Main File Recruitment and Selection Process

8/11/2019 Main File Recruitment and Selection Process

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1.1 INTRODUCTION TO INSURANCE INDUSTRY

1.1.1 HISTORY OF INSURANCE SECTOR IN INDIA

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu

(Manusmrithi), Yagnavalkya (Dharmasastra) andKautilya ( Arthasastra ). The writings talk

in terms of pooling of resources that could be re-distributed in times of calamities such as

fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.

Ancient Indian history has preserved the earliest traces of insurance in the form of marine

trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing

from other countries, England in particular.

1818 saw the advent of life insurance business in India with the establishment of the

Oriental Life Insurance Company in Calcutta (now Kolkata). This Company however

failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business

in the Madras Presidency.

Insurance in India started without any regulation in the Nineteenth Century. It was a

typical story of a colonial era: a few British insurance companies dominating the market

serving mostly large urban centres. After the independence, it took a dramatic turn. Insurance

was nationalized. First, the life insurance companies were nationalized in 1956, and then the

general insurance business was nationalized in 1972. Only in 1999 private insurance

companies have been allowed back into the business of insurance with a maximum of 26% of

foreign holding. In what follows, we describe how and why of regulation and deregulation.

The entry of the State Bank of India with its proposal of bank assurance brings a new

dynamics in the game. We study the collective experience of the other countries in Asia

already deregulated their markets and have allowed foreign companies to participate. If the

experience of the other countries is any guide, the dominance of the Life Insurance

Corporation and the General Insurance Corporation is not going to disappear any time soon.

I nsurance under the Bri tish Raj

Life insurance in the modern form was first set up in India through a British company

called the Oriental Life Insurance Company in 1818 followed by the Bombay Assurance

Company in 1823 and the Madras Equitable Life Insurance Society in 1829. All of these

companies operated in India but did not insure the lives of Indians. They were there insuring

the lives of Europeans living in India. Some of the companies that started later did provide

insurance for Indians. But, they were treated as "substandard" and therefore had to pay an


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extra premium of 20% or more. The first company that had policies that could be bought by

Indians with "fair value" was the Bombay Mutual Life Assurance Society starting in 1871.

The first general insurance company, Triton Insurance Company Ltd., was

established in 1850. It was owned and operated by the British. The first indigenous general

insurance company was the Indian Mercantile Insurance Company Limited set up in Bombay

in 1907. By 1938, the insurance market in India was buzzing with 176 companies (both life

and non-life). However, the industry was plagued by fraud. Hence, a comprehensive set of

regulations was put in place to stem this problem (see Table 1). By 1956, there were 154

Indian insurance companies, 16 non-Indian insurance companies and 75 provident societies

that were issuing life insurance policies. Most of these policies were cantered in the cities

(especially around big cities like Bombay, Calcutta, Delhi and

Madras). In 1956, the then finance minister S. D. Deshmukh announced nationalization of

the life insurance business.

Monopoly Raj

The nationalization of life insurance was justified mainly on three counts :

(1) It was perceived that private companies would not promote insurance in rural areas.

(2) The Government would be in a better position to channel resources for saving and

investment by taking over the business of life insurance.

(3) Bankruptcies of life insurance companies had become a big problem (at the time of

takeover, 25 insurance companies were already bankrupt and another 25 were on the verge of

bankruptcy). The experience of the next four decades would temper these views.

The insurance sector in India has come a full circle from being an open

competitive market to nationalization and back to a liberalized market again. Tracing

the developments in the Indian insurance sector reveals the 360-degree turn

witnessed over a period of almost two centuries. With largest number of life insurance

policies in force in the world, Insurance happens to be a mega opportunity in India. It

is a business growing at the rate of 15-20 percent annually and presently is of the

order of Rs 450 Billion. Together with banking services, it adds about 7 per cent to

the countrys GDP. Gross premium collection is nearly 2 per cent of GDP and funds

available with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while

health insurance and non-life insurance continues to be below international

standards. In addition, this part of the population is subject to weak social security


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and pension systems with hardly any old age income security. This is an indicator

that growth potential for the insurance sector is immense. A well-developed and

evolved insurance sector is necessary for economic development as it provides long-

term funds for infrastructure development and at the same time strengthens the risk

taking ability. It has estimated that, over the next ten years India would require

investments of the order of one trillion US dollar. The Insurance sector, to some

extent, can enable investments in infrastructure development to sustain economic

growth of the country.

Insurance is a federal subject in India. Two legislations govern the sector-

1. The Insurance Act- 1938 and

2. IRDA Act- 1999.

The insurance sector in India has come a full circle from being an open competitive

market to nationalization and back to a liberalized market again. Tracing the

developments in the Indian insurance sector reveals the 360-degree turn witnessed

over a period of almost two centuries.

Insurance has a long history in India. Life Insurance in its current form was introduced in

1818 when Oriental Life Insurance Company began its operations in India. General

Insurance was however a comparatively late entrant in 1850 when Triton Insurance company

set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three

eras:

a) Pre Nationalization

b) Nationalization and

c) Post Nationalization.

Life Insurance was the first to nationalize in 1956. Life Insurance Corporation of India was

formed by consolidating the operations of various insurance companies. General Insurance

followed suit and was nationalized in 1973. General Insurance Corporation of India was set

up as the controlling body with New India, United India, National and Oriental as its

subsidiaries. The process of opening up the insurance sector was initiated against the

background of Economic Reform process which commenced from 1991. For this purpose

Malhotra Committee was formed during this year who submitted their report in 1994 and

Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian

Insurance was opened for private companies and Private Insurance Company effectively

started operations from 2001.


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BRIEF HISTORY OF THE INSURANCE SECTOR IN INDIA

insurance company on Indian soil.

-standard lives and heavy extra premiums were

being charged on them.

company in the year 1870, and covered Indian lives at normal rates.

nspired by

nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.

Co-operative Assurance at Lahore were established in 1906.

year 1912, the Life Insurance Companies Act, and the Provident Fund Act were

passed.

and periodical valuations of companies should be certified by an actuary.

he Act discriminated between foreign and Indian companies on many accounts,

putting the Indian companies at a disadvantage.

non-life insurance to provide strict state control over insurance business.

-Indian companies and 75 provident were

operating in India at the time of nationalization.

1.1.2 CURRENT INSURANCE SECTOR IN INDIA

Life insurance can be defined as life insurance provides a sum of money if the person who

is insured dies while the policy is in effect. The life insurance act, 1912 was the first statuary

measure to regulate the life insurance business in India. In 1983, the earlier legislation was

consolidated and amended by the insurance act, 1938, with comprehensive provisions for

detailed effective control over insurance. The union government had opened the insurance

sector for private participation in 1999, also allowing the private companies to have foreign

equity up to 26%. Following the opening up of the insurance sector, 12 private sector

companies have entered the life insurance business.


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An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector

andLife Insurance Corporation (LIC) came into existence in the same year. The LIC

absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies - 245 Indian and

foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was

reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the west and the

consequent growth of sea-faring trade and commerce in the 17th century. It came to India as

a legacy of British occupation. General Insurance in India has its roots in the establishment of

Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the

Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all

classes of general insurance business.

