hrm in insurance

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HRM IN INSURANCE SECTOR

HRM IN INSURANCE INTRODUCTION

Competitive advantage of a company can be generated from human resources

(HR) and company performance is influenced by a set of effective HRM practices. In

this study, we intended to assess the HR practices in insurance companies. Every

organization is composed of people and utilizing their services, developing their skills,

motivating them to enhance their levels of performance and ensuring that they remain

committed to the organization are essential for the accomplishment of organizational

objectives. This is true for all types of organizations - government, business,

education, health, recreation or social action. Organizations that can do this will be

both effective as well as efficient. Inefficient or ineffective organizations face the

danger of stagnating or going out of business. The emphasis on proper and effective

human resource management has increased in the recent times. It has come to be

identified as an important factor in the successful management of an organization.

With the growing importance of knowledge workers to organizations and the rising

expectations of employees, it is essential to have a good human resource management

system in place.

Human Resource Management (HRM) consists essentially of four functions

acquiring, developing, motivating and retaining human resources. The acquisition

function starts with planning for the number and categories of employees required, and

end with staffing. The development function has three dimensions employee

training, management development, and career development. The motivation function

includes identifying the individual motivational needs of employees and finding ways

to motivate them. The retention function is concerned with providing a

work environment conducive to the employees and nurturing them to make them feel

committed and attached to the organization. Human resources are the most valuable

and unique assets of an organization. The successful management of an organization's

human resources is an exciting, dynamic and challenging task, especially at a time

when the world has become a global village and economies are in a state of flux. The

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scarcity of talented resources and the growing expectations of the modern day

worker have further increased the complexity of the human resource function. Even

though specific human resource functions/activities are the responsibility of the human

resource department, the actual management of human resources is the responsibility

of all the managers in an organization. It is therefore necessary for all managers to

understand and give due importance to the different human resource policies and

activities in the organization.

Human Resource Management outlines the importance of HRM and its

different functions in an organization. It examines the various HR processes that are

concerned with attracting, managing, motivating and developing employees for the

benefit of the organization. The insurance sector employers are indulging into

aggressive recruitments. With around 15million new policies being sold every year,

the insurance sector is picking up fast in India. Due to its robust growth there is a need

of skilled professionals in the sector. The employers are looking forward to hire

freshers at junior levels as they are quite flexible and ready to work as part time

employees as well. Apart from hiring actuaries and underwriters, the industry isfocusing on hiring agents. These agents represent the front end of the customer chain

and are responsible for bringing in new business.

Under present market forces and strict competition, the insurance companies are

forced to be competitive. Contemporary companies must seek ways to become more

efficient, productive, flexible and innovative, under constant pressure to improve

results. The traditional ways of gaining competitive advantage have to be

supplemented with organizational capability i. e. the firms ability to manage people.

Organizational capability relates to hiring and retaining competent employees and

developing competencies through effective human resource management practices.

Indeed, developing a talented workforce is essential to sustainable competitive

advantage. High performance work practices provide a number of important sources of

enhanced organizational performance.

Human Resource Management

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Human resource management (HRM) is planning personnel needs; recruiting,

selecting, training, and developing capable employees; placing them in productive

work environments; and rewarding their performance. Thus, human resource

management refers to a set of programmes, functions and activities designed and

carried out to maximize both, employee as well as organizational effectiveness. It is

concerned with the people dimensions in the management. Since every organization is

made up of people, acquiring their services developing their skills motivating them to

higher levels of performance and ensuring that they continue to maintain

their commitment to the organization are essential to achieving organizational

objectives. This is true, regardless of the type of organization -government, business,

education, health, recreation or social actions.

Human resource is one of the natural resources of any country's economy. It is

the wealth of the country. In the context of banking, 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

organization 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. Thus, HRM refers

to a set of programmes, functions and activities designed and carried out in order to

maximize both employees as well as organizational effectiveness.

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An organization is driven by human capital and the quality and effectiveness

of the organization is deter mined by the qual i ty of the peopl e that are

em pl oy ed . Th e res our ces of me n mo ne y material and machine are collected

and coordinated through people. Without people organization can not exist. Success

for most organizations depends on finding the employees with the skills to

successfully perform the tasks required to attain the companys strategic goals.

Management decisions and processes for dealing with employees are critical

to ensure that the organization gets and keeps the right staff. HRM may be

defined as a set of policies practices and programs designed to maximize

both personal and organizat ional goals and the process of binding people and

organizations together so that the objectives of the each are achieved.

Some definitions of HRM are as follows

HRM is the management function that is concerned with getting, training,

motivating and keeping competent employees.

HRM is a most advanced approach in the field of resource mgmt. talks about

optimal utilization of human capital. The approach is integrative and supportive.

Features/Characteristics/Nature of HRM

HRM involves management functions like planning, organizing, directing and

controlling.

It involves procurement, development, maintenance of human resource

It helps to achieve individual, organizational and social objectives

HRM is a mighty disciplinary subject. It includes the study of management

psychology communication, economics and sociology.

It involves team spirit and team work.

Evolution of HRM

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The evolution of HRM can be traced back to Kautilya Artha Shastra where

he recommends that government must take active interest in public and private

enterprise. He says that government must provide a proper procedure for regulating

employee and employee relation. The international institute of personnel management

and national institute of labour management were set up to look into problems faced

by workers to provide solutions to them. The Second World War created awareness

regarding workers rights and 1940s to 1960s saw the introduction of new technology

to help workers. The 1960s extended the scope of human resource beyond welfare.

Now it was a combination of welfare, industrial relation, administration together it was

called personnel management. With the second 5 year plan, heavy industries started

and professional management became important. In the 70s the focus was on

efficiency of labour wile in the 80s the focus was on new technology, making it

necessary for new rules and regulations. In the 90s the emphasis was on human values

and development of people and with liberalization and changing type of working

people became more and more important there by leading to HRM which is an

advancement of personnel management.

Objectives of HRM

1. Societal objective: To be socially responsible to the needs and challenges of

society while minimizing the negative impact of such demands upon the

organization. The failure of organizations to use their resources for society's

benefit may result in restrictions. For example, societies may pass laws that

limit human resource decisions.

2. Organizational objective: To recognize that HRM exists to contribute to

organizational effectiveness. HRM is not an end in itself; it is only a means to

assist the organization with its primary objectives. Simply stated, the department

exists to serve the restof the organization.

3. Functional objective: To maintain the department's contribution at a level

appropriate to the organizations needs. Resources are wasted when HRM is

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more or less sophisticated than the organization demands. A department's level

of service must be appropriate for the organization it serves.

4. Personal objective: To assist employees in achieving their personal goals, at

least insofar as these goals enhance the individual's contribution to the

organization. Personal objectives of employees must be met if workers are to be

maintained, retained and motivated. Otherwise, employee performance and

satisfaction may decline, and employees may leave the organization.

Scope/Functions of HRM in Insurance

1.Human Resources Planning: Human resource planning or HRP refers to a

process by which the company to identify the number of jobs vacant, whether the

company has excess staff or shortage of staff and to deal with this excess or

shortage.

2. Job Analysis Design: Another important area of HRM is job analysis. Job

analysis gives a detailed explanation about each and every job in the company.

Based on this job analysis the company prepares advertisements.

