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Transcript of Mngesh birla1f
M P BIRLA INSTITUTE OF MANAGEMENT 1
A REPORT ON
ORGANIZATIONAL STUDY IN
Birla Sun Life Insurance Limited Submitted in partial fulfillment of the requirements of
the M.B.A Degree Course of Bangalore University
By
Mr. Rama Krishna Raju T Register Number: 06XQCM6101
Under the Guidance and Supervision Of
Mr. Rudra Murthy Professor
M.P.BIRLA INSTITUTE OF MANAGEMENT
Associate Bharatiya Vidya Bhavan
# 43, Race Course Road
Bangalore-560001
July - August 2007
M P BIRLA INSTITUTE OF MANAGEMENT 2
PRINCIPAL’S CERTIFICATE
This is to certify that the organization study on Birla Sun Life Insurance,
Bangalore has been prepared by Mr. Rama Krishna Raju T bearing the
registration no. 06XQCM6101 under the guidance and supervision of Mr.
Rudra Murthy, Professor, MPBIM, Bangalore.
PLACE: Bangalore Dr. N S Mallavali
DATE: (Principal)
M P BIRLA INSTITUTE OF MANAGEMENT 3
GUIDE’S CERTIFICATE
This is to certify that the organization study on Birla Sun Life Insurance,
Bangalore, prepared by Mr. Rama Krishna Raju T bearing the
registration no.06XQCM6101 is a bonafide work done, carried under my
guidance and supervision during the academic year 2006-08 in partial
requirement for the award of MBA degree by Bangalore University. To the
best of my knowledge this report has not formed the basis for the award of
any other degree or diploma.
PLACE: Bangalore Mr. Rudra Murthy
DATE: (Professor)
M P BIRLA INSTITUTE OF MANAGEMENT 4
COMPANY CERTIFICATE
Birla Sun Life Insurance Limited
This is to certify that Mr. Rama Krishna Raju T has completed his
project, under my guidance during Jul& Aug 2007on the topic titled
“Organization study” His Conduct was Good during this period.
Place: BANGALORE
Date: Signature
Name
Designation
of the guide
Office Seal
M P BIRLA INSTITUTE OF MANAGEMENT 5
DECLARATION
I hereby, declare that this internship report entitled. An Organization Study at Birla Sun Life Insurance Limited, Bangalore submitted in partial
fulfillment for the award of Master of Business Administration of
Bangalore University is a record of independent work carried out by me
under the guidance of Prof. Rudra Murthy faculty member, M. P. Birla
Institute of Management Studies, Bangalore.
I also declare that this report is a result of my own effort and has not been
submitted earlier for the award of any degree or diploma of Bangalore
University or any other University.
Place: Bangalore Rama Krishna Raju T
Date: REGD.NO: 06XQCM6101
M P BIRLA INSTITUTE OF MANAGEMENT 6
Acknowledgement
At the outset, I would like to express my deep sense of gratitude and sincere
thanks to Dr. Mallavali, Principal, M.P.BIRLA INSTITUTE OF MANAGEMENT, Bangalore, for providing an opportunity to discover the corporate world, from a
close perspective.
Prof. Rudra Murthy, my professor and internal guide for this project to whom I
am deeply grateful for his constant support and guidance without which it would
not have been possible for me to complete this project in time.
I take this opportunity to extend my sincere gratitude to Mr. Ranjan Anand, Agency Manager, BSLI for giving me an opportunity to undertake internship
training and the project on the topic .Competency Mapping. in the esteemed
organization.
I would also like to express my heartfelt wishes to BSLI, for making these 2
months a stepping-stone for my career.
I convey my gratitude to all the staff members of Marketing Division for their
kind cooperation through out my project.
Finally, I thank my dearest Parents for their continued support.
M P BIRLA INSTITUTE OF MANAGEMENT 7
Executive Summary
Birla Sun Life Insurance pioneered the unique Unit Linked Life Insurance
Solutions in India. BSLI has cemented its position as a leading player in the
private life insurance industry within 4 years of its inception. Its main focus
on investment linked insurance products supported its leadership in product
innovation. Its multi-dimensional channels offered convenient channels for
sale of the products to customers. It had been maintaining corporate
governance and a high degree of transparency in all business practices and
procedures. It had a strong fundamentals based on Aditya Birla Group’s
local insight and sun life financials global expertise.
The company chosen was Birla Sun Life Insurance ( BSLI) . The reason
behind this was to understand the expertise it has developed and skills it has
owned, especially in the field of marketing its products as it is the booming
industries in India.
Learning really takes place outside the classroom. I stand a witness to this
statement. The in sight of knowledge that I acquired in the two months of
internship with BSLI was quite impressive. The opportunity I received to
apply my knowledge and skills in the organization gave me a practical view
point to the whole system of learning.
M P BIRLA INSTITUTE OF MANAGEMENT 8
The main objective of the internship was to imbibe a practical approach in
the students towards the knowledge gained at the classroom level. The
internship at BSLI has given me the right perception and has had a positive
effect on the kind of learning that I got at the M.P. Birla Institute of
Management, Bangalore.
It was a very good experience for me to work during this tenure. I am glad
that I have learnt so much in such little time. It has boosted my confidence
and has raised my spirits. I can confidently say that my knowledge has
improved in a very short time I would like to thank the entire Marketing
department at the BSLI for their constant support.
M P BIRLA INSTITUTE OF MANAGEMENT 9
Contents
CHAPTER-1 THEORYTICAL SETTING
CHAPTER-2 ORGANISATION STRUCTURE
CHAPTER-3 OPERATIONAL FUNCTIONAL
DEPAREMENTS AND
PERFORMANCE EVALUATION
CHAPTER-4 AWARDS AND ACHIVEMENTS
CHAPTER-5 RECOMMENDATIONS AND
SUGGESTIONS
CHAPTER-6 CONCLUSIONS
M P BIRLA INSTITUTE OF MANAGEMENT 10
Chapter 1
INTRODUCTION
Organizat ion s t ructure involves formal and recognized
st ructure where in each and every ind iv idual and group
have a def in i te re lat ionship wi th each other , have a
speci f ied area to ex is t , funct ion to per form, author i ty to
mobi l ize resources, obl igat ion to act , responsib i l i ty for
achiev ing the object ive and accountabi l i ty for the i r
per formance. I t is ar rangement of act iv i t ies and
ass ignment of personal to the i r act iv i t ies in order to
achieve the organizat ional goal .
Organizat ion s t ructure encompasses s ix
Major areas wi th in organizat ion. These are
Work specia l izat ion
Depar tmenta l izat ion
Chain of command
Span of contro l
Centra l izat ion and decentra l izat ion
Object ives of the study: 1) To understand the organizat ion s t ructure/h ierarchy of
the company
2) To ident i fy var ious depar tments in the organizat ion
and the funct ion ing of the same.
3) To understand the var ious responsib i l i t ies and dut ies
carr ied out by each depar tment .
M P BIRLA INSTITUTE OF MANAGEMENT 11
4) The study is a imed at understanding how an
organizat ion pract ica l ly works in the real s i tuat ion.
5) To under take a smal l ass ignment in order to know
the percept ion and at t i tudes of the people towards Bi r la
sun L i fe Insurance pol ic ies.
6) To of fer suggest ions based upon the f ind ings.
Scope of the study: The study is l imi ted to Bi r la Sun L i fe Insurance
Company L imi ted Bangalore branch.
Source of data: Pr imary data: One to one in terv iews wi th depar tmenta l
heads and few subord inates.
Secondary data: Secondary data are co l lected f rom the
company’s websi te , newspaper ar t ic les and magazines.
LIFE INSURANCE Li fe insurance is a contract prov id ing for a payment of a
sum of money to the person assured or fa i l ing h im to
the person ent i t led to receive the same on the
happening of cer ta in event . Uncer ta inty of death is
herent in human l i fe . I t is th is r isk , h igh g ives r ise to the
necessi ty for some form of protect ion against the
f inancia l loss ar is ing f rom death. Insurance subst i tu tes
th is uncer ta inty by cer ta inty . The object ive of insurance
is normal ly to prov ide: a. Fami ly protect ion and
b. Prov is ion for o ld age.
M P BIRLA INSTITUTE OF MANAGEMENT 12
THERE ARE 3 TYPES OF LIFE INSURANCE POLICIES: i ) Term insurance plans: Pure l i fe covers where pol icy holder pays for the r isk
cover and do not expect to receive anyth ing e lse in
return. Term insurance is now avai lab le in Ind ia. Opt ing
for such pol icy wi l l improve the ef f ic iency of the pol icy
premium and enable pol icy holder for a b igger r isk
cover for the same cost . These are term insurance
p lans wi thout in terest .
i i ) Whole l i fe insurance plans: Whole l i fe pol ic ies requi re the pol icy holder to pay
premium throughout h is /her l i fe and cover r isk for the
whole l i fe . The pol ic ies wi thout prof i ts are cheaper .
i i i ) Endowment insurance plan: Endowment pol ic ies are cost l iest and among th is group,
money back pol ic ies involve paying h ighest premium.
They g ive customers matur i ty benef i ts (normal ly , sum
assured) and addi t ional prof i ts by way of bonus,
guaranteed addi t ions, loyal ty bonus, etc
M P BIRLA INSTITUTE OF MANAGEMENT 13
DEFINITION OF SOME TYPES OF POLICIES :
1) Annuity An annui ty is a s teady st ream of equal payments that
one receives every year , or every month e i ther for l i fe
or a f ixed number of years, as return af ter making an
investment e i ther as a lump-sum or through insta l lments
paid over a cer ta in number of years, speci f ic sum Upon
the death of the annui tant , or a t the expi ry of the per iod
f ixed for annui ty payments, the invested annui ty fund is
refunded usual ly a long wi th a smal l bonus. Annui t ies
d i f fer f rom al l o ther forms of l i fe insurance in one
fundamenta l way. They do not prov ide any insurance
cover but of fer a guaranteed income for a cer ta in per iod
or for l i fe .
Typica l ly annui t ies are bought to generate income
dur ing one’s ret i red l i fe , which is why they are a lso
ca l led Pension Plans. Annui t ies prov ide a so lut ion to
the b iggest f inancia l insecur i ty of o ld age af ter one
ret i res and the income f rom salary ceases.
2) Endowment: Endowment pol ic ies cover the r isk for a speci f ied per iod
at the end of which the sum assured is paid back to the
pol icyholder a long wi th the bonus accumulated dur ing
M P BIRLA INSTITUTE OF MANAGEMENT 14
the term of the pol icy. The payment of the endowment
to the pol icy holder depends upon the complet ion of the
pol icy ’s term which r ight ly accounts for the popular i ty of
endowment pol ic ies. Typica l ly , one’s responsib i l i ty for
the f inancia l protect ion of the fami ly reduces
s ign i f icant ly once the ch i ldren are grown up and
independent ly set t led. The focus then shi f ts to
managing a smal ler fami ly perhaps only onesel f and
one’s spouse af ter ret i rement . This is where the
endowment . The or ig inal sum assured and the
accumulated bonus, received back comes handy.
3) Money back: Unl ike endowment p lans, in money back pol ic ies, the
pol icyholder gets per iod ic surv iva l benef i ts dur ing the
term of the pol icy and a lump sum amount on surv iv ing
i ts term. In the event of death dur ing the term of the
pol icy, the benef ic iary gets the fu l l sum assured,
wi thout any deduct ions for the amounts paid t i l l date,
and no fur ther premiums are requi red to be paid.
M P BIRLA INSTITUTE OF MANAGEMENT 15
Industry Prof i le A brief history of the insurance industry:
The insurance sector in Ind ia has become a fu l l
c i rc le f rom being an open compet i t ive market to
nat ional izat ion and back to a l ibera l ized market again.
Trac ing, the developments in Ind ian insurance sector
reveals the 360-degree turn wi tnessed over a per iod of
a lmost two centur ies.