1957 saw the formation of the General Insurance Council, a wing of the Insurance

Associaton of India. The General Insurance Council framed a code of conduct for ensuring

fair conduct and sound business practices. In 1968, the Insurance Act was amended to

regulate investments and set minimum solvency margins. The Tariff Advisory Committee

was also set up then. In 1972 with the passing of the General Insurance Business

(Nationalisation) Act, general insurance business was nationalized with effect from 1st

January, 1973.

107 insurers were amalgamated and grouped into four companies, namely National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company

Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of

India was incorporated as a company in 1971 and it commence business on January 1st 1973.

This millennium has seen insurance come a full circle in a journey extending to nearly 200

years. The process of re-opening of the sector had begun in the early 1990s and the last

decade and more has seen it been opened up substantially.

In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former

Governor of RBI, to propose recommendations for reforms in the insurance sector.The

objective was to complement the reforms initiated in the financial sector. The committee

submitted its report in 1994 wherein , among other things, it recommended that the private

sector be permitted to enter the insurance industry. They stated that foreign companies be

allowed to enter by floating Indian companies, preferably a joint venture with Indian

partners.

Following the recommendations of the Malhotra Committee report, in 1999, the Insurance

Regulatory and Development Authority (IRDA) was constituted as an autonomous body to
http://www.emediclaim.com/life-insurance-companies/lic-india.htmlhttp://www.emediclaim.com/life-insurance-companies/lic-india.html


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regulate and develop the insurance industry. The IRDA was incorporated as a statutory body

in April, 2000. The key objectives of the IRDA include promotion of competition so as to

enhance customer satisfaction through increased consumer choice and lower premiums,

while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for application for

registrations. Foreign companies were allowed ownership of up to 26%. The Authority has

the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from

2000 onwards framed various regulations ranging from registration of companies for

carrying on insurance business to protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were

restructured as independent companies and at the same time GIC was converted into a

national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July,

2002.

For years now, the private players are active in the liberalized environment. The insurance

market have witnessed dynamic changes which includes presence of a fairly large number of

insurers both life and non-life segment. Most of the private insurance companies have formed

joint venture partnering well recognized foreign players across the globe.

There are now 29 insurance companies operating in the Indian market 14 private life

insurers, nine private non-life insurers and six public sector companies. With many more

joint ventures in the offing, the insurance industry in India today stands at a crossroads as

competition intensifies and companies prepare survival strategies in a detariffed scenario.

There is pressure from both within the country and outside on the Government to increase the

Foreign Direct Investment (FDI) limit from the current 26% to 49%, which would help JV

partners to bring in funds for expansion.

There are opportunities in the pensions sector where regulations are being framed. Less than

10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first licence

for a standalone health company in the country as many more players wait to enter. The

health insurance sector has tremendous growth potential, and as it matures and new players

enter, product innovation and enhancement will increase. The deepening of the health

database over time will also allow players to develop and price products for larger segments

of society.


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1.1.3 ROLE & FUNCTIONS OF IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA..

(1) Subject to the provisions of this Act and any other law for the time being in force, the

Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance

business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the

powers and functions of the Authority shall include :

(A) Issue to the applicant a certificate of registration, renews, modify, withdraw, suspend or

cancel such registration;

(B) Protection of the interests of the policy holders in matters concerning assigning of policy,

nomination by policy holders, insurable interest, settlement of insurance claim, surrender

value of policy and other terms and conditions of contracts of insurance;

(C) Specifying requisite qualifications, code of conduct and practical training for

intermediary or insurance intermediaries and agents;

(D) Specifying the code of conduct for surveyors and loss assessors;

(E) Promoting efficiency in the conduct of insurance business;

(F) Promoting and regulating professional organizations connected with the insurance and re-

insurance business;

(G) Levying fees and other charges for carrying out the purposes of this Act;

(H) Calling for information from, undertaking inspection of, conducting enquiries and

investigations including audit of the insurers, intermediaries, insurance intermediaries and

other organizations connected with the insurance business;

(I) Control and regulation of the rates, advantages, terms and conditions that may be offered

by insurers in respect of general insurance business not so controlled and regulated by the

Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);

(J) Specifying the form and manner in which books of account shall be maintained and

statement of accounts shall be rendered by insurers and other insurance intermediaries ;

(K) Regulating investment of funds by insurance companies;

(L) Regulating maintenance of margin of solvency;

(M) Adjudication of disputes between insurers and intermediaries or insurance

intermediaries;

(N) Supervising the functioning of the Tariff Advisory Committee;

(O) Specifying the percentage of premium income of the insurer to finance schemes for

promoting and regulating professional organizations referred to in clause (f);


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(P) Specifying the percentage of life insurance business and general insurance business to be

undertaken by the insurer in the rural or social sector;

1.1.4 SEVEN (7) PS OF INSURANCE SECTOR

Wherever there is uncertainty there is risk. We do not have any control over uncertainties

which involves financial losses. The risks may be certain events like death, pension,

retirement or uncertain events like theft, fire, accident, etc.

Insurance is a financial service for collecting the savings of the public and providing them

with risk coverage. The main function of Insurance is to provide protection against the

possible chances of generating losses. It eliminates worries and miseries of losses by

destruction of property and death. It also provides capital to the society as the funds

accumulated were invested in productive heads. Insurance comes under the service sector

and while marketing this service, due care is to be taken in quality product and customer

satisfaction. While marketing the services, it is also pertinent that they think about the

innovative promotional measures. It is not sufficient that you perform well but it is also

important that you let others know about the quality of your positive contributions. The

creativity in the promotional measures is the need of the hour. The advertisement,

public relations, word of mouth communication needs due care and personal selling

requires intensive care.

I nsurance Marketing:The term Insurance Marketing refers to the marketing of Insurance

services with the aim to create customer and generate profit through customer satisfaction.

The Insurance Marketing focuses on the formulation of an ideal mix for Insurance

business so that the Insurance organisation survives and thrives in the right perspective.

Marketing --Mix F or I nsurance Companies:The marketing mix is the combination of

marketing activities that an organisation engages in so as to best meet the needs of its

targeted market. The Insurance business deals in selling services and therefore due

weight-age in the formation of marketing mix for the Insurance business is needed. The

marketing mix includes sub-mixes of the 7 P's of marketing i.e. the product, its price,

place, promotion, people, process & physical attraction. The above mentioned 7 P's can be

used for marketing of Insurance products, in the following manner:

1. Product:

A product means what we produce. If we produce goods, it means tangible product and

when we produce or generate services, it means intangible service product. A product is


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both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells

services and therefore services are their product.

In India, the Life Insurance Corporation of India (LIC) and the General Insurance

Corporation (GIC) are the two leading companies offering insurance services to the users.

Apart from offering life insurance policies, they also offer underwriting and consulting

services. When a person or an organisation buys an Insurance policy from the insurance

company, he not only buys a policy, but along with it the assistance and advice of the

agent, the prestige of the insurance company and the facilities of claims and

compensation. It is natural that the users expect a reasonable return for their investment

and the insurance companies want to maximize their profitability. Hence, while deciding

the product portfolio or the product-mix, the services or the schemes should be

motivational. The Group Insurance scheme is required to be promoted, the Crop

Insurance is required to be expanded and the new schemes and policies for the villagers

or the rural population are to be included. The Life Insurance Corporation has intensified

efforts to promote urban savings, but as far as rural savings are concerned, it is not that

impressive. The introduction of Rural Career Agents Scheme

has been found instrumental in inducing the rural prospects but the process is at infant

stage and requires more professional excellence. The policy makers are required to

activate the efforts. It would be prudent that the LIC is allowed to pursue a policy of direct

investment for rural development. Investment in Government securities should be stopped

and the investment should be channelized in private sector for maximizing profits. In

short, the formulation of product-mix should be in the face of innovative product strategy.

