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: )

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

CHAPTER - 1

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 employees motivation.

To study the factors affecting the individual performance.

HUMAN RESOURCE MANAGEMENT

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 depreciat e
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, skill
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 getting
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

Management

and

Silicon

concerned

the

Valleys
human

of
side

India.
of

the

Human

Resource

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 abilities 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
5

o rganization

and

by

raising

employees levels of commitment to the aims and requirements of the

firms. Now a days 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:

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:

Commitment

Competence

Congruence

Cost-effectiveness

Commitment
Concerns employees loyalty to the organization personal motivation
and linking for their work. The degree of employee commitment might
be assessed via attitude 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 comp etent.

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 opportunities and environmental changes.

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.

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 managers 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:

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 movementa 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
10

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

11

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.

12

SCOPE OF THE STUDY:

The human

resources

management has to identify employees

motivation to match with the organizations

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.

13

CHAPTER - 2

14

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,
its 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
relationship.

15

and

motivation

and

their

Study:

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

suited for

higher

productivity and

methods usually

adopted for

measuring employees 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

16

Motives motivation is the work behavior itself. Motivation depends on motives and
motivating therefore, it becomes a complex process.

17

Motive

Motivating

Needs in

Activating needs and

Individuals

Providing need
satisfaction
Environment

Motivation

Engagement in work
Behavior

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 individuals 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.

18

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

19

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.

20

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.

21

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 individuals
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

22

Motivation

Role
Perception

Abilit
y

Performanc
e
Sense of
Competence

Organizational
Resources

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
individuals 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.

23

Reward

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 his

personal attributes relevant for doing a job. Often, ability is expressed in the following
way 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.
Ability=knowledge* skill
4. Role perception
A role is the pattern of actions expected of a person in activities involving
others. Role reflects a persons 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.

24

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.

25

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.

26

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 ones 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 websters 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.

27

There are five approaches which have been suggested for empowerment:

1. Helping employees achieve job mastery giving training, coaching, and

guided experience that are required for initial success.
2. Allowing more control giving employees descr travel section over job
performance and making them accountable for the performance outcomes.
3. Providing successful role models allowing them to observe peers who are
performing 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 role
present 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:
Empowerment

Perception of

Better

Job mastery

Empowerment

Performance

More self-control
Self-confidence
Reinforcement
High values to job

Fig 5: empowerment and its effect

28

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 persons 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
organizations 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.

29

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

Doesnt 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: dont pinpoint problem people

When 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, dont expect
30

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

31

CHAPTER - 3

32

INDUSTRY PROFILE
". The insurance sector in India has come a full ci rcle from being
an open competitive market to nationalization and back to a liberalized
market again. Tracing the developments in the Indian insurance sector
reveals the 360 degree turn witnessed over a period of almost two
centuries.

A brief history of the Insurance sector

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 li fe and nonlife insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance
Act with the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken
over by the central government and nationalized. LIC formed by an Act
of Parliament, viz. LIC Act,1956, with a capital contribution of Rs. 5
crore from the Government of India.
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.

Insurance sector reforms

In 1993, Malhotra Committee headed by former Finance
Secretary and RBI Governor R.N. Malhotra was formed to evaluate the
Indian insurance industry and recommend its future direction.
The Malhotra committee was set up with the objective of
complementing the reforms initiated in the financial sector.
The reforms were aimed at creating a more efficient and
competitive financial system suitable for the requirements of the

33

economy keeping in mind the structural changes currently underway

and recognizing that insurance is an important part of the overall
financial system where it was necessary to address t he need for similar
reforms