Life insurance industry:
The business of l i fe insurance in Ind ia in i ts
ex is t ing form star ted in the year 1818 wi th the
establ ishment of the Or ienta l l i fe insurance company in
Calcut ta.
Important milestones in the l i fe insurance business in India:
1912: The Indian l i fe assurance companies ’ act enacted
as the f i rs t s tatute to regulate the l i fe insurance
business.
1928: the Ind ian insurance companies act enacted to
enable the government to co l lect s tat is t ica l in format ion
about both l i fe and non l i fe insurance businesses
M P BIRLA INSTITUTE OF MANAGEMENT 16
1938: Ear l ier leg is la t ion consol idated and amended to
by the insurance act wi th the object ive of protect ing the
in terest of the insur ing publ ic .
1956 : 245 Indian and fore ign insurers and prov ident
soc iet ies taken over by the centra l government and are
nat ional ized. LIC formed by an act o f par l iament , which
is LIC Act , 1956, wi th a capi ta l contr ibut ion of Rs. 5
crore f rom the government of Ind ia.
Insurance Sector Reforms:
In 1993, Malhotra commit tee, headed by former
F inance secretary and RBI governor Mr. R.N. Malhotra,
was formed to evaluate Ind ian insurance industry and
recommend i ts fu ture d i rect ion.
The Malhotra commit tee was setup wi th the
object ive of complement ing the reforms in i t ia ted in the
f inancia l sector , the reforms were a imed at “creat ing a
more ef f ic ient and compet i t ive f inancia l system sui tab le
for the requi rements of the economy keeping in mind
the st ructura l changes current ly underway and
recogniz ing that insurance is an important par t o f the
overa l l f inancia l system were i t was necessary to
address the need for s imi lar reforms…”
M P BIRLA INSTITUTE OF MANAGEMENT 17
V) Customer service:
1. LIC should pay in terest on delays in payments
beyond 30 days.
2. Insurance companies must be encouraged to
set up uni t l inked pension p lans.
3 . Computer izat ion of operat ion and updat ing of
technology to be carr ied out in the insurance
industry .
The commit tee emphasized that in order to improve
the customer serv ices and increase the coverage of the
insurance industry should be opened up to complet ion.
But at the same t ime, the commit tee fe l t the need to
exerc ise caut ion as any fa i lure on the par t o f new
p layers could ru in the publ ic conf idence I the industry .
Hence, I was decided to a l low compet i t ion in a
l imi ted way by s t ipu lat ing the min imum capi ta l
requi rement of Rs. 100 cores, The commit tee fe l t the
need to prov ide greater autonomy to insurance
companies in order to improve their per formance and
enable them to act as independent companies wi th
economic mot ives .For th is purpose, i t had proposed
set t ing up an independent regulatory body.
M P BIRLA INSTITUTE OF MANAGEMENT 18
L i fe Insurance Industry: Present context :
The l i fe insurance industry has rebound,
demonstrat ing a growth rate of 51% in new business
premium in the th i rd year of pr ivat izat ion.
L i fe insurance premiums rose to Rs 18,710 core
(Rs 187.10 mi l l ion) in f isca l 2006 f rom Rs 12,300 core
(Rs 123 b i l l ion) in 2004-05.
The massive growth comes chief ly on the back of
sa les of un i t - l inked p lans, group pol ices and pension
p lans.
The Indian insurance sector has wi tnessed new
premium income of Rs 34,828 core (Rs 348.28 b i l l ion) in
f isca l 2006. This ref lects a growth rate of 33% over
f iscal 2005’s aggregate f igure of Rs 26,203.8 core (Rs
262.03 b i l l ion) . Against a growth rate of 51% for l i fe
insurance business, non- l i fe insurance premiums rose
by 16% to Rs 16,118 core (Rs161.18 b i l l ion) in f iscal
2006.
A s igni f icant share of the new business has come
on the back on sale of group pol ic ies.
The L i fe Insurance Corporat ion of Ind ia, L IC, a lone
mopped up Rs 2,332.85 crore (Rs 23,32 b i l l ion) as i t
insured over 30 lakh l ives under the var ious group
schemes. LIC’ s group business reached new heights
dur ing the year , record ing a 119% growth in new
M P BIRLA INSTITUTE OF MANAGEMENT 19
premium income and 50% increase in the number of
l ives covered.
Today, the tota l fore ign d i rect investment in the
Indian insurance sector is pegged at Rs 1,021 crore (Rs
10.21 b i l l ion) whi le the paid-up capi ta l o f the insurance
sector s tands at Rs 5,518 crore (Rs 55.18 b i l l ion) .
Present ly there are 13 L i fe Insurance companies in
the Indian market , out of which, only LIC and SBI L i fe
Insurance are government organizat ions and the
remain ing are pr ivate p layers.
The fo l lowing is the l is t o f l i fe insurance companies
in the Ind ian market :
1) L i fe insurance Corporat ion of Ind ia
2) Al l ianz Baja j L i fe Insurance
3) HDFC Standard L i fe Insurance
4) TATA AIG Insurance
5) ING Vysya L i fe Insurance
6) ICICI Prudent ia l L i fe Insurance
7) Bi r la Sun L i fe Insurance
8) Met L i fe Ind ia Insurance
9) AMP Sanmar
10) SBI L i fe Insurance
11) Aviva L i fe Insurance
12) Max New York L i fe
13) OM Kotak Mahindra l i fe Insurance
M P BIRLA INSTITUTE OF MANAGEMENT 20
The Insurance Regulatory and Development Authori ty:
Reforms in the insurance sector were in i t ia ted wi th
the passage of the IRDA Bi l l in Par l iament in December
1999. The IRDA s ince i ts incorporat ion as a s tatutory
body in Apr i l 2000 has fast id ious ly s tuck to i ts schedule
of f raming regulat ions and regis ter ing the pr ivate sector
insurance companies.
The other decis ions take s imul taneously to prov ide
the suppor t ing systems to the insurance sector and in
par t icu lar the l i fe insurance companies were the launch
of the IRDA’s onl ine serv ice for issue and renewal of
l icenses to agents.
The approval o f inst i tu t ions for impart ing t ra in ing to
agents has a lso assured that the insurance companies
would have a t ra ined workforce of insurance agents in
p lace to se l l the i r products, which were expected to be
in t roduced by ear ly 2001.
S ince being set up as an independent s tatutory
body the IRDA has put in a f ramework of g lobal ly
compat ib le regulat ions. In the pr ivate sector 12 l i fe
insurance and 7 genera l insurance companies have
been regis tered.
M P BIRLA INSTITUTE OF MANAGEMENT 21
Company Prof i le:
B i r la Sun l i fe Insurance Company is head quar tered
at Mumbai and has establ ished a s t rong presence in the
c i t ies of Ahmedabad ,Baroda, Bangalore Chandigarh,
Chenni , Gurgaon, Hyderabad, Indore, Ja ipur ,
Kanchipuram, Kanpur, Kolkata, Lucknow, Meerut ,
Mysore, New Delh i , Noida, Patna, Pune, Rajkot , Surat ,
Varanasi and Visakhapatnam.
Background and inception of company: Sun Life Financial
Sun L i fe F inancia l is a leading in ternat ional
f inancia l serv ices organizat ion. Wi th a h is tory that dates
back to 1871, Sun L i fe F inancia l has evolved f rom a
s ing le mutual l i fe insurance to one of the most h ighly
rated insurance and weal th management inst i tu t ions in
the wor ld , Sun L i fe F inancia l knows i ts va lue l ies in
more than assets and h is tory, I t a lso l ies in the cu l ture
of in tegr i ty and the pursui t o f excel lence that have
marked a l l o f the organizat ion ’s endeavors. Today, the
sun l i fe f inancia l Group of companies and par tners are
represented g lobal ly in Canada, the Uni ted States, the
Phi l ipp ines, Japan, Indonesia, Ind ia and Bermuda.
M P BIRLA INSTITUTE OF MANAGEMENT 22
Sun Life in India: Sun l i fe ’s Ind ian insurance operat ions wi th the the
A.V. Bi r la group may be just four years young, but i t
was more than100 years ago-- -110years to be prec ise—
that sun l i fe insurance appointed i ts f i rs t agent in
Mumbai ( then of course known as Bombay) , a
gent lemen by the name of I ra B. Thayer . In May 1892,
Sun L i fe issued i ts f i rs t po l icy, there in the pol icy
number 23200, and soon opened i ts f i rs t o f f ice on
Esplanade Road. The Canadian Company has never
looked back ever s ince.
The foundat ion of the aesthet ic Canada Bui ld ing
was la id in May 1902, when the board of Di rectors
approved the purchase of a bui ld ing to house Sun L i fe ’s
operat ion in the subcont inent . A year la ter , Lot 71 on
Horns by Road was purchased to bui ld the st ructures. A
popular archi tectura l f i rm, Gost l ing, chambers and
Fr i tchely , was pressed in to act ion and Canada Bui ld ing
wi th i ts awe- inspi r ing yel low and whi te s tone façade
came into being in 1905. in t r icac ies l ike the maple leaf ,
beaver and r is ing sun logo couples wi th the char io t o f
the Sun logo added to the beauty of th is grand
st ructure.
M P BIRLA INSTITUTE OF MANAGEMENT 23
Expansion Times :
When the Pr ince of Wales v is i ted in 1921 i t was the
Canada Bui ld ing that greeted the royal ty in regal
sp lendor – the of f ic ia ls had i l luminated the bui ld ing at a
cost o f Rs.1000. In 1925, Sun L i fe expanded operat ions
by set t ing up d is t r ic t o f f ices in Calcut ta and Madras, in
addi t ion to the Bombay branch. Two years la ter , the
Lahore of f ice in to being, fo l lowing which operat ions at
Dacca were k icked of f .1929 saw an of f ice in Luck now,
fo l lowed by Colombo a year la ter . I t was only in 1952
that the New Delh i o f f ice was establ ished.
Aditya Bir la Group – The Indian MNC: Adi tya Bi r la Group is Ind ia ’s second largest
business house. I t en joys a dominant posi t ion in a l l the
sectors in which operates. The Adi tya Bi r la Group is
- The wor lds largest producer of v iscose staple
f iber
- The largest s ing le locat ion ref iner of pa lm o i l ,
- The wor ld ’s largest producer of carbon b lack.
In Ind ia the group is the s ingle largest producer of
- V iscose f i lament yarn
- A luminum
- Grey cement
M P BIRLA INSTITUTE OF MANAGEMENT 24
- Whi te cement and
- Rayon grade pulp
- Petro leum (HINDALCO)
The group is a lso
- The only producer of l inen in the text i le
industry in Ind ia.
- The leader in the ready- to-wear branded
appare l .
For severa l decades now, the Adi tya Bi r la Group
has won the t rust and respect of i ts 72,000 employees
and 8 lakh investors. The group’s turnover exceeds
Rs.260 b i l l ion and has an asset base, which is in
excess of Rs.257 b i l l ion.
The Adi tya Bi r la group has over 75 business uni ts
in Ind ia and overseas. I t has operat ions in Canada,
U.S.A; U.K, Thai land, Phi l ipp ines, Malays ia and Egypt .
I ts in ternat ional operat ions contr ibute great ly to Ind ia ’s
growth and to that o f South East Asia, making i t Ind ia ’s
f i rs t t ru ly mul t inat ional conglomerate.
The f lagship companies of the Adi tya Bi r la Group
inc lude some of the largest and wel l known companies
in Ind ia such as Grasim Industr ies Ltd;
Hindalco Industr ies L td; Ind ian Aluminum Company
Ltd; Ind ian Rayon Industr ies Ltd, Indo Gul f Corporat ion
M P BIRLA INSTITUTE OF MANAGEMENT 25
Ltd, Global F inance Ltd. The group has forged power
re lat ionships wi th large corporat ions l ike Hindustan
Petro leum, Tata and powergen PC and AT & T.
