skills. This is a kind of WORK SAMPLE
TESTING.

SELECTION-Finally they select the candidate on the basis of the results of evaluation.

SELECTION
INTERVIEWS:
They prefer STRUCTURED INTERVIEWS in which they prefer questions regarding family
background, work experience and interpersonal skills.

METHODS OF INTERVIEWS:

ONE-ON-ONE INTERVIEW-Applicant meets one by one with the interviewer.

Interview process takes place as follows:

INITIAL BRANCH LEVEL INTERVIEW-Branch manager takes such interviews mainly to

select the localities and decide who are best suited for the job.

REGIONAL BRANCH INTERVIEW-Regional branch manager takes the interview & his
decision to select or reject the candidate is final.

2)MAX NEW YORK LIFE INSURANCE

Max New York Life Insurance Company Ltd. is a joint venture between Max India Limited, one
of India's leading multi-business corporations and New York Life International, the international
arm of New York Life, a Fortune 100 company. The company has positioned itself on the quality
platform. In line with its vision to be the most admired life insurance company in India, it has
developed a strong corporate governance model based on the core values of excellence, honesty,
knowledge, caring, integrity and teamwork.

Incorporated in 2000, Max New York Life started commercial operation in April 2001. In line
with its values of financial responsibility, Max New York Life has adopted prudent financial
practices to ensure safety of policyholder's funds. The Company's paid up capital as on 30th
April, 2009 is Rs 1,786 crore.

Max New York Life has multi-channel distribution spread across the country. Agency
distribution is the primary channel complemented by partnership distribution, bancassurance,
alliance marketing and dedicated distribution for emerging markets. The Company places a lot of
emphasis on its selection process for agent advisors, which comprises four stages - screening,
psychometric test, career seminar and final interview. The agent advisors are trained in-house to
ensure optimal control on quality of training. The company currently has around 71,229 agent
advisors at 715 offices across 389 cities.
The company currently has more than 10,494 employees.

THE SIX DIFFERENTIATORS

SELECTION PROCESS
The selection process of Max New York Life is designed to help the candidate and the
organization make a decision in mutual best interest.
The first step in the process is an initial interview
This is followed by a test of numerical ability. Candidates who make the cut are invited
to attend a career seminar. The procedure facilitates a process of discovery, as both sides
develop an understanding of each others profile and requirements.
The final stage in the selection process is an assessment of the candidate's natural market
and potential for growth.

TRANING PROCESS
Max New York Life has the finest training program for agents in the industry. They run
training and development programs for agents throughout their career.
The training consists of a two-year formal classroom based program. Max New York Life
has
The success of their training programs owes a lot to the strength of their partner, New
York Life. The training program developed by New York Life in the United States is
widely recognized as the best in the insurance industry. They have customized this
outstanding program for the Indian market.
In the United States, New York Life had more members in the Million Dollar Round
Table, the worldwide organization of top professionals in the insurance industry, for 50
consecutive years. Since 2001, Max New York Life has had more qualifiers for the

prestigious Million Dollar Round Table than all the other private sector insurance
companies taken together.

MANAGEMENT LOYALTY
One of the many advantages of working with Max New York Life is that managers are
not allowed to sell insurance products to their own customers.
Compensation in management is derived entirely from the success of agents and the
overall growth of the organization.
Managers at all levels are totally committed to the success of agents and do not pursue
any conflicting goals.
PRODUCT RESEARCH
No organization can claim to have the number one product in the insurance industry for a
long period of time. It is a matter of great pride that our products have always been rated
among the best in the industry. These products have been developed after extensive
research of the Indian market and are designed to meet an individuals needs at every life
stage.

CONTRACT
The Agent's Contract is designed to attract efficient professionals and retain them for a
long time by compensating them generously. As an agent you can count on the support of
Max New York Life at all times to help you earn a good income today and create a secure
retirement for tomorrow.

GREAT WORK ENVIRONMENT

Max New York Life is committed to working in a high-tech environment. In the United
States, New York Life is noted for its leadership in using technology to provide the very
best in customer service and employee support. The same systems have been adapted for
India to offer simple, easy-to-understand illustrations for the most complex products.

Work Profile
This is an entrepreneurial opportunity with flexible working hours and the potential to earn
unlimited income without any capital investment. As an agent with Max New York Life, you
are a financial advisor, businessperson and your own boss. The only limit to your growth is your
own imagination and drive.
The Role:

Identify prospects and conduct need analysis

Provide customized solutions for long term financial protection and wealth creation

Close sales

Deliver the policy

Provide after sales service and build references for future sales

Benefits

A career at Max New York Life has innumerable advantages. With low start up investment you
can become a part of a world-class organization and make a positive difference to peoples lives.
Our agents sell more policies and make more money than agents of any other life insurance
company. The financial rewards are in the form of

Commissions on new sales

Ongoing renewal commissions

Performance linked bonus

Referral commissions

Training reimbursement

CHAP 5
CONCLUSION
CONCLUSION

The core function of HRM in the insurance industry is to facilitate performance improvement,
measured not only in terms of financial indicators of operational efficiency but also in terms of
the quality of financial services provided.
Factors like skills, attitudes and knowledge of the human capital play a crucial role in
determining the competitiveness of the financial sector. The quality of human resources indicates
the ability of insurance companies to deliver value to customers.
Capital and technology are replicable but not the human capital which needs to be valued as a
highly valuable resource for achieving that competitive edge. The primary emphasis needs to be
on integrating human resource management strategies with the business strategy.
HRM strategies include managing change, creating commitment, achieving flexibility and
improving teamwork. The other processes representing the overt aspects of HRM, viz.
recruitment, placement, performance management are complementary.
HRM has a crucial role to play in insurance sector. It acts as backbone for the insurance sector,
because it only lays the structure for the organizations operations, functioning and working. Even
with the advent of high technology it will have a prominent role to portray.

BIBLIOGRAPHY
www.google.com
www.wikipedia.com

www.licindia.com
www.fututregenarali.com
www.maxnewyorklife.com