3. Recruitment and Selection: Based on information collected from job analysis

the company prepares advertisements and publishes them in the news papers. This

is recruitment. A number of applications are received after the advertisement is

published, interviews are conducted and the right employee is selected thus

recruitment and selection are yet another important area of HRM.

4. Orientation and Induction: Once the employees have been selected an

induction or orientation program is conducted. This is another important area of

HRM. The employees are informed about the background of the company, explain

about the organizational culture and values and work ethics and introduce to the

other employees.

5. Training and Development: Every employee goes under training program

which helps him to put up a better performance on the job. Training program is also

conducted for existing staff that have a lot of experience. This is called refresher

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training. Training and development is one area were the company spends a huge

amount.

6. Performance Appraisal: Once the employee has put in around 1 year of

service, performance appraisal is conducted that is the HR department checks the

performance of the employee. Based on these appraisal future promotions,

incentives, increments in salary are decided.

7. Compensation Planning and Remuneration: There are various rules

regarding compensation and other benefits. It is the job of the HR department to

look into remuneration and compensation planning.

8. Motivation, Welfare, Health and Safety: Motivation becomes important to

sustain the number of employees in the company. It is the job of the HR department

to look into the different methods of motivation. Apart from this certain health and

safety regulations have to be followed for the benefits of the employees. This is

also handled by the HR department.

9. Industrial Relations: Another important area of HRM is maintaining co-

ordinal relations with the union members. This will help the organization to preventstrikes lockouts and ensure smooth working in the company.

Human Resource Development

Human Resource Development is the part ofhuman resource management

that specifically deals with training and development of the employees in the

organization. Human resource development includes training a person after he or

she is first hired, providing opportunities to learn new skills, distributing resources

that are beneficial for theemployee's tasks, and any other developmental

activities. Human Resource Development (HRD) is the framework for helping

employees develops their personal and organizational skills, knowledge, and

abilities. Human Resource Development includes such opportunities as employee

training, employee career development, performance management and

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development, coaching, mentoring, succession planning, key employee

identification, tuitionassistance,andorganization development.

Definitions of HRD: According to Leonard Nadler, "Human resource development

is a series of organized activities, conducted within a specialized time and designed to

produce behaviouralchanges."

Difference between HRD and HRM

The human resource management is mainly maintenance oriented whereas

human resource development is development oriented.

Organization structure in case of human resources management is independent

whereas human resource development creates a structure, which is inter-dependent

and inter-related.

Human resource management mainly aims to improve the efficiency of the

employees whereas aims at the development of the employees as well as

organization as a whole.

Responsibility of human resource development is given to the personnel/human

resource management department and specifically to personnel manager whereas

responsibility of HRD is given to all managers at various levels of the organization.

HRM motivates the employees by giving them monetary incentives or rewards

whereas human resource development stresses on motivating people by satisfying

higher-order needs.

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CHAPTER 2

JOB ANALYSIS, JOB DESIGN AND JOB EVALUATION

Job Analysis

Process of job analysis

Methods

Importance/uses of job analysis

Job Design

Factors affecting job design

Techniques of job design

Job Evaluation

Job Evaluation Methods

JOB ANALYSIS

Job Analysis is a process to identify and determine in detail the particular job

duties and requirements and the relative importance of these duties for a given job. Job

Analysis is a process where judgments are made about data collected on a job.

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The Job; not the person: An important concept of Job Analysis is that the analysis is

conducted of the Job, not the person.

Process of job analysis

1. Planning and organizing of Programme: The first step is to plan and organize

the job analysis programme. A person is designated as in-charge of programme and

required authority and responsibility is assigned to him. Schedule of the

programme and budget estimation is prepared.

2. Obtaining current information: Current job design information is collected

and study of job description, job specification, process used, manuals and

organization flow charts is done by the analyst.

3. Conduct needs research: The analyst determines that which manager,

department requires the job analysis. Purpose of the job analysis is determined,

extent to which job analysis is to be done is decided and how the information will

be used concluded.

4. Establishing priorities: Identification and priorities of the jobs to be analyzed

should be established by the human resource department executives with help of

various executives of the related departments

5. Collecting Job Data: The next step is to collect the data related to the job

selected for the analysis as they are being performed in the organization at present.

6. Preparation of Job Description: Using job information obtained from job

analysis job descriptions is being prepared. It states the full information of job

including working conditions nature of job, processes used machines and materials

used.

7. Developing Job Specification: Job specifications are developed using

information given in job description. Job specification is statement regarding

human qualities that are required for a particular job. Such information is used to

select the person matching the requirements of the job.

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Methods

There are different methods used by organization to collect information and conduct

the job analysis. These methods are-

1. Personal observation: In this method the observer actually observes the

concerned worker. He makes a list of all the duties performed by the worker and

the qualities required to perform those duties based on the information collected,

job analysis is prepared.

2. Interview method: In this method an interview of the employee is conducted.

A group of experts conduct the interview. They ask questions about the job, skilled

levels, and difficulty levels. They question and cross question and collect

information and based on this information job analysis is prepared.

3. Critical incident method: In this method the employee is asked to write one or

more critical incident that has taken place on the job. The incident will give an idea

about the problem, how it was handled, qualities required and difficulty levels etc.

critical incident method gives an idea about the job and its importance.

4. Questioner method: In this method a questioner is provided to the employee

and they are asked to answer the questions in it. The questions may be multiple

choice questions or open ended questions. The questions decide how exactly the

job analysis will be done. The method is effective because people would think

twice before putting anything in writing.

5. Log records/Daily Diary: Companies can ask employees to maintain log

records or daily diary and job analysis can be done on the basis of information

collected from the record. A log record is a book in which employee records /writes

all the activities performed by him on the job. The records are extensive as well as

exhausted in nature and provide a fair idea about the duties and responsibilities in

any job. In this method worker actually does the work himself and idea of the skill

required, the difficulty level of the job, the efforts required can be known easily.

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6. HRD records: Records of every employee are maintained by HR department.

The record contain details about educational qualification, name of the job, number

of years of experience, duties handled, any mistakes committed in the past and

actions taken, number of promotions received, area of work, core competency

area, etc. based on these records job analysis can be done.

Importance/uses of job analysis

1. Organizational structure and design: Job analysis helps in preparing the

organization chart and the organizational structure. Classification of the jobs

relation of each job with one another and various positions and hierarchy of the

positions is determined.

2. Man power planning: Job analysis provides the qualitative aspect of the jobs in

the organization. It determines the demands of job in terms of duties to be

performed, qualification of person skills required in the employee. It is a tool which

is used for matching job with men.

3. Recruitment and selection: Job analysis helps to hire future human resource. It

helps to recruit and select the right kind of people for the jobs available in the

organisation. It provides information necessary to select the right person by its

immediate products i.e. job description and job specification.

4. Performance appraisal and training/development: Based on the job

requirements identification of the training needs of the persons can be done easily.

Training is given in those areas which will help to improve the performance on the

job. Training programme can be designed according to the need and can be made

effective.

5. Job evaluation: Job evaluation refers to studying in detail the job performance

by all individual. The difficulty levels, skills required and on that basis the salary is

fixed. Information regarding qualities required, skilled levels, difficulty levels are

obtained from job analysis and worth (price) of the job is determined.

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6. Promotions and transfer: When we give a promotion to an employee we need

to promote him on the basis of the skill and talent required for the future job.

