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[Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] Sayani Halder [Pick the date]




I am extremely grateful and remain indebted to our guide Ms Seema Chiney for being a source of inspiration and for her constant support in the Design, Implementation and Evaluation of the project. I am thankful to her for her constant constructive criticism and invaluable suggestions, which benefited me a lot while developing the DESK PROJECT. She has been a constant source of inspiration and motivation for hard work. She has been very co-operative throughout this project work. Through this column, it would be my utmost pleasure to express my warm thanks to her for their encouragement, co-operation and consent without which I mightnt be able to accomplish this project. I also express my gratitude to all staff members who were directly and indirectly instrument in enabling us to stay committed for the project.

This report has been designed to discuss the Performance Appraisal system of IDBI Federal Life I insurance Co. Ltd. I t also discusses about the various ways and Methods of Appraisal systems being followed in the company. The report discusses about the satisfactory level of the employees of the company, with the existing system. It also Highlights on some of the merits and demerits of this Appraisal system, and also tries to find out if the current system has helped them improve in the overall productivity of the Company.

In this project, I basically tried to explain why Performance Appraisal system is Important in an insurance industry as such. I n the present company, IDBI Federal Life Insurance Co. Ltd., I was able to learn that not much of importance was being given to any Appraisal methods or systems as such. They have been following an old traditional method of Appraisal System, since their inception. So, through this project, I studied about the entire process in detail, and got feedback and responses from the employees themselves about how they feel about the system. It is also observed that, though there are several ways, in which the employees are being appraised, their s satisfaction levels as well as motivation levels were not that high. This could be due to various factors. On the other hand, through this project I have also tried to figure out if there are any kinds of errors associated with this kind of system. I t is seen that there are a few loopholes Associated with the entire Appraisal process. But on the other hand, there are a number of merits associated with the Appraisal system as well.

In my study, I also tried to highlight the kind of correlation existing between the Attrition rate as well as the sales turnover of the company, year by year. This reveals the fact that, the Appraisal system does play a major role in deter mining the overall productivity of the company. As my primary objective is to tr y and develop a new Appraisal System for the company, I studied the Appraisal system of three other companies , operating in the Insurance industries and did a kind of comparative analysis, before proposing a whole new method of Performance Appraisal System for IDBI Federal Life Insurance Co. Ltd. Through this project, I have recommended a new Performance Appraisal Sys tem for I DBI Federal Life Insurance Co. Ltd., and it is likely to reduce the errors and biasness, in contrast to the current system. This could likely improve on the overall productivity of the company as well as increase the satisfaction of employees, thus reducing the Attrition rate, for the upcoming financial year.

INSURANCE SECTOR IN INDIA With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It's a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country's GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This it is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. In India, insurance is generally considered as a tax-saving device instead of its other implied long term financial benefits. Indian people are prone to investing in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small. Even to this day, Life Insurance Corporation of India dominates Indian insurance sector. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant. PRESENT SCENARIO The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some

limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. Today, there are 24 companies both in life insurance and non-life insurance sector.

The following table shows the market share of life and non-life insurers MARKET SHARE (in %) LIFE INSURERS 1. 2. 3. 4. 5. 6. 7. 8. 9. LIC ICICI Prudential Bajaj Allianz HDFC Standard Brila Sunlife Tata AIG SBI Life Max New York Aviva 76.07 6.91 4.75 2.98 1.72 1.66 1.46 1.28 1.08 0.71 0.54 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. NON LIFE INSURERS New India National United India Oriental ICICI- Lombard Bajaj Allianz IFFCO-Tokio Tata-AIG ECGC Royal Sundaram Cholamandala m 21.41 17.11 17.11 17.02 8.04 6.15 4.00 2.89 2.50 2.17 1.22

10. Kotak Mahindra Old Mutual 11. ING Vysya

12. 13. 14.

AMP Sanmar Met Life Sahara Life

0.46 0.37 0.03

12. 13. 14.

HDFC-Chubb Reliance General Agriculture Insurance Co. Private total Public total Grand total

0.89 0.75 --

Private total Public total Grand total

23.93 76.07 100.00

27.35 72.65 100.00

Source :

THE INSURANCE INDUSTRY: The insurance sector has gone through a number of phases and changes. Insurance in India used to be tightly regulated and monopolized by state-run insurers. Following the move towards economic reform in the early 1990s, various plans to revamp the sector finally resulted in the passage of the Insurance Regulatory and Development Authority (IRDA) Act of 1999. Significantly, the insurance business was opened on two fronts. Firstly, domestic private-sector companies were permitted to enter both life and non-life insurance business. Secondly, foreign companies were allowed to participate, albeit with a cap on shareholding at 26%. With the introduction of the 1999 IRDA Act, the insurance sector joined a set of other economic sectors on the growth march. During the 2003 financial year, life insurance premiums increased by an estimated 12.3% in real terms to INR 650 billion (USD 14 billion) while non-life insurance premiums rose 12.2% to INR 178 billion (USD 3.8 billion). Growth in insurance premiums has been averaging at 11.3% in real terms over the last decade. There are strong arguments in favor of sustained rapid insurance business growth in the coming years, including Indias robust economic growth prospects and the nations high savings rates.

INTRODUCTION: About IDBI Federal Life Insurance IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, Indias premier development and commercial bank, Federal Bank, one of Indias leading private sector banks and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. At IDBI Federal, we endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers. Having started in March 2008, in just five months of inception we became one of the fastest growing new insurance companies to garner Rs 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on 31st March, 2012, the company has issued over 3.76 lakh policies with over 21,578 Cr in Sum Assured. Do visit to know more

About the sponsors of IDBI Federal Life Insurance Co Ltd IDBI Bank Ltd. continues to be, since its inception, Indias premier industrial development bank. It came into being as on July 01, 1964 (under the Companies Act, 1956) to support Indias industrial backbone. Today, it is amongst Indias foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from 977 branches and 1544 ATMs. The Bank offers its customers

an extensive range of diversified services including project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in Indias financial sector National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd, SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research Ltd). Please visit to know more. Federal Bank is one of Indias leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 950 branches and 1002 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations. Please visit to know more. Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Germany, Hong Kong and UK. It is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life player, through AG Insurance, and in the UK, it has a strong presence as the third largest player in private car insurance and the over 50s market. It employs more than 13,000 people and has annual inflows of more than EUR 17 billion.