In 1994, the committee submitted the report and some of

the 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 a nd its
subsidiaries so that these subsidiaries can act as independent
corporations.
All the insurance companies should be given greater freedom to
operate

ii) Competition
Private Companies with a minimum paid up capital of Rs.1bn should
be allowed to enter the industry.
No Company should deal in both Life and General Insurance through
a single entity.
Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.
Postal Life Insurance should be allowed to operate in the rural
market.
Only one State Level Life Insurance Company should be allowed to
operate 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 securities
to be reduced from 75% to 50%
GIC and its subsidiaries are not to hold more than 5% in any
company (There current holdings to be brought down to this level
over a period of time)

v) Customer Service
LIC should pay interest on delays in payments beyond 30 days
34

 Insurance companies must be encouraged to set up unit linked

pension plans
Computerization of operations and updating of technology to be
carried out in the Insurance industry.
Hence, it was decided to allow competition in a limited way by
stipulating the minimum capital requirement of Rs.100 crore. The
committee felt the need to provide greater autonomy to insuranc e
companies in order to improve their performance and enable them to
act 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 passage
of the IRDA Bill in Parliament in December 1999. The IRDA since its
incorporation as a statutory body in April 2000 has fastidiously stuck to
its schedule of framing regulations and registe ring the private sector
insurance companies.
The other decision taken simultaneously to provide the
supporting systems to the insurance sector and in particular the life
insurance companies was the launch of the IRDAs online service for
issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has
also ensured that the insurance companies would have a trained
workforce of insurance agents in place to sell their products, which are
expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA
has put in a framework of globally compatible regulations. In the
private sector 12 life insurance and 6 general insurance companies have
been registered.

35

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 nonmoney 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

36

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 postRenaissance 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

37

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.

38

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.

39

 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 coverages 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
40

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 publiclyfunded 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.
41

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.

42

 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 insureds 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,
43

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 coverages
(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.

44

 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.

45

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.

46

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;

47

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.

48

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.

49

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

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

S.N Regist Date of Reg.

o.
ration
Numb
er

Name of the Company

101

23.10.2000

HDFC Standard Life Insurance Company Ltd.

104

15.11.2000

Max New York Life Insurance Co. Ltd.

105

24.11.2000

ICICI Prudential Life Insurance Company Ltd.

107

10.01.2001

Kotak Mahindra Old Mutual Life Insurance Limited

109

31.01.2001

Birla Sun Life Insurance Company Ltd.

110

12.02.2001

Tata AIG Life Insurance Company Ltd.

111

30.03.2001

SBI Life Insurance Company Limited .

114

02.08.2001

ING Vysya Life Insurance Company Private Limited

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

50

Life Insurers:

S.No.

Registrati Date of
on
Registration
Number

Name of the Company

102

23.10.2000

Royal Sundaram Alliance Insurance Company Limited

103

23.10.2000

Reliance General Insurance Company Limited.

106

04.12.2000

IFFCO Tokio General Insurance Co. Ltd

108

22.01.2001

TATA AIG General Insurance Company Ltd.

113

02.05.2001

Bajaj Allianz General Insurance Company Limited

115

03.08.2001

ICICI Lombard General Insurance Company Limited.

131

03-08-2007

Apollo DKV Insurance Company Limited

132

04-09-2007

Future Generali India Insurance Company Limited

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. Registration
Number

Date of Reg.

Name of the Company

121

03.01.2002

AMP Sanmar Life Insurance Company Limited.

122

14.05.2002

Aviva Life Insurance Co. India Pvt. Ltd.

51

General Insurers :
S.No.

Registrati Date of
on
Registration
Number

Name of the Company

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
n
Number
1

127

Date of Reg.

Name of the Company

06.02.2004

Sahara India Insurance

Company Ltd.

Yr: 2004-2005 :
Insurance Industry in this year, so far has 1new entrants; namely
Life Insurers:
S.No. Registration
Number
1

128

Date of Reg.

Name of the Company

17.11.2005

Shriram Life Insurance

Company Ltd.

