1

A

PROJECT REPORT ON

EMPLOYEE MOTIVATION

AT

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED.

Dissertation submitted

In the partial fulfillment of the award of the degree of

BACHELOR OF COMMERCE

By

Ms. …………………………

(Reg. No: ……………)

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CONTENTS

Chapters Title Page nos.

Chapter - 1 Introduction 1 - 13

Chapter - 2 Review of literature 14 - 31

Chapter - 3 Industry Profile 32 - 52

Company Profile 53 - 63

Chapter - 4 Data Analysis And Interpretation 64 - 85

Chapter - 5 Findings, Suggestions & Conclusions 86 - 90

Chapter - 6 Bibliography 91 – 92

Questionnaire 93 - 97

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CHAPTER - 1

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STATEMENT OF THE PROBLEM:

This particular topic is chosen because employee motivations plays a

vital role in fulfilling the organization goals . Employee motivation

influences human relation in an organization and also its climate. This project

is aimed at understanding the employee’ s motivation and its effect on

performance, consequences of motivation before and after, & so on.

Purpose of the study:

The purpose of study is to identify the type of motivation

most suited for higher productivity and methods usually

adopted for measuring employee’s motivation.

To study the factors affecting the individual performance.

HUMAN RESOURCE MANAGEMENT

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A wonderful creation of man brought significant and paradigm shifts in

our day-to/day life . The people make or mar the organization.

According to L F Urwick “Business houses are made or broken in the

long run not by markets or capital, patent or equipment by men”

managing men has become a task of trauma. As it is said, by father of

psychologist Sigmund Freud that , “beats are better than some men”.

Sometimes we find such men in the organization and managing these

men is a task. Managing this task is Human Resource Management.

An organization is nothing without Human Resource. Of all the

resources manpower is the only resources, which does not depreciate

with the passage of the time. The term Human Resource is a resource

like any natural resources (i .e.) management can get and use the skills ,

knowledge, ability etc. Through the development of multi -facets, skil l

tapping and utilizing them again and again by developing a positive

attitude among employees. From the view point of the organization

Human Resource Management is the process of efficiently gett ing

activities completed with and through other people.

In the process of glamorous globalization Human resource management

was heralded as “a new era of human people – oriented employment

management” and derided as a “blunt instrument to bully workers”. But

the former proved a value and this value stabilized and strengthen the

Silicon Valley and Sil icon Valleys of India. Human Resource

Management concerned the human side of the management of

enterprises and employees relations with their firm.

The employees of a company i.e. its Human Resources are understood

in and used in such a way that the employer obtains the greatest

possible benefit from their abil ities and the employees obtain both

material and psychological rewards from their work. Human Resource

Management sees employees as assets to be used strategically through

their close involvement with the organization and by raising

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employee’s levels of commitment to the aims and requirements of the

firm’s. Now a day’s employees are encouraged to welcome change, to

be innovative, quality conscious and flexible.

HRM AS CENTRAL SUBSTSTEM IN AN ORGANIZATION

As a central subsystem, HRM interacts closely and continuously with

all other subsystem of an organization. The quality of people in all

subsystem depends largely upon the policies, programmes and practices

of the HRM subsystems. The quality of Human Resource determines in

turn the success of the organization.

HRM become very significant in recent decades due to the following

factors:

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Growth of powerful nation wide trade union.

Increase proportion of women in the workforce.

Rise of professional and knowledgeable workers.

Growing expectations of society from employers.

Increase in the size and complexity of the organization.

Revolution in information technology that might effect the

workforce.

Rapid technological developments like automation and

computerization.

Rapidly changing jobs and skills requiring long term manpower

planning.

Widening scope of legislation designed to protect the interests of

the workforce.

HRM – The new assumptions

Goal orientation (relationship orientation)

Participation and informed choice (control from top)

People are social capital capable of development (people are

variable cost)

Seeks power equalization for trust and collaboration (seeks

power advantage for bargaining and confrontation)

Coincidence of interest between stakeholders can be development

(self interest dominates conflict between stakeholders)

Proactive system wide intervention, with emphasis on fit linking

HRM with strategic planning and cultural change (old assumption

reactive, piecemeal intervention in response to specific problem)

Out comes to HRM

According to the Harvard Researchers, the effectiveness of the

outcomes to HRM are:

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Commitment

Competence

Congruence

Cost-effectiveness

Commitment

Concerns employee’s loyalty to the organization personal motivation

and linking for their work. The degree of employee commitment might

be assessed via at titude surveys labor turnover and absenteeism

statistics and through interview with the workers who quit their jobs.

Competence

Relates to employees skills and abilities, training requirements and

potential for higher work. These may be estimated through employee

appraisal system and the preparation of skills inventories. HRM

policies should be designed to attract, retain and motivate competent.

Congruence

Congruence means that management and workers share the same vision

of the organization goals and work together to attain them. In a well -

managed organization, employees at all levels of authority will share

common perspectives about the factors that determine its prosperity and

future prospects.

Cost-effectiveness

Concerns operational efficiency. HR should be used to the best

advantage and in the most productive ways. Outputs must be maximized

at the lowest input cost and the organizational must be quick to respond

to market opportunit ies and environmental changes.

INTRODUCTION:

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Motivation is one of the most important factors affecting human behavior

and performance. This is the one of the reason why managers attach great

importance to motivation in organizational setting. Lipkert has called

motivation has the core of management. Effective directing leads to

effectiveness, both at organizational and individuals levels. This requires the

understanding of what individuals want from the organization. However, what

individuals want from the organization has not been fully identified.

Inner strivings of individuals that direct behavior. Unsatisfied desires create the

motivation to act with purposeful behavior to achieve gratification.

Definition of Motivation:

A simple definition of motivation is the ability to change behavior. It is a drive that

compels one to act because human behavior is directed toward some goal. Motivation

is intrinsic (internal); it comes from within based on personal interests, desires, and

need for fulfillment. However, extrinsic (external) factors such as rewards, praise, and

promotions also influence motivation. As defined by Daft (1997), motivation refers to

“the forces either within or external to a person that arouse enthusiasm and persistence

to pursue a certain course of action”

People who are committed to achieving organizational objectives generally

outperform those who are not committed. Those who are intrinsically rewarded by

accomplishments in the workplace are satisfied with their jobs and are individuals

with high self-esteem. Therefore, an important part of management is to help make

work more satisfying and rewarding for employees and to keep employee motivation

consistent with organizational objectives. With the diversity of contemporary

workplaces, this is a complex task. Many factors, including the influences of different

cultures, affect what people value and what is rewarding to them.

From a manager’s perspective, it is important to understand what prompts people,

what influences them, and why they persist in particular actions. Quick (1985)

presented these four underlying principles that are important to understanding

motivation:

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People have reasons for everything they do.

Whatever people choose as a goal is something they believe is good for them.

The goal people choose must be seen as attainable.

The conditions under which the work is done can affect its value to the

employee and his or her perceptions of attainability or success.

When management was first studied in a scientific way at the turn of the

twentieth century, Frederick Winslow Taylor worked to improve productivity

in labor situations so important in those days of the developing Industrial

Revolution. Taylor developed efficiency measures and incentive systems.

When workers were paid more for meeting a standard higher than their normal

production, productivity increased dramatically. Therefore, workers seemed to

be economically motivated. At this time in history, social issues involved in

human behavior were not yet considered. Amore humanistic approach soon

developed that has been influencing management ever since.

During the late 1920s and early 1930s, Elton Mayo and other researchers from

Harvard University conducted studies at a Western Electric plant in Hawthorne,

Illinois, to measure productivity. They studied the effects of fatigue, layout, heating,

and lighting on productivity. As might be expected when studying lighting, employee

productivity levels increased as the illumination level was increased; however, the

same effect was noted when the illumination level was decreased. The researchers

concluded that the attention paid to the employees was more of a contributing factor to

their productivity level than the environmental conditions. The fact that paying

attention to workers could improve their behavior was called the Hawthorne effect. As

a result of this research, it was evident that employees should be treated in a humane

way. These findings started the human relations movement—a change in management

thinking and practice that viewed increased worker productivity as grounded in

satisfaction of employees’ basic needs. [Many years later, it was discovered that the

workers in the Hawthorne experimental group had received an increase in income;

therefore, money was probably a motivating factor, although it was not recognized as

such at the time. (Daft, 1997)].

Motivation theories have continued to evolve and have their roots in behavioral

psychology. They provide a way to examine and understand human behavior in a

variety of situations. Ongoing changes in the workplace require that managers give

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continuous attention to those factors that influence worker behavior and align them

with organizational goals. No one theory is appropriate for all people and for all

situations. Each individual has his or her own values and differing abilities. In

business settings, managers apply motivation theories to influence employees,

improve morale, and implement incentive and compensation plans.

NEED FOR THE STUDY

The purpose of the study is to identify the level of motivation among the

working group in HDFC Standard Life insurance.

To know the working environment, supervisors relationship, family

relationship and individual perception about the company in relation to

motivation.

The study can reveal the psychological and economic factors associated with

motivation and also can bring forth the interrelated factors for motivation.

The study would be helpful in giving suggestions to apply the motivation

methods.

OBJECTIVES OF THE STUDY:

To identify how employee motivation is related to performance.

To measure the consequences of pre and post employee

motivation.

To study the role of employee empowerment after motivation.

RESEARCH METHODOLOGY

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1. Sampling design

Size of sample : sample size is 32 i.e. Large (>30)

Methods of sampling : simple random sampling

1. Data collection methods :

In general there are two types of data collection

I. Primary data collection : questionnaire

II. Secondary data collection :

a. Articles in magazines

b. Journals

c. Internet

d. News papers

Hypothesis

Hypothesis: with regard to the above stated objectives following hypothesis

were formulated.

Null hypothesis:

Employees in various cadres do not hold different views with regard to the

Motivational factor.

Alternative hypothesis:

Employees in general are not satisfied with the existing motivational practices.

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SCOPE OF THE STUDY:

The human resources management has to identify employee’s

motivation to match with the organization’s productivity. The motivation of

each employee will lead to the better performance and in turn satisfies both

the employees and also organization. As employee motivation is important for

the organization to achieve the desired goals on time, therefore the employees

must be motivated by using various techniques.

LIMITATIONS

The study is conducted on a limited number of employees and no on

the entire workforce.

The information provided by the respondents in the survey may be

biased or may not view as seriously to provide with accurate

information.

This study is limited to a certain time period and at the point of time.