COMPANY PROFILE: IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, Indias premier development and commercial bank, Federal Bank, one of Indias leading private sector banks and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. At IDBI Federal, we endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian

customers. Having started in March 2008, in just five months of inception we became one of the fastest growing new insurance companies to garner Rs 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on January 31st 2011, the company has issued over lakh 2.68 lakh policies with over Rs 14, 230 Cr in Sum Assured. PRODUCT PROFILE:

WEALTHSURANCE: The Wealthsurance Milestone Plan enables the policyholder to save and build wealth to meet their financial goals. This Plan comes with a wide range of 13 investment options and 7 insurance benefits - all packaged with a low charge structure and unmatched flexibility.

HOMESURANCE: IDBI Federal Homesurance Protection Plan provides full insurance cover for properties even under construction, thus ensuring that the beneficiary gets the full sanctioned amount in case of any unfortunate event. It also has an innovative fixed period cover for those who would aim to prepay their loans early.

BONDSURANCE: Bondsurance is designed for customers looking for guaranteed returns which will not get affected by financial market conditions. It offers guaranteed return on investment along with life insurance cover.

MICROSURANCE: IDBI Federal Microsurance Plan is a one of its kind insurance plan which can be very useful for various Micro Financial Institutions and NGOs, wherein not only the members but even the members family gets an insurance cover.

TERMSURANCE: IDBI Federal Termsurance Protection Plan offers the unique Increasing Cover option that automatically increases the cover every year without increasing the premium.

INCOMESURANCE: Knowing the customer helped us to combine the Endowment & Money Back plans into a single plan. It linked the returns to the G-Sec rates, transparently declared by the government. Also, the Guaranteed Annual Payout and other benefits upon death are tax-free under Sec 10(10D).


G.V NAGESHVAR RAO (MD& CEO) Ashley Kennady (Country Head Sales) South East Zonal Zonal Head Head Bank Bank Area Asuran Area Agenc Agenc Asurance ce Head y y Head Manager Head Head
Distirbutio n

North Zonal Head Area Bank Agency Asurance Head Head

Manager Distirbution DEPUTY CHIEF SENIOR

Manager Distirbution DEPUTY CHIEF

West Zonal Head Area Bank Agency Asuran ce Head Head Manager

Corporat e Head

Distirbut Corporat or & e Trainess Head & Agencies



Distirbut SENIOR Corpora ors & te Trainess Head & Agencies

Distirbut ors & Trainess & Agencies

Corporat e Head

Distirbutors & Trainess & Agencies



MURLI IYER (Country Head Sales)

MALLIKA SARAWATH (Human Resource Head)

Service Department

Pay Roll


Senior Manager

Chief Manager

Assitant Manager

There are no Zonal Heads in the Human Resource Department the area Human Resource executive only acts as the Human Resource Manager and reports all the activities to the Head Office that is in MUMBAI.



MURLI IYER (Country Head Sales)





North Zonal Support Manager

South Zonal Support Manager

East Zonal Support Manager

West Zonal Support Manager

The Zonal Managers are supported by Branch Support Executives and the Operations department is present only in the Head Office which is in MUMBAI.

The brief outlook about the regulatory changes done by the Indian Government over the years is given below.

The effect of insurance reforms has been positive on the insurance industry. There has been positive growth in all the segments, with investments flowing in the right direction. Reforms have helped to achieve rapid growth in critical areas and sustain them over a period of time through channelized strategies. Post reforms, the number of players have increased from 4 to 22 players presently registered under IRDA (INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA). MARKET SHARE: The reality today is that the intense competition in the last five years has made it difficult for new entr ants to keep pace with the leaders and thereby failing to make any impact in the market. Also as the pr ivate sector controls over 26.18% of the life insurance market and over 26.53% of the non- life market, the public sector companies still call the shots. The countr ys lar ges t life insurer, Life I nsurance Corporation of I ndia ( LIC), had a share of 74.82% in new

bus iness premium income in November 2005. S imilarly, the four public- sector non- life ins urers New India Assurance, National Ins urance, Or iental Insurance and United I ndia I nsurance had a combined market s hare of 73.47% as of October 2005. ICICI Prudential Life I nsurance Company continues to lead the pr ivate sector with a 7.26% market share in terms of fres h premium, whereas ICICI Lombard General I nsurance Company is the leader among the private non- life players with an 8.11% market s hare. ICICI Lombard has focused on growing the market for general insurance products and increasing penetration within existing customers through product innovation and distr ibution.

The Various Players in the Indian Insurance Industry is given below.

1. Bajaj Allianz Life Insurance Company Limited 2. Birla Sun Life Insurance Co. Ltd 3. HDFC Standard Life Insurance Co. Ltd 4. ICICI Prudential Life Insurance Co. Ltd. 5. ING Vysya Life Insurance Company Ltd. 6. Life Insurance Corporation of India 7. Max New York Life Insurance Co. Ltd 8. Met Life India Insurance Company Ltd. 9. Kotak Mahindra Old Mutual Life Insurance Limited 10. SBI Life Insurance Co. Ltd 11. Tata AIG Life Insurance Company Limited

12. Reliance Life Insurance Company Limited. 13. Aviva Life Insurance Co. India Pvt. Ltd. 14. Sahara India Life Insurance Co, Ltd. 15. Shriram Life Insurance Co, Ltd. 16. Bharti AXA Life Insurance Company Ltd. 17. Future Generali Life Insurance Company Ltd. 18. IDBI Federal Life Insurance Company Ltd. 19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd 20. AEGON Religare Life Insurance Company Limited. 21. DLF Pramerica Life Insurance Co. Ltd. 22. Star Union Dai-ichi Life Insurance Comp. Ltd.

The Market leader in the insurance sector is public owned company LIC the market share picture of various companies is given below.

But recently in the year 2009 IRDA (Insurance Regulatory And Development Authority of India) has brought in some regulatory changes, the effect of new regulations done by IRDA (Insurance Regulatory And Development Authority of India) has adversely affected the Insurance Industry. So what are these changes which have affected the Insurance Industry so badly the changes are given below in a brief manner.