Similarly when we transfer an employee to another branch the job must be very

similar to what he has done before. To take these decisions we collect information

from job analysis.

7. Career path planning / Employee counseling: Many companies have not

taken up career planning for their employees. This is done to prevent the employee

from leaving the company. Employees are informed about the limitations of jobs in

terms of development and are guided to take required steps for their future

development. Job analysis provides such information regarding the areas in which a

person requires modification for better career options.

8. Health and safety: Job analysis provides the risk factor related to particular job

and thus action required for the safety of the employees can be taken. Unsafe

operations can be eliminated or can be replaced by safe one or the safety

equipments can be installed.

9. Performance Appraisal: By comparing actual performance of the employeesto the standard established organization can decide the personnel activities like

promotion increments incentives or corrective actions to enhance job performance.

These standards are established using information provided by job analysis.

JOB DESIGN

Job design refers to the way that a set of tasks, or an entire job, is organized.

Job design helps to determine: what tasks are done, how the tasks are done, how many

tasks are done, and in what order the tasks are done. It takes into account all factors

Factors affecting job design

1. Organizational factors: Organizational factors to refer to factors inside the

organization which affect job design they are the following:

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a) Task characteristics: Task characteristics refer to features of the job that is

depending on the type of job and the duties involved in it the organization will decide,

how the job design must be done. Incase the company is not in a position to appoint

many people; a single job may have many duties and vice versa.

b) The process or flow of work in organization: There is a certain order in which

jobs are performed in the company. Incase the company wishes it could combine

similar job and give it to one person this can be done if all the jobs come one after the

other in a sequence.

c) Ergonomics: Ergonomics refers to matching the job with physical ability and

characteristics of the individual and in providing an office environment which will

help the person to complete the jobs faster and in a comfortable manner.

d) Work practices: Every organization has different work practices. Although the job

may be the same the method of doing the job differs from company to company. This

is called work practice and it affects job design.

2. Environmental factors: Environmental factors which affect job design are as

follows:

a) Employee availability and ability: Certain countries face the problem of lack of

skilled labour. They are not able to get employees with specific education levels for

jobs and have to depend on other countries due to this job design gets affected.

b) Social and cultural expectations: The social and cultural conditions of every

country is different so when an MNC appoints an Indian it has to take into account like

festivals, auspicious time, inauspicious time, etc. to suit the Indian conditions. This

applies to every country and therefore job design will change accordingly.

3. Behavioral factors: Design is affected by behavioral factors also.

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a) Feedback: Job design is normally prepared on the basis of job analysis and job

analysis requires employee feedback based on this employee feedback all other

activities take place. Many employees are however not interested in providing a true

feedback because of fear and insecurity. This in turn affects job deign.

b) Autonomy: Every worker desires a certain level of freedom to his job effectively.

This is called autonomy. Thus when we prepare a job design we must see to it that

certain amount of autonomy is provided to the worker so that he carries his job

effectively.

c) Variety: When the same job is repeated again and again it leads to burden and

monotony. This leads to lack of interest and carelessness on the job. Therefore, while

preparing job design certain amount of variety must be provided to keep the person

interested in the job.

Techniques of job design

1. Simplification of Job: In job simplification jobs are broken in to very small

parts as in assembly line operations and work can be done by

same individual repeatedly and it will increase productivity and proficiency

of individual. However it produces boredom and monotony in worked.

2. Job Rotation: Job rotation is the systematic and planned rotation of individuals

in pre-determinedjobs (other than their own) so they can gain additional

knowledge or skills. It is done quite abit for developing managers (because

they need to be familiar with operations overall) and also used with others who

want to advance to a new role or become more knowledgeable in their current

job role.

3. Job Enlargement: Job enlargement expands job horizontally. It increases job

scope; that is, it increases the number of different operations required in a job

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and the frequency with which the job cycle is repeated. By increasing

the number of tasks an individual performs, job enlargement, increases the job

scope, or job diversity. Instead of only sorting the incoming mail by department,

for instance, a mail sorters job could be enlarged to include physically

delivering the mail to the various departments or running outgoing letters

through thepostage meter.

4. Job Enrichment: Job enrichment is an approach to job design. The focus is to

increase the depth of thejob (by the amount of discretion and responsibility the

job holderhas). It is different fromjob enlargement In job enrichment,

additional tasks are not the focus for the goal, but an increase in tasks could be a

result of giving the job holder more authority, discretion, and responsibility for

decision making in their current role. It is the most effectively motivating tool

used by the organizations which enhances the decision making skills of the

managers and helps in their overall development.

JOB EVALUATION:

Job evaluation is the process of systematically determining a relative internal

value of a job in an organization. In all cases the idea is to evaluate the job, not the

person doing it. Job evaluation is the process of determining the worth of one job in

relation to that of the other jobs in a company so that a fair and equitable wage and

salary system can be established.

Job Evaluation Methods

1. Ranking Method:

Perhaps the simplest method of job evaluation is the ranking method. According to

this method, jobs are arranged from highest to lowest, in order of their value or merit

to the organization. Jobs also can be arranged according to the relative difficulty inperforming them. The jobs are examined as a whole rather than on the basis of

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important factors in the job; and the job at the top of the list has the highest value and

obviously the job at the bottom of the list will have the lowest value.

2. Classification Method:

According to this method, a predetermined number of job groups or job classes are

established and jobs are assigned to these classifications. This method places groups of

jobs into job classes or job grades. Separate classes may include office, clerical,

managerial, personnel, etc. The job classification method is less subjective when

compared to the earlier ranking method. The system is very easy to understand and

acceptable to almost all employees without hesitation. One strong point in favor of the

method is that it takes into account all the factors that a job comprises. This system can

be effectively used for a variety of jobs.

3. Factor Comparison Method:

A more systematic and scientific method of job evaluation is the factor comparison

method. Under this method, instead of ranking complete jobs, each job is ranked

according to a series of factors. These factors include mental effort, physical effort,

skill needed, supervisory responsibility, working conditions and other relevant factors.Pay will be assigned in this method by comparing the weights of the factors required

for each job, i.e., the present wages paid for key jobs may be divided among the

factors weighed by importance (the most important factor, for instance, mental effort,

receives the highest weight). In other words, wages are assigned to the job in

comparison to its ranking on each job factor.

4. Point method

This method is widely used currently. Here, jobs are expressed in terms of key factors.

Points are assigned to each factor after prioritizing each factor in the order of

importance. The points are summed up to determine the wage rate for the job. Jobs

with similar point totals are placed in similar pay grades.

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CHAPTER 3HUMAN RESOURCE PLANNING, RECRUITMENT,

SELECTION AND INDUCTIONHuman Resource Planning

Objectives of Human Resource Planning Process of Human Resource Planning Limitations of Human Resource Planning

RECRUITMENT Objectives of Recruitment SOURCES OF RECRUITMENT

SELECTION Process of Selection Types of Selection Test

I N D U C T I O N

Human Resource Planning

Human resource planning has traditionally been used by organizations to

ensure that the right person is in the right job at the right time. Human resource

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planning can be defined as the process by which management determines how the

organization should move from its current manpower position to its desired position.

Through planning, management strives to have the right number and the right kinds of

people, at the right places, at the right time, doing things which result in both the

organization and the individual receiving maximum long-run benefits.