While initiating the innovative process it is necessary to take into consideration the

strategies adopted by private and foreign insurance companies.

2. Pricing:

In the insurance business the pricing decisions are concerned with:

i) The premium charged against the policies,

ii) Interest charged for defaulting the payment of premium and credit facility, and

iii) Commission charged for underwriting and consultancy activities. With a view of

influencing the target market or prospects the formulation of pricing strategy

becomes significant. In a developing country like India where the disposable income in

the hands of prospects is low, the pricing decision also governs the transformation of

potential policyholders into actual policyholders. The strategies may be high or low

pricing keeping in view the level or standard of customers or the policyholders. The


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pricing in insurance is in the form of premium rates. The three main factors used for

determining the premium rates under a life insurance plan are mortality, expense and

interest. The premium rates are revised if there are any significant changes in any of these

factors.

Mortality (deaths in a particular area): When deciding upon the pricing strategy the

average rate of mortality is one of the main considerations. In a country like South Africa

the threat to life is very important as it is played by host of diseases.

Expenses:The cost of processing, commission to agents, reinsurance companies as well

as registration are all incorporated into the cost of installments and premium sum and

forms the integral part of the pricing strategy

Interest:The rate of interest is one of the major factors which determines people's

willingness to invest in insurance. People would not be willing to put their funds to invest

in insurance business if the interest rates provided by the banks or other financial

instruments are much greater than the perceived returns from the insurance premiums.

3. Place:

This component of the marketing mix is related to two important facets-

i) Managing the insurance personnel, and

ii) Locating a branch. The management of agents and insurance personnel is found

significant with the viewpoint of maintaining the norms for offering the services. This is

also to process the services to the end user in such a way that a gap between the services-

promised and services -- offered is bridged over. In a majority of the service generating

organizations, such a gap is found existent which has been instrumental in making worse

the image problem. The transformation of potential policyholders to the actual

policyholders is a difficult task that depends upon the professional excellence of the

personnel. The agents and the rural career agents acting as a link, lack professionalism.

The front-line staff and the branch managers also are found not assigning due weight-age

to the degeneration process. The insurance personnel if not managed properly would make

all efforts insensitive. Even if the policy makers make provision for the quality upgrading

the promised services hardly reach to the end users.

It is also essential that they have rural orientation and are well aware of the lifestyles of

the prospects or users. They are required to be given adequate incentives to show their

excellence. While recruiting agents, the branch managers need to prefer local persons and

provide them training and conduct seminars. In addition to the agents, the front-line staff

also needs an intensive training program to focus mainly on behavioral


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management. Another important dimension to the Place Mix is related to the location of

the insurance branches. While locating branches, the branch manager needs to consider a

number of factors, such as smooth accessibility, availability of infrastructural facilities

and the management of branch offices and premises. In addition it is also significant to

provide safety measures and also factors like office furnishing, civic amenities and

facilities, parking facilities and interior office decoration should be given proper

attention. Thus the place management of insurance branch offices needs a new vision,

distinct approach and an innovative style. This is essential to make the work place

conducive, attractive and proactive for the generation of efficiency among employees. The

branch managers need professional excellence to make place decisions productive.

4. Promotion:

The insurance services depend on effective promotional measures. In a country like India,

the rate of illiteracy is very high and the rural economy has dominance in the national

economy. It is essential to have both personal and impersonal promotion strategies. In

promoting insurance business, the agents and the rural career agents play an important

role. Due attention should be given in selecting the promotional tools for agents and rural

career agents and even for the branch managers and front line staff. They also have to be

given proper training in order to create impulse buying.

Advertising and Publicity, organisation of conferences and seminars, incentive to

policyholders are impersonal communication. Arranging Kirtans, exhibitions,

participation in fairs and festivals, rural wall paintings and publicity drive through the

mobile publicity van units would be effective in creating the impulse buying and the rural

prospects would be easily transformed into actual policyholders.

5. People:

Understanding the customer better allows to design appropriate products. Being a service

industry which involves a high level of people interaction, it is very important to use this

resource efficiently in order to satisfy customers. Training, development and strong

relationships with intermediaries are the key areas to be kept under consideration.

Training the employees, use of IT for efficiency, both at the staff and agent level, is one of

the important areas to look into.

6. Process:

The process should be customer friendly in insurance industry. The speed and accuracy of

payment is of great importance. The processing method should be easy and convenient to

the customers. Installment schemes should be streamlined to cater to the ever growing


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demands of the customers. IT & Data Warehousing will smoothen the process flow. IT

will help in servicing large no. of customers efficiently and bring down overheads.

Technology can either complement or supplement the channels of distribution cost

effectively. It can also help to improve customer service levels. The use of data

warehousing management and mining will help to find out the profitability and potential

of various customers product segments.

7. Physical Distribution:

Distribution is a key determinant of success for all insurance companies. Today, the

nationalized insurers have a large reach and presence in India. Building a distribution

network is very expensive and time consuming. If the insurers are willing to take

advantage of India's large population and reach a profitable mass of customers, then new

distribution avenues and alliances will be necessary. Initially insurance was looked upon

as a complex product with a high advice and service component.

Buyers prefer a face-to-face interaction and they place a high premium on brand names

and reliability. As the awareness increases, the product becomes simpler and they become

off-the-shelf commodity products. Today, various intermediaries, not necessarily

insurance companies, are selling insurance. For example, in UK, retailer like Marks &

Spencer sells insurance products. The financial services industries have successfully used

remote distribution channels such as telephone or internet so as to reach more customers,

avoid intermediaries, bring down overheads and increase profitability. A good example is

UK insurer Direct Line. It relied on telephone sales and low pricing. Today, it is one of

the largest motor insurance operator. Technology will not replace a distribution network

though it will offer advantages like better customer service. Finance companies and banks

can emerge as an attractive distribution channel for insurance in India. In Netherlands,

financial services firms provide an entire range of products including bank accounts,

motor, home and life insurance and pensions. In France, half of the life insurance sales are

made through banks. In India also, banks hope to maximize expensive existing networks

by selling a range of products. It is anticipated that rather than formal ownership

arrangements, a loose network of alliance between insurers and banks will emerge,

popularly known as bancassurance.

Another innovative distribution channel that could be used are the non-financial

organisations. For an example, insurance for consumer items like fridge and TV can be

offered at the point of sale. This increases the likelihood of insurance sales. Alliances with


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manufacturers or retailers of consumer goods will be possible and insurance can be one of

the various incentives offered.

Life insurance is the only investment option that offers specific products tailormade for

different life stages. It thus ensures that the benefits offered to the customer reflect the needs

of the customer at that particular life stage, and hence ensures that the financial goals of that

life stage are met.

The table below gives a general guide to the plans that are appropriate for different life

stages.