Agency commission for retail life insurance business:

+ 7- 90% for 1st year premium if the premium paying term is more than 20 years + 7- 10% for 1st year premium if the premium paying term is more than 15 years + 7- 10% for 1st year premium if the premium paying term is less than 10 years + 7% - yr 2 and 3rd year and 3.5% - thereafter for all premium paying terms. 2. In case of Mutual fund related - Unit linked policies commission or company charges varies between 1.5% to 6% on the premium paid. 3. Agency commission for retail pension policies + 7.5% for 1st year premium and 2.5% thereafter 4. 5. Maximum broker commission - 30%

Referral fees to banks Max 55% for regular premium and 10% for single premium.

As you can see in the in the Second point above the company according to the new rules set by IRDA for all ULIP products the company can charge the customer up to 6% of the premium paid by the customer were as before this rule was done by the IRDA the companies used to charge around 20% of the premium paid by the customer as company charges or commission.

Since ULIP is the bread earner in the Insurance industry this rule has badly hit the cash inflow of the insurance companies as there has been a drastic reduction in the percentage of premium what companies used to charge the customers for ULIP products.

As shown in the above chart generally around 60% of the premium collected by the Insurance Companies come from the ULIP products and other 40% of the premium come from general insurance products, Endowment, Money Back policies and general life insurance products. Due to these regulatory changes done by IRDA (Insurance Regulatory Development Authority of India) with respect to ULIP products there has been a negative impact on the Insurance Industry, according to one of the leading News papers survey due to squeeze in margins on account of changes in unit-linked plans (ULIP) has forced private life insurance companies to close offices and retrench employees due to shortage of working capital.

During the first half of the fiscal 2010 private life insurance companies cut down branches by 442. As of September, private life insurers had 8,227 branches as compared to 8,667 as of March, data compiled by the Life Insurance Council shows. Private players also retrenched employees mainly in the sales division. The number of employees for private companies reduced by 5,840 during the first half of the year to 1.46 lakh employees, the data shows.

As you can see LIC (Life Insurance Corporation) has the best Claim Settlement Ratio of more than 97% while Future Generali has the worst payout ratio of 50.5%. But before you focus too much on these numbers, here are a few points you need to think about: Life insurance companies have a very high rate of rejection in the early claims so if there is a claim made within 2 years of taking the policy, there is a far greater chance of it being rejected. So all the companies which have started operation in last five years would obviously have low settlement ratio.

The data does not tell what kind of claims is being talked about? Is it only death claim or also included maturity claim. As you are aware that maturity claims cannot be anyway be rejected, so its unfair to club both death claim and maturity claim. IRDA should make provision for publishing this separately. A comparative analysis of banks Written by Vertical Grass Friday, 24 February 2012 00:00 Banking sector is going to be the most watched sector in the coming quarters. There are reasons for this. RBI has hinted that it will reduce the CRR rate and repo rates. Kingfisher airline has impacted few banks and it will play its own part. NPAs of banks have gone up recently. The debt/GDP ratio of the Government is scary at 80% essentially meaning that the Government cannot borrow much without jeopardizing stability of banking sector. In this backdrop, we studies 10 banks on various parameters which are important for banks to track. These parameters impact the outlook of banks. RESULT FOR Q3 FY 2011 - 12 Parameters CAR (%) NIM(%) GROSS NPA(%) NET NPA(%) CASA (%) SBI 11.6 4.05 4.61 2.22 48.95 ICICI Axis HDFC 18.88 2.7 0.7 43.6 11.78 3.75 1.1 0.39 42.2 16.3 4.1 1.1 0.2 47.7 BoI BoB PNB Can Bank 13.22 2.52 1.81 1.49 25 UBI 11.72 3.31 3.33 1.88 IDBI 13.53 1.89 2.94 1.96

11.18 13.45 11.48 2.55 2.74 1.78 32.41 3.44 1.48 0.51 35 3.85 2.42 1.11 36.2

32.54 19.67

Capital adequacy ratio (CAR) is fine with all the banks. All of them are adequately secured on this front. SBI is the one of PSU bank with high CASA ratio giving it the advantage to collect low cost deposit from people. This essentially reduces the cost of money for SBI which it can lend at higher rate to borrowers thus pocketing the difference as their profit. HDFC is equally strong when it comes to CASA ratio. This is surprising though. ICICI and Axis banks have done very well on this front too. IDBI has shown good improvement in last few quarters. The management of IDBI started focusing on retail investors recently and it will take some time before they catch up with big banks. NIM (net interest margin) the most important number for banks is best for SBI. This conforms to the observation that SBI has highest CASA ratio. A high CASA ratio gives SBI

enormous flexibility. This, in turn, results into higher NIM. HDFC is once again is equally good on NIM. IDBI, Bank of India, Canara Bank, and ICICI bank need to work on this front. IDBIs aggressive foray into retail banking is costing it in terms of NIM. Gross NPA, even though net NPA is not scary, should be a cause of concern for SBI, IDBI, and BoI. Banks typically turn very liberal when it comes to calculating net NPA. Hence people should look at gross NPA first and then the net NPA. If there is huge difference (such as net NPA is 50% of gross NPA), it is time to see how the banks have defined NPA. Net NPA, ratio which scares banks, is highest for SBI. This could be the result of teaser loans offered by it and also economic slowdown which has hit the industry hard. Since SBI has significant exposure to companies, its net NPA is showing high number.

Lets take a look at profit margin.

Clearly, SBI has to work on its net margin. Axis Bank, Canara Bank, Bank of Baroda, and HDFC Bank have maintained lead in profitability.

The Worst hit companies were ICICI Prudential, HDFC, Met Life, Bharti AXA the number branches of individual companies closed down is given below.

Some of the replies given by the Financial Experts for the shutting down of the branches are given below:

Amitabh Chaudhry, managing director and CEO of HDFC Standard Life Insurance said in an interview We are looking at consolidating some of our branches and resizing some of the others to manage expense.

Mr S.B. Mathur, Secretary General, Life Insurance Council, said that some private players might take some more time to get adjusted to the new regulatory framework.

According to G Murlidhar, chief operating officer of Kotak Mahindra Life Insurance, the company intends to bring down the expense ratio from 18 per cent to 12-13 per cent in the short term because the usual expense ratio for all private life insurers range between 18-25 per cent but due to the new regulatory rules done by IRDA there has been a reduction in the Cash Inflow and has affected the Working Capital of the Companies so these measures have to be taken.