Objectives of Human Resource Planning

The important objectives of manpower planning in an organization are

1. To recruit and retain the human resources of required quantity and quality.

2. To foresee the employee turnover and make the arrangements for minimizing

turnover and filling up of consequent vacancies

3. To meet the needs of the program of expansion, diversification etc.

4. To foresee the impact of technology on work, existing employees and future human

resources requirements.

5. To improve the standards skill, knowledge, ability, disciplines etc.

6. To assess the surplus or shortage of human resources and take measuresaccordingly.

7. To maintain congenial industrial relations by maintaining optimum level and

structure of human resources;

8. To minimize imbalances caused due to non-availability of human resources of right

kind, right number in right time and right place;

9. To make the best use of its human resources; and

10. To estimate the cost of human resources.

Process of Human Resource Planning

1. Analysing the Corporate Level Strategies: Human Resource Planning should start

with analysing corporate level strategies which include expansion, diversification,

mergers, acquisitions, reduction in operations, technology to be used, method of

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production etc. Therefore Human Resource Planning should begin with analysing the

corporate plans of the organisation before setting out on fulfilling its tasks.

2. Demand forecasting: Forecasting the overall human resource requirement in

accordance with the organisational plans is one of the key aspects of demand

forecasting. Forecasting of quality of human resources like skills, knowledge, values

and capabilities needed in addition to quantity of human resources is done through the

following methods: -a. Executive or Managerial Judgment,b. Statistical Techniques, c.

Work Study method, d. Delphi Technique

3. Analysing Human Resource Supply: Every organisation has two sources of

supply of Human Resources: Internal & External. Internally, human resources can be

obtained for certain posts through promotions and transfers. In order to judge the

internal supply of human resources in future human resource inventory or human

resource audit is necessary. Human resource inventory helps in determining and

evaluating the quantity of internal human resources available. Once the future internal

supply is estimated, supply of external human resources is analysed.

4. Estimating manpower gaps: Manpower gaps can be identified by comparingdemand and supply forecasts. Such comparison will reveal either deficit or surplus of

Human Resources in the future. Deficit suggests the number of persons to be recruited

from outside, whereas surplus implies redundant employees to be re-deployed or

terminated. Employees estimated to be deficient can be trained while employees with

higher, better skills may be given more enriched jobs.

5. Action Planning: Once the manpower gaps are identified, plans are prepared to

bridge these gaps. Plans to meet the surplus manpower may be redeployment in other

departments and retrenchment. People may be persuaded to quit voluntarily through a

golden handshake. Deficit can be met through recruitment, selection, transfer and

promotion. In view of shortage of certain skilled employees, the organisation has to

take care not only of recruitment but also retention of existing employees. Hence, the

organisation has to plan for retaining of existing employees.

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6. Modify the Organisational plans: If future supply of human resources form all the

external sources is estimated to be inadequate or less than the requirement, the

manpower planner has to suggest to the management regarding the alterations or

modifications in the organisational plans.

7. Controlling and Review: After the action plans are implemented, human resource

structure and the processes should be controlled and reviewed with a view to keep

them in accordance with action plans.

Limitations of Human Resource Planning

1. The future is uncertain: The future in any country is uncertain i.e. there are

political, cultural, technological changes taking place every day. This effects the

employment situation. Accordingly the company may have to appoint or remove

people. Therefore HRP can only be a guiding factor. We cannot rely too much on it

and do every action according to it.

2. Conservative attitude of top management: Much top management adopts a

conservative attitude and is not ready to make changes.

3. Problem of surplus staff: HRP gives a clear out solution for excess staff i.e.

Termination, layoff, VRS, However when certain employees are removed from

company it mostly affects the psyche of the existing employee, and they start feeling

insecure, stressed out and do not believe in the company.

4. Time consuming activity: HRP collects information from all departments,

regarding demand and supply of personnel. This information is collected in detail and

each and every job is considered. Therefore the activity takes up a lot of time.

5. Expensive process: The solution provided by process of HRP incurs expense. E.g.

VRS, overtime, etc. company has to spend a lot of money in carrying out the activity.

Hence we can say the process is expensive.

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RECRUITMENT

R e c r u i t m e n t i s d e f i n e d a s , a p r o c e s s t o d i s c o v e r t h e

s o u r c e s o f m a n p o w e r t o m e e t t h e r equi r emen ts o f t he s ta ff i ng

s ch ed ul e a nd t o e mp lo y e ff ec ti ve me as ur es f or a tt r ac ti ng t ha t

manpower in adequate numbers to facilitate effective selection of an efficient

workforce.Recruitment is the process of hiring talented employees for certain jobs bymotivating them to apply for those jobs which are available in organization.

Objectives of Recruitment

1. It reviews the list of objectives of the company and tries to achieve them by

promoting the company in the minds of public.

2.It forecasts how many people will be required in the company.

3. It enables the company to advertise itself and attract talented people.

4.It provides different opportunities to procure human resource.

SOURCES OF RECRUITMENT: INTERNAL SOURCES:

Internal sources of recruitment refer to obtaining people for job from inside the

company. There are different methods of internal recruitment:

1. Promotion: Companies can give promotion to existing employees. This method of

recruitment saves a lot of time, money and efforts because the company does not have

to train the existing employee. Since the employee has already worked with the

company. He is familiar with the working culture and working style. It is a method of

encouraging efficient workers.

2. Departmental examination: This method is used by government departments to

select employees for higher level posts. The advertisement is put up on the notice

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board of the department. People who are interested must send their application to the

HR department and appear for the exam. Successful candidates are given the higher

level job. The method ensures proper selection and impartiality.

3. Transfer: Many companies adopt transfer as a method of recruitment. The idea is

to select talented personnel from other branches of the company and transfer them to

branches where there is shortage of people.

4. Retirement: Many companies call back personnel who have already retired from

the organization. This is a temporary measure. The method is beneficial because it

gives a sense of pride to the retired when he is called back and helps the organization

to reduce recruitment selection and training cost.

5. Internal advertisement: In this method vacancies in a particular branch are

advertised in the notice board. People who are interested are asked to apply for the job.

The method helps in obtaining people who are ready to shift to another branch of the

same company and it is also beneficial to people who want to shift to another branch.

6. Employee recommendation: In this method employees are asked to recommend

people for jobs. Since the employee is aware of the working conditions inside the

company he will suggest people who can adjust to the situation. The company is

benefited because it will obtain.

EXTERNAL SOURCES

External sources of recruitment refer to methods of recruitment to obtain people from

outside the company. These methods are:

1. Management consultant: Management consultant helps the company by providing

them with managerial personnel, when the company is on the look out for entry level

management trainees and middle level managers. They generally approach

management consultants.

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2. Employment agencies: Companies may give a contract to employment agencies

that search, interview and obtain the required number of people. The method can be

used to obtain lower level and middle level staff.

3. Campus recruitment: When companies are in search of fresh graduates or new

talent they opt for campus recruitment. Companies approach colleges, management,

technical institutes, make a presentation about the company and the job and invite

applications. Interested candidates who have applied are made to go through a series

of selection test and interview before final selection.

4. News paper advertisement: This is one of the oldest and most popular methods of

recruitment. Advertisements for the job are given in leading news papers; the details of

the job and salary are also mentioned. Candidates are given a contact address where

their applications must be sent and are asked to send their applications within a

specified time limit. The method has maximum reach and most preferred among all

other methods of recruitment.