Life Stage Primary Need Life Insurance Product

Young & Single Asset creation Wealth creation plans

Young & Just

marriedAsset creation & protection

Wealth creation and mortgage

protection plans

Married with kidsChildren's education, Asset

creation and protection

Education insurance, mortgage

protection & wealth creation plans

Middle aged with

grown up kids

Planning for retirement &

asset protection

Retirement solutions & mortgage

protection

Across all life-

stagesHealth plans Health Insurance

Benefits of Life Insurance :

Life insurance encourages saving and forces thrift.

It is superior to a traditional savings vehicle.

It helps to achieve the purpose of life assured.

It provides valuable tax relief.

Thus insurance is found to be very useful in the lives of the person both in short term and

long term. Fundamental principles of life insurance contract:-

Principle of almost good faith:-A positive duty to voluntary disclose, accurately

and fully, all facts, material to the risk being proposed whether requested or not.

Principle of insurable interest:-Relationships with the subject matter (a person)

which is recognized in law and gives legal right to insure that person.
http://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Retirement-Plans/Retirement-Plans-Need.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Retirement-Plans/Retirement-Plans-Need.htmhttp://www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htm


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India's insurance sector is zooming to show an unprecedented progressive growth of more

than 200% by the period of 2009-12. The Associated Chambers of Commerce and Industry

of India has clocked out the fact that during this period, private players in the industry will

see a growth of about 140 per cent, owing to the adoption of the aggressive marketing

techniques in comparison of the growth rate of 35 per cent-40 per cent achieved by the state

owned insurance companies. The chamber is expected to poise the business of insurance to

reach at Rs.2000 billions in coming 2 years from the present level of Rs. 500 billion. With

the result of adoption of the intense marketing strategies by the private players, the

declination has been witnessed in respect of the share of the state owned insurance

companies captured in the market. The market share fallout has been noticed in context of

such companies like GIC, LIC, which have come down to nearly 70 per cent in the past 4-5

years from the 97 per cent. The experts have fore casted the more severe competition in the

insurance sector likely to be occurred in the near future. Till recently, insurance sector was

majority driven by the government sector players but now many private sector multinational

players have come into the picture. Like HDFC, ICICI, Kotak, Mahindra and Birla Sunlife.

Insurance sector has been characterized as the booming sector of the Indian arena, which has

shown the growth rate of more than 15 per cent to 20 per cent. Insurance in India is put under

the federal subject and is governed by the Insurance Act, 1938, the Life Insurance

Corporation Act, 1956 and General Insurance Business(Nationalization) Act, 1972, Insurance

Regulatory and Development Authority(IRDA) Act, 1999 and by various other acts.

1.1.6 LIST OF INSURANCE COMPANIES IN INDIA

Following is the list of all LIFE & GENERAL INSURANCE COMPANIESgranted

permission by IRDA.

Table 1.1 List of Life and General Insurance Companies

LIFE INSURERS Websites

Public Sector

Life Insurance Corporation of India www.licindia.com

Private Sector

Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in

Birla Sun-Life Insurance Company Limited www.birlasunlife.com


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HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com

ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com

ING Vysya Life Insurance Company Limited www.ingvysayalife.com

Max New York Life Insurance Co. Limited www.maxnewyorklife.com

DLF Pramerica Life Insurance Co. Ltd www.dlfpramerica.com

Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com

SBI Life Insurance Company Limited www.sbilife.co.in

TATA AIG Life Insurance Company Limited www.tata-aig.com

AMP Sanmar Assurance Company Limited www.ampsanmar.com

Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com

Reliance Life Insurance Company Limited. www.reliancelife.com

Aviva Life Insurance Co. India Pvt. Ltd. www.avivaindia.com

Sahara India Life Insurance Co, Ltd. www.saharalife.com

Shriram Life Insurance Co, Ltd. www.shriramlife.com

Bharti AXA Life Insurance Company Ltd www.bharti-axalife.com

Future Generali Life Insurance Company Ltd. www.futuregenerli.in

IDBI Fortis Life Insurance Company Ltd. www.idbifortis.com

Canara HSBC Oriental Bank of Commerce Life

Insurance Co. Ltd www.canarahsbclife.com

AEGON Religare Life Insurance Company Limited www.aegonreligare.com

Star Union Dai-ichi Life Insurance Comp. Ltd. www.sudlife.in

MetLife Insurance Company Limited www.metlife.com

GENERAL INSURERS

Public Sector


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National Insurance Company Limited www.nationalinsuranceindia.com

New India Assurance Company Limited www.niacl.com

Oriental Insurance Company Limited www.orientalinsurance.nic.in

United India Insurance Company Limited www.uiic.co.in

Private Sector

Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in

ICICI Lombard General Insurance Co. Ltd. www.icicilombard.com

IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.in

Reliance General Insurance Co. Limited www.ril.com

Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com

TATA AIG General Insurance Co. Limited www.tata-aig.com

Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com

Export Credit Guarantee Corporation www.ecgcindia.com

HDFC Chubb General Insurance Co. Ltd.

REINSURER

General Insurance Corporation of India www.gicindia.com

Summary of Insurance Sector in India

The insurance sector in India has come a full circle from being an open competitive market to

nationalization and back to a liberalized market again.

The business of life insurance in India in its existing form started in India in the year 1818

with the establishment of the Oriental Life Insurance Company in Calcutta, when it was

introduced for English Widows. Even till the end of the nineteenth century, Insurance

Companies in India were mainly the overseas companies investing in the insurance works in

India. An interesting fact here was that higher premiums were charged for Indian lives, as

they were considered riskier for insurance cover.

Insurance is mainly of 2 types :

1.

LIFE INSURANCE.


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2. GENERAL INSURANCE.

Under life insurance the life of an individual is covered whereby an individual or his family

is assured a particular amount. Life insurance covers only the financial losses and not the

emotional losses.

India General Insurance covers almost everything related to property, vehicle, cash,

household goods, health and also one's liability towards others. The basic difference of

general insurance with the life insurance policy is that it offers protection against

contingencies.

Some of the important milestones in the life insurance business in India are:

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 taken over by the

central government and nationalized. LIC formed by an Act of Parliament, viz. LIC

Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

Some of the important milestones in the general insurance business in India are:

1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of general insurance business.

1957 - General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business practices.

1968 - The Insurance Act amended to regulate investments and set minimum

solvency margins and the Tariff Advisory Committee set up.

1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the

general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company

Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Today Insurance Companies in India have grown manifold. The insurance sector in India has

shown immense growth potential. Even today a giant share of Indian population nearly 80%

is not under life insurance coverage, let alone health and non-life insurance policies. This

clearly indicates the potential for insurance companies to grow their market in India.


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In 1999, various reforms were suggested in the insurance industry in India. This has changed

a lot of things for the insurance companies in India. These reforms were:

o Bringing down of the governments stake holding to 50%.

o Only the private companies with a minimum capital of Rs.100 crores should be

allowed to enter the insurance sector.

o No insurance company can deal in both life and non-life insurance under the same

business entity.

o Foreign Insurance Companies can enter India only in collaboration with domestic

insurance companies.

o Interest should be paid on delays of payments by the insurance companies in case of

non settlement of insurance claims.

o And many more to bring greater freedom and a well-planned regulation to the

insurance companies in India.

Though, the existing rule says that a foreign partner can hold 26% equity in an insurance

company, a proposal to increase this limit to 49% is pending with the government. Since

opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have

poured into the Indian market and 22 private companies have been granted licenses.