Response from inexperienced workforce or relatively new workforce in

the survey may tamper some validity of information.

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CHAPTER - 2

15

REVIEW OF LITERATURE

Employee motivation and empowerment

Introduction:

Motivation is one of the most important factors affecting human behavior

and performance. This is the one of the reason why managers attach great

importance to motivation in organizational setting. Lipkert has called

motivation has the core of management. Effective directing leads to

effectiveness, both at organizational and individuals levels. This requires the

understanding of what individuals want from the organization. However, what

individuals want from the organization has not been fully identified.

Definition:

“motivation is the complex forces starting and keeping a person at

work in an organization . Motivation is something that moves the person to

action, and continues him in course of action already initiated”.

“ motivation refers to the way in which urges, drives, desires, aspirations,

strives, or needs direct, control or explain the behavior of human beings”.

Motivation can be defined in a variety of ways, depending on whom

you ask. If you ask someone on the street, you may get a response like,

‘’it’s what drives us’’ or ‘’motivation is what makes us to do the things we

do .’’ as far as a formal definition, motivation can be defined as ‘’forces

within in an individual that account for the level, direction, and persistence

of effort expended at work,’’ according to schermer horn, et al . This is an

excellent working definition for use in business.

In order to understand the concept of motivation, we have to

examine three terms : motive, motivating and motivation and their

relationship.

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Study:

The purpose of study is to identify the type of motivation most

suited for higher productivity and methods usually adopted for

measuring employee’s motivation.

To study the factors affecting the individual performance.

Motive: based on the latin word mover, motive (need) has been defining s follow;

“a motive is an inner state that energies, actives, or moves (hence motivation),

and

That directs behavior towards goals.

There is a difference between needs and wants. It is necessary to know the

difference

Between those two terms for every employee. Needs are more comprehensive and

include

Desires both physiological needs like social needs, recognition needs, etc, which do

not fall under wants.

Motivating:

Motivation is the term which implies that one person in the organization context,

a manager, induces anther, say employee to engage in action (work behavior) by

ensuring that a channel to satisfy the motive become available and accessible to the

individual in addition

To channel zing the strong motive in a direction that is satisfying t both the

organization and the employers the manger can also active the latest motivation in

individuals and harness them in a manner that would be function for the organization.

Motivation:

While a motive is engizer of action motivation is the canalization and

activation of

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Motives motivation is the work behavior itself. Motivation depends on motives and

motivating therefore, it becomes a complex process.

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Fig 1: relationship between motive, motivating and motivation.

Nature of motivating:

Based on the definition of motivation, we can derive its nature relevant for human

behavior in organization.

Following characteristics of motivation clarify its nature:

1. Based on motives:

Motivation is based on individual’s motives which are internal to the individuals.

These motives are in the form of feelings that the individual lacks something. In order to

overcome this feeling of lackness, the employee tries to behave in a manner which helps in

overcoming this feeling.

2. Affected by motivating:

Motivation is affected by way the individual is motivated. The act of motivating

channelizes need satisfaction. Besides, it can also activate the latent needs in the

individual, that is, the needs that are less strong and somewhat dormant, and

harness them in a manner that would be functional for the organization.

3. Goal-directed behavior:

Motivation leads to goal directed behavior. A goal-directed behavior is one

which satisfies the causes for which behavior take place. Motivation has profound

influence on human behavior; in the organizational requirements.

Motive MotivationMotivating

Needs in

Individuals

Activating needs and

Providing needsatisfactionEnvironment

Engagement in workBehavior

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4. Related to satisfaction:

Motivation is related to satisfaction. Satisfaction refers to the contentment

experiences of an individual which he drives out of need fulfillment. Thus,

satisfaction is a consequence of rewards and punishments associated with the past

experiences. It provides means to analyze outcomes already experienced by

individual.

5. Persons motivated in totality:

A person is motivated in totality and not in part. Each individual in the

organization is a self-contained unit and his needs are interrelated. These affect his

behaviour in different ways. Moreover, feelings of needs and their satisfaction is a

continuous process. As such, these create continuity in behavior.

6. Complex process:

Motivation is a complex process; complexity emerges because of the nature

of needs and the type of behavior that is attempted to satisfy those needs.

These generate complexity in motivation process in the following ways.

(1) needs are internal feelings of individuals and sometimes even they,

They may not be quite aware about their needs and the priority of these. Thus,

Understanding of human needs and providing means for their satisfaction

Becomes difficult.

(2) even if needs are identified, the problem is not over here as a

particular need may result into different behaviors from different behaviors from

different result into different behaviors from different need ma individuals

because of their differences. For example, the need for promotion may be uniform

for different individuals may no engage in similar type of behavior; they may

adopt different routes to satisfy their promotion needs.

3) a particular behavior may emerge not only because of the specific

need but it may be because of a variety of needs. For example, hard work in the

organization may be due to the need for earning more money to satisfy

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psychological needs, or may to enjoy the performance of work itself and money

becomes secondary, or to get recognition as a hard- working person.

4) goal directed behavior may lead to goal attainment. There may be

many consbuses in situation which may restring the goal attainment of goal

directed behavior. This may lead to frustration in an individual creating lot of

problems.

Type of needs

There are many types of needs which an individual may have and there

are various ways in which these may be classified. The basic objective behind

classification of needs into categories is to find out similarly and dissimilarly in

various needs so that incentives are grouped to satisfy the needs falling under one

category or the other. Needs may be natural, biological phenomenon in an

individual, or these may over the period of time through learning.

Thus, needs may be grouped into three categories:

1) primary needs

2) secondary needs

3) general needs

Primary needs:

Primary needs are also known as physiological, biological, basic, or unlearned

needs. Primary needs are animal drives which are essential for survival. These needs

are common to all human beings, though their intensity may differ.

Secondary needs:

These needs are learned by the individual through his experience and

interaction. Therefore these are called derived or learned needs. Emergence of these

depends on learning. These may be different types of secondary needs for power,

achievement, status affiliation, etc.

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General types:

Though a separate classification of general needs is not always given, such a

category seems necessary because there are of needs which lie in the grey area

between the primary and secondary needs. Such needs are like need for competence,

curiosity, manipulation, affection, etc

Motivation and behavior

Motivation causes goal- directed behavior. Felling of a need by an individual

generates a feeling that he lacks something. This lack of something creates tension in

the in of the individual. Since the tension is not an ideal state of mind, the individual

tries to overcome this by engaging himself in an behavior through which he satisfies

his needs. Goal – directed behavior leads to goal fulfillment and the individual

succeeds in fulfilling his needs and there by overcoming his tension in the favorable

environment. Satisfaction is one need leads to feeling of another need, either same

need after the lapse of certain time or different need and goal – directed behavior goes

on. Thus, goal – directed behavior is a continuous process.

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3. Aggression:

A more common reaction to frustration is aggression, an act against someone

or something. An employee being denied a promotion may become aggressive and

verbally berate his supervisor.

Motivation and performance

Motivation is necessary for work performance because if people do not feel

inclined to engage themselves in work behavior, they will not put in necessary efforts

to perform well. However, performance of an individual in the organization depends

on a variety of factors besides motivation. Therefore, it is desirable to identify various

factors which affect individual performance and the role that motivation plays.

Factors affecting individual performance:

Observations show that (1) various individual perform differently in the same

work situations, and (2) the same individual performs differently in different work

situations. These statements suggest that various factors which affect an individual’s

performance are broadly of two types ------- individual and with in each type there

may be several factors.

We can derive form figure that individual performance depends on the following

factors:

1. Motivation of individual,

2. His since of competence,

3. His ability,

4. His role perception, and

5. Organizational resources

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Fig 4: factors affecting individual performance

If any of the elements is taken away, performance will be affected

adversely. The double- headed arrow between motivation and sense of competence

that the two variables mutually influence each other. Reward, as a result of

individual’s performance affects his level of motivation. If the reward is perceived to

be of valence and equitable, it energizes the individual for still better performance and

this process goes on.

1. Motivation:

Level of motivation drives an individual for work. Motivation is based on

motive which is a feeling that an individual lacks some things. This feeling creates

some sort of tension in his mind. In order to overcome this tension, he engages in goal

–directed behavior that is taking those actions trough which his needs are satisfied.

Thus, motivation becomes a prime mover for efforts and better work performance.

Motivation

Ability

Performance

Reward

OrganizationalResources

Sense ofCompetence

RolePerception

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2. Sense of competence:

To sense of competence denotes the extent to which an individual

consistently regards himself as capable of doing a job. Sense of competence of an

individual depends to a very great extent on his locus of control. Locus of control

means whether people believe that they are in control of events or events control

them. Those who have internal locus of control believe that they can control and

shape the course of events in their lives; those who have external locus of control

tend to believe occur purely by chance or because of factors beyond their own

control. An individual with internal locus of control tends be high performer than

those with external locus of control. However, this sense of competence is not an

independent factor but depends on the ability of the individual.

3. Ability

While sense of competence is type of perception about oneself, ability is hispersonal attributes relevant for doing a job. Often, ability is expressed in the followingway or equation.

Knowledge refers to the position of information and ideas in a particular field which

may be helpful in developing relationships among different variables related to that

field. Skill refers to expertness, practical ability or facility in an action or doing

something. Thus, if the individual has ability relevant to his job, his performance tends

to be higher than those who do not posses such ability.

4. Role perceptionA role is the pattern of actions expected of a person in activities involving

others. Role reflects a person’s position in the social system with its accompanying rights

and obligations. In an organization, activities of an individual are guided by his role

perception that is, how he thinks he is supposed to act in his own role is clear, the

individual tends to perform well. There are two types of problems which emerge in role

specification, role ambiguity and role conflict role ambiguity denotes the state in which

the individual is not clear what is expected from him in the job situation. Role conflict is

the situation in which the individual engages in two or more roles simultaneously and

these roles are mutually incompatible. In both these situations, his performance is likely

to be affected adversely.

Ability=knowledge* skill

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5. Organizational resources:

Organizational resources denote various types of facilities ---physical and

psychological ---which are available at the work place. Physical facilities include

appropriate layout of the work place and conductive physical environment.

Psychological facilities include appropriate reward system, training development

facilities, harmonious workshop appropriate and motivating leadership styles,

motivating work, and do on. These organizational resources work in two ways in

increasing individual performance. First, they facilitate job performance. Second they

work as motivating factors which enhance individual enthusiasm to perform well.

Role of motivation

Motivation is one among the various factors affecting individual performance.