5. Internet advertisement: With increasing importance to internet, companies and

candidates have started using the internet as medium of advertisement and search for

jobs. There are various job sites like naukri.com and monster.com etc. candidates can

also post their profiles on these sites. This method is growing in popularity.

6. Walk in interview: Another method of recruitment which is gaining importance is

the walk in interview method. An advertisement about the location and time of walk in

interview is given in the news paper. Candidates require to directly appearing for the

interview and have to bring a copy of their C.V. with them. This method is very

popular among B.P.O and call centers.

SELECTION

Selection is the process of picking individuals who have relevant

qualifications to fill jobs in an organization. The basic purpose is to choose

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the individual who can most successfully perform the job from the pool of qualified

candidates. The size of the labour market, the image of the company, the place of

posting, the nature of job , the compensation package and a host of other factors

influence the manner of aspirants are l ik ely to res pon d to the re cru iti ng

efforts of the company. Through the process of recruitment the company

tries to locate prospective employees and encourages them to apply for vacancies at

various levels. Recruiting, thus, provides a pool of applicants for selection.

Process of Selection

1. Job analysis: The very first step in the selection procedure is the job analysis. TheHR department prepares the job description and specification for the jobs which are

vacant. This gives details for the jobs which are vacant. This gives details about the

name of the job, qualification, qualities required and work conditions etc.

2. Advertisement: Based on the information collected in step 1, the HR department

prepares an advertisement and publishes it in a leading news papers. The

advertisement conveys details about the last date for application, the address to which

the application must be sent etc.

3. Application blank/form: Application blank is the application form to be filled by

the candidate when he applies for a job in the company. The application blank collects

information consisting of the following four parts: 1. Personal details, 2. Educational

details, 3. Work experience, 4. Family background

4. Written test: The applications which have been received are screened by the HR

department and those applications which are incomplete are rejected. The other

candidates are called for the written test. Arrangement for the written test is looked

after the HR department i.e. question papers, answer papers, examination centers and

hall tickets etc.

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5. Interview: Candidates who have successfully cleared the test are called for an

interview. The entire responsibility for conducting the interview lies with the HR

department i.e. they look after the panel of interviewers, refreshments, informing

candidates etc.

6. Medical examination: The candidates who have successfully cleared the interview

are asked to take a medical exam. This medical exam may be conducted by the

organization itself (army). The organization may have a tie up with the hospital or the

candidate may be asked to get a certificate from his family doctor.

7. Initial job offer: Candidates who successfully clear the medical exam are given an

initial job offer by the company stating the details regarding salary, terms of

employment, employment bond if any etc. The candidate is given some time to think

over the offer and to accept or reject.

8. Acceptance/ rejection: Candidates who are happy with the offer send their

acceptance within a specified time limit to show that they are ready to work with the

company.

9. Letter of appointment/final job offer: Candidates who send their acceptance are

given the letter of appointment. The letter will state the name of the job. The salary

and other benefits, number of medical leaves and casual leaves, details of employment

bond if any etc. It will also state the date on which the employee is required to start

duty in the company.

10. Induction: On the date of joining the employee is introduced to the company and

other employees through am elaborate induction program.

Types of Selection Test

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Different selection test are adopted by different organization depending upon their

requirements. These tests are specialized test which have been scientifically tested and

hence they are also known as scientific test.

1. Aptitude test: Aptitude tests are test which assess the potential and ability of a

candidate. It enables to find out whether the candidate is suitable for the job. The job

may be managerial technical or clerical. The different types of aptitude test are the

following:

a) Mental ability/mental intelligence test: This test is used to measure the over all

intelligence and intellectual ability of the candidate to deal with problems. It judges

the decision making abilities.

b) Mechanical aptitude test: This test deals with the ability of the candidate to do

mechanical work. It is used to judge and measure the specialized knowledge and

problem solving ability. It is used for technical and maintenance staff.

c) Psycho motor test: This test judges the motor skills the hand and eye co-ordination

and evaluates the ability to do jobs lie packing, quality testing, quality inspection etc.

2. Intelligence test: This test measures the numerical skills and reasoning abilities of

the candidates. Such abilities become important in decision making. The test consists

of logical reasoning ability, data interpretation, comprehension skills and basic

language skills.

3. Personality test: In this test the emotional ability or the emotional quotient is

tested. This test judges the ability to work in a group, inter personal skills, ability to

understand and handle conflicts and judge motivation levels. This test is becoming

very popular now days.

4. Performance test: This test judges and evaluates the acquired knowledge and

experience of the knowledge and experience of the individual and his speed and

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accuracy in performing a job. It is used to test performance of typist, data entry

operators etc.

I N D U C T I O NIt involves familiarizing the new employees with company, the work

environment and existing employees so that the new people feel at home. Once an

employee is selected and placed on an appropriate job, the process of familiarizing

him with the job and the organization is known as induction. Induction is the process

of receiving and welcoming an employee when he first joins the company and giving

him basic information he needs to settle down quickly and happily and stars work.Induction is designed to achieve following objectives: -

1) To give new comer necessary information.

2) To build new employee confidence in the organization.

3) It helps in reducing labor turnover and absenteeism.

4) It reduces confusion and develops healthy relations in the organization.

5) To ensure that the new comer do not form false impression and negative attitude

towards the organization.

6) To develop among the new comer a sense of belonging and loyalty to the

organization.

7) To help the new comer to overcome his shyness and overcome his shyness

nervousness in meeting new people in a new environment.

The advantages of formal induction are: -

1) Induction helps to build up a two-way channel of communication between

management and workers.

2) Proper induction facilitates informal relation and team work among employee.

3) Effective induction helps to integrate the new employee into the organization and to

develop a sense of belonging.

4) Induction helps to develop good relation.

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5) A formal induction programme proves that the company is taking interest in getting

him off to good start.

6) Proper induction reduces employee grievances, absenteeism and labor turnover.

7) Induction is helpful in supplying information concerning the organization,

the job and employee welfare facilities.

CHAPTER 4

TRAINING AND DEVELOPMENT

Definition of Training and Development Program

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Objectives/Purpose/Goals of Training and Development

Training Process

Techniques of Training and Development

Evaluation of Training Program

T R A I N I N G A N D D E V E L O P M E N T

Definition of Training and Development Program

Training is the process of planned programs and procedures undertaken for the

improvement of employee's performance in terms of his attitude, skills, knowledge and

behavior. These training and development programs can significantly improve the

overall performance of organization. Training is normally viewed as a short process. It

is applied to technical staff, lower, middle, senior level management. When applied to

lower and middle management staff it is called as training and for senior level it is

called managerial development program/executive development program/development

program. Training and development managers and specialists create, procure, and

conduct training and development programs for employees.

Objectives/Purpose/Goals of Training and Development

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1. Improving quality of workforce: Training and development programs can help in

improving the quality of work produced by the workforce of organization. Mostly,

training is given in a specific area like finance, marketing or HR, which helps in

improving the quality of work in that particular area.

2. Enhance employee growth: By attending these training and development

programs, employees are able master the work of their jobs and that's how they

develop and grow themselves in a professional way.

3. Prevents obsolescence: These programs help employees to keep themselves up to

date with the new trends in latest technology, which reduces the chances of

termination of the job.