52

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, Indias premier housing finance ins titution has assisted
more than 3.3 million families own a home, since its inception in 1977
across 2400 cities and towns through its network of over 250 offices. It
has international offices in Dubai, London and Singapore with service
associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and
PIOs 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

lot

of

consultancies abroad assisting different countries including Egypt,

Maldives, and Bangladesh in the setting up of housing finance
companies.
53

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 billion 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 pensions 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 banki ng, 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.

54

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 it 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

55

Quality policy

Quality road map time lines

Phase-1 to phase -3 should run simultaneously

Phases

Objectives

Visible proof

When

Phase-5

Business

BE award (external)/service

12-24

excellence

guarantee

months and
Improve
levels

Phase-4

Phase-3

Value stream

6 sigma processes, SLA,

6-8 months

map projects

financial benefit.

and improve

Process

Process complaint functions

8-12 months

maturity

and
sustenance

Phase-2

Organized

Zone/region/branch/location 6-10 months

work places

certification

and
sustenance

Phase-1

Current

Completion of projects and

4-6 months

business

benefits derived and

and

improvement

sustenance

sustenance

programs

56

D) Product/service profile
1.

Protection Plans

HDFC Term Assurance Plan:This plan is designed to help

secure familys 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 critical 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 ones family in the unfortunate event of
ones 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

childs future and being able to meet their childs dreams and

57

aspirations. With HDFC Childrens 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 ca se 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
58

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 life 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 postretirement income for life 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 life with the
freedom to maximize their investment returns. This plan also gives

59

Bumper Addition* 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 it 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 it 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: It is a convenient plan, which saves investors

from the need of going for Medicals. This Unit Linked Plan gives them
60

with an outstanding investment opportunity to maximize their savings

by providing them a choice of thoroughly researched and selected
investments.

HDFC Endowment Super Suvidha: It 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 al so gives
Bumper Addition to the fund value at Maturity.

HDFC Wealth Builder: HDFC Wealth Builder is an exclusive

plan crafted for elite achievers. An investment cum in surance 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 Addition 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
familys future by giving their family a guaranteed lum p sum on
maturity or in case of their unfortunate demise, early into the policy
term.

61

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 familys 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 familys

future protected. This With Pr ofits savings plan helps them to build
their long-term savings while securing their familys 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 Critical 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 dont 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,

independence at all times.

6.

Rural Products

HDFC Gramin Bima Kalyan Yojana

62

ensuring

their

financial

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

63

4. DATA ANALYSIS
AND
INTERPRETATION

64

1. Following are the list of motivational factors.

Response/category

Sr. Section
Officer

Sr.
Supervisor

Sr. Isa

Money

Job security

Promotion

Career

Welfare measures

Recognition &

Assistant
Accounts
Officer
0

Total

Percentage
Of total

12

11

34

18

Development

Reward
Both career
development &
recognition &rewards
Both job security &
carrier development
All the above

65

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.

66

2. Perception of staff regarding primary aim of the organization

Response/category

Sr.
Section
Officer

Sr.
Sr.
Supervisor Isa

Assistant Total
Accounts
Officer

Percentage
To total

Transportation

11

15

47

Public service

12

Utilization of it

15

Profit making

12

Checking accounts

12

67

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.

Sr.sectio
n officer

Sr.
Superviso
r

Sr.is
a

Tota

Percentag

e to total

Assistan
t
Account
s
Officer
1

Happy

Proud

10

31

Good

12

Average

Satisfied

15

Very satisfied

Mixed feelings

21

Response/categor
y

68

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.

69

4. Involvement of the employees in the organization.

Response/categor
y

Sr.sectio
n officer

Sr.
Su1perviso
r

Sr.is
a

Assistan Tota
t
l
accounts
officer
2
9

Percentag
e to total

Good

Very involved

10

31

Moderate

10

31

Not at all involved

29

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.

70

5. Effectiveness of employee participation in decision making.

Response/categor
y

Yes
No

Sr.sectio
n officer

Sr.
Superviso
r

Sr.is
a

5
2

3
5

6
4

Assistan
t
Account
Officer
0
7

Tota
l

Persentag
e to total

14
18

44
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.