Considering the above circumstances we can actually see the importance of proper Working Capital Management so that the company will be prepared to face any kind of risk which might arise in the future due to any reason like Competition in the Market, change in the regulations, slump in the market situation and so on.


Following are the main ways in which IDBI Federal life Insurance company ltd promotes its products/services and creates awareness in the market.

PRINT MEDIA: The main ways of advertising via print media are as follows:


PAPER Economic times TOI Hindu

PAGE 3rd 3rd 1st

COST (IN Rs.) 320 per sq. cm 320 per sq. cm 400 per sq. cm


As of now, the total number of hoardings which are put up in Hyderabad region counts to a good 17 number.

COST (IN Rs.) 4,00,000

TIME LEASE 3 months


Pamphlets are distributed across India at least 5 times in a month without any cost. Its done to create maximum awareness about the products/services.


There is no specific magazine in which advertisement is given. Its given in magazines depending upon their sales and reputed magazines like Outlook, Money etc. The advertisement is given every month at least once in any magazine.


Mainly, the advertisement is shown on cricket channels, Star channels. The main promotions were done during FEB & MARCH to:

Highlight Tax benefits. To combat competition as all the Insurance companies would advertise during this time at a great frequency.

Also the company will soon start displaying their advertisements on Satellite TV like SUN network, etc.

CREATING TV COMMERCIAL: The complete cost of making a commercial which includes all the equipments, actors, etc is approximately Rs. 20 lacs. The company has tie-up with Ogilvy and Mather as its advertising agency along with Equinox (TLG) as its media partner. The life of usage of a single television commercial is 2 years.

RUNNING THE TVC: Following are the costs associated with running the TVC:

REGION/CHANNEL Tamil Nadu Local channels Cricket channels

COST (IN Rs.) 45,000 6,000-8,000 60,000 Onwards

DURATION/SLOT 10 seconds 10 seconds 10 seconds

Mainly the ads are shown in between TV soaps and Cricket matches to gain attention of the consumers.

DISTRIBUTORS: A strong network of distributors and parent advisors also helps a lot in promoting products/services of IDBI Federal by WORD OF MOUTH.

A Viral campaign is also run on the Internet by wherein flash videos of working of products is explained in a very humorous manner. The same is shown on

LOCAL EVENTS: Some great events are also conducted in and out the city to create more awareness about the IDBI Federal and free gifts are given wherein local marketing people interact with the prospects and try to gauge their financial needs and respectively pitch the products.

The overall costs associated with such events totals to Rs. 2,00,000 per annum such events are mainly conducted in Apartments, Schools, etc.

T benefits for ax life insurance policies

The Finance Bill, 2012, has proposed modifications which impact Section 80C and Section 10(10D) of the Income Tax Act, 1961, as follows:

Sec 80C of the Income Tax Act, 1961

policies, issued on or after April 1, 2012, shall be available only to the extent of 10% of the Capital Sum Assured*.

Tax benefits on premiums: Under Sec 80C, deduction from income for premiums paid on life insurance

Sec 10(10D) of the Income Tax Act, 1961

payable in any of the policy years is not more than 10% of the Capital Sum Assured*. The death benefit is always tax-free under Sec 10(10D) of the Income Tax Act, 1961.

Tax-free benefits: Under Sec 10(10D), exemption on benefits received under life insurance policies, issued on or after April 1, 2012, shall be available only if the premium

*Capital Sum Assured: It is the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account the value of any premium agreed to be returned, or any benefit by way of bonus or otherwise which is to be received under the policy over and above the sum actually assured.

Please refer to the following examples to understand the implications of the proposed modifications in tax benefits:

Example 1 Example 2 Mr. Sharma, aged 35 years, pays an annual premium of Rs. 60,440 for a life insurance policy with Sum Insured of Rs. 5,00,000, policy term and premium payment term of 10 years. The death benefit payable under this policy will be the Sum Insured of Rs. 5,00,000 along with vested bonuses.

Tax benefit under Sec 80 C The premium paid by Mr. Sharma is Rs. 60,440 which is greater than 10% of the Capital Sum Assured of Rs. 5,00,000 (the minimum benefit paid on death - the insured event and does not include bonuses). Hence, tax benefits under Sec 80C will be available only to the extent of 10% of the Capital Sum Assured (which amounts to Rs. 50,000) and not on the full premium amount of Rs. 60,440.

Tax benefit under Sec 10(10D) As the premium payable is greater than 10% of the Capital Sum Assured, the maturity benefit payable under this plan will be taxable in the hands of the policyholder.

However, any death benefit payable will be completely tax free.

Mr. Vohra, aged 35 years, pays an annual premium of Rs. 39,090 for a life insurance policy with Sum Insured of Rs. 5,00,000, policy term and premium payment term of 15 years. The death benefit payable under this policy will be the Sum Insured of Rs. 5,00,000 along with vested bonuses.

Tax benefit under Sec 80 C The premium paid by Mr. Vohra is Rs. 39,090 which is less than 10% of the Capital Sum Assured of Rs. 5,00,000 (the minimum benefit paid on death - the insured event and does not include bonuses). Hence, tax benefits under Sec 80C will be available on the full premium amount of Rs. 39,090.

Tax benefit under Sec 10(10D) As the premium payable is less than 10% of the Capital Sum Assured, the maturity benefit payable under this plan will be tax free in the hands of the policyholder. The death benefit payable will also be completely tax free.

5 Elements This article will talk about 5 things every portfolio must have and we will see that it should be good for almost every type of investor . The Five most important and must have things each and every portfolio must have are : 1. Life Insurance Each and every person who has financial dependents must have a good Life cover through Term Insurance. This must be taken at an early stage of life for the longest term possible. 2. Health Insurance

This is extremely important now a days, because of rising health-care expenses. A Family must be covered with a Family Floater plan for a good amount (Rs 5 lacs/$10,000) depending on your budget .

3. PPF Each and every portfolio much have debt exposure and PPF (for India) is an excellent investment product for anyone, backed by government , its 100% safe and one of the most efficient and tax efficient products available , with post-tax returns of 8% , its a must have in each portfolio .