4. Assisting new comer: These programs help new employees to adjust themselves in

a new working environment, culture and technology. They feel themselves as regular

employees of that organization.

5. Bridging the gap between planning and implementation: It helps organizations

to easily achieve their targets and goals what they actually planned for. Employees

know their job better and they deliver the quality performance according to needs of

top management. That's why organizations can easily implement their plans.

6. Health and safety measures: Training and development program clearly identifies

and teaches employees about the different risk involved in their job, the different

problems that can arise and how to prevent such problems. This helps to improve the

health and safety measures in the company.

Training Process

1. Determining training needs of employee: In the very 1st step of training

procedure, the HR department, identifies the number of people required training,specific area in which they need training, the age group of employee, the level in

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organization etc. in some cases the employee may be totally new to the organization.

Here the general introduction training is required. Some employees may have

problems in specific areas; here the training must be specific. This entire information

is collected by HR department.

2. Selecting target group: Based on information collected in step 1 the HR

department divides employee into groups based on the following:i. The area of

training, ii. Level in the organization, iii. The intensity of training

3. Preparing trainers: Once the employees have been divided into groups, the HR

department arranges for trainers. Trainers can be in house trainers or specialized

trainers from outside. The trainers are given details by HR department, like number of

people in group, their age, their level in organization, the result desired at the end of

training, the area of training, the number of days of training, the training budget,

facilities available etc.

4. Preparing training packages: Based on the information provided by trainers, he

prepares entire training schedule i.e. number of days, number of sessions each day,

topics to be handled each day, depth of which the subject should be covered, the

methodology for each session, the test to be given for each session, handout/printed

material to be given in each session.

5. Presentation: On the first day of training program the trainer introduces himself

and specifies the need and objective of the program and then actually stars the

program. The performance of each employee is tracked by the trained and necessary

feedback is provided.

6. Performance: At the end of training program the participants reports back to their

office or branches. They prepare report on the entire training program and what they

have learned. They the start using whatever they have learned during their training.

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Their progress and performance is constantly tracked and suitable incentives are given

if the participant is able to use whatever he has learned in training.

7. Follow up: At the end of training program the participants reports back to theiroffice or branches. They prepare report on the entire training program and what they

have learned. They the start using whatever they have learned during their training.

Their progress and performance is constantly tracked and suitable incentives are given

if the participant is able to use whatever he has learned in training.

Techniques of Training and Development

On-the-job training and development techniques

Job rotation means moving management trainees from department to broaden

their understanding of all part of the business and to test their abilities. A

manager may spend several months in each department. The person may just

bean observer in each department but more commonly gets fully involved in its

operations.

Coaching/understudy approach: Here the person workers directly with the senior

manager or with the person he or she is to replace; the latter is responsible for

the executive of certain responsibilities, giving the trainee a chance to learn the

job.

Action learning programmers give managers and others released time to work

full time on projects, analysis and solving problems in departments other than

their own trainees meet periodically in four or five person project groups to

discuss their findings. Several trainees may work together as a project group or

compare notes and discuss each others projects.

Off the job training and development techniques:

Case Study method: Case study method presents a trainee with a written

description of an organizational problem. The person then analyzes the case,

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diagnoses the problem and presents his or her findings and solutions in

discussion with other trainees.

Management Games: With management games trainees are dividend in to give

or six persons group, each of which competes with the others in a stimulated

marketplace. Management games can be good development tools. People learn

best by getting involved, and the games can be useful for gaining such

involvement. They help trainee develop their problem solving skills, as well as

to focus attention on planning rather than just putting out fires. The group also

usually elects their own officers and organize themselves; they can thus develop

leadership skills and faster cooperation and team work.

Roll Playing: The aim of role playing is to create a realistic situation and then

have the trainees assume the role of specific persons in that situation. When

combined with the general instruction and other roles for the exercise, role

playing can trigger spirited discussions among the role player trainees. The aim

is to develop trainees skills in areas like leadership and delegation.

Evaluation of Training Program

Criteria used for the evaluation of training programs-

1. Reaction: Reaction refers to attitude of employee about the training, whether the

employee considers training to be positive or negative one. If reaction is positive then

people have accepted the program and changes will be possible.

2. Learning: Another method of judging effectiveness is to identify levels of learning

i.e. how much the people have learnt during the training. This can be found out by

trainers mark sheet, the report submitted by the employee, and actual performance.

3. Behavior: The HR department needs to understand behavior of the employees, to

understand the effectiveness of training. The behavioral change can be seen in how the

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person interacts with juniors, peer groups and seniors. They mark change in behavior

and inform the HR department of the success of training program.

4. Result: Results provided by employee in monetary terms also determineseffectiveness of training program i.e. employee success in handling the project, the

group performance before and after training etc.

CHAPTER 5

PERFORMANCE APPRAISAL

Definition

Process of Performance Appraisal

Methods of Performance Appraisal

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PERFORMANCE APPRAISAL

Definition

Performance appraisal is defined by Wayne Cascio as the systematic description of

employees job relevant, strength, weakness. Performance appraisal may be conducted

once in every 6 months or once in a year. The basic idea of the appraisal is to evaluate

the performance of the employee, giving him a feed back. Identify areas where

improvement is required so that training can be provided. Give incentives and bonus to

encourage employees etc.

Process of Performance Appraisal

1. Setting performance standards: In this very first step in performance appraisal the

HR department decides the standards of performance i.e. they decide what exactly is

expected from the employee for each and every job. Sometimes certain marking

scheme may be adopted eg. A score 90/100 = excellent performance, a score of 80/100

= good. And so on.

2. Communication standard set to the employee: Standards of performance

appraisal decided in 1st step are now conveyed to the employee so that the employee

will know what is expected from him and will be able to improve his performance.

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Alternate ranking method: -This method involves ranking employees from best to

worst on a particular trait, choosing highest, then lowest until all are ranked.

Since it is easier to distinguish between the worst and best employees and

alternate ranking is quite popular. First, list all subordinates to be rated. Then

indicate the employee who is the highest on the characteristic being measured

and also the one who is lowest. The process continues till all the employees are

ranked on similar fashion.

Paired comparison method: -Paired comparison method helps make the ranting

method more precise. For every trait (quality of work, quality etc), Pairs are

made and every subordinate is compared with every other subordinate.

Forced distribution method: -Forced distribution method is similar to grading on a

curve. With this method, manager place predetermined percentage or rates in to

performance categories. Forced distribution means tow things for employee:

Not everyone can get an A; and ones performance is always rated relative to

ones peers. One practical, one practical, if low-tech, way to do this is to write

each Employees name on a separate index card. Then for each trait managersplace the employees card in the appropriate performance category.

Critical Incident Method: -Critical incident method involves keeping a record of

uncommonly good or undesirable examples of an employees work related

behavior and reviewing it with the employee at predetermined time.

Narrative Forms: -The final written appraisal is often in narrative form. A

persons supervisor is asked (i) to rate the employees performance for each

performance factor or skill (ii) to write down examples and (iii) an important

plan. This aids the employee to understand where his or her performance was

good or bad and how to improve that performance.

Behaviorally Anchored Rating Scales: - is an appraisal method that aims at

combining the benefits of narrative critical incidents and quantified ratings by

anchoring a quantified scale with specific narrative example of good and poor

performance.