The various fields covered by insurance companies in India include:

o

Life Insurance: For students, children, family, individual etc.

o Health insurance: For self, for family, accidental insurance premium, medical claim

policies etc.

Non-life insurance: Home or House Insurance and other property insurance, Auto Insurance

(for cars, motorcycle and other two-wheelers, commercial vehicles), Infrastructure Projects

Insurance, Travel Insurance, real estate insurance, mobile insurance etc.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling

private insurance companies to sign up Indian customers faster than anyone expected.

Indians, who had always seen life insurance as a tax saving device, are now suddenly turning

to the private sector and snapping up the new innovative products on offer.

With the largest number of life insurance policies in force in the world, Indias insurance

sector accounted for 4.1 per cent of GDP in 2006-07, up from 1.2 per cent in 1999-2000, far

ahead of China where insurance accounts for just 1.7 per cent of the GDP and even the US

where insurance penetration stands at 4 per cent of the GDP. One area that continues to cause

concern is the number of customer grievances in insurance, especially in a few specific

classes. This calls for more transparency in designing the contract wording and on insisting


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that the applicant is sufficiently informed about the coverage and more particularly the

exclusions. In addition, the legislation itself requires to be transformed to meet the needs of

the emerging markets.

The demand for health insurance covers has seen a healthy increase, and today the sector is

the fastest growing segment in the non-life insurance industry in India, which grew at over

40% last year. It is also emerging as an increasingly significant line of business for life

insurance companies. While this rate of growth appears to be very healthy, it is on a low

base, and health insurance penetration in the country continues to be low. Only about 25

million persons are presently covered for health through commercial insurance, in a country

of over 1.1 billion people. Overall, the Indian health sector is still characterized by the near

absence of any significant risk protection against major health-related expenditure.

1.2 INTRODUCTION TO THE COMPANY

1.2.1 DLF Pramerica Life Insurance Company Ltd. (DPLI)

It is a joint venture between DLF Limited and Prudential International Insurance Holdings,

Ltd. (referred to hereafter as "PIIH"). PIIH is a fully owned subsidiary of Prudential

Financial, Inc. (referred to hereafter as "PFI"). The combination of the strength of the DLF

brand and PFI's insurance expertise provides the strongest possible foundations for DPLI to

succeed in the rapidly growing Indian life insurance market.

Founded in 2007.

Headquartered in Gurgaon, Haryana.

DLF holds 74% equity in the venture while PIIH holds 26% equity as per FDI Norms.

Capital base of over Rs 180 crores.

Expanding at a fast pace with presence currently in Del NCR, Himachal Pradesh,

Punjab, Haryana & Gujrat.

DLF is one of the largest and most respected organisations in the real estate sector in India

with over six decades of experience and a track record of sustained growth, customer

satisfaction, and innovation. In September 2006, DLF Limited was the only real estate firm

to be nominated amongst the "Super brands of India" in the consumer validated category.

After strengthening its position in the core business of residential, commercial and retail

property development, the DLF group has now made forays into the infrastructure, SEZ and

hotel businesses by entering into several strategic alliances with global industry leaders like


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Laing ORourke Plc. and Hilton Hotels Corporation.DLF is committed to quality, trust and

customer sensitivity, and to deliver on promises with agility, financial prudence and in tune

with the highest global standards.

PFI is a U.S. based financial services leader with its headquarters in Newark, New Jersey,

with approximately US$ 638 billion of assets under management as of June 30, 2008 and

operations in the United States, Asia, Europe and Latin America. PFI is focused on helping

its customers achieve financial prosperity and peace of mind.PFI ranks among the Top 100 in

the 2007 Forbes Global 2000 List, an annual tabulation of the world's largest public

companies and ranks 1st on Fortune Magazine's list of World's Most Admired Companies in

the Insurance: Life and Health Insurance Category two years running, in 2007 and 2008.

With more than 130 years in financial services, PFI is focused on helping approximately 50

million individual and institutional customers grow and protect their wealth. The company's

well recognized 'Rock' symbol is an icon of strength, stability, expertise and innovation that

has stood the test of time. PFI's businesses offer a variety of products and services, including

life insurance, annuities, retirement-related services, mutual funds, investment management,

and real estate services. PFI's legacy is based on a long history of social responsibility, strong

leadership, sound investments, and innovative products and services.

VISION: At DLF Pramerica, our vision is to ensure that every life we touch feels secure and

enriched.

MISSION: We shall be a guide and a mentor to people so that they are able to make the

most informed insurance decisions to meet their life goals.

VALUES:

customer focused- Be someone who places customers and their needs at the forefront

while developing and managing their financial solutions.

mutual respect- Build mutual respect by being an equal partner, who knows and

willingly shares, helping people go further rather than walking ahead and leading

them or walking behind and following.

worthy of trust- Build trust by choosing the right path rather than the easy path and

tell the truth the way it is. Be someone who keeps promises, meets commitments and

behaves with integrity at all times.

winning- Be positive and confident; seize every moment, every day, with a winning

perspective, fearlessly facing the uncertainties of life.


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Every organization requires competent employees (Sales Managers) for the successful

functioning of its various departments. To ensure that the staff works efficiently and

effectively, the organization has to continuously evaluate their performance and bridge any

performance gaps by providing appropriate training to them. For, it is the people who make

or breakan organization. Traditionally, the training policy in an organization focused on

enhancing the productivity and effectiveness of the employees so that the medium term and

long term strategies of the organization could be successfully fulfilled. Since upgradation of

skills and knowledge has direct relevance to performance. This necessitates huge investments

in the training programs for providing the requisite skill set to the staff.

The ultimate aim of any training program is to achieve:

- Continuous Improvement.

- Change-in-Attitude.

- Cost Saving.

- Total Productivity.

- Scope for development.

1.2.2 PRODUCTS OF DLF PRAMERICA LIFE INSURANCE

A. PROTECTION PLAN- Currently available products to purchase :

1. DLF Pramerica Family Income Plan-A plan that ensures that in case you

are not there, then your family receives a monthly financial support, the

amount of which you have fixed, until the end of the plan term. Your family

will receive at least 36 monthly installments.

2. DLF Pramerica Family First - It is designed to ensure your family will be

spared the financial gaps in their lives.

3.

DLF Pramerica Tatkaal Suraksha Gold It offers you life insurance

without the hassles of lengthy paperwork and gives assured savings without

the worry of the ups-and-downs of the market.

B. CHILD PROGRESS PLAN -Currently available products to purchase :

1. DLF Pramerica Free Protect + - It is a unique insurance product that

addresses your vital concern as a parent - protecting your childs school

education, come what may.


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2. DLF Pramerica Fee Protect It is a simple, affordable and straightforward

plan that secures the most important priority that any parent hasthe

schooling of your child.

C. SAVING PLAN- Currently available products to purchase

1. DLF Pramerica Dhan Suraksha It is a money back endowment plan, an

ideal savings cum protection plan. With this plan, while you have all the

advantages and benefits of a comprehensive insurance cover, you also have

assurance of a guaranteed return, free from speculation or risk.

2. DLF Pramerica Assure Money + - A plan that gives the assurance of a

minimum guaranteed benefit at maturity along with the advantage of a life

insurance cover.

3. DLF Pramerica Wealth+ Premier -The plan gives you a security that your

family will be safe & secure in case you are not there to support them. The plan

covers the features like-Protection to your family, Potential on higher returns,

flexibility, and withdrawal option, offers you option to continue and avail tax

4. DLF Pramerica Ezee Wealth+ - It is a unit linked plan which offers you life

insurance without the hassle of lengthy paperwork.