However, it is one of the most important factors. All organizational facilities will go

waste in the lack of motivated people to utilize these facilities effectively. Every

superior in the organization must motivate his subordinates for the right types of

behavior. Diagnosing human behavior and analyzing as to why people behave in a

particular way is of prime importance in motivating them irrespective of the

organization because individual is the basic component of any organization.

The importance of motivation in an organization may be summed up as follows:

1. High performance level:

Motivated employees put together performance as compared to other

employees. In a study it was found that motivated employees worked at close 80-90

percent of their ability. The further suggested that hourly employees could maintain

their jobs, if they were not fired, by working approximately 20to30 percent of their

ability. The high performance is a must for an organization being successful and this

performance comes by motivation.

2. Low employee turnover and absenteeism

Motivated employees stay in the organization and their absenteeism is

quite low. High turnover and absenteeism create many problems in the organization.

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Recruiting, training and developing large number of new personnel into a working

team take years. In a competitive economy, this is almost an impossible task.

Moreover, this also effects the reputation of the organization unfavorably

3. Acceptance of organizational changes:

Organizations are created in the society. Because of changes in the

society--- changes in technology, value system etc, and organization has to

incorporate those things to cope up with the requirement of the time. When these

changes are introduced in the organization, there is a tendency to a resist these

changes by the employees. However if they are properly motivated, they accept,

introduce and implement these changes keeping the organization on the right track of

progress.

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Empowerment

Empowerment is the process of enabling or authorizing an individual to

think, behaves, take action, and control work and decision making in autonomous

ways. It is the state of feeling self-empowered to take control of one’s own destiny.

Empowerment rules as a development strategy.

Along with motivation job design, empowerment is also used as a technique

for motivation. Most of work organizations have a number of employees who believe

that they are dependent on others and their own efforts have little impact on the

performance. Sense of this powerless creates frustration in employees and they start

developing feeling that they cannot perform successfully or make meaningful

contributions. In order to overcome this feeling of employees and involving them in

their jobs, the idea of empowerment has been introduced. The basic those of

empowerment have emerged from the proponents of total quality management (tqm)

which has gained acceptance throughout the world.

In webster’s dictionary, the verb empowers means to give the means, ability of

authority”. Thus, empowerment in work setting involves giving employees the means, ability

and authority to do something.

Newstrom and davis have defined empowerment as follows

“empowerment is any process that provides greater autonomy through the sharing of

relevant information and the provision of control over factors affecting job performance.”

“empowerment helps remove the conditions that cause powerlessness while

enhancing employee feeling of self-efficacy.”

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There are five approaches which have been suggested for empowerment:

1. Helping employees achieve job mastery – giving training, coaching, andguided experience that are required for initial success.

2. Allowing more control – giving employees descr travel section over jobperformance and making them accountable for the performance outcomes.

3. Providing successful role models – allowing them to observe peers who areperforming successfully on the job.

4. Using social reinforcement and persuasion – giving praise, encouragement,and verbal feedback to raise confidence.

5. Giving emotional support – reduction of stress and anxiety through better rolepresent travel section, task assistance, and personal care.

When managers use these approaches, employees develop a feeling that their

jobs are important and they contribute meaningfully for the achievement of

organizational effectiveness.

This feeling contributes positively to the use of skills and talents in job performance

as shown in figure:

Fig 5: empowerment and its effect

Empowerment

Job mastery

More self-control

Reinforcement

Perception of

Empowerment

Self-confidence

High values to job

Better

Performance

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Making empowerment effective

Top 10 principles of employee empowerment:

These are the most important principles for people in a way that reinforces

employee empowerment, accomplishment, and contribution. These management

actions enable both the people who work with you and the people who report to you to

soar.

1. Demonstrate, you value people

Your regard for people shines through in all of your actions and words. Your

facial expression, your body language, and your words express what you are thinking

about the people who report to you. Your goal is to demonstrate your appreciation for

each person’s unique value. No matter how an employee is performing on their

current task, your value for the employee as a human being should never falter and

always be visible.

2. Share leadership vision

Help people feet that they are part of something bigger than themselves and

their individual job. Do this by making sure they know and have access to the

organization’s overall mission, vision, and strategic plans.

3. Share goals and direction

Share the most important goals and direction for your group. Where possible,

either make progress on goals measurable and observable, or ascertain that you have

shared your pictures of a positive outcome with the people responsible for

accomplishing the results.

4. Trust people

Trust the intention of people to do the right thing, make the right decision, and

make choices that, while may be not exactly what you would decide, still work.

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5. Provide information for decision making

Make certain that you have give people, or made sure that they have access to,

all of the information they need to make thoughtful decisions.

6. Delegate authority and impact opportunities, not just more work

Doesn’t just delegate the drudge work; delegate some of the fun stuff, too. You

know, delegate the important meetings, the committee memberships that influence

product development and decision making, and the projects that people and customers

notice. The employee will grow and develop new skills. Your plate will be less full so

you can concentrate on contribution. Your reporting staff will gratefully shine-and so

will you.

7. Provide frequent feedback

Provide frequent feedback so that people know how they are doing.

Sometimes, the purpose of feedback is reward and recognition. People deserve your

constructive feedback, too, so they can continue to develop their knowledge and skills.

8. Solve problems: don’t pinpoint problem peopleWhen a problem occurs, ask what is wrong with the work system that caused

the people to fail, not what is wrong with the people. Worst case response to

problems? Seek to identify and punish the guilty.

9. Listen to learn and ask questions to provide guidance

Provide a space in which people will communicate by listening to them and

asking them questions. Guide by asking questions, not by telling grown up people

what to do. People what to do. People generally know the right answers if they have

the opportunity to produce them. When an employee brings you a problem to solve,

ask, “what do you think you should do you should do to solve this problem?”

Or, ask, “what action steps do you recommend?” Employees can demonstrate what

they know and grow in the process.

10. Help employees feel rewarded and recognized for empowered behavior

When employees feel under-compensated, under-titled for the responsibilities

they take on, under-noticed, under-praised, and under – appreciated, don’t expect

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results from employee empowerment. The basic needs of employees must feel met for

employee’s empowerment. The basic needs of employees must feel met for employees

to give you their discr travel stationary energy, that extra effort that people voluntarily

invest in work.

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CHAPTER - 3

33

INDUSTRY PROFILE

". The insurance sector in India has come a full ci rcle from beingan open competitive market to nationalization and back to a l iberalizedmarket again. Tracing the developments in the Indian insurance sectorreveals the 360 degree turn witnessed over a period of almost twocenturies.

A brief history of the Insurance sectorThe business of life insurance in India in its existing form started

in India in the year 1818 with the establishment of the Oriental LifeInsurance Company in Calcutta.

Some of the important milestones in the life insurancebusiness in India are:

1912: The Indian Life Assurance Companies Act enacted as the firststatute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable thegovernment to collect statistical information about both li fe and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the InsuranceAct with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies takenover by the central government and nationalized. LIC formed by an Actof Parliament, viz. LIC Act,1956, with a capital contribution of Rs. 5crore from the Government of India.

The General insurance business in India, on the other hand, cantrace its roots to the Triton Insurance Company Ltd. , the first generalinsurance company established in the year 1850 in Calcutta by theBritish.

Insurance sector reforms

In 1993, Malhotra Committee headed by former FinanceSecretary and RBI Governor R.N. Malhotra was formed to evaluate theIndian insurance industry and recommend its future direction.

The Malhotra committee was set up with the objective ofcomplementing the reforms initiated in the financial sector.

The reforms were aimed at “creating a more efficient andcompetitive financial system suitable for the requirements of the

34

economy keeping in mind the structural changes currently underwayand recognizing that insurance is an important part of the overallfinancial system where it was necessary to address the need for similarreforms…”

In 1994, the committee submitted the report and some ofthe key recommendations included:

i) Structure Government stake in the insurance Companies to be brought down to

50% Government should take over the holdings of GIC and its

subsidiaries so that these subsidiaries can act as independentcorporations.

All the insurance companies should be given greater freedom tooperate

ii) Competition

Private Companies with a minimum paid up capital of Rs.1bn shouldbe allowed to enter the industry.

No Company should deal in both Life and General Insurance througha single entity.

Foreign companies may be allowed to enter the industry incollaboration with the domestic companies.

Postal Life Insurance should be allowed to operate in the ruralmarket.

Only one State Level Life Insurance Company should be allowed tooperate in each state

iii) Regulatory Body

The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part f rom the Finance Ministry)

should be made independent

iv) Investments

Mandatory Investments of LIC Life Fund in government securitiesto be reduced from 75% to 50%

GIC and its subsidiaries are not to hold more than 5% in anycompany (There current holdings to be brought down to this levelover a period of time)

v) Customer Service

LIC should pay interest on delays in payments beyond 30 days

35

Insurance companies must be encouraged to set up unit linkedpension plans

Computerization of operations and updating of technology to becarried out in the Insurance industry.

Hence, it was decided to allow competit ion in a limited way bystipulating the minimum capital requirement of Rs.100 crore. Thecommittee felt the need to provide greater autonomy to insurancecompanies in order to improve their performance and enable them toact as independent companies with economic motives. For this purpose,it had proposed setting up an independent regulatory body.

The Insurance Regulatory and Development Authority(IRDA)

Reforms in the Insurance sector were initiated with the passageof the IRDA Bill in Parl iament in December 1999. The IRDA since itsincorporation as a statutory body in April 2000 has fastidiously stuck toits schedule of framing regulations and registe ring the private sectorinsurance companies.

The other decision taken simultaneously to provide thesupporting systems to the insurance sector and in particular the lifeinsurance companies was the launch of the IRDA’s online service forissue and renewal of licenses to agents.

The approval of institutions for imparting training to agents hasalso ensured that the insurance companies would have a trainedworkforce of insurance agents in place to sell their products, which areexpected to be introduced by early next year.

Since being set up as an independent statutory body the IRDAhas put in a framework of globally compatible regulations. In theprivate sector 12 life insurance and 6 general insurance companies havebeen registered.

36

History of insurance

In some sense we can say that insurance appears simultaneously with the appearance

of human society. We know of two types of economies in human societies:

money economies (with markets, money, financial instruments and so on) and non-

money or natural economies (without money, markets, financial instruments and so

on).

The second type is a more ancient form than the first. In such an economy and

community, we can see insurance in the form of people helping each other. For

example, if a house burns down, the members of the community help build a new one.