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Assessment centers: Assessment centers (AC) are places where the employees

are assessed on certain qualities talents and skills which they possess. This

method is used for selection as well as for appraisal. The people who attend

assessment centers are given management games, psychological test, puzzles,

questioners about different management related situations etc. based on their

performance in these test an games appraisal is done.

Management by objective: This method was given by Petter Druckard in

1974. It was intended to be a method of group decision making. It can be use for

performance appraisal also. In this method all members of the of the department

starting from the lowest level employee to the highest level employee together

discus, fix target goals to be achieved, plan for achieving these goals and work

together to achieve them. The seniors in the department get an opportunity to

observe their junior- group efforts, communication skills, knowledge levels,

interest levels etc. based on this appraisal is done.

360* appraisal: In this method of appraisal and all round approach is adopted.

Feedback about the employee is taken from the employee himself, his superiors,his juniors, his colleagues, customers he deals with, financial institutions and

other people he deals with etc. Based on all these observations an appraisal is

made and feedback is given. This is one of the most popular methods.

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CHAPTER 7

COMPENSATION MANAGEMENT- WAGES, INCENTIVES,

FRINGE BENEFITS, EMPLOYEE WELFARE

Wages and salary administration

1. Factors Affecting Wages Salary

INCENTIVES, REWARDS, REMUNERATION AND PUNISHMENTS

Employee benefits

Health, Safety and Welfare health

1. Health

2. Safety

3. Welfare

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COMPENSATION

It refers to fair and equitable remuneration to employees for their

contribution to the attainment of organizational objectives. Compensation is all forms

of financial returns and tangible services and benefits employees receive as part of an

employment relationship. An effective set of choices about compensation systems

plays a major role in determining firm performance. It is paid in form of wages,

salaries, and employee benefits such as paid vacations, insurance, maternity leave, free

travel facility, retirement benefits etc. monetary payments are a direct form of

compensating employees & have a great impact in motivating employees. The system

of compensation should be designed in such a way that it achieves following

objectives:

(1) Capable employees are attracted towards organization.

(2) Employees are motivated for better performance.

3) Employees do not leave employer frequently.

A) Wages and salary administration

Base compensation includes monetary benefits to employees in form of

wages or salaries. The term wage is used to denote remuneration to workers doing

manual or physical work. Thus wages are given to compensate the unskilled workers

for their services rendered to organization Wages may be based on hourly, daily,

weekly or even monthly basis The term salary means compensation to officeemployees, foremen, managers & professional& technical staff. It is based on weekly,

monthly &yearly basis. Thus time period for which salaries are paid is generally

higher than in case of wage payments. Wages may be based on number of units

produced (i.e. piece wage system) or time spent on job. But salary is always based on

time spent on job.

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Factors Affecting Wages Salary

1) Demand and supply: -Wage rates of workers depends upon demand and supply force

in labour market. If the labour is in short supply, the workers will offer the services

only if they are paid well. On the other hand, if the supply is more then workers

available might get ready work at cheaper rates.

2) Bargaining Power: -Where labour unions are strong enough to force the hand of

employers, the wages will be determined at a higher level in comparison to other units

where unions are weak.

3) Cost of living: -Wages of workers also depends upon the cost of living of the worker

so as to ensure him a decent living wage. Cost of living varies under deflationary and

inflationary pressures. Where labour unions are strong and employer do not show

enough awareness, here wage are adjusted according to cost of living index numbers.

4) Condition of product market: -Degree of competitions prevailing in the market for

the product of the industry will also influence the wage level. For e.g. if there is

perfect competition in the market the wage level may be at par with the value of net

additions made by the workers to the total output, but may not reach this level in case

of imperfect competition in the market.

5) Comparative Wages: -Wages paid by the other firms for the same work also

influence the wage levels. Wage rates must also be in consistent with the wages paid

by the other firms in the same industry so as to increases the job satisfaction among

the workers.

6) Ability to Pay:-Wage rates are influenced by the paying ability of industry or firms toits workers. Those firms which are earning huge profits may afford to pay high wages

and can provide more facilities to its workers in comparison to the firms earning

comparatively low profits.

(7)Productivity of labour: -Higher productivity will automatically fetch more profit to

the firm, where in turn workers will be paid high wages in comparison to other firms

with low productivity.

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(8)Job Requirements: -If a job requires higher skill, greater responsibility and risk, the

worker placed on that job will naturally get higher wages in comparison to other jobs

which do not require the same degree of skill, responsibility or risk.

(9)Govt. Policy: -Since the bargaining power of the workers is not enough to ensure fair

wages in all industries, the Govt. has to interfere in regulating wage rate to guarantee

minimum wage rates in order to cover the essentials of a decent living.

(10)Goodwill of the company: -A few employers want to establish themselves as good

employer in the society and fix higher wages for their workers. It attracts qualified

employees. In addition there are other important factors which affect the individual

differences in wage rates..

B) INCENTIVES , REWARDS, REMUNERATION AND PUNISHMENTS

HR department should make efforts to provide appropriate incentives,

rewards and increase remuneration to employees. Otherwise, dissatisfaction

may creep into all levels of the bank, resulting in" inefficiency, perfunctory

attitude, and poor service standards. These will ultimately affect the functioning of the

organization. Therefore, the HR department has to formulate policies with utmost caretaking into account all these facets.

Radical changes are required in the performance appraisal system to avoid

nepotism. HR policies with regard to manpower and career planning, and

placement policies have to he revamped. A level of professionalism with the help

of technology and scientific management has to be brought in by the HR departments.

Clear policies regarding performance rewards, incentives and increase in remuneration

have to be outlined and implemented. With regard to the accountability for non-

performance and for the mistakes, the HR department's in tervent ion is a must for

establishing the facts of each case. Proper judgment "with impartial attitude

helps develop satisfaction among the staff members.

Before punishing for mistakes and non-performance, a certain kind of enquiry

is required by the HR dep ar tme nt. In the pre sen t sce nar io, par tic ula rly in

th e ne w pr iv at e se ct or in su ra nc e companies, dismissals are taking place

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arbitrarily without proper enquiry for accountability. This wi ll im par t th e

e ff ic ie nc y o f th e e xi st in g s ta ff a nd l ow er d yn ami sm i n t he ir

per formance, ul timately leading to reduced product ivity due to fear and

insecurity of losing the job. It is the first and foremost duty of the HR

department to formulate appropriate policies with regards to p u n i s h m e n t s .

A s e t o f g u i d e l i n es a n d p r o c e du r e s h a s t o b e f o r mu l a te d a n d

f o l l o w e d f o r punishments to staff in case of any indiscipline.

C) Employee benefits

Also called benefits in kind; also called fringe benefits, perquisites, or perks are

various non-wage compensations provided to employees in addition to their normal

wages orsalaries. Some of these benefits are: housing (employer-provided or

employer-paid), group insurance(health,dental, life etc.),disability income protection,

retirement benefits, daycare, tuition reimbursement, sick leave, vacation(paid and non-

paid),social security, profit sharing, funding of education, and other specialized

benefits. The purpose of the benefits is to increase the economic security of

employees.