1.3 INTRODUCTION TO RECRUITMENT AND SELECTION

HRM is seen by practitioners in the field as a more innovative view of workplace

management than the traditional approach. Its techniques force the managers of an enterprise

to express their goals withspecificity so that they can be understood and undertaken by the

workforce, and to provide the resources needed for them to successfully accomplish their

assignments. As such, HRM techniques, when properly practiced, are expressive of the goals

and operating practices of the enterprise overall. HRM is also seen by many to have a key

role in risk reduction within organisations The Human Resources Management (HRM)

function includes a variety of activities, and key among them is deciding what staffing needs

you have and whether to use independent contractors or hire employees to fill these needs,

recruiting and training the best employees, ensuring they are high performers, dealing with

performance issues, and ensuring your personnel and management practices conform to

various regulations. Activities also include managing your approach to employee benefits

and compensation, employee records and personnel policies. Usually small businesses (for-

profit or nonprofit) have to carry out these activities themselves because they can't yet afford

part- or full-time help. However, they should always ensure that employees have -- and are


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aware of -- personnel policies which conform to current regulations. These policies are often

in the form of employee manuals, which all employees have.

Difference between HRM (a major management activity) and HRD (Human Resource

Development, a profession). HRD includes the broader range of activities to develop

personnel inside of organizations, including, eg, career development, training, organization

development, etc.

There is a long-standing argument about where HR-related functions should be organized

into large organizations, eg, "should HR be in the Organization Development department or

the other way around?"

The HRM function and HRD profession have undergone tremendous change over the past

20-30 years. Many years ago, large organizations looked to the "Personnel Department,"

mostly to manage the paperwork around hiring and paying people. More recently,

organizations consider the "HR Department" as playing a major role in staffing, training and

helping to manage people so that people and the organization are performing at maximum

capability in a highly fulfilling manner.

Human resource management (HRM) is the strategic and coherent approach to the

management of an organization's most valued assets - the people working there who

individually and collectively contribute to the achievement of the objectives of the business.

The terms "human resource management" and "human resources" (HR) have largely replaced

the term "personnel management" as a description of the processes involved in managing

people in organizations. Human Resource management is evolving rapidly. Human resource

management is both an academic theory and a business practice that addresses the theoretical

and practical techniques of managing aworkforce.Features

Feature:

Its features include:

Personnel administration

Personnel management

Manpower management

Industrial management

But these traditional expressions are becoming less common for the theoretical discipline.

Sometimes even industrial relation and employee relations are confusingly listed as

synonyms although these normally refer to the relationship between management and

workers and the behavior of workers in companies.
http://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Coherenthttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Workforcehttp://en.wikipedia.org/wiki/Workforcehttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Coherenthttp://en.wikipedia.org/wiki/Strategic


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Definiton

Synonyms such as personnel management are often used in a more restricted sense to

describe activities that are necessary in the recruiting of a workforce, providing its members

with payroll and benefits, and administrating their work-life needs, Torrington and Hall

define personnel management as

a series of activities which: first enable working people and their employing organisations to

agree about the objectives and nature of their working relationship and, secondly, ensures

that the agreement is fulfilled"

".......those decisions and actions which concern the management of employees at all levels in

the business and which are related to the implementation of strategies directed towards

creating and sustaining competitive advantage".

Academic theory

The goal of human resource management is to help an organization to meet strategic goals by

attracting, and maintaining employees and also to manage them effectively. The key word

here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of

an organization's employees, and the overall strategic direction of the company .

The basic premise of the academic theory of HRM is that humans are not machines, thereforewe need to have an interdisciplinary examination of people in the workplace. Fields such as

psychology,industrial engineering, industrial and organizational psychology,industria

lrelations,sociology,and critical theoriespostmodersition,poststructuring, play a major role.

Many colleges and universities offer bachelor and master degrees in Human Resources

Management.

Function:

One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4

fields for the HRM function

Strategic business partner

Change agent

Employee champion

Administration

However, many HR functions these days struggle to get beyond the roles of administration

and employee champion, and are seen rather as reactive than strategically proactive partners


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for the top management. In addition, HR organizations also have the difficulty in proving

how their activities and processes add value to the company. Only in the recent years HR

scholars and HR professionals are focusing to develop models that can measure if HR adds

value.

Critical Academic Theory

Indeed Karen Legge in 'Human Resource Management: Rhetorics and Realities' possess the

debate of whether HRM is a modernist project or a postmodern discourse). In many ways,

critically or not, many writers contend that HRM itself is an attempt to move away from the

modernist traditions of personnel (man as machine) towards a postmodernist view of HRM

(man as individuals). Critiques include the notion that because 'Human' is the subject we

should recognize that people are complex and that it is only through various discourses that

we understand the world. Man is not Machine, no matter what attempts are made to change it

Critical Theory also questions whether HRM is the pursuit of "attitudinal shaping,

particularly when considering empowerment, or perhaps more precisely pseudo-

empowerment - as the critical perspective notes. Many critics note the move away from Man

as Machine is often in many ways, more a Linguistic (discursive) move away than a real

attempt to recognise the Human in Human Resource Management.

Critical Theory, in particular postmodernism (poststructualism), recognises that because the

subject is people in the workplace, the subject is a complex one, and therefore simplistic

notions of 'the best way' or a unitary perspectives on the subject are too simplistic. It also

considers the complex subject of power, power games, and office politics. Power in the

workplace is a vast and complex subject that cannot be easily defined. This leaves many

critics to suggest that Management 'Gurus', consultants, 'best practice' and HR models are

often overly simplistic, but in order to sell an idea, they are simplified, and often lead

Management as a whole to fall into the trap of oversimplifying the relationship.

Business Practice

Human resources management comprises several processes. Together they are supposed to

achieve the above mentioned goal. These processes can be performed in an HR department,

but some tasks can also be outsourced or performed by line-managers or other departments.

Recruitment (sometimes separated into attraction and selection)

Induction and Orientation

Skills management


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Training and development

Workforce planning

Personnel administration

Compensation in wage or salary

Time management

Travel management (sometimes assigned to accounting rather than HRM)

Payroll (sometimes assigned to accounting rather than HRM)

Employ benefits administration

Personnel cost planning

Performance appraisal

Strategic Workforce Planninginvolves analyzing and forecasting the talent that companies

need to execute their business strategy, proactively rather than reactively, it is a critical

strategic activity, enabling the organization to identify, develop and sustain the workforce

skills it needs to successfully accomplish its strategic intent whilst balancing career and

lifestyle goals of its employees.

Strategic Workforce Planning is a relatively new management process that is being used

increasingly to help control labour costs, assess talent needs, make informed business

decisions, and assess talent market risks as part of overall enterprise risk management.

Strategic workforce planning is aimed at helping companies make sure they have the right

people in the right place at the right time and at the right price

Through Strategic Workforce Planning organizations gain insight into what people the

organization will need, and what people will be available to meet those needs. In creating this

understanding of the gaps between an organizations demand and the available workforce

supply, organizations will be able to create and target programmes, approaches and develop

strategies to close the gaps

Workforce analytics approach

The focus is to analyse current and historical employee data to identify key relationships

among variables and use this to provide insight into the workforce they need for the future..