4. SIP in Mutual Funds (for long term) For long term investments, its hard to beat this . For long term investments Equity must be the route and for systematic and disciplined investing, SIP is the best way to channelize your money . Considering the undebatable growth for Indian economy, no can afford to miss Equities for long term investments. 5. Contingent Fund (Cash + Liquid Funds) Each and every portfolio must have good amount of cash and liquidity to meet unforeseen and emergency expenses. Other wise you will have to liquidate and break you investment products which may attract penalites and may not give you enough cash at the time of requirement which can create problem. Better to have money equivalent to 3-4 months of expenses in contingent fund . You can also put 1-2 months expenses as Cash and rest into Liquid funds which may also provide you some returns. Analysis Understand that these 5 things are a list of things one would have for sure , but its not an exhaustive list . Depending on your profile and requirements you should have other products as well. but I would say this will solve 90% of the problem

1. Capital Appreciation : **** With SIP in mutual funds and PPF, the capital appreciation should happen to a great extent, PPF would provide stability and assurity or returns, where as Equity will gives exceptional returns. 2. Liquidity : ***** We have already covered that Contingent fund should be able to provide good Liquidity. 3. Risk Management : ***** Term Insurance and Health Insurance will take good care . SIP will take care of the market volatility. some other techniques like Hedging using Derivatives and being well informed will manage extra level of risk . 4. Goal Oriented : ***** Each and every product is for a specific and important goal, as described above . For Non-Indian Readers

Hi all, the article is specifically with Indian context, but article is helpful for each of you, please find the similar products in your country. Conclusion Each and every portfolio can be different and should match the requirement of the investor, but these 5 things are such that it can be for any kind of investor. Just like we have master key for any kind of lock, we have these products for any kind of investor.




Indian Insurance Industry the task ahead- By Ernst and Young

The Indian Insurance Industry: Challenges and Prospects- By Dr. Tapen Sinha

An Analysis of Working Capital Management Results Across Industries By Greg Filbeck Schweser Study Program -Thomas M. Krueger Trends in Working Capital Management and its impact on Firms Performance: An analysis of Mauritian Small Manufacturing Firms- By Kesseven Padachi. Need for Working Capital- By Citi Bank Financial Advisor The Financial ratio Analysis- By Meir Liraz

Text Books:

Financial Management by I M Pandey, 10th Edition, Chapter No. 27, Chapter No.25 Financial Management by Icfai Press, Chapter No.6, Chapter No.13 Statistics of Management, 7th Edition, Chapter No.12

Websites: News Paper Article:

2. 3.

Business Line print edition Dated November 11, 2010 Business line print edition Dated January 08, 2011 4. Other Financial Articles

Case Study:


Siemens Manufacturing Company Year 2001

Annual Reports: 6. 7. IRDA Annual Reports 2008-09,2009-10,2010-11

IDBI Federal Life Insurance Co. Ltd Annual Report of past three years 8. Canara HSBC Annual Reports of past three years.


To study the Per formance Appraisal S ystem of IDBI Federal Life I nsurance Co. Ltd This project aims to study the various methods and ways of Perfor mance Appraisal System, being followed at IDBI Federal and also to find out the effectiveness, merits and demerits of the existing Appraisal S ystem. The project also aims to understand the satisfactor y level among the employees, with the existing Appraisal S ystem The project also aims to find out if the exis ting system has helped the company in their improving their overall productivity to remain competitive in the industr y. The project also shows a kind of comparative analysis, with the Appraisal systems

of other companies, operating in the same industr y The project also attempts to suggest a better Appraisal S ystem for IDBI Federal. To find out the errors and loopholes (if any) with the current Appraisal S ystem of IDBI Federal.

4.2 SCOPE OF STUDY: Give employees feedback on per formance Identify employee training needs Form a basis for personnel decisions: salary increases, promotions, disciplinar y actions, bonuses, etc. Provide the opportunity for organizational diagnosis and development Facilitate communication between employee and administration To improve perfor mance through counseling, coaching and development.



In this project, pr imary data research will be done through the use of ques tionnaires and interviews (if necessary) for the purpose of analyzing employee responses for their feedback and to understand their satisfaction levels on the existing Appraisal system.

Analysis of previous research ar ticles relating to the topic Performance Appraisal. (Secondar y data analysis)


Study is limited to the employees belonging to Chennai, Coimbatore, Hyderabad and Bangalore branches, i.e. Sample size is limited.

Data collection is also limited to employees belonging to the Sales department.

Respondents may not provide 100% accurate and tr ue infor mation for the surveys which may lead to a var iation in employee responses and feedback.




The var ious kinds of Appraisal methods include:

CONFIDENTI AL REPORT : I t is a descr iptive report prepared, generally at the end of ever y year, by the employee s immediate super ior. The report highlights the strengths and weaknesses of the subordinate. The report is not data based. The impress ions of the superior about the subordinate are merely recorded there. It does not offer any feedback to the appraisee. The appraisee is not ver y sure about why his ratings have fallen despite his best effor ts, why other s are rated high when compared to him, how to rectify his mistakes, if any; on what basis he is going to be evaluated next year, etc.

ESSAY EVALUATION : Under this method, the Rater is asked to express the strong as well as weak points of the employee s behavior. This technique is nor mally used with a combination of the graphic rating scale because the Rater can elaborately present the scale by substantiating an explanation for his rating. While prepar ing the es say on the employee, the Rater considers var ious factors. Essay evaluation is a non- quantitative technique. This method is advantageous in at leas t one sense, i.e., the essay provides a good deal of infor mation about the employee and also reveals more about the evaluator.

CRITI CAL INCIDENT METHOD : The cr itical incident for perfor mance appraisal is a method in which the manager wr ites down positive and negative per formance beha vior of employees throughout the per formance per iod.

WEIGHTED CHECKLIS T METHOD: This method descr ibe a perfor mance appraisal method where rater familiar with t he jobs being evaluated prepared a lar ge lis t of descriptive statements about effective and ineffective behavior on


PAIRED COMPARISON ANALYSIS : Paired compar ison analysis is a good way of weighing up the relative importance of options. A range of plausible options is listed. Each option is compared against each of the other options. The results are tallied and the option with the highest score is the preferred option.

GRAPHIC RATING S CALES : The Rating Scale is a for m on which the manager simply checks off the employee s level of perfor mance. This is the oldest and most widely method used for per formance appr aisal.



(BARS) : This method

used to describe a perfor mance rating that focused on specific behaviors or sets as indicators of effective or ineffective per formance. It is a combination of the rating scale and critical incident techniques of employee perfor mance evaluation.