Should the same thing happen to one's neighbour, the other neighbours must help

Otherwise; neighbours will not receive help in the future. This type of insurance has

survived to the present day in some countries where modern money economy with its

financial instruments is not widespread (for example countries in the territory of the

former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern money

economy, in which insurance is part of the financial sphere), early methods of

transferring or distributing risk were practiced by Chinese and Babylonian traders as

long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling

treacherous river rapids would redistribute their wares across many vessels to limit the

loss due to any single vessel's capsizing. The Babylonians developed a system which

was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early

Mediterranean sailing merchants. If a merchant received a loan to fund his shipment,

he would pay the lender an additional sum in exchange for the lender's guarantee to

cancel the loan should the shipment be stolen.

Achaemenian monarchs were the first to insure their people and made it official by

registering the insuring process in governmental notary offices. The insurance

tradition was performed each year in Norouz (beginning of the Iranian New Year); the

heads of different ethnic groups as well as others willing to take part, presented gifts

to the monarch. The most important gift was presented during a special ceremony.

When a gift was worth more than 10,000 Derrick (Achaemenian gold coin weighing

8.35-8.42) the issue was registered in a special office. This was advantageous to those

37

who presented such special gifts. For others, the presents were fairly assessed by the

confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift

registered by the court was in trouble, the monarch and the court would help him.

Jahez, a historian and writer, writes in one of his books on ancient Iran:

"[W]whenever the owner of the present is in trouble or wants to construct a building,

set up a feast, have his children married, etc. the one in charge of this in the court

would check the registration. If the registered amount exceeded 10,000 Derrik, he or

she would receive an amount of twice as much."

A thousand years later, the inhabitants of Rhodes invented the concept of the 'general

average'. Merchants whose goods were being shipped together would pay a

proportionally divided premium which would be used to reimburse any merchant

whose goods were jettisoned during storm or sink age.

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD

when they organized guilds called "benevolent societies" which cared for the families

and paid funeral expenses of members upon death. Guilds in the Middle Ages served a

similar purpose. The Talmud deals with several aspects of insuring goods. Before

insurance was established in the late 17th century, "friendly societies" existed in

England, in which people donated amounts of money to a general sum that could be

used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other

kinds of contracts) were invented in Genoa in the 14th century, as were insurance

pools backed by pledges of landed estates. These new insurance contracts allowed

insurance to be separated from investment, a separation of roles that first proved

useful in marine insurance. Insurance became far more sophisticated in post-

Renaissance Europe, and specialized varieties developed.

Toward the end of the seventeenth century, London's growing importance as a centre

for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd

opened a coffee house that became a popular haunt of ship owners, merchants, and

ships’ captains, and thereby a reliable source of the latest shipping news. It became the

meeting place for parties wishing to insure cargoes and ships, and those willing to

underwrite such ventures. Today, Lloyd's of London remains the leading market (note

38

that it is not an insurance company) for marine and other specialist types of insurance,

but it works rather differently than the more familiar kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London, which in

1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon

opened an office to insure buildings. In 1680, he established England's first fire

insurance company, "The Fire Office," to insure brick and frame homes.

The first insurance company in the United States underwrote fire insurance and was

formed in Charles Town (modern-day Charleston), South Carolina, in 1732.

Benjamin Franklin helped to popularize and make standard the practice of insurance,

particularly against fire in the form of perpetual insurance. In 1752, he founded the

Philadelphia Contribution ship for the Insurance of Houses from Loss by Fire.

Franklin's company was the first to make contributions toward fire prevention. Not

only did his company warn against certain fire hazards, it refused to insure certain

buildings where the risk of fire was too great, such as all wooden houses.

In the United States, regulation of the insurance industry is highly Balkanized, with

primary responsibility assumed by individual state insurance departments. Whereas

insurance markets have become centralized nationally and internationally, state

insurance commissioners operate individually, though at times in concert through a

national insurance commissioners' organization. In recent years, some have called for

a dual state and federal regulatory system for insurance similar to that which oversees

state banks and national banks.

In the state of New York, which has unique laws in keeping with its stature as a global

business centre, former New York Attorney General Eliot Spitzer was in a unique

position to grapple with major national insurance brokerages. Spitzer alleged that

Marsh & McLennan steered business to insurance carriers based on the amount of

contingent commissions that could be extracted from carriers, rather than basing

decisions on whether carriers had the best deals for clients. Several of the largest

commercial insurance brokerages have since stopped accepting contingent

commissions and have adopted new business models.

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Types of insurance

Any risk that can be quantified can potentially be insured. Specific kinds of

risk that may give rise to claims are known as "perils". An insurance policy

will set out in details which perils are covered by the policy and which are .

Below is a (non-exhaustive) list of the many different types of insurance that exist.

A single policy may cover risks in one or more of the categories set forth below.

For example, auto insurance would typically cover both property risk (covering

the risk of theft or damage to the car) and liability risk (covering legal claims from

causing an accident). A homeowner's insurance policy in the U.S. typically

includes property insurance covering damage to the home and the owner's

belongings, liability insurance covering certain legal claims against the owner, and

even a small amount of health insurance for medical expenses of guests who are

injured on the owner's property.

Automobile insurance, known in the UK as motor insurance, is probably the

most common form of insurance and may cover both legal liability claims

against the driver and loss of or damage to the insured's vehicle itself.

Throughout most of the United States an auto insurance policy is required to

legally operate a motor vehicle on public roads. In some jurisdictions, bodily

injury compensation for automobile accident victims has been changed to a

no-fault system, which reduces or eliminates the ability to sue for

compensation but provides automatic eligibility for benefits. Credit card

companies insure against damage on rented cars.

Aviation insurance insures against hull, spares, deductible, hull war and

liability risks.

Boiler insurance (also known as boiler and machinery insurance or equipment

breakdown insurance) insures against accidental physical damage to

equipment or machinery.

Builder's risk insurance insures against the risk of physical loss or damage to

property during construction. Builder's risk insurance is typically written on an

"all risk" basis covering damage due to any cause (including the negligence of

the insured) not otherwise expressly excluded.

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Business insurance can be any kind of insurance that protects businesses

against risks. Some principal subtypes of business insurance are (a) the various

kinds of professional liability insurance, also called professional indemnity

insurance, which are discussed below under that name; and (b) the business

owners policy (BOP), which bundles into one policy many of the kinds of

coverage that a business owner needs, in a way analogous to how homeowners

insurance bundles the coverage’s that a homeowner needs.[4]

Casualty insurance insures against accidents, not necessarily tied to any

specific property.

Credit insurance repays some or all of a loan back when certain things happen

to the borrower such as unemployment, disability, or death. Mortgage

insurance (which see below) is a form of credit insurance, although the name

credit insurance more often is used to refer to policies that cover other kinds of

debt.

Crime insurance insures the policyholder against losses arising from the

criminal acts of third parties. For example, a company can obtain crime

insurance to cover losses arising from theft or embezzlement.

Crop insurance "Farmers use crop insurance to reduce or manage various risks

associated with growing crops. Such risks include crop loss or damage caused

by weather, hail, drought, frost damage, insects, or disease, for instance."[5]

Defense Base Act Workers' compensation or DBA Insurance insurance

provides coverage for civilian workers hired by the government to perform

contracts outside the US and Canada. DBA is required for all US citizens, US

residents, US Green Card holders, and all employees or subcontractors hired

on overseas government contracts. Depending on the country, Foreign

Nationals must also be covered under DBA. This coverage typically includes

expenses related to medical treatment and loss of wages, as well as disability

and death benefits.

Directors and officers liability insurance protects an organization (usually a

corporation) from costs associated with litigation resulting from mistakes

incurred by directors and officers for which they are liable. In the industry, it is

usually called "D&O" for short.

Disability insurance policies provide financial support in the event the

policyholder is unable to work because of disabling illness or injury. It

41

provides monthly support to help pay such obligations as mortgages and credit

cards.

o Total permanent disability insurance insurance provides benefits when

a person is permanently disabled and can no longer work in their

profession, often taken as an adjunct to life insurance.

Errors and omissions insurance: See "Professional liability insurance" under

"Liability insurance

Expatriate insurance provides individuals and organizations operating outside

of their home country with protection for automobiles, property, health,

liability and business pursuits.

Financial loss insurance protects individuals and companies against various

financial risks. For example, a business might purchase cover to protect it from

loss of sales if a fire in a factory prevented it from carrying out its business for

a time. Insurance might also cover the failure of a creditor to pay money it

owes to the insured. This type of insurance is frequently referred to as

"business interruption insurance." Fidelity bonds and surety bonds are included

in this category, although these products provide a benefit to a third party (the

"obligee") in the event the insured party (usually referred to as the "obligor")

fails to perform its obligations under a contract with the obligee.

Health insurance policies will often cover the cost of private medical

treatments if the National Health Service in the UK (NHS) or other publicly-

funded health programs do not pay for them. It will often result in quicker

health care where better facilities are available.

Liability insurance is a very broad superset that covers legal claims against the

insured. Many types of insurance include an aspect of liability coverage. For

example, a homeowner's insurance policy will normally include liability

coverage which protects the insured in the event of a claim brought by

someone who slips and falls on the property; automobile insurance also

includes an aspect of liability insurance that indemnifies against the harm that

a crashing car can cause to others' lives, health, or property. The protection

offered by a liability insurance policy is twofold: a legal defense in the event

of a lawsuit commenced against the policyholder and indemnification

(payment on behalf of the insured) with respect to a settlement or court verdict.

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Liability policies typically cover only the negligence of the insured, and will

not apply to results of willful or intentional acts by the insured.

Environmental liability insurance protects the insured from bodily injury,

property damage and cleanup costs as a result of the dispersal, release or

escape of pollutants.

Professional liability insurance, also called professional indemnity insurance,

protects professional practitioners such as architects, lawyers, doctors, and

accountants against potential negligence claims made by their patients/clients.

Professional liability insurance may take on different names depending on the

profession. For example, professional liability insurance in reference to the

medical profession may be called malpractice insurance. Notaries public may

take out errors and omissions insurance (E&O). Other potential E&O

policyholders include, for example, real estate brokers, home inspectors,

appraisers, and website developers.