Modeling approach

This approach incorporates forecasting and scenario planning. Forecasting uses quantitative

data to create forecasts incorporating multiple what-if and modeling the future. Scenario


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Planning being the more useful tool where there are uncertainties, therefore incorporating

quantitative and qualitative.

Segmentation approach

Breaking the workforce into segments along the lines of their jobs and determining relevance

to strategic intent. Provides a technique for prioritizing.

Steps in Workforce Planning

Though there is no definitive Start here activity for any of the approaches to Strategic

Workforce Planning, there are five fundamentals activities that most Workforce Plan models

have:

Environment Scan

Current Workforce Profile

Future Workforce View

Analysis and Targeted Future

Closing the gaps

Envoriment scanning

Environment Scanning is a form of business intelligence. In the context of Workforce

Planning it is used to identify the set of facts or circumstances that surround a workforcesituation or event.

Current Workforce Profile

Current State is a profile of the demand and supply factors both internally and externally of

the workforce the organization has today.

Future Workforce View

Future View is determining the organizations needs considering the emerging trends and

issues identified during the Environment Scanning.

Future View is often where the different approaches identified above are applied:

Quantitative futuring: understanding the future you are currently tracking to by forecasting;

Qualitative futuring: scenario planning potential alternative futures in terms of capabilities

and demographics to deliver the business strategy.


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Analysis and Targeted Future

Qualitative and quantitative futuring creates the content for an organizational unit to analyse

and identify critical elements. As the critical elements are identified the Targeted Future

begins to take form. The targeted future is the future that the organization is going to target as

being the best fit in terms of business strategy and is achievable given the surrounding factors

(internal/external, supply/demand).

Closing the Gaps

Closing the gaps is about the people management (human resources) programs and practices

that deliver the workforce needed for today and tomorrow. The process is about determining

appropriate actions to close the gaps and therefore deliver the targeted future.

There are 8 key areas that Closing the Gaps needs to focus on -

Resourcing, Learning and Development, Remuneration, Industrial Relations, Recruitment,

Retention, Knowledge Management, Job design.

Recruitment refers to the process of sourcing, screening, and selecting people for a job or

vacancy within an organization. Though individuals can undertake individual components of

the recruitment process, mid- and large-size organizations generally retain profesional

recruities.

The recruitment industry has four main types of agencies. Their recruiters aim to channel

candidates into the hiring organisations application process. As a general rule, the agencies

are paid by the companies, not the candidates. The industries practice of information

asymmetry and recruiters' varying capabilities in assessing candidate quality produces the

negative economic impacts described by The Market for Lemons.

PURPOSES AND IMPORTANCE:

In general purposes of recruitment is to provide a pool of potencially qualifide job

candidates. Specifically the purposes are to;

1. Determining the present and future recruitment of the organization in conjunction

with its personel planning and job-analysis activities.

2. Increase the pool of job candidates at minimum cost.

3.

Help increase the suscess rate of the selection process by reducing the number of

visibley under qualified or ovetqualified job application.

4. Help reduce the probability that job applicants, once recruited and selected ,will have

the organazation only after a short period of time.


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5. Meet organazations legal and social obligations regarding the composition of its

workforce.

TRADITIONAL RECRUITMENT

Also known as a employment agencies, recruitment agencies have historically had a physical

location. A candidate visits a local branch for a short interview and an assessment before

being taken onto the agencys books. Recruitment Consultants then endeavour to match their

pool of candidates to their clients' open positions. Suitable candidates are with potential

employers.

Remuneration for the agency's services usually takes one of two forms:

A contingency fee paid by the company when a recommended candidate accepts a job with

the client company (typically 20%-30% of the candidates starting salary), which usually has

some form of guarantee, should the candidate fail to perform and is terminated within a set

period of time.

An advance payment that serves as a retainer, also paid by the company.

It may still be legal for an employment agency to charge the candidate instead of the

company, but in most places that practice is now illegal, due to past unfair and deceptivepractices.

Online recruitment websites

Such sites have two main features: job boards and a rsum/Curriculum Vitae (CV) database.

Job boards allow member companies to post job vacancies. Alternatively, candidates can

upload a rsum to be included in searches by member companies. Fees are charged for job

postings and access to search resumes.

In recent times the recruitment website has evolved to encompass end to end recruitment.

Websites capture candidate details and then pool then in client accessed candidate

management interfaces (also online). Key players in this sector provide e-recruitment

software and services to organisations of all sizes and within numerous industry sectors, who

want to e-enable entirely or partly their recruitment process in order to improve business

performance.


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The online software provided by those who specialise in online recruitment helps

organisations attract, test, recruit, employ and retain quality staff with a minimal amount of

administration.

Online recruitment websites can be very helpful to find candidates that are very actively

looking for work and post their resumes online, but they will not attract the "passive"

candidates who might respond favorably to an opportunity that is presented to them through

other means. Also, some candidates who are actively looking to change jobs are hesitant to

put their resumes on the job boards, for fear that their current companies, co-workers,

customers or others might see their resumes.

Headhunters

Headhunters are third-party recruiters often retained when normal recruitment efforts have

failed.

Headhunters are generally more aggressive than in-house recruiters. They may use advanced

sales techniques, such as initially posing as clients to gather employee contacts, as well as

visiting candidate offices. They may also purchase expensive lists of names and job titles, but

more often will generate their own lists. They may prepare a candidate for the interview, help

negotiate the salary, and conduct closure to the search. They are frequently members in good

standing of industry trade groups and associations. Headhunters will often attend trade shows

and other meetings nationally or even internationally that may be attended by potential

candidates and hiring managers.

Headhunters are typically small operations that make high margins on candidate placements

(sometimes more than 30% of the candidates annual compensation). Due to their higher

costs, headhunters are usually employed to fill senior management and executive level roles,

or to find very specialized individuals.

While in-house recruiters tend to attract candidates for specifisc jobs, headhunters will both

attract candidates and actively seek them out as well. To do so, they may network, cultivate

relationships with various companies, maintain large databases, purchase company

directories or candidate lists, and cold call.

In-house recruitment

Larger employers tend to undertake their own in-house recruitment, using their Human

Resources department. In addition to coordinating with the agencies mentioned above, in-

house recruiters may advertise job vacancies on their own websites, coordinate employee


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referral schemes, and/or focus on campus graduate recruitment. Alternatively a large

employer may choose to outsource all or some of their recruitment process (Recruitment

process outsourcing).

There are the main recruiting stages:

Sourcing

Sourcing involves 1. advertising, a common part of the recruiting process, often

encompassing multiple media, such as the Internet, general newspapers, job ad newspapers,

professional publications, window advertisements, job centers, and campus graduate

recruitment programs; and 2. recruiting research, which is the proactive identification of

relevant talent who may not respond to job postings and other recruitment advertising

methods done in. This initial research for so-called passive prospects, also called name-

generation, results in a list of prospects who can then be contacted to solicit interest, obtain a

resume/CV, and be screened .

Screening & selection

Suitability for a job is typically assessed by looking for skills, e.g. communication, typing,

and computer skills. Qualifications may be shown through rsums, job applications,

interviews, educational or professional experience, the testimony of references, or in-house

testing, such as for software knowledge, typing skills, numeracy, and literacy, through

psychological tests or employment testing.