PER FORMANCE RANKING METHOD : Ranking is a per formance appraisa l method that is used to evaluate employee performance from best to worst. Manager will compare an employee to another employee, r ather than compar ing each one to a s tandard measurement.

MANAGEMENT BY OBJECTIVES (MBO) METHOD: MBO is a process in which managers / employees set objectives for the employee, per iodically evaluate the per for mance, and reward according to the result. MBO focuses attention on what mus t be accomplished (goals) rather than how it is to be accomplished ( methods)

360 DEGREE PER FORMANCE APPRAISAL : 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them.


Forced ranking is a

method of per formance appraisal to rank employee but in order of forced distribution. For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.

FIELD REVIEW METHOD : supervisors are inter viewed by an exper t from personnel department and asked to obtain all the relevant infor mation on each

employee. Employees are rated on overall bas is as outstanding, satisfactory and unsatisfactor y.

ASSESSMENT CENTRES : An assessment centre typically involves the use of methods like social/infor mal events, tests and exercises, ass ignments being given to a group of employees to assess their competencies to take higher responsibilities in the futur e. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators obser ve and evaluate employees as they perfo rm the as signed jobs and are evaluated. The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities,


motivation; career orientation etc. assessment centers are also a n effective way to determine the training and development needs of the tar geted employees.


Human resource

accounting method tries to find the relative worth of these assets in the terms of money. In this method the Per formance appraisal of the employees is judged in ter ms of cost and contr ibution of the employees. The cost of employees include all the expenses incur red on them like their compensation, recruitment and selection costs, induction and training cos ts etc whereas their contribution includes the total value added (in monetary ter ms). The difference between the cost and the contr ibution will be the perfor mance of the employees. Ideally, the contr ibution of the employees should be greater than the cos t incurred on them.


People do not improve on their res ults without feedback on their per for mance.

Per formance appraisal s ystems help in the following ways :

1. They can be a source of direct feedback from the supervisor to the employee. 2. They can help the employee to monitor this own perfor mance. For feedback to be effective, it must be :

honest Specific behaviour- oriented



It takes place: semiannually/annually where in A manager may rate an employee. A group of manager s may rate an employee. A group of peers may rate a colleague. Employees may rate their bosses.


4.8 APPRAISAL PROCESS: Establish and communicate expectations for per for mance. Observe and measure individual perfor mance against standards. Reinforce perfor mance to provide remedies Take corrective actions


Managers commit mistakes while evaluating employees and their perfor mance. Bias here refers to inaccurate distortion of a meas urement. These ar e:

FIRST IMPRESSION (PRIMACY EFFECT): Raters for m an overall impression about the employee on the basis of some par ticular characteris tics identified by them. The identified qualities and features may not provide adequate base for appraisal.

HALO EFFECT: The individual s perfor mance is completely appraised on the bas is of a perceived pos itive quality, feature or trait. I n other words this is the tendency to rate a man unifor mly high or low in other traits if he is extra- ordinarily high or low in one particular trait.

HORN EFFECT: The individual s perfor mance is completely apprais ed on the bas is of a negative quality or feature per ceived. This results in an overall lower rating than may be warranted.

EXCESS IVE STIFFN ESS OR LENIENCE: Depending upon the raters own standards,

values and physical and mental makeup at the time of appraisal, ratees may be rated ver y strictly or leniently. Some of the managers are likely to take the line of least resistance and rate people high, whereas others, by nature, believe in the tyranny of exact assessment, consider ing more par ticular ly the drawbacks of the individual and thus making the assessment excessively severe.

CENTR AL TENDENCY: Appraisers rate all employees as average per formers. That is, it is an attitude to rate people as neither high nor low and follow the middle path.


PERSONAL BIASES: The way a supervisor feels about each of the ind ividuals working under him - whether he likes or dislikes them - as a tremendous effect on the rating of their per formances. Personal Bias can stem from var ious sources

SPILLOVER EFFECT: The pr esent per formance is evaluated much on the bas is of past per formance.

RECEN CY EFFECT: Rating is influenced by the most recent behaviour ignor ing the commonly demons trated behaviors during the entire appraisal per iod. Therefore while appraising perfor mances; all the above biases should be avoided



At IDBI Federal, they have been following, one of the most traditional method of Per formance Appraisal System, which is the Graphic rating s cale method. The Rating Scale is a for m on which the manager simply checks off the employee s level of per for mance.

This is the oldest and most widely method used for per for mance appraisal. The scales may specify five points, so a factor such as job knowledge might be rated 1 (poor ly infor med about work duties) to 5 (has complete mastery of all phases of the job). ADVANTAGES OF THE RATING SCALES:

Graphic rating scales are less time consuming to develop. They also allow for quantitative comparison.


Different super visor s will use the same graphic scales in s lightly different ways. One way to get around the ambiguity inherent in graphic rating scales is to use behavior based scales, in which specific work related behavior s are assessed. More validity comparing workers ratings from a single s upervisor than comparing two worker s who were rated by different super visors.


At I DBI Federal, it is an Appraisal system, which is pur ely performance based . The rating scale being used at IDBI is,

1 = Exceptional 2 Strong 3 = Fully Competent 4 = Continued Development 5 = Poor N = Not Applicable KEY CRITERIA FOR EVALUATION: The employees are rated, based on the following parameters,

Technical skills Financial skills Decision making ability Analytical ability / problem solving Initiative/perseverance/enthusias m Flexibility Wr itten communication skills Oral communication skills Customer focus Teamwork Organizational ability Negotiating skills

4.10.2 MBO METHOD: As regards the Appraisal method, apart from the Graphic Rating Scale method, another

type of Appraisal system being followed is Management by Objectives (MBO) method. It can be defined as a process whereby the employees and the s uper iors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the cr iteria for meas urement of their per formance and contr ibution and deciding the course of action to be followed. The essence of MBO is par ticipative goal setting, choosing course of actions and decis ion making. An impor tant part of the MBO is the meas urement and the compar ison of the employee s actual per formance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choos ing the cour se of action to be followed by them, they are mor e likely to fulfill their responsibilities.




The principle behind M anagement by Objectives (MBO) is to create empowered employees who have clarity of the roles and respons ibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. MBO emphasizes on participative set goals that are tangible, ver ifiable and measurable. MBO focuses attention on what must be accomplished ( goals) rather than how it is to be accomplished ( methods). MBO is a systematic and rational technique that allows management to attain maximum results from available resources by focus ing on achievable goals. It allows the subordinate plenty of room to make creative decisions on his own.