71

6. Employee choice at work place

Response/ Sr.
category
Section
officer
Yes
7
No

Sr.
Sr. Isa
Supervisor
4

Assistant
accounts
officer
3

Total

Percentage
to total

16

50

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.

72

7. Role of hr in the organization.

Response /

Sr.

Sr.

Sr. Isa

category

Section

Supervisor

Assistant

Total

accounts

officer

Percentage
to total

officer

100%

75%

17

50%

14

43

25%

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%.

73

8. List of approaches to motivate

Response/category

Sr.

Sr.

Sr.isa Assistant Total Percentage

Section Supervisor

Accounts

Officer

Officer

To total

Awards

28

Rewards

28

Promotional

18

26

channels
Through ldc
No comments

74

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.

Sr.

Section

Sr.

Assistant

Supervisor Isa

Accounts

Officer

Total

Percentage

officer

Personal issues

18

Educational back

13

17

26

26

ground
Competition
among trade unions
Reluctance against
administration
Bias in
management
decisions

75

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.

76

10. Obstacles in employee performance

Response/categor

Sr.sectio

Sr.superviso

Sr.is

Assistan

Tota

Percentag

n officer

e to total

account
s officer
Stagnation,

22

28

28

Miscellaneous

13

No comments

lethargy,

growth

prospects
Lack
motivation

of
and

recognition
Decision taken by
top authorities

77

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

78

11. Employee awareness of motivation and empowerment.

Response/category

Sr.

Sr.

Sr.

Assistant

Section

Supervisor

Isa

Accounts

officer

Total

Percentage
To total

Officer

Yes

12

37

Very little

12

37

No knowledge

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 dont have any knowledge of what exactly employee
motivation is all about.

79

12. Employee empowerment.

Response/categor

Sr.sectio

Sr.superciso

Sr.is

Assistan

Tota

Percentag

n officer

e to total

accounts
officer
Yes

10

31

No

18

Sometimes

Depends

No comments

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.

80

13. Empowerment of employees in their performance.

Response/categor

Sr.sectio

Sr.supreviso

Sr.is

Assistan

Tota

Percentag

n officer

e to total

accounts
officer
&

22

of

12

22

Very little scope

22

Accountability

Work schedule

Miscellaneous

Recognition
rewards
Delegation
authority
No
empowerment

without
suitability
No link between
pay

&

performance

81

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.

82

14. Employee recognition from superior.

Response/categor

Sr.sectio

Sr.superviso

Sr.is

Assistan

Tota

Percentag

n officer

e to total

accounts
officer
Yes

11

36

No

26

Rarely

Satisfied

Through

13

Depends

No comments

Monetary terms

83

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.

84

15. Job satisfaction of employee.

Response/categor
y

Sr.sectio
n officer

Sr.superviso
r

Sr.is
a

Assistan Tota
t
l
accounts
officer
0
9

Percentag
e to total

Very satisfied

Satisfied

12

16

50

Dissatisfied

22

Very dissatisfied

28

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.

85

CHAPTER - 5

86

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. Employees awareness of motivation and empowerment is very low.

12. There lie the similarities between the responses opined by the employees on
recognition & rewards, no empowerment, very little scope. It shows that
there 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.

87

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.

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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, employees stock option schemes
participative management may be improved.

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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.

90

CHAPTER - 6

91

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.

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Questionnaire
1. Following are the list of motivational factors.
Money
Job security
Promotion
Career development
Welfare measures
Recognition & reward
Both career development & recognition &
rewards
Both security & carrier development
Both job security & carrier development
All 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

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4. Involvement of the employees in the organization.

Good
Very
involved
Moderate
Not at all
involved
5. Effectiveness of employee participation in decision making.
Yes
No
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

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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

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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

96

14. Job satisfaction of employee.

Very satisfied
Satisfied
Dissatisfied
Very dissatisfied

97