Life insurance provides a monetary benefit to a decedent's family or other

designated beneficiary, and may specifically provide for income to an insured

person's family, burial, funeral and other final expenses. Life insurance

policies often allow the option of having the proceeds paid to the beneficiary

either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as

insurance because they are issued by insurance companies and regulated as

insurance and require the same kinds of actuarial and investment management

expertise that life insurance requires. Annuities and pensions that pay a benefit

for life are sometimes regarded as insurance against the possibility that a

retiree will outlive his or her financial resources. In that sense, they are the

complement of life insurance and, from an underwriting perspective, are the

mirror image of life insurance.

Locked funds insurance is a little-known hybrid insurance policy jointly issued

by governments and banks. It is used to protect public funds from tamper by

unauthorized parties. In special cases, a government may authorize its use in

protecting semi-private funds which are liable to tamper. The terms of this

type of insurance are usually very strict. Therefore it is used only in extreme

cases where maximum security of funds is required.

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Marine insurance and marine cargo insurance cover the loss or damage of

ships at sea or on inland waterways, and of the cargo that may be on them.

When the owner of the cargo and the carrier are separate corporations, marine

cargo insurance typically compensates the owner of cargo for losses sustained

from fire, shipwreck, etc., but excludes losses that can be recovered from the

carrier or the carrier's insurance. Many marine insurance underwriters will

include "time element" coverage in such policies, which extends the indemnity

to cover loss of profit and other business expenses attributable to the delay

caused by a covered loss.

Mortgage insurance insures the lender against default by the borrower.

National Insurance is the UK's version of social insurance (which see below).

No-fault insurance is a type of insurance policy (typically automobile

insurance) where insured’s are indemnified by their own insurer regardless of

fault in the incident.

Nuclear incident insurance covers damages resulting from an incident involving

radioactive materials and is generally arranged at the national level. (For the

United States, see the Price-Anderson Nuclear Industries Indemnity Act.)

Pet insurance insures pets against accidents and illnesses - some companies

cover routine/wellness care and burial, as well.

Political risk insurance can be taken out by businesses with operations in

countries in which there is a risk that revolution or other political conditions

will result in a loss.

Pollution Insurance. A first-party coverage for contamination of insured

property either by external or on-site sources. Coverage for liability to third

parties arising from contamination of air, water, or land due to the sudden and

accidental release of hazardous materials from the insured site. The policy

usually covers the costs of cleanup and may include coverage for releases from

underground storage tanks. Intentional acts are specifically excluded

Property insurance provides protection against risks to property, such as fire,

theft or weather damage. This includes specialized forms of insurance such as

fire insurance, flood insurance, earthquake insurance, home insurance, inland

marine insurance or boiler insurance.

Purchase insurance is aimed at providing protection on the products people

purchase. Purchase insurance can cover individual purchase protection,

44

warranties, guarantees, care plans and even mobile phone insurance. Such

insurance is normally very limited in the scope of problems that are covered by

the policy.

Retrospectively Rated Insurance is a method of establishing a premium on

large commercial accounts. The final premium is based on the insured's actual

loss experience during the policy term, sometimes subject to a minimum and

maximum premium, with the final premium determined by a formula. Under

this plan, the current year's premium is based partially (or wholly) on the

current year's losses, although the premium adjustments may take months or

years beyond the current year's expiration date. The rating formula is

guaranteed in the insurance contract. Formula: retrospective premium =

converted loss + basic premium × tax multiplier. Numerous variations of this

formula have been developed and are in use.

Social insurance can be many things to many people in many countries. But a

summary of its essence is that it is a collection of insurance coverage’s

(including components of life insurance, disability income insurance,

unemployment insurance, health insurance, and others), plus retirement

savings, that mandates participation by all citizens. By forcing everyone in

society to be a policyholder and pay premiums, it ensures that everyone can

become a claimant when or if he/she needs to. Along the way this inevitably

becomes related to other concepts such as the justice system and the welfare

state. This is a large, complicated topic that engenders tremendous debate,

which can be further studied in the following articles (and others):

o Social welfare provision

o Social security

o Social safety net

o National Insurance

o Social Security (United States)

o Social Security debate (United States)

Surety Bond insurance is a three party insurance guaranteeing the performance

of the principal.

Terrorism insurance provides protection against any loss or damage caused by

terrorist activities.

45

Title insurance provides a guarantee that title to real property is vested in the

purchaser and/or mortgagee, free and clear of liens or encumbrances. It is

usually issued in conjunction with a search of the public records performed at

the time of a real estate transaction.

Travel insurance is an insurance cover taken by those who travel abroad,

which covers certain losses such as medical expenses, lost of personal

belongings, travel delay, personal liabilities, etc.

Volcano insurance is an insurance that covers volcano damage in Hawaii.

Workers' compensation insurance replaces all or part of a worker's wages lost

and accompanying medical expense incurred because of a job-related injury.

INDUSTRY ANALYSIS

Brief History Of Insurance Sector In India

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

market to nationalization and back to a liberalized market again.

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

witnessed over a period of almost 190 years.

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

1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

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

1912 - The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.

1928 - The Indian Insurance Companies Act enacted to enable the government to

collect statistical information about both life and non-life insurance businesses.

46

1938 - Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956 - 245 Indian and foreign insurers and provident societies taken over by the

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

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

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in the

year 1850 in Calcutta by the British.

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

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

classes of general insurance business.

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

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

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

margins and the Tariff Advisory Committee set up.

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

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

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

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

Insurance Company Ltd. and the United India Insurance Company Ltd. GIC

incorporated as a company.

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The functions of Insurance can be bifurcated into two parts

1. Primary Functions

2. Secondary Functions

3. Other Functions

The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection against

future risk, accidents and uncertainty. Insurance cannot check the happening of the

risk, but can certainly provide for the losses of risk. Insurance is actually a protection

against economic loss, by sharing the risk with others.

Collective bearing of risk - Insurance is a device to share the financial loss of few

among many others. Insurance is a mean by which few losses are shared among larger

number of people. All the insured contribute the premiums towards a fund and out of

which the persons exposed to a particular risk is paid.

Assessment of risk - Insurance determines the probable volume of risk by evaluating

various factors that give rise to risk. Risk is the basis for determining the premium rate

also

Provide Certainty - Insurance is a device, which helps to change from uncertainty to

certainty. Insurance is device whereby the uncertain risks may be made more certain.

The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt

suitable device to prevent unfortunate consequences of risk by observing safety

instructions;

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installation of automatic sparkler or alarm systems, etc. Prevention of losses cause

lesser payment to the assured by the insurer and this will encourage for more savings

by way of premium. Reduced rate of premiums stimulate for more business and better

protection to the insured.

Small capital to cover larger risks - Insurance relieves the businessmen from security

investments, by paying small amount of premium against larger risks and uncertainty.

Contributes towards the development of larger industries - Insurance provides

development opportunity to those larger industries having more risks in their setting

up. Even the financial institutions may be prepared to give credit to sick industrial

units which have insured their assets including plant and machinery.

The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the unnecessary expenses by

the insured's For the purpose of availing income-tax exemptions also, people invest in

insurance.

Source of earning foreign exchange - Insurance is an international business. The

country can earn foreign exchange by way of issue of marine insurance policies and

various other ways.

Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade

risk free with the help of different types of policies under marine insurance cover.

India Insurance

The end of the year 2000 marks a significant change and growth of 'India Insurance’

industry scenario.

Monopoly of Public Sector Insurance company marks an end and Private companies

makes inroad.

49

Foreign companies, both Life and General flocked, collaborated and helped

astronomical growth of 'Insurance Industry in India'.

'India Insurance' growth was long overdue. Within 1st 12 months of liberation of

'Indian Insurance Industry' 10 licenses for selling life insurance products and 6

licenses for selling non-life products were issued to private companies.

The Public sector giant LIC started losing its market share at the cost of stupendous

growth of private players.

Now 'India Insurance' industry has more than a dozen private life insurance players

and 9 private general insurance companies. Aggressive and penetrative marketing

strategy coupled with wide product bandwidth was an instant success among the

ignorant masses.

Most of the private companies registered more than 100% growth till then and are still

continuing with such monstrous growth figures.

Although, 'Insurance in India' is not regarded as a basic need but it is getting popular

among semi urban to rural masses.

Top rank private companies like ICICI Prudential Life Insurance, Tata AIG,

Bajaj Allianz etc are aggressively researching and innovating products for huge

untapped rural 'India Insurance' market.

Collaboration with micro finance companies, post offices, rural banks and village

management authorities for selling insurance is doing wonders.

Life insurance products covers risk for the insurer against eventualities like death or

disability. Non-life insurance products covers risks against natural calamities,

burglary, etc. They are not as popular as life products in the ' Insurance India's'

portfolio. Until very recently it had only corporate buyers, but with natural disasters

like, earth quakes, tsunamis, storms and floods becoming more frequent and damaging

there has been a sudden spurt in sales of general insurance amongst individuals.

Consumerism of life style goods and modern amenities has also contributed to its

growth. With more awareness and wide bandwidth of insurance product portfolio the

growth for 'India Insurance' story will only get more competitive and more affordable

to all sections of Indian society.

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Yr: 2000-2001 : ( From 2nd April '2000 to 31st December'2001)

Insurance Industry in the year 2000-2001 had 16 new entrants, namely:

S.No.

RegistrationNumber

Date of Reg. Name of the Company

1 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.

2 104 15.11.2000 Max New York Life Insurance Co. Ltd.

3 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.

4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited

5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.

6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.

7 111 30.03.2001 SBI Life Insurance Company Limited .

8 114 02.08.2001 ING Vysya Life Insurance Company Private Limited

9 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited

10 117 06.08.2001 Metlife India Insurance Company Pvt. Ltd.

11 133 04.09.2007 Future Generali India Life Insurance Company

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Life Insurers:

General Insurers:

Yr: 2001-2002 : ( From 1st Jan 2001 to Dec. 2002)

Insurance Industry in this year, so far has 5new entrants; namely

Life Insurers:

S.No. RegistrationNumber

Date of Reg. Name of the Company

1 121 03.01.2002 AMP Sanmar Life Insurance Company Limited.

2 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.

S.No. RegistrationNumber

Date ofRegistration

Name of the Company

1 102 23.10.2000 Royal Sundaram Alliance Insurance Company Limited

2 103 23.10.2000 Reliance General Insurance Company Limited.

3 106 04.12.2000 IFFCO Tokio General Insurance Co. Ltd

4 108 22.01.2001 TATA AIG General Insurance Company Ltd.

5 113 02.05.2001 Bajaj Allianz General Insurance Company Limited

6 115 03.08.2001 ICICI Lombard General Insurance Company Limited.