Growing Financial Services Clout: Bir la Sun L i fe jo in t venture par tner , Sun L i fe
F inancia l is one of the largest g lobal insurance and
weal th management organizat ions. Sun L i fe has been
of fer ing l i fe insurance in Canada s ince 1871, whi le MFS
i ts subsid iary created the f i rs t US mutual fund in 1924.
Sun L i fe has operat ions around the wor ld in Uni ted
States, Uni ted Kingdom, Canada, Phi l ipp ines, Hong
Kong, Bermuda and Indonesia and of f ices in 21 key
markets throughout the wor ld.
I t has tota l assets under management CDN$328 b i l l ion
as on December 31, 2002. I t has employees wor ld wide
and g lobal d is t r ibut ion network of over 1,00,000
d is t r ibutors.
Sun L i fe has a g lobal reputat ion as top
insurers wi th h igh prof i tab i l i ty , pers is tency And
product iv i ty rat ios, which in turn ref lect the underwr i t ing
exper t ise of the company.
The turnover of the group is growing at a s teady
rate and is current ly est imated to be in excess of
M P BIRLA INSTITUTE OF MANAGEMENT 26
Rs.260 Bi l l ion. The group has a s t rong asset base
valued at Rs.180 b i l l ion. The group is wel l respected in
the f inancia l markets and a l l the group stocks command
a heal thy market va luat ion – the tota l market
capi ta l izat ion being near ly Rs.150 b i l l ion.
Nature of business carr ied: Whi le the Adi tya Bi r la Group contr ibutes i ts
knowledge of the Ind ian market , Sun L i fe F inancia ls
of fers i ts g lobal exper t ise in the areas of protect ion of
weal th management serv ices. Both the par tners are
a l ready engaged in the business of asset management ,
re ta i l d is t r ibut ion and stock brok ing. This par tnership
has been now extended to L i fe Insurance af ter
Pr ivat izat ion of th is sector .
A jo in t venture between the Adi tya Bi r la Group and
Sun L i fe f inancia l , B i r la ’s sun l i fe insurance forayed in to
the l i fe insurance and ret i rement p lanning business by
p ioneer ing the unique uni t - l inked solut ions in Ind ia. In
just 2 years of i ts launch the company has catapul ted to
second posi t ion in new business premium in the h ighly
compet i t ive pr ivate l i fe insurance industry based on i ts
s t rategy of uni t - l inked p lans.
M P BIRLA INSTITUTE OF MANAGEMENT 27
Vision ,Mission, Qual i ty Pol icy :
Vision:
“To be prov ider of f inancia l secur i ty to ind iv iduals and
corporate” . Mission: To be the f i rs t preference of our customers as a leading
in tegrated insurance prov ider of Insurance solut ions
super ior va lue creat ion and technology.
Qual i ty Pol icy: Bir la Sun L i fe has put in carefu l ly des igned st rategies to
move to the leading posi t ion in the l i fe insurance
industry through product innovat ion, customer focus,
and cut t ing edge technology.
M P BIRLA INSTITUTE OF MANAGEMENT 28
Product Prof i le: Bir la Sun L i fe insurance was the f i rs t in Ind ia to
in t roduce Uni t –L inked L i fe Insurance p lans. INDIVIDUAL LIFE PLANS
1) F lex i L i fe L ine Plan
2) F lex i Save p lus Endowment Plan
3) F lex i Cash Flow Money Back Plan
4) Bi r la Sun L i fe Term Plan
5) Class ic L i fe Premier
1) Flexi Li fe Line Plan: Unique Features:
a) The p lan is a uni t l inked non-par t ic ipat ing p lan which
g ives ef f ic ient earn ings in the long term.
b) L i fe long Insurance cover t i l l age 100 years in addi t ion
to other durat ions avai lab le.
c) A choice of three Investment Fund Opt ions: Protector ,
Bui lder and enhancer , wi th the f reedom to swi tch
between the Investment Fund opt ions anyt ime dur ing
the pol icy tenure.
d) F lex ib i l i ty to make addi t ional lump sum investments
( top ups) to increase the savings por t ion of pol icy.
M P BIRLA INSTITUTE OF MANAGEMENT 29
e) Min imum Guaranteed returns of 3% p.a. on premium
and any top up amounts, net of a l l Pol icy Charges.
More important ly the ent i re upside in the per formance
of the Investment Fund is passed on to customer.
f ) Opt ions to make tax f ree Par t ia l Wi thdrawal f rom fund
Value anyt ime af ter three years.
g) Surrender the pol icy wi thout penal ty any t ime af ter 4
pol icy years.
h) Increase the Sum Assured dur ing the premium-paying
per iod depending on l i fe insurance requi rements.
i ) Convenient premium payment opt ions: Shor t or
Regular paying per iod. 2) Flexi Save Plus Endowment Plan:
Unique Features :
a) The p lan is a uni t l inked non par t ic ipat ing p lan g iv ing
ef f ic ient earn ings in the long term.
b) A choice of three Investment Fund Opt ions:
Protector , Bui lder and Enhancer , wi th the f reedom to
M P BIRLA INSTITUTE OF MANAGEMENT 30
swi tch between the Investment Fund Opt ions anyt ime
dur ing the pol icy tenure.
c) F lex ib i l i ty to make addi t ional lump sum investments
( top ups) to increase the savings por t ion of pol icy.
d) Min imum Guaranteed returns of 3% p.a. on premium
and any top up amounts, net o f a l l Pol icy Charges. More
important ly the ent i re upside in the per formance of the
Investment Fund is passed on to customer.
e) Opt ions to make tax f ree Par t ia l Wi thdrawals f rom
fund Value, any t ime af ter three years.
f ) Surrender the pol icy wi thout penal ty any t ime af ter 4
pol icy years.
g) Increase the Sum Assured dur ing the premium paying
per iod depending on your requi rements.
3) Flexi Cash Flow Money Back Plan: Unique Features: a) The p lan is a uni t l inked non-par t ic ipat ing p lan to g ive
ef f ic ient returns.
b) Tax f ree lump sum pay-outs, to take care of recurr ing
needs.
M P BIRLA INSTITUTE OF MANAGEMENT 31
c) A choice of three Investment Fund Opt ions:
Protector , Bui lder and Enhancer , wi th the f reedom to
swi tch between the Investment Fund Opt ions anyt ime
dur ing the pol icy tenure.
d) F lex ib i l i ty to make addi t ional lump sum investments
( top ups) to increase the savings por t ion of pol icy.
e) Min imum Guaranteed returns of 3% p.a. on premium
and any top up amounts, net o f a l l Pol icy Charges. More
important ly the ent i re upside in the per formance of the
Investment Fund is passed on to customer.
f ) Opt ions to make tax- f ree Par t ia l Wi thdrawals fund
Value anyt ime af ter three years.
g) Surrender the pol icy wi thout penal ty af ter 4 pol icy
years) Increase the Sum Assured dur ing the premium
paying per iod any t ime depending on needs.
4) Bir la Sun Life Term Plan: Unique Features:
a) The p lan has been designed for people who want to
avai l o f the benef i ts of l i fe insurance at low cost . I t is a
low premium, pure r isk coverage p lan which takes care
M P BIRLA INSTITUTE OF MANAGEMENT 32
of f inancia l commitments towards fami ly or dependants,
should anyth ing unfor tunate happen to customer.
b) Riders - Acc identa l Death & Dismemberment Rider ,
Cr i t ica l I l lness Rider , Waiver Of Premium Riders
avai lab le a long wi th the p lan, one can avai l o f r iders
even in the case of S ingle Premium Pol icy.
c) Favorable Term - Favorable Premium Rates for
Female Cl ientsd) Age Benef i t - Maximum age for
matur i ty is 70 years
5) Classic Li fe premier: Unique Features :
a) The p lan is a uni t l inked non par t ic ipat ing p lan
b) One has the choice of s ix Investment Fund Opt ions
wi th the f lex ib i l i ty to a l locate the premiums in vary ing
propor t ions in to the d i f ferent Fund Opt ions or even
swi tch f rom one or more Investment Fund(s) to other
Investment Fund(s) .
c) One can top up Fund Value whenever one has
addi t ional sav ings. The min imum amount of top ups
wi l l be Rs. 10,000
d) The p lan of fers fur ther benef i ts in the form of
addi t ional uni ts , which wi l l be added to the Fund
M P BIRLA INSTITUTE OF MANAGEMENT 33
Value at the end of the 10th pol icy year and at the ed
of every 5th year thereaf ter
e) There is h igh l iqu id i ty in the form of Par t ia l
Wi thdrawals and surrender benef i ts . f )
Death benef i ts , which wi l l be h igher of the Fund Value
or Sum Assured, reduced by the appl icable par t ia l
wi thdrawals
Areas of Operat ion: B i r la Sun l i fe Insurance is present in Ind ia and
spread across 1000 towns in Ind ia. Apar t f rom th is i t ’s
do ing business even in the rura l segment .
Ownership pattern: The Adi tya Bi r la group holds 74% of the equi ty in
Bi r la Sun L i fe Insurance whi le the Sun L i fe group holds
the balance 26%. Both the companies are commit ted to
enhance the capi ta l o f the p lan pro ject ions.
Competi tors’ information: The company faces two types of compet i tors :
• D i rect Compet i tors
• Ind i rect Compet i tors
M P BIRLA INSTITUTE OF MANAGEMENT 34
Direct ly the company shal l have to face the
onslaught of L IC, the large customer base, accumulated
funds, wel l -establ ished market ing machinery etc .
This is just one hal f o f the s tory; there would be
the recent ly “of f – the- b lock insurers” who would be
coming out wi th a var ie ty of product var ia t ions and
many of them wi th para l le l f inancia l act iv i t ies and
s imi lar products. Just to name few: ICICI – Prudent ia l ,
HDFC-Standard L i fe , TATA-AIG, OM-Kotak, Max-New
York, SBI L i fe , e tc .
These newer compet i tors are l ike ly to be
aggressive and innovat ive. Th is d i rect compet i t ion, on
the f l ip s ide, could resul t in market expansion. The
Company shal l a lso be fac ing compet i t ion is more
damaging. Ind i rect compet i t ion shows up in terms of
o ther f inancia l inst ruments l ike Bank FSs, PPF, NSCs,
ULIP, Stocks land other s imi lar sav ings inst ruments.
In v iew of the changing scenar io as wel l as the
nature of the market we operate in , the task of
establ ish ing a dynamic, progress ive and a successfu l
company is both qui te daunt ing and chal lenging. Some
of the chal lenges current ly faced and to be faced in
fu ture are:
1 . F inding a su i tab le, mot ivated team
2. Tai lor ing an innovat ive product mix
3. Ident i fy ing a potent ia l market n iche’
M P BIRLA INSTITUTE OF MANAGEMENT 35
4. Serv ic ing the c l ient to the c l ient ’s complete
sat is fact ion
5. Designing a h ighly ef f ic ient system of contro ls ,
analys is and t rouble-shoot ing
6. Managing the funds bet ter to consis tent ly outper form
the market
Infrastructure Faci l i t ies :
1 . A l l branches are computer ized and l inked in a wide
area network
2 . There is in ter branch connect iv i ty a wel l as
connect iv i ty wi th the head of f ice
3 . The main back and pol icy adminis t rat ion is a
Rs.6000 based COBOL- java system running on AIX wi th
DB2 database and a HTML f ront end
4. The sales i l lustrat ion system is an in ter face system
wi th Java c lasses. The account ing system used is Sun
Account ing system, which in ter faces wi th the Rs.6000
5. Bi r la Sun L i fe would prov ide Sales I l lust rat ion
Systems to every d is t r ibutor and i t can be loaded on
laptops a lso.
6. BSLI would be harnessing the IT advantage for
improving the ef fect iveness and ef f ic iency of i ts
d is t r ibut ion channels .