In some countries, employers are legally mandated to provide equal opportunity in hiring.

Agencies are particularly suitable for recruitment of executives and specialists. It is also

known as RPO (Recruitment Process Outsourcing)

SOURCES OF RECRUIMENT

Employment exchanges

Government establishes public employment exchanges throughout the country. These

exchanges provide job information to job seekers and help employers in identifying suitable

candidates.

Labour contractors

Manual workers can be recruited through contractors who maintain close contacts with the

sources of such workers. This source is used to recruit labor for construction jobs.


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Unsolicited applicants

Many job seekers visit the office of well-known companies on their own. Such callers are

considered nuisance to the daily work routine of the enterprise. But can help in creating the

talent pool or the database of the probable candidates for the organization.

EMPLOYEE REFERRALS / RECOMMENDATIONS

Many organizations have structured system where the current employees of the organization

can refer their friends and relatives for some position in their organization. Also, the office

bearers of trade unions are often aware of the suitability of candidates. Management can

inquire these leaders for suitable jobs. In some organizations these are formal agreements to

give priority in recruitment to the candidates recommended by the trade union.

RECRUITMENT AT FACTORY GATE

Unskilled workers may be recruited at the factory gate these may be employed whenever a

permanent worker is absent. More efficient among these may be recruited to fill permanent

vacancies. Factors Affecting Recruitment

Effective human resource planning helps in determining the gaps present in the existing

manpower of the organization. It also helps in determining the number of employees to be

recruited and what qualification they must possess.

RECURITMENT PROCESS DLF PRAMERICA HAMIRPUR

Here the company adopted to system for recruited their staff and worker .for staff member

the company adopted generally the traditional process like by the test , G.D , interview and

for the worker level the company adopted the flowing process.

On gate

By the contractor

By the camp

On the reference

Thus the recruitment process of the DLF in as like as the other company but one thing

different the camp based selection process .I think this a different kind of process and unique

it self . The company run the camp in the rural and remote area in state for the


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Recruitment they conducts one week program and this time interval the select number of

candidate. This helps not only the company but also the life of rural people who cut of the

rest world due to several reasons. This also helps increasing the economic and social

condition of the remote area which ultimately helps the nation development.

By this process the company also full fills the social objective of the company.

FACTOR AFFECTING THE RECRUITMENT PROCESS:

SIZE OF THE FIRM

The size of the firm is an important factor in recruitment process. If the organization is

planning to increase its operations and expand its business, it will think of hiring more

personnel, which will handle its operations.

COST

Recruitment incur cost to the employer, therefore, organizations try to employ that source of

recruitment which will bear a lower cost of recruitment to the organization for each

candidate.

Influence the recruiting efforts of the organization. If there is surplus of manpower at the

time of recruitment, even informal attempts at the time of recruiting like notice boards

display of the requisition or announcement in the meeting etc will attract more than enough

applicants.

IMAGE / GOODWILL

Image of the employer can work as a potential constraint for recruitment. An organization

with positive image and goodwill as an employer finds it easier to attract and retain

employees than an organization with negative image. Image of a company is based on what

organization does and affected by industry. For example finance was taken up by fresher

MBA's when many finance companies were coming up.

POLITICAL-SOCIAL- LEGAL ENVIRONMENT

Various government regulations prohibiting discrimination in hiring and employment have

direct impact on recruitment practices. For example, Government of India has introduced

legislation for reservation in employment for scheduled castes, scheduled tribes, physically


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handicapped etc. Also, trade unions play important role in recruitment. This restricts

management freedom to select those individuals who it believes would be the best

performers. If the candidate can't meet criteria stipulated by the union but union regulations

can restrict recruitment sources.

UNEMPLOYMENT RATE

One of the factors that influence the availability of applicants is the growth of the economy

(whether economy is growing or not and its rate). When the company is not creating new

jobs, there is often oversupply of qualified labor which in turn leads to unemployment.

COMPETITORS

The recruitment policies of the competitors also affect the recruitment function of the

organizations. To face the competition, many a times the organisationsS have to change their

recruitment policies according to the policies being followed by the competitors.

RECENT TREND:

Company need not plan for human resources much in advance.

Value creation, operational flexibility and competitive advantage

turning the management's focus to strategic level processes of HRM

Company is free from salary negotiations, weeding the unsuitable resumes/candidates.

Company can save a lot of its resources and time

POACHING/RAIDING

"Buying talent" (rather than developing it) is the latest mantra being followed by theorganisations today. Poaching means employing a competent and experienced person already

working with another reputed company in the same or different industry; the organisation

might be a competitor in the industry. A company can attract talent from another firm by

offering attractive pay packages and other terms and conditions, better than the current

employer of the candidate. But it is seen as an unethical practice and not openly talked about.

Indian software and the retail sector are the sectors facing the most severe brunt of poaching

today. It has become a challenge for human resource managers to face and tackle poaching,as it weakens the competitive strength of the firm.


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E-RECRUITMENT

Many big organizations use Internet as a source of recruitment. E- recruitment is the use of

technology to assist the recruitment process. They advertise job vacancies through worldwide

web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using

the Internet. Alternatively job seekers place their CV's in worldwide web, which can be

drawn by prospective employees depending upon their requirements.

Advantages internal of recruitment are:

Low cost.

No intermediaries

Reduction in time for recruitment. Recruitment of right type of people.

Efficiency of recruitment process.

RECRUITMENT POLICY

1. The recruitment policy of an organization specifies the objectives of recruitment and

provides a framework for implementation of recruitment programmed. It may involve

organizational system to be developed for implementing recruitment programmed and

procedures by filling up vacancies with best qualified people.

2. Recruitment is a positive process i.e. encouraging more and more employees to apply

WHEREAS selection is a negative process as it involves rejection of the unsuitable

candidates.

3. Recruitment is concerned with tapping the sources of human resources whereas selection

is concerned with selecting the most suitable candidate through various interviews and tests.

4. There is no contract of recruitment established in recruitment whereas selection results in a

contract of service between the employer and the selected employee.


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REVIEW OF LITERATURE


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REVIEW OF LITERATURE

Janifer A Chatman (2008)according to him to investigate how the fit of an employee with

his or her organization a a whole is established and maintained and what the consequencesare in organizations, this study tracked the early careers of 171 entry-level auditors in eight of

the largest U.S. public accounting firms and assessed the congruence of their values with

those of the organization. Person-organization fit is shown to be created, in part, by selection

(assessments of who the person is when he or she enters the organization) and socialization

(how the organization influences the person's values, attitudes, and behaviors during

membership. Results show some support for three general hypotheses: First, recruits whose

values, when they enter, match those of the firm adjust to it more quickly; second, those who

experience the most vigorous socialization fit the firm's values better than those who do not;

and third, recruits whose values most closely match the firm's feel most satisfied and intend

to and actually remain with it longer.

Methews (2009) concluded that organizations devote substantial resources to establishing

and maintaining a "good fit" between people and their jobs because they assume that certain

people are better suited to perform some jobs than others . Numerous fit theories have been

advanced, focusing on careers, job choice and organizational climate. These theories draw on

interactional psychology in that they consider how individual and situational characteristics

combine to influence a focal individual's response in a given situation. Pervasive influences

on individual behaviors and attitudes may also arise from the organization's social

Main File Recruitment and Selection Process

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