7 131 03-08-2007 Apollo DKV Insurance Company Limited

8 132 04-09-2007 Future Generali India Insurance Company Limited

52

General Insurers :

S.No. RegistrationNumber

Date ofRegistration

Name of the Company

1 123 15.07.2002 Cholamandalam General Insurance Company Ltd.

2. 124 27.08.2002 Export Credit Guarantee Corporation Ltd.

3. 125 27.08.2002 HDFC-Chubb General Insurance Co. Ltd.

Yr: 2003-2004 : ( From 1st Jan 2003 till Date)

Insurance Industry in this year, so far has 1new entrants; namely

Life Insurers:S.No. Registratio

nNumber

Date of Reg. Name of the Company

1 127 06.02.2004 Sahara India InsuranceCompany Ltd.

Yr: 2004-2005 :

Insurance Industry in this year, so far has 1new entrants; namely

Life Insurers:S.No. Registration

NumberDate of Reg. Name of the Company

1 128 17.11.2005 Shriram Life InsuranceCompany Ltd.

53

COMPANY PROFILE

COMPANY PROFILE OF HDFC - STANDARD LIFE

A) Background and inception of the company

HDFC Standard Life Insurance Company Limited is one of India's

leading private insurance companies, which offers a range of individual

and group insurance solutions. It is a joint venture between Housing

Development Finance Corporation Limited (HDFC Limited), India's

leading housing finance institution and a Group Company of the

Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds

72.43% and Standard Life (Mauritius Holding) 2006, Ltd. holds 26.00%

of equity in the joint venture, while the rest is held by others.

HDFC Limited

HDFC Limited , India’s premier housing finance ins titution has assisted

more than 3.3 million families own a home, since i ts inception in 1977

across 2400 cities and towns through i ts network of over 250 offices. It

has international off ices in Dubai, London and Singapore with service

associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI’s and

PIO’s to own a home back in India. As of December 2008, the total

asset size has crossed more than Rs. 95,000 crores including the

mortgage loan assets of more than Rs. 82,800 crore. The corporation

has a deposit base of Rs. 17,551 crore, earning the trust of more than 9,

00,000 depositors. Customer Service and satisfaction has been the

mainstay of the organization. HDFC has set benchmarks for the Indian

housing finance industry. Recognition for the service to the sector has

come from several national and international entities including the

World Bank that has lauded HDFC as a model housing finance company

for the developing countries. HDFC has undertaken a lot of

consultancies abroad assist ing different countries including Egypt,

Maldives, and Bangladesh in the setting up of housing finance

companies.

54

Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life Group has been looking after the financial

needs of customers for over 180 years. It currently has a customer base

of around 7 million people who rely on the company for their

insurance, pension, investment, banking and health-care needs. Its

investment manager currently administers £125 bil lion in assets. It is a

leading pensions provider in the UK, and is rated by Standard & Poor's

as 'strong' with a rating of A+ and as 'good' with a rating of A1 by

Moody's. Standard Life was awarded the 'Best Pension Provider ' in

2004, 2005 and 2006 at the Money Marketing Awards, and it was voted

a 5 star life and pension’s provider at the Financial Adviser Service

Awards for the last 10 years running. The '5 Star' accolade has also

been awarded to Standard Life Investments for the last 10 years, and to

Standard Life Bank since its inception in 1998. Standard Life Bank was

awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine

Awards in 2006.

B) Nature of the business carried

HDFE standard life is on the business of life insurance. But HDFC is in

diversified business like banking, housing finance, securities etc…….

C) Vision, Mission and quality policy

Vision

“The most successful and admired life insurance company, which mean

that we are the most trusted company, the easiest to deal with, offer the

best value for money, and set the standards in the industry. In short,

“The most obvious choice for all”.

55

Mission

We aim to be the top new life insurance company in the market. This

does not just mean being the largest or the most productive company in

the market, rather i t is a combination of several things like-

Customer service of the highest order

Value for money for customers

Professionalism in carrying out business

Innovative products to cater to different needs of different

customers

Use of technology to improve service standards

Increasing market share

Values

Integrity

Innovation

Customer centric

People Care “One for all and all for one”

Team work

Joy and Simplicity

56

o Quality policy

Quality road map – time lines

Phase-1 to phase-3 should run simultaneously

Phases Objectives Visible proof When

Phase-5 Business

excellence

BE award (external)/service

guarantee

12-24

months and

Improve

levels

Phase-4 Value stream

map projects

6 sigma processes, SLA,

financial benefit.

6-8 months

and improve

Phase-3

Process

maturity

Process complaint functions 8-12 months

and

sustenance

Phase-2

Organized

work places

Zone/region/branch/location

certification

6-10 months

and

sustenance

Phase-1

Current

business

improvement

programs

Completion of projects and

benefits derived and

sustenance

4-6 months

and

sustenance

57

D) Product/service profile

1. Protection Plans

HDFC Term Assurance Plan:This plan is designed to help

secure family’s financial needs in case of uncertainties. The plan does

this by providing a lump sum to the family of the life assured in case of

death or crit ical illness (if option is chosen) of the life assured during

the term of the contract. One can choose the lump sum that would

replace the income lost to one’s family in the unfortunate event of

one’s death.

HDFC Loan Cover Term Assurance Plan : This plan aims to

protect family from loan liabilities in case of unfortunate demise within

the policy term. It provides the beneficiary with a lump sum amount,

which is a decreasing percentage of the initial Sum Assured. This

means that as the outstanding loan decreases as per the loan schedule,

the cover under the policy also decreases as per the policy schedule.

HDFC Home Loan Protection Plan : This plan aims to protect

family from loan liabilities in case of unfortunate demise within the

policy term. It ensures that family does not lose the dream house that

person have purchased for them, in case person is not around to repay

the outstanding monthly installments on their housing loan.

2. Children's Plans

HDFC Children's Plan : As a parent, everyone priority is their

child’s future and being able to meet their child’s dreams and

58

aspirations. With HDFC Children’s Plan, they can start building their

savings today and ensure a bright future for their child.

HDFC Young Star Super : This Plan provides valuable

protection to insured person child in case his/her is not around and

gives them an outstanding investment opportunity to maximize their

savings by providing them a choice of thoroughly researched and

selected investments. This plan also gives Bumper Addition to the fund

value at Maturity.

HDFC Young Star Super Suvidha : It is a convenient plan, which

saves insured person from the need of going for Medicals. This Unit

Linked Plan provides valuable protection to his/her child in case he is

not around and gives him with an outstanding investment opportunity to

maximize their savings by providing them a choice of thoroughly

researched and selected investments. This plan also gives Bumper

Addition to the fund value at Maturity.

HDFC Young Star Supreme Suvidha : This Plan provides

valuable protection to insured person child in case he is not around and

gives him an outstanding investment opportunity to maximize his

savings by providing him a choice of thoroughly researched and

selected investments. This plan also gives Bumper Addition to the fund

value at Maturity.

HDFC SL Young Star Champion Suvidha : This is a convenient

plan, which saves him from the need of going for Medicals. This Unit

Linked Plan gives him with an outstanding investment opportunity to

maximize his savings by providing you a choice of thoroughly

researched and selected investments. This plan also gives Bumper

Addition to the fund value at Maturity.

3. Retirement Plans

59

HDFC Personal Pension Plan : The HDFC Personal Pension Plan

is a ‘With Profits’ insurance policy that is designed to provide a post -

retirement income for l ife with the freedom to choose your retirement

date.

HDFC Pension Super : The HDFC Personal Pension Plan is a

‘With Profits’ insurance policy that is designed to provide a post-

retirement income for l ife with the freedom to choose your retirement

date.

HDFC Pension Supreme : The HDFC Pension Supreme is Unit

Linked plan, designed to provide a post-retirement income for life with

the freedom to choose their retirement date. This plan gives them with

an outstanding investment opportunity to maximize their savings by

providing them a choice of thoroughly researched and selected

investments. This plan also gives Bumper Addition to the fund value at

vesting.

HDFC SL Pens\ion Champion: The HDFC SL Pension Champion

is Unit Linked plan, designed to provide a post -retirement income for

life with the freedom to choose their retirement date. This plan gives

them with an outstanding investment opportunity to maximize their

savings by providing them a choice of thoroughly researched and

selected investments. This plan also gives Bumper Addition to the fund

value at vesting.

HDFC SL Unit Linked Pension Maximiser II : HDFC SL Unit

Linked Pension Maximiser II is a unique Single Premium unit linked

plan, designed to provide a post-retirement income for l ife with the

freedom to maximize their investment returns. This plan also gives

60

Bumper Addit ion* of 5% of initial single premium at vesting and on

death.

HDFC Immediate Annuity : The HDFC Immediate Annuity is a

contract that uses investor capital to provide them with a guaranteed

gross income throughout their lifetime or over a period of their choice.

The income is guaranteed and is unaffected by the rise and fall of

interest rates. This means the investor can plan their life the way they

want i t to be, safe in the knowledge that their gross income will not fall

during the period they have selected. The HDFC Immediate Annuity

offers a number of options to meet all their income needs.

4. Savings & Investment Plans

HDFC Endowment Super : With HDFC Endowment Super,

investors can start building their savings and it ensures that their

family remains financially independent, even when they are not a round.

This Unit Linked Plan also gives them with an outstanding investment

opportunity to maximize their savings by providing them a choice of

thoroughly researched and selected investments.

HDFC Endowment Supreme : With HDFC Endowment Supreme,

investors can start building their savings today and i t ensures that their

family remains financially independent, even when they are not around.

It is a convenient plan, which saves them from the need of going for

Medicals. This Unit Linked Plan gives them with an outstanding

investment opportunity to maximize their savings by providing them a

choice of thoroughly researched and selected investments. This plan

also gives Bumper Addition to the fund value at Maturity.

HDFC SimpliLife : I t is a convenient plan, which saves investors

from the need of going for Medicals. This Unit Linked Plan gives them

61

with an outstanding investment opportunity to maximize their savings

by providing them a choice of thoroughly researched and selected

investments.

HDFC Endowment Super Suvidha : I t is a convenient plan,

which saves investors from the need of going for Medicals. This Unit

Linked Plan gives them with an outstanding investment opportunity to

maximize their savings by providing you a choice of thoroughly

researched and selected investments. This plan also gives Bumper

Addition to the fund value at Maturity.