M P BIRLA INSTITUTE OF MANAGEMENT 36
Chapter 2 Organizational structure:
ORGANISATION CHART
CEO
VP
MKT DSF
CFO
VP
GROUP
VP CHANNEL
SALES
REGIONA
L
MANAGE
R BRANCH
MANAGER BRANCH
MANAGER
BRANCH
MANAGER
MARKETING
MANAGER
MARKETING
MANAGER
MARKETING
MANAGER
AGENCY
MANAGER
AGENCY
MANAGER
AGENCY
MANAGER
M P BIRLA INSTITUTE OF MANAGEMENT 37
Work Flow Model:
APPLICATION
ADDITION OF RIDERS
REQUIREMENT
ADDITION OF RIDERS
CHEQUE DISHONOUR
DISPATCH
REFUND
CLIENT SERVICES ID
COMMUNICATION CELL
M P BIRLA INSTITUTE OF MANAGEMENT 38
1) Appl icat ion:
I t conta ins a l l the in format ion of proposer .
2) Addit ion of r iders:
The customer i f needed can take addi t ional
insurance cover by tak ing a term r ider , i f he wants ext ra
coverage for acc idents he could take acc identa l r ider
and i f he wants to be covered for cr i t ica l medical
operat ions he could take cr i t ica l i l lness r ider . This is
termed as addi t ion of r ider .
3) Requirement:
I t is the job of the underwr i ter that whenever a new
appl icat ion is received by h im, he evaluates the
customer based on the informat ion prov ided by h im
through the appl icat ion and decides whether he could
be g iven insurance coverage or not . The in format ion
which he would c losely observe is sum assured and
premium proposes medical h is tory, h is habi ts , k ind of
organizat ion he is work ing etc . I f the underwr i ter is not
sat is f ied wi th the avai lab le in format ion he could demand
for addi t ional in format ion before issuing the pol icy.
M P BIRLA INSTITUTE OF MANAGEMENT 39
4) Cheque Dishonor: I f due to insuf f ic ient funds or due to s ignature
mistake or due to d i f ference between words and
f igures , i f the cheque g iven by the customer bounces
then organizat ion can not proceed wi th issue of po l icy.
Then in that case a new cheque needs to be issued by
customer a long wi th cer t i f icate of insurabi l i ty .
5) Dispatch:
When the underwr i ter is fu l ly sat is f ied wi th the
customer, he decides that he could be g iven insurance
cover . Then the pol icy document s tat ing that c l ient is
insured by Sun L i fe is sent to the c l ients mai l ing
address. This is termed as d ispatch.
6) Refund: Once the c l ient receives the pol icy document he is
g iven 15 days of t ime cal led “Free look per iod” ,dur ing
which he could g ive a second thought for h is decis ion
and i f he th inks that he doesn’ t requi re the pol icy ,he
could return back the pol icy document .Then h is ent i re
money that he ahs paid to the company would be
returned to h im .This is termed as refund.
M P BIRLA INSTITUTE OF MANAGEMENT 40
7) Cl ient Services ID :
I f the customer doesn’ t re turn the pol icy document
wi th in the f ree look per iod, then i t means that he has
accepted the pol icy and therefore h is log in ID and
password required to access h is po l icy deta i ls on l ine is
sent to h is mai l ing address.
8) Communicat ion Cel l :
B i r la Sun L i fe has a ca l l center which the customer
can cal l anyt ime to get any in format ion regard ing h is
pol icy.
Future Growth and Prospects: The Bi r la Sun L i fe Company is expanding i tse l f a l l
over Ind ia through i ts branches. I ts a l ready present in
more than 1000 towns in Ind ia. I t has a huge
recru i tment p lan to meet i ts growing demand for
manpower. Through the k ind of business that the
company has done t i l l now, i t is becoming the f i rs t
insurance company in Ind ia to achieve break even point .
M P BIRLA INSTITUTE OF MANAGEMENT 41
Chapter 3 Operational Departments &
Performance Evaluation Performance evolut ion of concerned departments FUNDAMENTAL DEPARTMENTS OF THE ORGANISATION:
ACTUARY: An ef f ic ient and successfu l l i fe insurance business
is dependent on key funct ions of r isk management . Our
team of profess ional actuar ies is among the best in the
industry and is dedicated to create sound r isk
assessment and pr ic ing st ructure.
MARKETING AND COMMUNICATION: I ts object ive is to br ing the la tent need of l i fe
insurance in to the conscious awareness of the Indian
Diaspora and bui ld ing a brand that people of Ind ia can
t rust and invest in .
M P BIRLA INSTITUTE OF MANAGEMENT 42
UNDERWRITING: The underwr i t ing team per forms the key funct ion of
assessing the r isk on wor ld c lass underwr i t ing
s tandards. The team along wi th a nat ionwide panel of
Medical Ev idence Prov iders acts as the backbone of the
company.
CLIENT SERVICING:
I t serv ices an ex is t ing base of over 1 lakh
pol icyholders which is constant ly growing at a
compounding rate. The team is cont inuously evolv ing
ef f ic iency levels n order to meet i ts commit ted
standards.
PRODUCT DEVELOPMENT:
A team dedicated to conceptual iz ing, product
features, set up the implementat ion and lead i t to the
product launch wi th the act ive suppor t o f the other core
funct ions.
HUMAN RESOURCE:
In an ever growing and expanding company the key
ro le of recru i t ing and reta in ing the r ight ta lent and
ef f ic ient per formance management system is a cruc ia l
d i f ferent ia tor between a leader and any other company.
M P BIRLA INSTITUTE OF MANAGEMENT 43
IMPLEMENTATION ADMINISTRATION & CONTROL: BSLI is the f i rs t company in the insurance industry
to implement “BCP – Business Cont inu i ty Plan” to take
care of any d isaster which can st r ike the organizat ion.
Under th is p lan, a l l the cr i t ica l bus iness data is mapped
of f -s i te to another Bi r la Sun L i fe Insurance locat ion in
another c i ty . In case of any d isaster , the BSLI team can
be up and running in less than 12 hours.
INFORMATION TECHNOLOGY:
BSLI boasts of the most advanced sof tware
technology in the L i fe Insurance industry . Being a uni t
l inked product of fer ing wi th customizat ion, the
technology and back- end processing is done on the
universal p lat form on the wor ld c lass ingenious system.
Wi th th is technology, customers can even t rack thei r
po l icy and fund deta i ls on the in ternet .
INVESTMENT:
The uni t l inked products of fer the f lex ib i l i ty of
choosing f rom var ious investment opt ions. An ef f ic ient
investment s t rategy wi th in the f rame work of the IRDA
guidel ines is a cruc ia l factor contr ibut ing to the success
of uni t l inked products in the market p lace.
M P BIRLA INSTITUTE OF MANAGEMENT 44
LEGAL AND COMPLIANCE: Being a good corporate c i t izen and being compla int
is a work s tandard at BSLI . The compl iance Process is
embedded in the work f low across the company.
FINANCE AND PLANNING:
A team dedicated to handle the day to day Finance
& Accounts operat ions of BSLI , in addi t ion to the cruc ia l
funct ion of MIS and st rategic p lanning enabled by the
top three pr ivate l i fe insurance companies in Ind ia.
Ski l l : Off the job training: In Insurance industry i t ’s the customer who is
supreme and company’s revenue would d i rect ly depend
on i t . So i t requi res the Di rect Sales force of the
company to have good communicat ion sk i l ls , s ince they
d i rect ly in teract wi th the customer. To cater to th is need
the organizat ion prov ides for exc lus ive communicat ion
sk i l l improvement t ra in ing f rom reputed organizat ions so
that the i r Di rect Sales Force would in teract in a bet ter
way wi th the customers and emerge successfu l in
get t ing business f rom him.
BSLI would be harnessing the IT advantage for
improving the ef fect iveness and ef f ic iency of i ts
M P BIRLA INSTITUTE OF MANAGEMENT 45
dist r ibut ion channels . At the same t ime i t uses IT
technology to meet the people. This requires i ts d i rect
sa les force to be wel l versed in usage of computer and
Microsof t o f f ice products .Hence a complete t ra in ing
cater ing to the IT needs of Di rect Sales force is
prov ided by the organizat ion.
On the job training: Af ter complet ion of o f f the job t ra in ing, the
advisors would accompany agency managers for a few
meet ings wi th the customer, so that the advisor could
understand the way he needs to put for th the product to
the customer. In the same way the new agency
managers would accompany the senior managers in
the i r c l ient meet ings to know how best they could se l l
the product .
Style: Top down Part icipat ive Decision Making:
In Bi r la Sun L i fe the decis ion regard ing products,
company pol ic ies etc . is taken by the top level
management which wi l l have to be fo l lowed by the low
level management namely branch mangers, agency
managers and advisors in a l l the branches. The
decis ion could be taken at the star t o f every f inancia l
M P BIRLA INSTITUTE OF MANAGEMENT 46
year and a lso whenever a cr is is ar ises in any
depar tment .
In Bi r la Sun L i fe the top level management , before
tak ing the decis ion would conduct a lo t o f meet ings
involv ing employees f rom al l depar tments which would
be af fected by the decis ion. From al l these meet ings
they would gather as much in format ion as possib le and
la ter on ly top level management would come up wi th a
f ina l decis ion.
Strategies:
B i r la Sun L i fe has put in carefu l ly designed
st rategies to move to the leading posi t ion in the l i fe
insurance industry through cont inuous product
innovat ion, customer focus, cut t ing edge technology and
pr ic ing st rategy.
A. Product Innovation: a) New product to be launched: Bi r la Sun L i fe is
p lanning to Launch a product which as 100% equi ty
exposure.
b) Customizat ion of products: B i r la Sun L i fe has
under taken Customizat ion of products to meet the
vary ing needs of d iverse customers.
M P BIRLA INSTITUTE OF MANAGEMENT 47
B. Customer Focus: a) Medical underwr i t ing: I t comes under the basis of
sum assured, premium, age, habi t , medica l h is tory
of the customer. Company may ask customers to go
for medical check up.
b) Automat ic premium loan: Before 1s t Ju ly , 2006
automat ic premium loan was there. But now
accord ing to new IRDA guidel ines th is feature has
been removed.
c) Anyt ime premium: Dur ing the f i rs t 3 years of the
pol icy per iod the customer has to pay premiums
regular ly . But af ter 3 years he could pay premiums
for every 2 years to keep the pol icy in force.
d) Web based serv ices: Bi r la Sun L i fe has i ts own
websi te namely www.Bi r la Sun L i fe .com which
conta ins a l l the in format ion regard ing i ts insurance
products, the norms in the insurance industry , da i ly
uni t va lues of i ts var ious funds etc . Every customer
is prov ided wi th a log in id and password through
which he could get to know his pol icy s tatus any
t ime any where in the wor ld.
M P BIRLA INSTITUTE OF MANAGEMENT 48
e) Cal l center based serv ices: Bi r la Sun L i fe has their
own cal l center known “TRANS WORKS” which
handles a l l types of quer ies which could come f rom
customer or of f ice adminis t rat ion. This ca l l center
could be reached by d ia l ing 1800227000.
f ) Free look per iod: Bi r la Sun L i fe was the f i rs t
company in Ind ia to in t roduce the concept of f ree
look per iod in which the customer upon receiv ing
the pol icy document is g iven t ime of 15 days,
dur ing which he could return the pol icy to Bi r la Sun
L i fe , i f he changes h is mind . In that case the ent i re
money what the customer had paid to company wi l l
be paid back to h im.
g) Sales process safeguard ing against wrong sel l ing:
Whenever an advisor f rom Bir la Sun L i fe would
meet the customer, he is expected to reveal a l l the
in format ion to the customer regard ing the product ,
i ts charges, medical norms etc. He is a lso expected
to show the pol icy i l lust rat ion to the customer
Later , the Agency Manager ,would check up wi th
the customer to know whether h is advisor has
revealed h im a l l the deta i ls or not . This is the
measure taken to prevent wrong sel l ing f rom the
advisor .