Perquisites:

The term perks is often used colloquially to refer to those benefits of a more

discretionary nature. Often, perks are given to employees who are doing notably well

and/or have seniority. Common perks are take-home vehicles,hotel stays, free

refreshments, leisure activities on work time (golf, etc.),stationery, allowances

forlunch, andwhen multiple choices existfirst choice of such things as job

assignments and vacation scheduling. They may also be given first chance at job

promotions when vacancies exist.

D) HEALTH, SAFETY and WELFAREHEALTH

The well- being of the employee in an organization is affected by accidents and ill

health both physical and mental.

1. Health

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http://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Wagehttp://en.wikipedia.org/wiki/Salaryhttp://en.wikipedia.org/wiki/Health_insurancehttp://en.wikipedia.org/wiki/Dental_insurancehttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Disability_insurancehttp://en.wikipedia.org/wiki/Retirement_planhttp://en.wikipedia.org/wiki/Daycarehttp://en.wikipedia.org/wiki/Tuitionhttp://en.wikipedia.org/wiki/Sick_leavehttp://en.wikipedia.org/wiki/Annual_leavehttp://en.wikipedia.org/wiki/Social_securityhttp://en.wikipedia.org/wiki/Profit_sharinghttp://en.wikipedia.org/wiki/Take-home_vehiclehttp://en.wikipedia.org/wiki/Hotelhttp://en.wikipedia.org/wiki/Golfhttp://en.wikipedia.org/wiki/Stationeryhttp://en.wikipedia.org/wiki/Allowancehttp://en.wikipedia.org/wiki/Lunchhttp://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Wagehttp://en.wikipedia.org/wiki/Salaryhttp://en.wikipedia.org/wiki/Health_insurancehttp://en.wikipedia.org/wiki/Dental_insurancehttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Disability_insurancehttp://en.wikipedia.org/wiki/Retirement_planhttp://en.wikipedia.org/wiki/Daycarehttp://en.wikipedia.org/wiki/Tuitionhttp://en.wikipedia.org/wiki/Sick_leavehttp://en.wikipedia.org/wiki/Annual_leavehttp://en.wikipedia.org/wiki/Social_securityhttp://en.wikipedia.org/wiki/Profit_sharinghttp://en.wikipedia.org/wiki/Take-home_vehiclehttp://en.wikipedia.org/wiki/Hotelhttp://en.wikipedia.org/wiki/Golfhttp://en.wikipedia.org/wiki/Stationeryhttp://en.wikipedia.org/wiki/Allowancehttp://en.wikipedia.org/wiki/Lunch


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PHYSICAL HEALTH: health of employees results in reduced productivity.

Healthy employees are more productive, more safety conscious, and are more

regular to work. This realization has made many management to provide health

services to their employees like first-aid, complete medical care, etc. Many

progressive organizations have well equipped dispensaries with full-time and

part-time doctors.

MENTAL HEALTH: In recent years, mental health of employees, particularly

that of executives, has engaged the attention of management. Mental

breakdowns are common in modern days because of stress and tension. This

results in reduced productivity and lower profits for the organization. A mental

health service is rendered in following ways:

1 . P s y c h i a t r i c c o u n s e l i n g

2. Co operation and consultation with outside psychiatrics

3. Education of company personnel in importance of mental Health.

4. Development and maintenance of effective human resource Programme.

2.SAFETY: Safety refers to absence of accidents. It is protection of workers fromthe dangers of accidents.

NEED FOR SAFETY MEASURES

COST SAVING: Two types of cost are incurred by the management when an accident

occurs. These are direct costs in form of compensation payable and medical expenses

incurred in treating the patients.

INCREASED PRODUCTIVITY: Safety promotes productivity. Employees in a safeenvironment can devote time to improving quality and quantity of output.

MORAL and LEGAL: Safety is important on humane grounds too. There are legal

provisions relating to safety measures which have to be undertaken by the

management.

3. WELFARE: Welfare includes anything that is done for the comfort and

improvement of employees and is provided over and above the wages. Welfare

helps in keeping the morale and motivation of the employees high so as to retain

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To Increase Industrial Productivity: In todays competitive world,

motivation, job security and high pay packages are not enough to increase

industrial productivity. Leadership, flexibility, delegation of authority,

industrial democracy and employee say in decision making are important to

increase annual turnover of any organization.

To Establish Harmonious Industrial Relationship: Participatory from of

management is an unbeatable tact to establish and maintain cordial

relationships with employees and workers union. The success of an

organization depends on its human resources. Employee empowerment acts

as a strong force to bind the employees and motivate to give them their best

to the organization.

To Maintain a Proper Flow of Communication: Two-way

communication plays an important role in the success of any organization.

Employee participation in decision making ensures proper flow of

communication in the organization. Everyone contributes their best and tries

to strengthen the organization by contributing their best to improve business

processes.

Benefits of Participative Management

Innovation and increased efficiency: The problem solving process and

openness to new ideas can result in innovation. Apart from this as mentioned above

there is also knowledge sharing amongst the workers and the managers. This means

that those who are part of a certain process at the ground level give inputs for

improved efficiency of the same. This has dual implications, helping improve the

quality of product and curtailing the cost of manufacture.

Timeliness: There is improved communication between the managers and the

workers and between workers across different units. A loophole or flaw is reported

in time.

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e ff ic ie nt s el ec ti on , t ra in in g a nd d ev el op me nt , i s c al le d Human

Resource Management. T h e s u c c e s s o f a n y i n s u r a n c e c o m p a n y

l a r g e l y d e p e n d s o n e f f i c i e n t h u m a n r e s o u r c e management, apart

from operations, marketing and sales, the HR department manages all the

efficient people working in operations and marketing divisions in any organization.

Need for HRD and Its Management in insurance sector

1. There are many changes in the insurance sector on account of changes in the

industry due to the entry of new insurance companies. Therefore, it has become a

necessity to recruit, train and de plo y peo ple at all lev el eff ici ent ly, forbe t ter per formance and success . This i s the basic function of HRD, which

includes the concept of HRM.

2. In view of the changes in the political scene in the recent past, seeping changes are

expected to take place in the insurance industry . It is expected that only a few

insurance companies will remain after a series of amalgamations and

mergers, not only in the Indian insurance industry, but also at the international

level.

3. Emergence of new private sector insurance companies, competition and self-

regulation has necessitated efficient Human Resources Management in insurance

companies. HRM is a continuous process, involving selection, recruitment and training

on an "on going basis" for the staff and their deployment in the right place. The

activity is called HR development.

EFFICIENCY IN INSURANCE SECTOR WITH HRM

1. The crucial factors behind successful insurance companies will be continuous and

sustained build up of skills, knowledge, education and attitudes among people working

in the companies, particularly the frontline staff, working in the branches.

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the HR department to properly counsel people and prepare them to face the challenges

before them. T h e i r m i n d s h o u l d b e f i n e - t u n e d t o w o r k i n t h e

n e w t e c h n o l o g i c a l e n v i r o n m e n t .

The main function of HRM is to build up capabilities in people working and

intensify their sense o f be l o ng i n g t o t h e o r ga n i za t i on . To i m pr ov e

t h e i r p e r f o r m a n c e a n d i n c r e a s e t h e b a n k ' s productivity HR must

incorporate challenges in routine work. Team spirit has to be inculcated in the

branches and greater focus should be on customer care.

CASE STUDIES

1) FUTURE GENE RALI INDIA LIFE I NSURANCE

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hrm in insurance

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