HDFC Endowment Supreme Suvidha : It is a convenient plan,

which saves insured person from the need of going for Medicals. This

Unit Linked Plan gives them with an outstanding investment

opportunity to maximize their savings by providing them a choice of

thoroughly researched and selected investments. This plan also gives

Bumper Addit ion to the fund value at Maturity.

HDFC Wealth Builder : HDFC Wealth Builder is an exclusive

plan crafted for elite achievers. An investment cum insurance plan that

will actively help in building investor wealth and give them twin

advantage of exclusive funds (actively managed ) along with choice of

limited premium payment term. This plan provides the financial

protection to their loved ones and builds up their wealth effortlessly.

This plan also gives Bumper Addit ion to the fund value at Maturity.

HDFC Endowment Assurance Plan : With HDFC Endowment

Assurance Plan, investors can start building their savings today and

ensure that their family remains financially independent, even when

they are not around. This ‘With Profits’ plan is designed to secure their

family’s future by giving their family a guaranteed lum p sum on

maturity or in case of their unfortunate demise, early into the policy

term.

62

HDFC Single Premium Whole of Life Insurance Plan : HDFC

Single Premium Whole of Life Plan is a tailor made plan well suited to

meet investors long-term investment needs and help them to maintain

their family’s financial independence. This single premium investment

plan is a Whole of Life plan aimed at providing long-term real growth

of their money.

HDFC Assurance Plan : HDFC Assurance Plan helps investors

conveniently build their long-term savings while keeping their family’s

future protected. This ‘With Profits’ savings plan helps them to build

their long-term savings while securing their family’s future.

HDFC Savings Assurance Plan : HDFC Savings Assurance Plan

is a ‘With Profits’ savings plan which helps investors conveniently

build their long-term savings and ensure that their family is protected

even if they are not around.

5. Health Plans

HDFC Critical Care Plan : HDFC Crit ical care plan provides

for a lump sum payment on survival post diagnosis of a critical illness,

so that in the event a critical illness strikes, investors don’t have to dig

into those precious savings of them.

HDFC SurgiCare Plan: HDFC SurgiCare Plan provides investors

with timely support in case they have to undergo a major surgery and

hospitalization, as the case maybe, ensuring their financial

independence at all t imes.

6. Rural Products

HDFC Gramin Bima Kalyan Yojana

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HDFC Gramin Bima Mitra Yojana

HDFC Bima Bachat Yojana

7. Social Products

HDFC Development Insurance Plan

E)Area of operation

HDFC STANDARD LIFE is operating internationally, that means all

over INDIA and outside India; it is rendering its insurance services

including rural places.

F)Ownership pattern

It is a joint venture between Housing Development Finance Corporation

Limited (HDFC Limited), India's leading housing finance institution

and a Group Company of the Standard Life Plc, UK. As on February 28,

2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding)

2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is

held by others.

Associate Companies:

HDFC Limited

HDFC Bank

HDFC Mutual Fund

HDFC Sales

HDFC ERGO General Insurance

64

4. DATA ANALYSISAND

INTERPRETATION

65

1. Following are the list of motivational factors.

Response/category Sr. SectionOfficer

Sr.Supervisor

Sr. Isa AssistantAccountsOfficer

Total PercentageOf total

Money 3 1 0 0 4 12

Job security 4 2 3 2 11 34

Promotion 1 0 2 0 3 9

Career

Development

0 1 0 1 2 6

Welfare measures 0 0 0 0 0 0

Recognition &

Reward

3 1 1 1 6 18

Both career

development &

recognition &rewards

1 0 0 1 2 6

Both job security &

carrier development

2 0 0 0 2 6

All the above 3 0 0 0 3 9

66

Interpretation:

Data furnished in the above table reveals that 12% of the respondents feel that

money as their motivational factor; the majority 34% opines that security as their

factor for motivation; and surprisingly none voted for welfare measures; the second

largest 18% of the people opted for recognition and rewards as their motivational

factor; 6% of the respondents opine that both career development and recognition and

rewards are the driving motivational factors at work; 6% of the respondents feel that

job security and career development as the motivational factor; lastly 9% of the

respondents voted for all the above factors which drives them to work as they factor of

motivation.

67

2. Perception of staff regarding primary aim of the organization

Response/category Sr.SectionOfficer

Sr.Supervisor

Sr.Isa

AssistantAccountsOfficer

Total PercentageTo total

Transportation 11 2 2 0 15 47

Public service 1 0 2 1 4 12

Utilization of it 2 1 2 0 5 15

Profit making 2 1 0 1 4 12

Checking accounts 2 0 1 1 4 12

68

Interpretation:

From the above table and graph it is obvious that majority 47% of the respondents

opine that transportation is the primary aim of their organization; 12% of the respondents

feel that public service is the primary aim of their organization; 15% of the respondents

feel it as utilization of it; 12% of the respondents agree that profit making as their primary

aim of the organization whereas the remaining 12% feel it to be checking the accounts as

the primary aim of their organization.

3. Employees at work place.

Response/categor

y

Sr.section officer

Sr.Supervisor

Sr.isa

AssistantAccountsOfficer

Tota

l

Percentag

e to total

Happy 1 0 0 1 2 6

Proud 6 3 1 0 10 31

Good 1 2 1 0 4 12

Average 1 0 1 1 3 9

Satisfied 2 1 0 2 5 15

Very satisfied 0 1 0 1 2 6

Mixed feelings 1 2 1 3 7 21

69

Interpretation:

From the above table it is obvious that6% of the respondents feel happy about

the organization; the majority 31% feel proud of working in the organization; the second

highest 12% of the people feel good about the organization; 9% of the respondents feel

average about the organization;15%are satisfied of the organization which they are

working for;6 % are very satisfied and the remaining 21% of the respondents have mixed

feelings about their organization.

70

4. Involvement of the employees in the organization.

Response/category

Sr.section officer

Sr.Su1pervisor

Sr.isa

Assistantaccountsofficer

Total

Percentage to total

Good 4 2 1 2 9 29

Very involved 5 2 2 1 10 31

Moderate 4 1 2 3 10 31

Not at all involved 2 0 1 0 3 9

Interpretation:

From the above data furnished it is clear that 29% of the respondents feel that

the employees are good involve in the organization; the majority 31% respondents feel

that the employees are very much involved in the organization;31% of respondents

opine that the employees are moderately involved in the organization; and the least

9% feel that they are not at all involved in the organization.

71

5. Effectiveness of employee participation in decision making.

Response/category

Sr.section officer

Sr.Supervisor

Sr.isa

AssistantAccountOfficer

Total

Persentage to total

Yes 5 3 6 0 14 44No 2 5 4 7 18 56

Interpretation:

From the data, it can be understood that majority of the respondents share

different opinion towards their participation for effective decision making in the

meetings, discussions arranged by the organization according to their requirement.

From the table it can be analyzed that majority of the respondents i.e, 56% of the

employees say no for their participation for effective decision making. And the

remaining 44% of the respondents said yes because they felt that they can participate

for the effective decision making.

72

6. Employee choice at work place

Response/category

Sr.Sectionofficer

Sr.Supervisor

Sr. Isa Assistantaccountsofficer

Total Percentageto total

Yes 7 4 2 3 16 50

No 5 2 3 6 16 50

Interpretation:

When asked about freedom in choosing their work to employees, most of the

responds agreed that they have enough freedom in choosing their work. The responds

have equal opinion that is 50% of the total respondents said yes and the remaining

50% of them said no i.e , they have freedom in choosing their work according to their

opinion.

73

7. Role of hr in the organization.

Response /

category

Sr.

Section

officer

Sr.

Supervisor

Sr. Isa Assistant

accounts

officer

Total Percentage

to total

100% 1 0 1 1 3 9

75% 2 1 2 0 5 17

50% 3 2 5 4 14 43

25% 3 2 3 2 10 31

Interpretation:

From the above data it is clear that the majority 43% of the respondents opine

that the employees role in the organization is only 50%; the least 9% of the

respondents feel that there is role in the employees up to 100% the se second highest

of the collected opinions is 31% that is the role of employees in the organization

according to their opinion only 25%; 17% of the respondents agree that the there is

role of employees in the organization up to 75%.

74

8. List of approaches to motivate

Response/category Sr.

Section

Officer

Sr.

Supervisor

Sr.isa Assistant

Accounts

Officer

Total Percentage

To total

Awards 1 0 3 5 9 28

Rewards 3 2 4 3 9 28

Promotional

channels

Through ldc

0 1 2 3 6 18

No comments 6 1 1 0 8 26

75

Interpretation:

Data furnished in the above table reveals that 18% of the respondents feel that

promotional channels is one of the approach that the organization use to motivate the

employees; the majority 28% of the respondents opines that awards is other approach

to motivate the employee in the organization; 28% of the people agree that rewards as

the approach which the organization use in order to motivate the employees; lastly

26% of the respondents are not willing to express their opinion to wards the various

approaches used by the organization to motivate the employees.

9. Motivational challenges of employee.

Response/category Sr.

Section

Officer

Sr.

Supervisor

Sr.

Isa

Assistant

Accounts

officer

Total Percentage

Personal issues 0 2 3 1 6 18

Educational back

ground

3 1 0 0 4 13

Competition

among trade unions

1 1 3 0 5 17

Reluctance against

administration

3 4 1 0 8 26

Bias in

management

decisions

1 3 2 2 8 26

76

Interpretation:

Data furnished in the above table clearly shows that the 18% of the

respondents opines that personal issues are the challenges to motivate the employees.

The least 13% of the respondents agree that educational background is the one of the

challenge used by the organization to motivate the employee. 17% of the respondents

said that competition among trade unions is the challenge to motivate the employees.

The majority of the respondents 26% opined that reluctance against administration is

the important challenge for the organization to motivate the employee. The majority

of the respondents 26% said bias in management decisions is the biggest challenge

towards the management to motivate the employees.

77

10. Obstacles in employee performance

Response/categor

y

Sr.sectio

n officer

Sr.superviso

r

Sr.is

a

Assistan

t

account

s officer

Tota

l

Percentag

e to total

Stagnation,

lethargy, growth

prospects

4 1 1 1 7 22

Lack of

motivation and

recognition

3 0 4 2 9 28

Decision taken by

top authorities

2 3 2 2 9 28

Miscellaneous 4 0 0 0 4 13

No comments 2 0 0 1 3 9

78

Interpretation:

From the above data it is clear that the majority 22% of the respondents opine that

gnation, lethargy, growth prospects are the obstacles that stop employees performing to the

majority 28% of the respondents feel that lack of recognition as the factor of obstacle stop

employees performing the most; 28% of the respondents vote for the decision taken the top

authorities is the key factor that plays in stopping them from performing to the best; of them

agree that the miscellaneous factors play a major role in obstacles that stop them performing

to the best; and not willing to give their opinion

79

11. Employee awareness of motivation and empowerment.

Response/category Sr.