M P BIRLA INSTITUTE OF MANAGEMENT 49
C. The technology edge: a) Al l branches are computer ized and l inked in a wide
area network
b) There is in ter branch connect iv i ty a wel l as
connect iv i ty wi th the head of f ice
c) B i r la Sun L i fe would prov ide Sales I l lust rat ion
Systems to every d is t r ibutor and i t can be loaded
on laptops a lso.
d) BSLI would be harnessing the IT advantage for
improving the ef fect iveness and ef f ic iency of i ts
d is t r ibut ion channels .
D. Pricing strategy:
a) Bi r la Sun l i fe has in t roduced a new product
ca l led “Class ic L i fe Premier” which has the least
po l icy charges among a l l i ts compet i tors and
hence the return f rom th is product is very good.
b) Bi r la Sun l i fe products have the least morta l i ty
charges in the market .
M P BIRLA INSTITUTE OF MANAGEMENT 50
c) B i r la Sun l i fe has the least Fund Management
charges in the market . Systems in BSLI: Inventory control System in BSLI:
From the head quar ters s i tuated at Mumbai , to
every branch in Ind ia, inventory l ike product brochures,
appl icat ions, etc . , are d ispatched. At the local level a
count of a l l these is mainta ined to min imize wastage.
Meri t Rat ing System in BSLI:
For each ind iv idual in the organizat ion there is a
par t icu lar team in Human Resource Department which
moni tors every ind iv idual per formance on cer ta in
parameters. Based on that the ind iv idual is promoted or
demoted.
Underwrit ing System in BSLI: Introduction:
To underwr i te means to assess and approve an
appl icat ion for coverage thus accept ing l iab i l i ty should
a loss occur?
The f i rs t s tage of Underwr i t ing begins wi th c lass
se lect ion, which means the insurance company decides
to whom i t is prepared to se l l i ts products or how i t
M P BIRLA INSTITUTE OF MANAGEMENT 51
sel ls . For example the company may decide that i t
would canvass business f rom high net wor th ind iv iduals
or employees of corporate bodies. The second stage is
when the agent approaches a potent ia l c l ient and
completes the appl icat ion for coverage which would
inc lude personal deta i ls of the proposed c l ient , p lan and
amount appl ied for ; deta i ls of occupat ion, avocat ion,
income benef ic iary , p lus medical in format ion such as
bui ld fami ly h is tory and medical h is tory. The th i rd s tage
is when the insurance company actual ly receives the
appl icat ion forms. The company may obta in deta i led
in format ion about the l i fe to be insured, h is age, fami ly
h is tory of i l lness to f ind any heredi tary d isorders,
personal heal th h is tory and f inancia l in format ion to
check the appropr ia teness of the chosen l i fe cover
amount and other benef i t cover sought .
Based on the in format ion, the insurance company may
take the fo l lowing decis ions –
1. Accept the proposal at the company’s publ ished rates for the plan and term OR
2. Accept on modif ied terms subject to addit ional f inancial or more detai led medical examination OR
M P BIRLA INSTITUTE OF MANAGEMENT 52
3. Postpone the considerat ion of the insurance proposal OR
4. Decl ine the case.
Staff in BSLI: ACTUARY:
An ef f ic ient and successfu l l i fe insurance business
is dependent on key funct ions of r isk management .
Out team of profess ional actuar ies is among the
best in the industry and is dedicated to create sound
r isk assessment and pr ic ing st ructure.
UNDERWRITING: The underwr i t ing team per forms the key funct ion of
assessing the r isk on wor ld c lass underwr i t ing
s tandards. The team along wi th a nat ionwide panel of
Medical Ev idence Prov iders acts as the backbone of the
company.
CLIENT SERVICING: I t serv ices an ex is t ing base of over 10 lakh
pol icyholders which is constant ly growing at a
compounding rate.
PRODUCT DEVELOPMENT: A team dedicated to conceptual iz ing, product
features, set up the implementat ion and lead i t to the
M P BIRLA INSTITUTE OF MANAGEMENT 53
product launch wi th the act ive suppor t o f the other core
funct ions.
HUMAN RESOURCE: In an ever growing and expanding company the key
ro le of recru i t ing and reta in ing the r ight ta lent and
ef f ic ient per formance management system is a cruc ia l
d i f ferent ia tor between a leader and any other company.
IMPLEMENTATION ADMINISTRATION & CONTROL: BSLI is the f i rs t company in the insurance industry
to implement “BCP – Business Cont inu i ty Plan” to take
care of any d isaster which can st r ike the organizat ion.
Under th is p lan, a l l the cr i t ica l bus iness data is mapped
of f -s i te to another Bi r la Sun L i fe Insurance locat ion in
another c i ty . In case of any d isaster , the BSLI team can
be up and running in less than 12 hours.
INFORMATION TECHNOLOGY: BSLI boasts of the most advanced sof tware
technology in the L i fe Insurance industry . Being a uni t
l inked product of fer ing wi th customizat ion,
the technology and back- end processing is done
on the universal p la t form on the wor ld c lass ingenious
system. Wi th th is technology, customers can even t rack
thei r po l icy and fund deta i ls on the internet .
M P BIRLA INSTITUTE OF MANAGEMENT 54
INVESTMENT: The uni t l inked products of fer the f lex ib i l i ty of
choosing f rom var ious investment opt ions. An ef f ic ient
investment s t rategy wi th in the f rame work of the IRDA
guidel ines is a cruc ia l factor contr ibut ing to the success
of uni t l inked products in the market p lace.
LEGAL AND COMPLIANCE: Being a good corporate c i t izen and being compla int
is a work s tandard at BSLI . The compl iance Process is
embedded in the work f low across the company.
FINANCE AND PLANNING: A team dedicated to handle the day to day Finance
& Accounts operat ions of BSLI , in addi t ion to the cruc ia l
funct ion of MIS and st rategic p lanning to enable BSLI in
the top 3 pr ivate l i fe insurance in Ind ia.
Shared Value:
B i r la Sun L i fe Insurance was the f i rs t pr ivate l i fe
insurer in Ind ia to in t roduce Uni t -L inked l i fe insurance
p lans. A Uni t -L inked p lan is an auspic ious coming
together of secur i ty f rom l i fe insurance and earn ings
f rom investments. Which means, apar t f rom secur ing
one’s fu ture, i t o f fers ef f ic ient returns.
M P BIRLA INSTITUTE OF MANAGEMENT 55
4) Swot Analysis:
Strengths: 1) Bi r la Sun L i fe Insurance is the only company to g ive
3% guarantee on investments in ULIPS.
2) The large product l ine of BSLI cater ing to the needs
of customers of d i f ferent age and r isk appet i te has been
st rength of BSLI For example,
a) People who are look ing for more returns can invest
maximum percentage in equi t ies.
b) People who are look ing for safe returns can invest
in to govt . secur i t ies and nominal percentage of
equi t ies.
c) As BSLI invest the i r fund in d ivers i f ied por t fo l io so
the r isk is low.
3) Bi r la Sun L i fe is the only company to g ive ULIP
pol icy for term of 100 years.
4) Bi r la Sun L i fe Insurance is the only one company in
INDIA to ask CRISIL to rate i ts funds.
M P BIRLA INSTITUTE OF MANAGEMENT 56
5) The name “BIRLA” is a house hold name in Ind ia and
hence people have t rust over here.
6) BSLI would be harnessing the IT advantage for
improving the Ef fect iveness and ef f ic iency of i ts
d is t r ibut ion channels. A l l branches are computer ized
and l inked in a wide area network.
There is in ter branch connect iv i ty a wel l as connect iv i ty
wi th the head of f ice. This g ives the company an added
advantage to serv ice i ts large customer base.
Weaknesses: 1) In th is industry customer is supreme and revenues
are d i rect ly dependent on the number of customers BSLI
can get insured. This requires BSLI to have very
ef fect ive adver t is ing st rategy so as to popular ize the i r
products among the masses. BSLI is found lack ing in
th is domain where even though thei r po l ic ies are as
powerfu l as any other compet i tors , the i r adver t is ing
st rategy is not at a l l e f fect ive.
2) The company should extend thei r serv ices to
corporate employees where i t is found to be lack ing.
3) Bi r la Sun L i fe doesn’ t have a fund that invests 100
percent in to equi t ies. So a customer who would l ike to
M P BIRLA INSTITUTE OF MANAGEMENT 57
take maximum advantage of equi t ies would f ind i t hard
to invest here.
Opportunit ies: 1) Only 7% of Ind ian populat ion is insured t i l l now. This
means that there is a great oppor tuni ty for the company
in coming years to capture the market .
2) The growing IT sector of INDIA would prov ide for an
excel lent oppor tuni ty for BSLI to increase i ts sa les
3) The growing knowledge about ULIPS among people
would only mean that BSLI has grater oppor tuni t ies to
grow in coming years.
Threats: 1) Di rect ly the company shal l have to face the onslaught
of L IC.The large customer base, accumulated funds,
wel l -establ ished market ing machinery etc .
2) This is just hal f o f the s tory; there would be the
recent ly “of f – the- b lock insurers” who would be coming
out wi th a var ie ty of product var ia t ions. Many of them
wi th para l le l f inancia l act iv i t ies and s imi lar products.
Just to name few: ICICI – Prudent ia l , HDFC-Standard
L i fe , TATA-AIG OM-Kotak, Max-New York, SBI L i fe , e tc .
M P BIRLA INSTITUTE OF MANAGEMENT 58
These newer compet i tors are l ike ly to be aggress ive
and innovat ive. This d i rect compet i t ion, on the f l ip s ide,
could resul t in market expansion. The Company shal l
a lso be fac ing compet i t ion is more damaging. Ind i rect
compet i t ion shows up in terms of other f inancia l
inst ruments l ike Bank FSs, PPF, NSCs, ULIP, Stocks
land other s imi lar sav ings inst ruments
M P BIRLA INSTITUTE OF MANAGEMENT 59
Learning Experience: The in p lant t ra in ing gave me an oppor tuni ty to
know about money saving inst ruments in INDIA,
especia l ly INSURANCE INDUSTRY.I could learn about
format ion of L IC, i ts hold on Indian market t i l l year
2000. I came to know about the format ion of IRDA and
subsequent ly the advent of pr ivate p layers in to India in
2001. In par t icu lar I came to know much about Sun L i fe
F inancia l Inc. , i t ’s operat ions around the wor ld etc . I
could a lso learn much about Bi r la Group, the var ious
f ie lds in to which they have entered and become market
leaders in those f ie lds etc . In par t icu lar I could develop
a very good understanding of Bi r la Sun L i fe Insurance,
i ts emergence in Ind ian market and a lso came to know
that i t was the f i rs t company to in t roduce ULIPS into
Ind ian market . I could have a thorough understanding of
how ULIPS operate and how they g ive bet ter returns
than t radi t ional po l ic ies by tak ing the advantage of
share market . I could gather a lo t o f in format ion about
the var ious products of fered by Bi r la Sun L i fe to i ts
customers, the features of those products. I came to
know that many of the features in t roduced by Bi r la Sun
L i fe to i ts products l ike:
M P BIRLA INSTITUTE OF MANAGEMENT 60
Chapter 4 Achievements:
1) Best Private Sector Li fe Insurer-outlook money awards 2) Among Tops 5 Contenders for Li fe Insurance Company of the year’ of 8 Asia Insurance Industry awards 3) Ranked 23r d in the best employer’s survey by Hewitt Associates among top 25 best places to work for 2n d year. 4) Among top 3 Contenders for `Strategy to Execution’ of the 5 t h Aditya Bir la Awards for outstanding achievements, 2006.
M P BIRLA INSTITUTE OF MANAGEMENT 61
Microscopic Study Of
Human Resource
Department
M P BIRLA INSTITUTE OF MANAGEMENT 62
HUMAN RESOURCE Human Resource Department has mul t ip le goals . These
inc lude employee competency and employee mot ivat ion
and organizat ional c l imate development . Employees
requi re a var ie ty of competencies to per form di f ferent
tasks or funct ions requi red by thei r jobs. The nature of
jobs is constant ly changing due to changes in the
envi ronment , changes in organizat ional pr ior i t ies, goals
ands st rategies, changes in the prof i les of fe l low
employees, changes in technology, new oppor tuni t ies,
new chal lenges, new knowledge base etc . , such
changes in the nature of jobs requi re cont inuous
development of employee competencies to per form the
job wel l .