As a part of my pr imar y research, I had analysed the questionnaires which were circulated among the employees & staff of IDBI Federal, located at var ious branches. Through the feedback obtained by them, it was seen that, many of the employees feel they need a better Appraisal system. Though most of them, do not really mind with the current Sys tem being followed, there are a few others, who feel they need to move on from the traditional old method, to something new and better. It is also lear nt that most of them do not feel that the e xisting Appraisal s ystem, has helped them in getting better Appraisal opportunities. I n such cases, it is quite clear, that there is need for an enhanced or a better method of Appraisal s ystem for the company.

There has also been a case, where few employees are not really satisfied with the current method of Appraisal, and have shifted to other companies, belonging to the same industry. So when it comes to satisfactory level among the staff, it is rounded off to a poor 50 %. It is quite evident, that not much of an importance is given to this area, as regards to IDBI Federal. But one advantage which is seen from this Appraisal system is that, it has clearly helped in distinguishing per formers and the non-performers. I n a way, it has also helped in assessing the quality of an employee as well as helped in identifying their strengths and weaknes ses. They also feel, a better Appraisal system if implemented, would help in improving work life conditions as well, and would aid as a motivating factor to perfor m better. The employees feel this could help in improving the overall productivity of the company.

Highlighting on the process being followed, each employee is rated, based on their per formance on the Graphic rating scale. This takes place quarterly i.e. once in 4 months. This rating is being done by their immediate s uper iors / managers. The better perfor mers and those who have been rated high, will be Appraised by promoting them to a higher post/ senior level

within the depar tment. This is done half yearly. Apart from promotions, the employees are also given certain kinds of incentives, like salary boosts, commis sions etc. The non- per formers or those who have been rated relatively poor ly on the scale, will be given further training. So the present Appraisal system has helped them in identifying their training needs.























When it comes to MBO Method, all employees will be provided with a Goal S heet. This also happens once in 4 months. I n this, the employees are asked to set certain targets for themselves, which they are quite confident of achieving. This can be said as a kind of s elf appraisal being followed by the company. If the employees achieve the targets, they will be promoted to a higher level. If in case, the employees fail to achieve their targets, they will be given fur ther training, to try and achieve their set goals.

It is seen that there are just two ways in which the employees are appraised:

1. Promotions within same or different departments 2. Incentives like salary boos ts, commiss ions, bonuses.


Promotion of employees will happen as per old norms of NAC, Lives & Q ualified Dis tributors, based on their achievements.

Also there is oppor tunity for promotions to higher levels within the same financial year.

An example:




Variable incentives are also awarded to employees based on

per for mance dur ing the

appraisal year in ter ms of monthly number of active dis tributors in direct team, the total number of club member distr ibutors in the dir ect team and the Net Agency Credits (NAC) ear ned by direct sales, direct team sales and sales from dis tributor s of Business Mentors.

There are three bonuses that is earned during the appraisal year and they are:

1. Dis tributor Activisation Bonus

2. Dis tributor Club Bonus

3. In addition to the above they can also earn a Distr ibutor Production Override


Employees will be eligible for Distr ibutor Activisation Bonus for activising specified number of Distr ibutors in the direct team in a particular month. The same is as follows:



The various Recognition Clubs for Distr ibutors which include Bronze, S ilver, Gold and Platinum. Also for new distr ibutors there is the Rapid Starter initiative.

For every Q ualifying Distributor from your team, there is points allotted based on the type of club for which the Dis tributor qualifies. Based on total number of points, the club bonuses are offered.


An example:



This is for the upcoming Appraisal Year. Employees will start receiving Production

Overr ide once they cross the Net Agency Credit Thres holds. The per centages of Production Overr ide are on a cumulative bas is. Production Overr ide is payable on a monthly basis. The percentage and amount of Production Override on a policy will depend upon the NAC slab in which the completed policy falls.



Another inter esting observation seen in the current year is that, most of the Recr uitments are taken place within the organization. Internal recruiting happens more than external. So, followed by the appraisal of employees, they are promoted within or ganizations to various departments, or retained within the same department. This is see n from the balance sheet, as recr uitment costs are nil for the company, for the current year. This could be due to the poor sales tur nover and in the current year.



As far as training is concer ned, the poor or under per formers will be given training for about 3 months. After the three months, they will be given a period of three months to attain their tar gets. I f they fail to achieve this even after 3 months, then they will be asked to resign with immediate effect.

There is a program called as PERFORMANCE IMPROVEMENT PROGRAM (PIP ). If any of the employees, for any of the quar ter under review, have not met the minimum nor ms on NAC then they will be put to a Per for mance I mprovement Program (PIP). PIP will be fo r one full quarter divided into 6 stages of a fortnight each. Dur ing the period of PIP, the Measured Allowance paid in your salar y will be withheld and not paid. At the end of the PIP per iod, they are expected to complete all three minimum norms of NAC / Q ualified Distributors On completion of the expected minimum norms, the withheld Measured Allowances will be paid. PIP will be allowed only twice dur ing your Appraisal year and never for consecutive quarter s.


It is also lear nt that, at IDBI the per formance of the employees is rated by their immediate superiors or manager s. They are known as Bus iness Mentors . It is also s tudied that, the feedback about their per formance, is communicated either in the oral or written format to the employees.