Section

officer

Sr.

Supervisor

Sr.

Isa

Assistant

Accounts

Officer

Total Percentage

To total

Yes 6 2 3 1 12 37

Very little 7 1 1 3 12 37

No knowledge 2 1 2 3 8 26

Interpretation:

Data furnished in the above table clearly shows that the majority 37% of the

respondents agree that they know about the employee motivation and posses sufficient

knowledge on the subject; 37% of the respondents feel that they are having a very

little knowledge on the employee motivation; and the remaining 26% of the

respondents feel that they don’t have any knowledge of what exactly employee

motivation is all about.

80

12. Employee empowerment.

Response/categor

y

Sr.sectio

n officer

Sr.superciso

r

Sr.is

a

Assistan

t

accounts

officer

Tota

l

Percentag

e to total

Yes 8 0 1 1 10 31

No 3 1 1 1 6 18

Sometimes 3 0 0 0 3 9

Depends 1 1 0 0 2 6

No comments 5 1 2 3 11 36

Interpretation:

From the data furnished in the above table it is clear that the majority 31% of the

respondents feel that they are empowered while contradicting to it 18% feel that they are not

at all empowered; 9% of the employees feel that they are something empowered; 6% opine

that the feeling of empowerment depends on the situation while the least 36% respondents are

not willing to make any comments on this.

81

13. Empowerment of employees in their performance.

Response/categor

y

Sr.sectio

n officer

Sr.supreviso

r

Sr.is

a

Assistan

t

accounts

officer

Tota

l

Percentag

e to total

Recognition &

rewards

3 3 1 0 7 22

Delegation of

authority

2 1 0 1 4 12

No

empowerment

2 1 2 2 7 22

Very little scope 3 1 1 2 7 22

Accountability

without

suitability

0 1 0 0 1 4

No link between

pay &

performance

1 0 0 1 2 6

Work schedule 2 0 0 0 2 6

Miscellaneous 1 1 0 0 2 6

82

Interpretation:

It is obvious from the above table that 22% of the respondents opine that

recognition & rewards are the empowering factors for their performance; 12% of the

respondents agree that delegation of authority is the empowering factor for their

performance; surprisingly 22% feel that there is no empowering factor at all in the

organization; 22% respondents agree that there is s very little scope for empowerment;

4% opt for accountability without suitability as the empowerment factor; 6% say that

there is no link between pay and performance; 6% of the respondents feel that work

schedule as the factor of empowerment for their performance; 6% of the respondents

opine miscellaneous as the empowerment factor for their performance.

83

14. Employee recognition from superior.

Response/categor

y

Sr.sectio

n officer

Sr.superviso

r

Sr.is

a

Assistan

t

accounts

officer

Tota

l

Percentag

e to total

Yes 5 3 1 2 11 36

No 1 4 1 2 8 26

Rarely 1 0 0 0 1 4

Satisfied 3 0 0 0 3 9

Through

Monetary terms

2 0 2 0 4 13

Depends 2 0 0 0 2 6

No comments 1 0 1 0 2 6

84

Interpretation:

From the above table it is clear that the majority 36% of the respondents vote

that they have got the recognition from their supervisors whereas contradicting 26%

say as no that they are not recognized from their supervisors; 4% of the respondents

agree that they are rarely recognized for their work by the supervisors; 9% feel that

they are satisfied with the kind of recognition that they are getting from their

supervisors; 13% of the respondents agree that the fact that the recognition getting is

in monitory terms; 6% of the respondents opine that the recognition is depended on

the work and the situation; and lastly 6% are not willing to make any comments on

this.

85

15. Job satisfaction of employee.

Response/category

Sr.section officer

Sr.supervisor

Sr.isa

Assistantaccountsofficer

Total

Percentage to total

Very satisfied 2 4 3 0 9 28

Satisfied 12 1 1 2 16 50

Dissatisfied 3 1 2 1 7 22

Very dissatisfied 0 0 0 0 0 0

Interpretation:

Data furnished in the above table clearly gives the information that the 28% of

the respondents feel that they are very much satisfied with their job; the majority 50%

of the respondents opine that they are satisfied with their job; 22% of the respondents

vote for dissatisfaction of the job while 0% of the respondents are very dissatisfied

with their overall job satisfaction.

86

CHAPTER - 5

87

FINDINGS

It was found that:1. Job security is the highest motivation factor than any other.

2. The perception of the employee is high towards the aim of the organization i.e.

Transportation

3. The majority of the employees feel proud at work place.

4. There is high involvement of the employee in the organization.

5. There is low participation of employees in decision making.

6. There is equal participation in work.

7. The role of hr in the organization is only 50%

8. Awards and rewards are the high rated approaches that which motivates

employees.

9. Reluctance against administration and bias in management decisions are the

Motivational challenges of employees.

10. Lack of motivation and recognition, decision taken by top authorities are the

obstacles that stoop employees performing to the best.

11. Employee’s awareness of motivation and empowerment is very low.

12. There lie the similarities between the responses opined by the employees onrecognition & rewards, no empowerment, very little scope. It shows thatthere is a lack of information towards the empowerment.

13. Majority of the employees discloses that there is staff recognition.

14. Majority of the employees opine that they are satisfied.

88

SUGGESTIONS

1. Employees should be identified by their better performance and should

give some type of incentives, promotions etc. So that employee will be

boosted up and will work better.

2. Promotions should be given to the basis of performance only.

3. Motivation should give in fair manner without showing any favourism to

employee.

4. The Management creates a challenging work (or) new assignment (or)

opportunity to develop the innovative idea of employee.

5. The motivation review discussion should be practiced well to encourage

the open communication between both the appraiser and appraise.

6. The management should study motivation theories for better motivation.

7. The motivation should be unbiased and avoid being stereo-type while

encouraging the employees.

89

Conclusions & recommendations

Enthusiasm:

The employees in the organization are lacking enthusiasm. The

employees are working with out interest. The chef is the expert whereas cook

is his follower. The cook will not have expertise likewise in this organization

are like cooks. There is no proficiency, no expertise. The main problem with

these employees is that they lack the item that is enthusiasm.

The lack of enthusiasm is due to the following factors:

i. Low interest

ii. Less motivation

iii. Obstacles in performance

iv. Low empowerment

From the above conclusions, it would like to recommend a few suggestions to

the organization:

Gearing hr activities:

A satisfactory hr environment is essential in every organization for its

successful functioning. The management must gear u-p the hr activities to

create a favorable hr climate in the organization.

Welfare facilities:

The existing welfare facilities may be improved. Facilities such

aproductivity linked annual bonus, employee’s stock option schemes

participative management may be improved.

90

Motivation measures:

It is suggested that the organization introduce measures such as

`suggestions scheme’ and ‘quality circles’. Also ,the management may

conduct competitions to the employees on some important occasions, such as

independence day, republic day, deewali, pongal, and during the celebrations

of organization functions, such as `safety week/month’, `quality week/month’.

These measures will benefit both the employees and the organization.

Imparting new knowledge:

Due to recent changes in the trend, the employees must be made aware

of the latest concepts, developments and improvements. For this purpose, the

organization must arrange the training programs, guest lectures, seminars etc.,

to impart new knowledge to the employees. Also the management may sub bw

travels be to technical and commercial journal and magazines and they may be

placed in the library. Such activities will make the employees aware of new

developments, and it will increase their efficiency, behavior, morale etc,

Highest motivational factor:

Highest motivational factor which gives to the employee apart from job

security is interest towards work or zeal towards work which is lacking in

them. The interest towards work is to be developed by providing opportunity

to learn new things, providing a unique learning culture and environment. The

employees must be motivated to improve productivity.

Employee recognition:

Employee recognition by his performance can be identified the talent

and the competency. It is commended that talent nurturing is to be adopted and

infrastructure also pays a vital role in motivating the employee.

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CHAPTER - 6

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Bibliography

Books

1. L. M. Prasad “principles and practice of management”. New delhi:

sultan chand & sons educational publishers, 2006.

Websites

2. Journal of extension understanding employee motivation, www.joe.org.

3. Business balls, employee motivation, www.businessballs.com.

4. All business a d & b company, building morale, motivating and

empowering employees. By weiss, w.h date: monday, january 1

2001,www.allbusiness.com/human-resources/workforce-management.

Magazines

5. A hrd nesletter, a monthly publication of the national hrd network,

www.nationalhrd.org, march 2008.

93

Questionnaire

1. Following are the list of motivational factors.

MoneyJob securityPromotionCareer developmentWelfare measuresRecognition & rewardBoth career development & recognition &rewardsBoth security & carrier developmentBoth job security & carrier developmentAll the above

2. Perception of staff regarding primary aim of the organization

Transportation

Public service

Utilization of it

Profit making

Checking accounts

3. Employees at work place.

Happy

Proud

Good

Average

Satisfied

Very satisfied

Mixed feelings

94

4. Involvement of the employees in the organization.

Good

Very

involved

Moderate

Not at all

involved

5. Effectiveness of employee participation in decision making.

YesNo

6. Employee choice at work place

Yes

No

7. Role of hr in the organization.

100%

75%

50%

25%

8. List of approaches to motivate

Awards

Rewards

Promotional channels

Through ldc

No comments

95

8. Motivational challenges of employee.

Personal issues

Educational back ground

Competition among trade unions

Reluctance against administration

Bias in management decisions

9.Obstacles in employee performance

Stagnation, lethargy, growth prospects

Lack of motivation and recognition

Decision taken by top authorities

Miscellaneous

No comments

10. Employee awareness of motivation and empowerment.

Yes

Very little

No knowledge

96

11. Employee empowerment.

Yes

No

Sometimes

Depends

No comments

12. Empowerment of employees in their performance.

Recognition & rewards

Delegation of authority

No empowerment

Very little scope

Accountability without suitability

No link between pay & performance

Work schedule

Miscellaneous

13. Employee recognition from superior.

Yes

No

Rarely

Satisfied

Through

Monetary terms

Depends

No comments

97

14. Job satisfaction of employee.

Very satisfied

Satisfied

Dissatisfied

Very dissatisfied