Human Resources Depar tment a lso a ims at prepar ing
people for per forming ro les, jobs, tasks, funct ions which
they may be requi red to per form in the future as they go
up on the organizat ion h ierarchy or as the organizat ion
takes up new tasks through d ivers i f icat ion, expansion,
modern izat ion, economizat ion etc .
Human Resource Department t r ies to develop potent ia l
o f employees for fu ture l ike ly jobs in the organizat ion.
M P BIRLA INSTITUTE OF MANAGEMENT 63
The success of any organizat ion in the long run
depends very much on the qual i ty of i ts human
resources. Human Resources compr ise the aggregate of
employee at t r ibutes inc luding knowledge, sk i l l ,
exper ience and heal th , which are present ly and
potent ia l ly avai lab le to an organizat ion for the
achievement of i ts goal . Of a l l the pr ime resources of an
organizat ion, men, mater ia ls , money and machine the
human resources is recognized as the most v i ta l and
the most va luable .For i t is the qual i ty of manpower that
u l t imate ly determines the success of an organizat ion.
HRD prov ides the p lat form for super ior performance in
organizat ion s ince the success of organizat ion depends
upon i ts employees and i ts re lat ion wi th i ts in ternal and
external customers, So HRD must keep a l l such factors
ins ight before formulat ing any st rategy.
Human Resource Depar tment is one of the core
depar tments of an organizat ion and i t a lso p lays a v i ta l
ro le in the development of the organizat ion ICICI
Prudent ia l considers i ts human resource as the most
va luable asset of i ts organizat ion.
Human resource pol icies :
Pol icy is a course of act ion or s tatement of in tent ion
commit t ing the management to genera l course of act ion
when the management draf ts a pol icy s tatement to
M P BIRLA INSTITUTE OF MANAGEMENT 64
cover some features of i ts personal programme’s of the
s tatement may of ten conta in an expression of
phi losophy and pr inc ip le as
Wel l ICICI has severa l po l ic ies regard ing the fu l f i l lment
of goals set by the management such as:
1) Recruitment pol icies: The recru i tment is carr ied out f rom both external &
in ternal are:
1 . Present employees
2. Employee referra ls
3. Former employees.
External Sources: The fo l lowing external sources are:
1. Campus recru i tment
2. Pr in t media
3. E lect ronic media
2) Select ion Select ion is carr ied out in three major s tages:
1. Pre l iminary in terv iew
2. Select ion test
3 . HR Interv iew
M P BIRLA INSTITUTE OF MANAGEMENT 65
3) REMUNERATION AND INCENTIVES The organizat ion of fers at t ract ive remunerat ion and
incent ives to at t ract the budding youngsters and to
mainta in i ts present employees.
4) SALARY Att ract ive salar ies and other ext ra incent ives based on
thei r per formance.
5) Reimbursement pol icy Reimburs ing the te lephone and , e lect r ic i ty b i l ls etc .
6) Leave pol icy Giv ing leaves in cer ta in occasions and even tour of fers
to employees to foster in terest in them for organizat ion.
OTHER HUMAN RESOURCE POLICIES Goal set t ing
Medi c la im pol icy
Company accommodat ion pol icy
Mobi le Phone pol icy
Credi t card pol icy
Travel po l icy
M P BIRLA INSTITUTE OF MANAGEMENT 66
Human Resource Planning Human Resource Planning inc ludes the est imat ion of
how many qual i f ied people to carry out the ass igned
task, how many people wi l l be avai lab le, and what i f
anyth ing ,must be done to ensure that personnel supply
equals personnel demand at the appropr ia te point in
fu ture. Speci f ica l ly Human Resource Planning is the
process by which an organizat ion ensures that i t has
the r ight no. and k ind of people, a t the r ight p lace, at
the r ight t ime, capable of e f fect ive ly and ef f ic ient ly
complet ing those tasks that wi l l he lp the organizat ion to
achieve i ts overa l l ob ject ives. Human Resource
Planning t ranslates the organizat ional ob ject ives and
p lans in to the number of workers
Needed to meet those object ives .Wi thout a c lear-cut
p lanning and est imat ion of organizat ion ’s human
resource need is reduced to more guesswork
Recruitment process Right people at the r ight p lace at the r ight t ime p lays a
major ro le in the recru i tment process in any
organizat ion. Because of ext reme compet i t ion in today’s
wor ld , organizat ions need to have a very ef f ic ient and
ef fect ive recru i tment process, which saves t ime and in
turn resul ts in reducing the cost of recru i tment process.
M P BIRLA INSTITUTE OF MANAGEMENT 67
Many Internal and External Factors govern the recruitment process. Five stages of recruitment process : are
1 Planning
2 Strategy Developments
3 Searching
4 Screening
5 Evaluat ions and Contro l
Methods of recru i tment process l ike Web recru i tment ,
Appl icant Track ing system and Outsourc ing can be used
to cut down the cost and t ime involved.
Accord ing to the rev iew of l i terature successfu l
recru i t ing involves three steps:
1 Def in ing the needs
2 Spreading the word
3 Using the Internet .
I t is possib le to improve the current s tatus of the
recru i tment cyc le t ime by
1. Conduct ing a l l the in terv iew rounds in two or three
rounds
2. Making candidates to jo in ear ly .
3 . Improving the var ious steps in the process.
4. removing the non- va lue adding act iv i t ies.
M P BIRLA INSTITUTE OF MANAGEMENT 68
Type of recruitment :
How to look How to look refers to the methods or
sources of recru i tment . These are severa l sources and
they may be broadly categor ized in to
1) Internal 2) External Internal recruitment In ternal recru i tment seeks, appl icants for the posi t ions
those who are current ly employed. In ternal sources
inc lude present employees, employee referra ls , former
employees and former appl icants .
There are three major advantages of in ternal
recru i tment .
1 F i rs t ly , i t is less cost ly that external recru i tment .
2 Secondly, organizat ions typ ica l ly have a bet ter
knowledge of the in ternal candidate ’s .sk i l ls and
abi l i t ies than the ones acqui red through external
recru i t ing.
3 Thi rd ly , an organizat ion pol icy of promot ing f rom
wi th in can enhance employee’s morale, organizat ional
commitment and job sat is fact ion. Good per formance is
rewarded
There are few d isadvantages of in ternal recru i tment .
M P BIRLA INSTITUTE OF MANAGEMENT 69
1 One theory is that the method s imply perpetuates the
o ld concept of do ing th ings that creat ive problem
solv ing may be h indered by the lack of new ta lents.
2 Some organizat ions compla in of un i t ra id ing in which
d iv is ions compete for the same people.
3 Thi rd ly , po l i t ics probably has a greater impact on
in ternal recru i t ing and select ion than does external
recru i t ing.
4 Candidate ’s current work may be af fected.
External recruitment External sources far outnumber the in ternal methods.
Speci f ica l ly sources external to an organizat ion are
profess ional or t rade associat ions, ads, employment
exchanges, co l lege/univers i ty / inst i tu te p lacement
serv ices, walk ins and wr i te ins, consul tants,
contractors, d isp laced persons, radio and te lev is ion,
acquis i t ions and mergers and compet i tors .
There are three advantages of external recru i tment :
1 Benef i ts of new sk i l ls and new ta lents and new
exper iences to organizat ions
2 Compl iance wi th reservat ion pol icy becomes easy
3 Scope for resentment , jea lousies and hear t bum are
avoided
There are few d isadvantages a lso of external
recru i tment as:
M P BIRLA INSTITUTE OF MANAGEMENT 70
4 Bet ter morale and mot ivat ion associated wi th in ternal
recru i t ing is denied to the organizat ion
5 I t is cost ly
6 Chances of creeping in fa lse posi t ive and fa lse
negat ive errors. Adjustment of new employees to the
organizat ional cu l ture takes longer t ime.
Orientat ion Orientat ion is a lso cal led induct ion, is designed to
prov ide a new employee wi th the in format ion he or she
needs to funct ion comfor tably and ef f ic ient ly in the
organizat ion . Purpose of or ientat ion Organizat ions are of ten known to spend few weeks or
even months on or ientat ion programme the idea is to
make the employee feel a t home. In the new
envi ronment i t is wel l known fact that employees feel
anx ious on enter ing in organizat ion, induct ion is a
method to reduce th is anxiety .
Training and development I t wi l l be company’s endeavor to recognize the value of
i ts human resources for the ir growth. The company is
commit ted to prov ide adequate oppor tuni ty to
employees to neigh thei r knowledge sk i l ls a t t i tudes,
contr ibut ing to s teady growth of the company and
M P BIRLA INSTITUTE OF MANAGEMENT 71
fee l ing proud of work ing for the company. Methodica l ly
ident i fy ing needs for employees to upgrade thei r
knowledge sharpen sk i l ls and improve at t i tude for
improving per formance at the i r present and future
funct ion.
Impart ing such t ra in ing to employees af ter assessing
thei r capabi l i t ies and potent ia ls , var ious types of
t ra in ing techniques are employed
FEEDBACK is one s igni f icant method for evaluat ion.
Training may be under taken on the basis of career
development p lans. Tra in ing can be par t o f Qual i ty of
Work L i fe programmers and organizat ion Development .
Tra in ing can be used as a reward.
Inputs in t ra in ing and development are
1 Ski l l
2 Educat ions
3 Developments
4 Business Eth ics
5 At t i tude change
6 Enhancement of dec is ion-making and problem -
so lv ing sk i l ls .
Methods of t ra in ing:
1. Lecture
2. Audio-v isuals
3. On-the- job t ra in ing
M P BIRLA INSTITUTE OF MANAGEMENT 72
4. Programmed inst ruct ion
5. Computer ass is ted inst ruct ion s imulat ion
6. Case study
7. Role p lay ing
8. Vest ibu le t ra in ing
9. Sensi t ive t ra in ing, etc .
Human Resource Development: Human Resource Development is sa id to be the core of
a larger system known as Human Resource System
(HRS), wherein Human Resource Development is main ly
concerned wi th prov id ing learn ing exper ience for the
people associated wi th an organizat ion through a
behaviora l approach adopt ing var ious processes. In a
broader sense, the term Human Resource Development
means those learn ing exper iences, which are organized
for a speci f ic t ime and designed to br ing about the
possib i l i ty of f behaviora l change.
Human Resource Development goals include 1) Develop the ind iv idual to real ize h is potent ia l as an
ind iv idual to the maximum extent ; 2) Develop the ind iv idual ’s capabi l i t ies to per form his
present job bet ter ;
3) Develop the capabi l i t ies to handle fu ture l ike ly ro les;
M P BIRLA INSTITUTE OF MANAGEMENT 73
4) Develop and mainta in a h igh mot ivat ion level o f the
employees; s t rengthen super ior . Subord inate
re lat ionships;
5) Strengthen team spi r i t among d i f ferent teams;
6) Promote in ter team col laborat ion: and promote
c l imate development and organizat ional heal th
development .
7) Human resource management v iews people as an
important source or asset to be used for the benef i t
o f organizat ions, employees and society . I t is
emerging as a d is t inct phi losophy of management
a iming at po l ic ies that promote mutual i ty , mutual
goals , mutual respect , mutual rewards and mutual
responsib i l i ty . The bel ie f is that pol ic ies of mutual i ty
wi l l e l ic i t commitment , which in turn wi l l y ie ld both
bet ter economic per formance and greater human
resource development . Though a d is t inct ph i losophy,
human resource management cannot be t reated is
iso lat ion. I t is be ing in tegrated in to the overa l l
s t rategic management of business.
HRD Instruments, Processes and Outcomes
There are many inst ruments that can be used to
fac i l i ta te Human Resource Development . These
inst ruments may be cal led sub-systems or methods or
M P BIRLA INSTITUTE OF MANAGEMENT 74
techniques or a ids. Each inst rument or sub-system
focuses on some aspects of human Resource
Development . To have a comprehensive HRD many of
these inst ruments may needed to be used
s imul taneously. Human Resource Development in the
organizat ion context re fers to the process whereby the
employees are cont inuously helped in a p lanned way to:
Acqui re or sharpen capabi l i t ies requi red to per form
var ious tasks and funct ions associated wi th the i r
present or fu ture expected ro les;
� Develop thei r genera l enabl ing capabi l i t ies as
ind iv iduals so that they are able to d iscover and explo i t
the i r own inner potent ia l for the i r own and or
organizat ional development purposes;
� Develop an organizat ional cu l ture where super ior .
Subord inate re lat ionships teamwork and col laborat ion
among d i f ferent sub-uni ts are s t rong and contr ibute to
the profess ional wel l be ing, mot ivat ion and pr ide of
employees.
Human Resources Information System Human resources in format ion or Management
In format ion systems (MIS) helps in determin ing
organizat ion ’s major human resources needs st rategies
and phi losophies.
M P BIRLA INSTITUTE OF MANAGEMENT 75
The inst ruments of Human Resources Development are
many. Human Resource Development inst ruments
should lead to the generat ion of Human Resource
Development processes l ike ro le c lar i ty , per formance
p lanning, and development c l imate, r isk- tak ing and
dynamism in employees. Such a Human Resource
Development process should resul t in more competent
sat is f ied and commit ted people who, by thei r
contr ibut ions, would make the organizat ion grow. A
model expla in ing the l inkages between Human Resource
development inst ruments, processes outcomes and
organizat ional e f fect iveness is presented.
HR PRINCIPLES The organizat ion bel ieves that development of employee
is in i ts own in terest . The organizat ion wi l l prov ide
oppor tuni t ies and condi t ions for the development and
opt imizat ion of human resources.
1. The management is wi l l ing to invest adequate t ime
and resources for the development of the employees
and personal ly par t ic ipate in the development .
2 . Managers have concern for growth of subord inates.
3 . Employees are wi l l ing to avai l o f g iven oppor tuni t ies
for growth and receive such help f rom the managers as
may be necessary for th is development and improving
per formance.
M P BIRLA INSTITUTE OF MANAGEMENT 76
The main object ive of the HRD depar tment is to create a
learn ing envi ronment and development c l imate in the
organizat ion. By learn ing envi ronment is meant a
cu l ture where employees cont inuously learn f rom thei r
own exper ience and the var ious learn ing oppor tuni t ies
the organizat ion prov ides. The HRD department should
create an .enabl ing Cul ture cal led Appolo Cul ture where
the employees are able to make th ings happen and in
the process d iscover and ut i l ize the i r potent ia l .
The most f requent ly used inst ruments are the fo l lowing:
Performance Appraisal Performance Appra isa l data forms basis for decis ions
for developing the potent ia l employee for h igher . Level
jobs and is basis for feedback and counsel ing.
Per formance Appra isa l data ind icates the job t ra in ing
needs of each ind iv idual the main appra isa l method
used by Bi r la Sun L i fe is 360 degree
There are two major ways of per formance appra isa l
1) Past-or iented methods
2) Future-or iented methods
Each group has severa l techniques. Some of them are
expla ined in the fo l lowing Sect ion.
The term used to descr ibe a per formance rat ing that
focuses on speci f ic behaviors or sets as ind icators of
e f fect ive or inef fect ive per formance, rather than on
M P BIRLA INSTITUTE OF MANAGEMENT 77
broadly s tated adject ives such as "average, above
average, or below average". Other var ia t ions are:
1) Behaviora l observat ion scales
2) Behaviora l expectat ions scales
3) Numer ica l ly anchored rat ing scales
System of appraisal
In 360 degree system of appra isa l , ra t ing is done by the
employee’s immediate superv isor , h is or her immediate
subord inates etc . , Ar thur Anderson survey reveals that
20% of the organizat ions use the 360 degree system to
assess the ta lents , behaviora l aspects, va lues, e th ica l
s tandards, temper, loyal ty by the people who are the
best p laced to do i t .
Employee benefi ts: Employee benef i ts and serv ices inc lude any benef i ts
that an employee receives in addi t ion to d i rect
remunerat ion. Employee benef i ts embrace a broad
range of benef i ts and serv ices that employees receive
as a par t o f the i r local compensat ion package. Pay and
d i rect ly compensat ions i t is based on cr i t ica l job factors
and per formance. Benef i ts and serv ices, however , are
ind i rect compensat ion because they are usual ly
in tended as a condi t ion of employment and or not
M P BIRLA INSTITUTE OF MANAGEMENT 78
direct ly re lated to per formances. Few benef i ts are as
fo l lows:
1) Leal ly requi red payments as unemployment payment
and worker ’s compensat ion
2) Cont inent and deferred benef i ts as pension p lans,
group l i fe insurance, prepaid legal p lans, and mi l i tary
leave and pay.
.
Potential Appraisal Development (PAD) Potent ia l Appra isa l Development is based on career
p lans and career p lans are prepared by us ing Potent ia l
Appra isa l Development data.
Tra in ing may be prov ided to develop candidates wi th
potent ia l .
Feedback Performance Coaching (FPC) Feedback and Per formance Data can be used to moni tor
ind iv idual development and the data can be used for
ident i fy ing t ra in ing. Career counsel ing and verbal
rewards can be par t o f feedback.
Career Planning (CP) Career Planning data are used for human resources
audi ts and career p lanning and help in conduct ing
research on promot ion pat terns for Organizat ion
Development programmers.
M P BIRLA INSTITUTE OF MANAGEMENT 79
Employee Welfare and Qual i ty of Work Life Group ef for ts can be rewarded through qual i ty of work
l i fe measurers. Qual i ty of work l i fe improvements can be
par t o f organizat ion Development act iv i t ies.
Rewards Performance Data is used for rewards and reward data
are entered for development
Grievance Grievance procedure is one of the techniques of
resolv ing d isputes. A l l labor agreements conta in some
form of gr ievance procedure. And i f people fo l low i t
s t r ic t ly any d ispute can be resolved very easi ly . Terms
which g ive r ise to gr ievances is :
1) Vio lat ion of law
2) Vio lat ion of company ru les
3) Vio lat ion of heal th and safety measures
4) A change in work ing condi t ion or past company
pract ices
5) Vio lat ion of the in tent of the par t ies as s t ipu lated
dur ing contract negot ia t ions.
There are few other techniques avai lab le as col lect ive
bargain ing and code of d isc ip l ine.
M P BIRLA INSTITUTE OF MANAGEMENT 80
Challenges faced by Human Resource In and organizat ion l ike Bi r la Sun L i fe ; i t is a very b ig
chal lenge to handle a l l the HR re lated issues. Here the
ro le of a HR manger and h is personal ins ight to tack le
s i tuat ion comes in to p ic ture. There are few chal lenges
faced by the HR manger in Bir la Sun L i fe
1) Department outsourc ing HR act iv i t ies
2) BPO and cal l centers
3) To balance workers work- l i fe
4) To make HR act iv i t ies eth ica l
5) To manage d ivers i ty
6) At t i tude towards d i f ferent work groups
7) Global izat ion
8) Organizat ional rest ructur ing
9) Changing demographics of work- force
10) Changed employee’s expectat ions
11) chal lenges
PERFORMANCE APPRAISAL Performance appra isa l may be def ined as a s t ructured
formal in teract ion between a subord inate and
superv isor , that usual ly takes the form of a per iod ic
in terv iew (annual or semi-annual ) , in which the work
per formance of the subord inate is examined and
d iscussed, wi th a v iew to ident i fy ing weaknesses and
st rengths as wel l as oppor tuni t ies for improvement and
M P BIRLA INSTITUTE OF MANAGEMENT 81
sk i l ls development . In many organizat ions - but not a l l -
appra isa l resul ts are used, e i ther d i rect ly or ind i rect ly
to help determine reward outcomes. That is , the
appra isa l resul ts are used to ident i fy the bet ter
per forming employees who should get the major i ty of
avai lab le mer i t pay increases, bonuses, and promot ions.
By the same token, appra isa l resul ts are used to
ident i fy the poorer per formers who may requi re some
form of counsel ing, or in ext reme cases, demot ion,
d ismissal or decreases in pay. Whether th is is an
appropr ia te use of per formance appra isa l - the
ass ignment and just i f icat ion of rewards and penal t ies -
is a very uncer ta in and content ious mat ter .
Basic Purposes Effect ive per formance appra isa l systems conta in two
basic systems operat ing in conjunct ion: an evaluat ion
system and a feedback system.
The main a im of the evaluat ion system is to ident i fy the
per formance gap ( i f any) .
This gap is the shor t fa l l that occurs when per formance
does not meet the s tandard set by the organizat ion as
acceptable. The main a im of the feedback system is to
in form the employee about the qual i ty of h is or her
per formance.
M P BIRLA INSTITUTE OF MANAGEMENT 82
(However , the in format ion f low is not exc lus ive ly one
way. The appra isers a lso receive feedback f rom the
employee about job problems, etc . )
One of the best ways to apprec iate the purposes of
per formance appra isa l is to look at i t f rom the d i f ferent
v iewpoints of the main s takeholders: the employee and
the organizat ion.
Employee Viewpoint :
From the employee v iewpoint , the purpose of
per formance appra isa l is four- fo ld :
(1) Tel l me what you want me to do
(2) Tel l me how wel l I have done i t
(3) Help me improve my per formance
(4) Reward me for doing wel l .
Organizat ional Viewpoint :
From the organizat ion 's v iewpoint , one of the most
important reasons for having a system of per formance
appra isa l is to establ ish and uphold the pr inc ip le of
accountabi l i ty .
For decades i t has been known to researchers that one
of the ch ief causes of organizat ional fa i lure is "non-
a l ignment of responsib i l i ty and accountabi l i ty . "
Nonal ignment occurs where employees are g iven
responsib i l i t ies and dut ies, but are not held accountable
M P BIRLA INSTITUTE OF MANAGEMENT 83
for the way in which those responsib i l i t ies and dut ies
are per formed. What typ ica l ly happens is that severa l
ind iv iduals or work uni ts appear to have over lapping
ro les. The over lap a l lows - indeed act ive ly encourages -
each ind iv idual or business un i t to "pass the buck" to
the others.
Ul t imate ly , in the severe ly non-a l igned system, no one
is accountable for anyth ing. In th is event , the pr inc ip le
of accountabi l i ty breaks down complete ly . Rganizat ional
fa i lure is the only possib le outcome.
Formal versus Informal appraisal Formal appra isa ls usual ly occur at speci f ied t ime
per iods-once or twice a year . Ormal appra isa ls are most
of ten requi red by the organizat ion for the purpose of
employee evaluat ion. In formal per formance appra isa l
can occur whenever the superv isor fee ls the needs for
communicat ion. Many organizat ions encourage a f ix ture
of both formal and in formal appra isa ls . The formal
appra isa l is most of ten seed as pr imary evaluat ion.
However , the in formal appra isa l is very helpfu l for more
per formance feedback. In formal appra isa ls should not
take p lace of formal Per formance evaluat ion
M P BIRLA INSTITUTE OF MANAGEMENT 84
Whose performance should be rated? To the quest ion as to whose per formance should be
rated, the answer is obvious employees. When we say
employees, is i t ind iv iduals or teams? Speci f ica l ly , the
team may be def ined as the ind iv idual , work group,
d iv is ion, or organizat ion. I t is a lso poss ib le to def ine
the rate at mul t ip le levels . For example, under some
condi t ions, i t may be desi rable to appra ise per formance
both at the work-group level for mer i t -pay increases and
at the ind iv idual level to assess t ra in ing needs.
Who are raters? Raters can be immediate superv isors, specia l is ts f rom
the HR depar tment , depar tment , subord inates, peers,
commit tees, c l ients , se l f .appra isa ls , or a combinat ion
of severa l .
Problems of rat ing Performance appra isa ls are subject to a wide var ie ty of
inaccurac ies and b iases referred to as . rat ing errors. .
These errors occur in the rater ’s observat ions,
judgments, and in format ion processing, and can
ser ious ly af fect assessment
Resul ts : The most common rat ing errors are
1) Leniency or sever i ty
2) Centra l tendency
M P BIRLA INSTITUTE OF MANAGEMENT 85
3) Halo ef fect
4) Rater ef fect
5) Pr imacy and Regency ef fects
6) Perceptual set
7) Per formance d imension behaviors
8) Spi l l over ef fect
9) Status ef fect
Solving raters problems The best way to overcome these problems is to
prov id ing t ra in ing to the raters. From a pract ica l po int o f
v iew, severa l factors, inc luding the extent to which pay
is re lated to per formance rat ings, union pressure,
turnover rates, t ime constra ints and the need to just i fy
rat ings may be more important than t ra in ing, in f luencing
the rat ings that raters actual ly g ive. This means that
improving rat ing systems involves not just t ra in ing the
raters but rect i fy ing outs ide factors such as union
pressure. And i t means that a rater t ra in ing, to be
ef fect ive, should a lso address real - l i fe problems such
as the fact that union representat ives wi l l t ry to
in f luence superv isors to rate everyone h igh. Tra in ing
helps to improve the appra isa l system by overcoming
d is tor t ion that occurs due to the raters, er rors such as
halo, len iency, centra l tendency and b ias. Tra in ing of
raters must help s t rengthen the factors that tend to
M P BIRLA INSTITUTE OF MANAGEMENT 86
improve accuracy of rat ings and weaken those that
lower the accuracy of the per formance measurement .
What should be rated?
One of the s teps in designing an appra isa l programme
is to determine the evaluat ion cr i ter ia . I t is obvious that
the cr i ter ia should be re lated to the job. The s ix cr i ter ia
for assessing per formance are:
1) Qual i ty
2) Quant i ty
3) T imel iness
4) Cost ef fect iveness
5) Need for superv is ion
6) In terpersonal impact
Methods of Appraisals The last to be addressed in the process of des igning an
appra isa l programme is to determine method(s) of
evaluat ion. Numerous methods have been devised to
measure the quant i ty and qual i ty of employee’s job
per formance.
Each of the methods d iscussed could be ef fect ive for
some purposes, for some organizat ions. None should be
d ismissed or accepted as appropr ia te except as they
M P BIRLA INSTITUTE OF MANAGEMENT 87
re late to par t icu lar type of employees. Broadly a l l
approaches can be c lass i f ied in to:
1) Past-or iented methods
2) Future-or iented methods
Each group has severa l techniques. Some of them are
expla ined in the fo l lowing sect ion.
Behavioral Anchored Rating Scales The term used to descr ibe a per formance rat ing that
focuses on speci f ic behaviors or sets as ind icators of
e f fect ive or inef fect ive per formance, rather than on
broadly s tated adject ives such as "average, above
average, or below average". Other var ia t ions are:
1 . Behaviora l observat ion scales
2. Behaviora l expectat ions scales
3. Numer ica l ly anchored rat ing scales
Checkl ists The term used to def ine a set of ad ject ives or
descr ip t ive s tatements. I f the rater be l ieves the
employee possessed a t ra i t l is ted, the rater checks the
i tem; i f not , the rater leaves h im i tem blank. Rat ing
score f rom the checkl is t equals the number of checks.
Cri t ical Incident Technique The term used to descr ibe a method of per formance
appra isa l that makes l is ts of s tatements of very
M P BIRLA INSTITUTE OF MANAGEMENT 88
ef fect ive and very inef fect ive behavior for employees.
The l is ts are combined in to categor ies, which vary wi th
the job. Once the categor ies are developed and
statements of e f fect ive and inef fect ive behavior
prov ided, the evaluator prepares a log for each
employee. Dur ing the evaluat ion per iod, the evaluator
records examples of cr i t ica l behaviors in each of the
categor ies, and the log is used to evaluate the
employee year end.
Forced Choice Method This appra isa l method has been developed to prevent
evaluators f rom rat ing employees to h igh. Using th is
method, the evaluator has to se lect f rom a set of
descr ip t ive s tatements, s tatements that apply to the
employee. The statements are weighted and summed to
at , e f fect iveness index.
Forced Distr ibution The term used to descr ibe an appra isa l system s imi lar
to grading on a curve.
The evaluators are asked to rate employees in some
f ixed d is t r ibut ion of categor ies. One way to do th is is to
type the name of each employee on a card and ask the
evaluators to sor t the cards in to p i les corresponding to
rat ing.
M P BIRLA INSTITUTE OF MANAGEMENT 89
Graphic Rating Scale The term used to def ine the o ldest and most widely
used per formance appra isa l method. The evaluators are
g iven a graph and asked to rate the employees on each
of the character is t ics. The number of character is t ics
can vary f rom one to one hundred. The rat ing can be a
matr ix of boxes for the evaluator to check of f or a bar
graph where the evaluator checks of f a locat ion re lat ive
to the evaluators rat ing.
Narrat ive or Essay Evaluat ion This appra isa l method asks the evaluator to descr ibe
s t rengths and weaknesses of an employee's behavior .
Some companies s t i l l use th is s method exc lus ive ly ,
whereas in others, the method has been combined wi th
the graphic rat ing scale.
Management by Object ives The management by object ives per formance appra isa l
method has the superv isor and employee get together to
set object ives in quant i f iab le terms. The appra isa l
method is worked to e l iminate communicat ion problems
by the establ ishment of regular meet ings, emphasiz ing
resul ts , and by being an ongoing process where new
object ives have been establ ished and o ld object ives are
modi f ied as necessary in l ight of changed condi t ions.
M P BIRLA INSTITUTE OF MANAGEMENT 90
Paired Comparison The term used to descr ibe an appra isa l method for
rank ing employees. Fi rs t , the names of the employees
to be evaluated are p laced on separate sheets in a
predetermined order , so that each person is compared
wi th a l l o ther employees to be evaluated. The evaluator
then checks the person he or she feels has been the
bet ter of the two on the cr i ter ion for each compar ison.
Typica l ly the cr i ter ion is the employees over a l l ab i l i ty
to do the present job.
Ranking The term ranking has been used to descr ibe an
a l ternat ive method of per formance appra isa l where the
superv isor has been asked to order h is or her
employees in terms of per formance f rom highest to
lowest .
Weighted Checkl ist The term used to descr ibe a per formance appra isa l
method where superv isors or personnel specia l is ts
fami l iar wi th the jobs being evaluated prepared a large
l is t o f descr ip t ive s tatements about ef fect ive and
inef fect ive behavior on jobs.
M P BIRLA INSTITUTE OF MANAGEMENT 91
Performance Interview Performance Interv iew is another s tep in the appra isa l
process. Once the Appra isa l has been made of
employees, the raters should d iscuss and rev iew the
per formance wi th the rates, so that they wi l l receive
feedback about where they s tand in the eyes of the
super iors. Feedback is necessary to ef fect improvement
in per formance, especia l ly when i t is adequate.
Speci f ica l ly Per formance Interv iew has three goals
1) To change behavior of employees. Whose
per formance does not meet Organizat ional
requi rements or the i r own personal goals?
2) To mainta in the behavior of employees who per form
in an acceptable manner,
3) To recognize super ior per formance behavior so that
they wi l l be cont inued.
Use of appraisal data The f ina l s tep in the evaluat ion process is the use of
evaluat ion data. The HR depar tment must use the data
and in format ion generated through per formance
evaluat ion. In one way or the other , data and
in format ion outputs of a per formance appra isa l
programme can cr i t ica l ly in f luence employer-employee
reward oppor tuni t ies.
M P BIRLA INSTITUTE OF MANAGEMENT 92
Speci f ica l ly the data and in format ion wi l l be usefu l in
the
1) Fol lowing areas of HRM
2) Remunerat ion adminis t rat ion
3) Val idat ion of se lect ion programs
4) Employee t ra in ing and development programs
5) Promot ion, t ransfer and lay-of f dec is ions
6) Gr ievance and d isc ip l ine programs
7) HR planning
Performance Management verses Performance Appraisal The shi f t f rom per formance appra isa l to per formance
management requi res a sh i f t in focus f rom a s ingle
event to a cont inuous process. The process prov ides
employees wi th d i rect ion and suppor t v ia a deta i led
per formance p lan composed of goals , act ion s teps,
measurements, and coaching throughout the year long
cyc le. Per formance management is d i f ferent f rom the
s ingle appra isa l because i t :
1) Begins wi th p lanning at the beginning of the year to
c lar i fy job expectat ions and accountabi l i t ies between
employee and manager
2) El iminates current employee concerns that
expectat ions are vague or not ar t icu lated
M P BIRLA INSTITUTE OF MANAGEMENT 93
3) Turns the appra isa l document and appra isa l meet ing
in to the year-end feedback summary and prev ious
meet ings on per formance
Findings of the Study 1) I t can be in ferred by the study that the employees are
aware of the present Per formance appra isa l System
fo l lowed in the company.
2) Most of the execut ives are sat is f ied wi th the
per formance appra isa l system fo l lowed in the
company. This shows that the present per formance
appra isa l system is sat is factory
3) Fur ther improvement in the system can be made in
order to at ta in fu l l sat is fact ion of the
employees/execut ives of the company.
4) Greater par t agrees that the per formance standards
set are c lear and achievable. .
5) Major i ty of the employees favored t ra in ing for the
appra isers to carry appra isa l programme..
6) In response to the company spending of considerable
t ime and at tent ion for the per formance appra isa l
system, most of the employees fe l t that the company
spends the necessary t ime and at tent ion in fo l lowing
the Per formance appra isa l System,
M P BIRLA INSTITUTE OF MANAGEMENT 94
7) Most of the execut ives surveyed are sat is f ied wi th the
Sel f -Appra isa l process being fo l lowed in the
company.
8) I t can be said that the present system of per formance
appra isa l is e f fect ive in br ing ing out the per formance
feed back by the rev iewing and repor t ing of f icers.
9) Most of the employees agree that the help and
guidance prov ided is suf f ic ient ind icat ing that the
management spends considerable t ime on prov id ing
employees wi th help and guidance.
M P BIRLA INSTITUTE OF MANAGEMENT 95
Chapter 5 Recommendat ions & Suggestions:
IRDA use t radi t ional mode of t ra in ing and
market ing which should be replaced wi th the use of
la test emerging technologies.
Regular feedback is recommended to know the l ike
& d is l ike and a lso expectat ions of the Customers.
Proper weightage should be g iven to improve the
communicat ion sk i l l o f the advisors so as to
improve customer re lat ions.
Dur ing t ra in ing to advisors importance should be
g iven to prov ide the most important in format ion to
them l ike making wel l aware about the products of
the i r organizat ion.
Market ing mater ia ls received before the advisor
reaches the customer should add value to the
product prepar ing more awareness in customers.
M P BIRLA INSTITUTE OF MANAGEMENT 96
Chapter 6 Conclusion
In present scenar io, there is a cut - throat compet i t ion
among the companies to get more and more prospects
to buy thei r var ious products. The only way to achieve
the target is t ra in the insurance advisors in the best
poss ib le way.
Birla Sun Life Insurance uses a l l those possib le
too ls and la test techniques l ike sof tware for ca lcu lat ing
premiums, etc which helps the i r insurance advisors to
se l l more of the i r products. They have shown a lo t o f
creat iv i ty and innovat ion in the i r t ra in ing programs and
have succeeded in achiev ing the desired outcome.
M P BIRLA INSTITUTE OF MANAGEMENT 97
BIBLIOGRAPHY 1. COMPANY BROUCHURES AND PAMPHLETS
2. COMPANY ANNUAL RECORDS
3. www.bi r lasunl i fe .com
4. www.google.com