4.10.6 LOOPHOLES: Some of the employees do not receive the feedback quite regularly. This acts as a kind of loophole as it is a mus t for ever y employee to know where he/ s he stand in compar ison to the others. This is a very valuable part of any Appraisal process in a company, there is a direct feedback given by the Business mentors to the employees. As a result, this could lead to a lot of subjectivity, which in turn could lead to Rater bias. Here at I DBI Federal it is observed that, many employees are not quite satisfied with the way their superiors are rating them. Some of the mentioned bias es and errors tend to occur, repeatedly. The s uperior s , being biased towards employees is seen as one of the major communication between the s uper iors and its employees. Communication would mostly be oneway or downward communication. This could lead to a kind of strained relations hip between disadvantages of the existing Performance Appraisal system. This could lead to a number of errors in the whole process of Per formance Appraisal. This is seen as a major drawback in their current Perfor mance Appraisal system. It is lear nt that among most of the employees, they feel they are not appraised as much as they deser ve. This could be as a result of Rater bias. A combination of different kinds of biases is seen to be involved, which points out as a black mark in the entire Performance Appraisal system. To minimize this, it is necessar y to implement a different method of Performance Appraisal system as s uch, where no single person rates an employee. This kind of interaction does not provide any scope for improvement in the superiors and subordinates. 4.10.7 PRODUCTIVITY RATE: AN INCREASE OR DECLINE? To check if the current Per formance Apprais al syste m of the company has helped in signif icant improvement in the overall productivity of IDBI Federal Life Ins urance Co. Ltd., a correlation between the Sales figures and the Attrition rate of the company is done. Sales figures were taken as an indicative of the overall productivity increase or decrease. From the primar y research analysis, it was seen that, those employees who were not ver y satisfied with the existing Appraisal system, had quit their jobs from the company. So Attrition Rate was taken as an indicative for this and a correlation test was done between the Sales figures


as well as Attrition rate to find out, if there has been an improvement or decline in the overall Productivity of I DBI Federal Life I nsurance Co. Ltd, with respect to the cur rent P er for mance Appraisal system being followed in the company. IDBI FEDERAL LIFE INSURANCE CO. LTD.


2007-2008 66836 29% 2008-2009 86298 20.83% 2009-2010 135868 14% 2010-2011 117019 18.5%

CONCLUSION: This project has been a ver y knowledgeable exper ience, as I have got a great exposure in the field of Human resource management, especially into P er formance Appraisal system and management. After studying about the exis ting Per formance Appraisal s ystem, followed at IDBI Federal Life I nsur ance Co. Ltd., in detail, and also focusing on the var ious methods and ways in which the employees are appraised, a lot of loopholes have been identified. It is also seen that ther e are means for a lot of biasnes s and subjectivity in the current appraisal system being followed. There are a few mer its associated with the current system, but after getting the employees responses, their feedback shows, there is a need for a better and more improved and efficient Performance Appraisal system for IDBI Federal Life Insurance Co. Ltd. So, I have recommended a new Performance Management and Appraisal system for the company, taking into account, all the negatives that had been associated with the present s ystem. I would also like to recommend this method to other companies in the I ndustr y, especially being in the Services industr y, as this method, is a more objective and a better way of appraising the employees.

7. RECOMMENDATIONS: Taking into account, all the demerits and loopholes and other errors associated with the existing s ystem, I would like to recommend a new Per formance Appraisal System, for I DBI Federal Life I nsurance Co. Ltd. This is the FEEDBACK APPRAIS AL S YS TEM. 360 DEGR EE


Dear Sir/Madam,

I am conducting a st udy on the Performance Appraisal System of the organization. I request you to fill in the following quest ionnaire to help me in t he collection of primary data t o validat e my study. Name:(opt ional)

Sex: Male Female

Age: Up to 20 y ears 20-30 years 30-40 years 40-50 years >50 years

please specify

Educational qualifications

1. Are y ou aware of t he company s Perf ormance Appraisal System? Yes No

2. Do y ou think a pr oper Performance Appraisal Syst em is necessary for your organ ization? Yes No


3. Does th e present Appraisal Syst em of your organization help you in getting better appraisal opportunities sub sequent ly? Yes No Cant Say

4. Are you satisfied with the exist ing Perf ormance Appraisal System of y our organ ization?

Yes No, if n ot please specify reason

5. How periodically are you appraised? Once in 4 month s Once in 6 month s Once a year Others please specify

6. How is your P erf ormance assessed? ( mult iple t icks allowed) By Immediate superiors By Superior manager s By Peer s an d colleagues of the same rank/ level Self-appraisal By subordinates

7. Do y ou think this system distinguish es the Per formers and the Non -Performers? Yes No

8. Do y ou think the curren t Appraisal System really assesses th e quality of an employee? Yes No Cant say


9. Do y ou think the curren t Appraisal syst em, has helped y ou in identify ing your Train ing n eeds? Yes No Cant say

10. Do y ou think this Appraisal system has helped in improving efficiency and productivity, b oth individually as well as for the organization, in any way? Yes No

11. Do y ou think this Appraisal system has h elped in reducing gr ievances of employees? Yes No

12. Do y ou think this Appraisal system is helpf ul in identifying the strengths and weaknesses of employees? Yes No Cant say

13. Do y ou think this Appraisal system has h elped t o increase employee mot ivat ion? Yes No Cant say

14. Do y ou think this Appraisal system has h elped in im pr oving Work lif e con ditions in the organization? Yes No Cant say


15. Do y ou think this Appraisal system has h elped y ou in any other way as well? Yes No If Yes, please specify

16. Do y ou think you n eed t o be appraised more often, wh en compared to th e curren t method? Yes No

17. How is your P erf ormance communicated t o you? Writt en form Oral f orm No comm un icat ion

18. How do you want y our per formance to be com municated? Writt en form Oral f orm No comm un icat ion n eeded

19. If you have any suggestions for the Perf ormance Appraisal system of your organ ization, please specify

Thank you for your time ..


9. REFERENCES: 9.1. Company Guide : M rs. Shanthi Yagyanath Designation: Manager Distribution- Chief ( IDBI Federal Life I nsurance Co. Ltd) Mobile No. 09943634445

9.2. Webs ites : o http://en.wikipedia.or g/wiki/I nsurance_in_India o o o o o o o o o www.lic o o o www.acadjour o o o o o www.openlear o www.perfor o o

o http://www.ques o www.scr o ucture/360%20degree%20feedback.pdf o

9.3. Articles and journals:

o An article relating to the current Insurance industr y- OVERVI EW OF INDIAN INSURANCE SECTOR, Authored by Mr. N. KANNAN M.B.A., M.Phil Research Scholar, Sathyabama University o A jour nal on 'HRM and Per formance: Achievement, Methodological Iss ues and Prospects' by Paauwe. J


9.4. Books:

Human Resource Management by Mathias and Jack man o o A Handbook of Human Resource Management Practice (10th ed.) by Michael and Armstrong.

Refining Per formance Appraisal by Thomas F. Patterson. o

Per for mance Appraisals by Terrence. H. M urphy. o

360 Degree Feedback, a Management tool by Peter Ward. o


Please find enclosed a lis t of abbreviations used in the document along with the expansion of the same: