A PROJECT REPORT ON

Performance Appraisal System of HDFC Life Insurance

SUBMITTED
TO THE UNIVERSITY OF MUMBAI

AS A PARTIAL REQUIREMENT FOR COMPLETING THE

DEGREE OF B.M.S (HUMAN RESOURCES) SEMESTER VI

SUBMITTED BY

SHUBHAM VASANT GHODAPKAR

ROLL NO: - 36

UNDER THE GUIDANCE

SAMEER SHIKALGAR
SIDDHARTH COLLEGE OF ARTS, SCIENCE AND COMMERCE
(2020-21)
 CERTIFICATE
This is to certify that SHUBHAM VASANT GHODAPKAR of BMS Semester VI
(Academic year 2021-22) has successfully completed a research project on
“Performance Appraisal System of HDFC Life Insurance” under the
guidance of SAMEER SHIKALGAR

SAMEER SHIKALGAR SURAJ PURENDARE

(PROJECT GUIDE) (COURSE CO-ORDINATOR)

________________________ ________________________

(EXTERNAL EXAMINER) (PRINCIPAL)

PLACE: - MUMBAI
DATE:-
 DECLARATION
I, HARSHAL PRKASH KHAMKAR, Student of B.M.S (Human Resources) Semester VI
(Academic year 2021-22) hereby declare that I have completed the research
project on- “Performance Appraisal System of HDFC Life Insurance”

This information presented in this project is true and original to the best of my knowledge. This
Project was previously not submitted to any university for any Degree or Diploma Course of this
or any other university.

(SHUBHAM VASANT GHODAPKAR)

Roll no: - 36

Place: -Mumbai
Date: -
 ACKNOWLEDGEMENT

I would like to thank the University of Mumbai for introducing BMS (Human
Resources) Semester VI course, thereby giving its student a platform to be abreast
with changing business scenario, with the help of theory as a base and practical as
a solution.

I am indebted to our Principal Dr. G. V. RAO for providing necessary facilities

required for completion of the project.

I take this opportunity to thank our Co-Coordinator PROF SURAJ PURENDARE for
her support and guidance. I would sincerely like to thank her for all efforts.

I would like to express my sincere gratitude towards my project guide SAMEER

SHIKALGAR whose guidance and care made the project successful.

I would like to thank my college library for having provided various references
books and magazines related to my project.

Finally, I would like to thank my parents for giving the best education and for their
support and contribution without which this Project would not have been
possible.
 INDEX
Sr No. PARTICULAR PAGE NO.
1. INTRODUCTION
 CHAPTER –1
INTRODUCTION
 INTRODUCTION

The process of Human Resource Development (HRD) helps the employee's to acquire and
develop technical, managerial and behavioral knowledge, skills & abilities and the values, beliefs
&attitudes necessary to perform present and future roles. The process of Performance Appraisal
helps the employees and management to know the level of employees Performance compared to
the standard or predetermined level.

Performance Appraisal is important to understand and improve the employee's performance

through HRD. In fact, Performance Appraisal is the basis of HRD. It was viewed that
Performance Appraisal was useful decide employee's promotion or transfer, salary
determination. But the recent developments in HRD indicate that Performance Appraisal is the
basis for employee development. Performance Appraisal indicates the level of desired
performance level and actual performance and the gap between these two. This gap should be
bridged through training, counseling, and motivation etc.

In every organization, the process of HRD helps the employees to acquire and development
technical, managerial, and behavioral knowledge, skill, and abilities, belief, and attitudes
necessary exists to achieve goals; the degree of success obtained by the individual employee in
achieving individual's goals directly determine the organizational effectiveness. The assessment
of the degree of success of an individual employee is an important part of HRM that leads to the
Performance Appraisal.

In American business, the Performance Appraisal is done to determine wage increase,

promotion, transfer, regarding the emphasis for the feedback to the employee's and assessing the
need for their training is very less or we can say it's little. In contrast, Indian companies use
Performance Appraisal for training and

development, providing feedback to the employees and personal research. They also use it in
determining wages and transfers as they do it in the American companies.

The purpose of Performance Appraisal to make a distinction between performer and non-
performer on the job.
The aim of the project is to focus on the Performance Appraisal system undergone in HDFC Life
Insurance Co Ltd (HDFC LIC). This project aims to study the need for Performance Appraisal;
how it helps the employees of the Organization to improve their abilities so as to meet both the
personal and organizational present and future requirements. Whether the organization is
reaching its standards by Performance Appraisal resulting in an increase in quality and
productivity of the employees observed.

The overriding purpose of Performance Appraisal is to help HDFC Life Insurance Company
Limited employees to improve and thus to improve organizational effectiveness. Performance
Appraisal therefore institutional needs as well as staff member needs, abilities, motivation and
expectations.
 ABOUT THE COMPANY

HDFC Life, one of India's leading private life insurance companies, offers a range of individual
and group insurance solutions. It is a joint venture between Housing Development Finance
Corporation Limited (HDFC), India's leading housing finance in situation and Standard Life plc,
the leading provider of financial services in the United Kingdom. HDFC Ltd. holds 72.37% and
Standard Life (Mauritius Holding) Ltd. holds 26.00 % of equity in the joint venture, while the
rest is held by others. HDFC Life's product portfolio comprises solutions, which meet various
customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the
added advantage of customizing the plans, by adding optional benefits called riders, at a nominal
price. The company currently has 25 retail and 9 group products in its portfolio, along with 10
optional rider benefits catering to the savings, investment, protection and retirement needs of
customers. HDFC Life continues to have one of the widest reaches among new insurance
companies with about 500 branches in India touching customers in over 900 cities and towns.
The company has also established as on office in Dubai. HDFC Life has a strong presence in its
existing markets with a strong base of Financial Consultants. Standard Life Aberdeen manages
and administers £535 billion of assets worldwide*. It offers active asset management to
institutional, wholesale and strategic insurance clients around the world, in addition to wealth
management, financial planning and advisory services, either directly to customers or through
financial advisers, in the UK.
 Our Vision & Values

OUR VISION
To be the most successful and admired life insurance company, which means that we are the
most trusted Company, the easiest to deal with, offer the best value for money and set the
standards for the industry. “The most obvious choice for all”.

OUR VALUES
Our Values Framework ‘EPICC’ (Excellence, People Engagement, Integrity, Customer-
Centricity, and Collaboration) characterizes the inspiring culture, which fosters growth and
progress, for us and all our stakeholders, for today and tomorrow.

EXCELLENT: To excel in every action with an aspiration to be the best in the industry.
PEOPLE ENGAGEMENT: Respect your colleagues and contribute towards an engaged work
environment.

INTEGRITY: To conduct in a manner that is consistent with the Company's code of conduct
and demonstrates accountability for all professional actions.

CUSTOMER-CENTRICITY: Keep policy holders interest in the center and deliver on all
commitments.

COLLABORATION: Proactively align all actions towards achieving organizational goals.

HDFC PROFILE

Housing Development Finance Corporation Ltd. (HDFC), India‟s premier housing finance
institution has assisted more than 3.3 million families own a home, since in inception in
1977 across 2400 cities and town through its network over 250 offices. It has international
offices in Dubai, London and Singapore service associates in Saudi Arabia, Qatar, Kuwait
and Oman to assist NRI‟s and PIO‟s to own a home back in India. As of December 2012,
the total asset size has crossed more than Rs. 95,000 cores including mortgage loan assets of
more than Rs. 83,800 cores.
The corporation has a deposit base of Rs. 17,551 cores, earning the trust of more than 9,
00,000 depositors. Customer Service and satisfaction has been the mainstay of the
organization.
HDFC has set benchmarks for the Indian housing finance industry. Recognition for the
service to the sector has come from several national and international entities including the
World Bank that has lauded HDFC as a model housing finance company for the
developing countries. HDFC has undertaken a lot of consultancies abroad assisting
different countries including Egypt, Maldives, and Bangladesh in the setting up of housing
g finance companies.
HDFC Bank was incorporated in August 1994, and currently has a nationwide network of
1412 Branches and 325‟s ATM‟s in 528 Indian towns and cities. The Housing
Development Finance Corporation Limited (HDFC) was amongst the first to receive an „in
principle‟ approval from the Reserve Bank of India (RBI)to set up a bank in the private
sector, as part of the RBI‟s liberalization of the Indian Banking industry in 1994.
The bank was incorporated in August 1994 in the name of „HDFC‟s Bank Limited‟, with
its registered office in Mumbai, India. HDFC Bank commenced operation as a Scheduled
Commercial Bank in January 1995.
AWARDS AND ACCOLADES:
o Awarded the Economic Times Corporate Citizen award in 2004.

o Presented „Dream Home‟ award for the biggest housing finance provider in 2004.

o HDFC Ranked as India's Third Best Managed Company by Finance Asia 2005.

o HDFC won the Best award for “Investment Management in India” at the Euro
money 2006 Real Estate Awards.

o “Best Home Loan Provider” title at the ZEE Pinnacle Awards 2006.

o “Best Strategy,” at the 4Ps Business, Marketing &Advertising Power Awards 2006.

o Dun & Bradstreet –American Express Corporate Award 2006.

o Sar Utha Ke Jiyo Among India's 60 Glorious Advertising Moments January 2008.

o Received 2008 CIO Bold 100 and CIO Security Awards.

HDFC Group Companies:

Other Companies:
 HDFC Property Ventures Ltd
 HDFC Developers Ltd.
 GRUH Finance Ltd.
 HDFC Ventures Trustee Company Ltd.
 HDFC Trustee Company Ltd
 HDFC Investments Ltd
 HDFC Holdings Ltd
 Credit Information Bureau (India) Ltd
 HDFC Securities
BANC ASSURANCE:

Career:
HDFC Bank is a dynamic bank; with a youthful and enthusiastic team determine to accomplish
the vision of becoming a world-class Indian bank. Our business philosophy is based on four core
values – Customer Focus, Operational Excellence, Product Leadership and People. We believe
that the ultimate identity and success of our bank will reside in the exceptional quality of our
people and their extraordinary efforts. For this reason, we are committed to hiring, developing,
motivating, and retaining the best people in the industry.

E-Corporate Governance:
HDFC Bank recognizes the importance of good corporate governance, which is generally
accepted as a key factor in attaining fairness for all stake holders and achieving organizational
efficiency. This corporate Governance Policy, therefore, is established to provide a direction and
framework for managing and monitoring the bank in accordance with the principle of goods
corporate governance.
Standard Life –UK:
♦ Standard Life Insurance Company is one of the most trusted Insurance Companies
worldwide based in Edinburgh, Scotland (UK). Founded in 1825, Currently over 7
million Customers worldwide, operation in all the important markets of the world like
Austria, Canada, China, Germany, Spain, Hong Kong, Ireland, and India through its
network.
♦ Standard Life listed on 10th July 2006, the biggest float on the London Stock Exchange
in the last five years.
♦ Standard Life Insurance Co. is the largest mutual insurance company in Europe.
♦ Providing a range of saving, pension, and protection and investment products.
♦ As of December 2006, Standard Life Financial Strength has total Assets under
management UK £ 125 billion (more than Rs. 10, 46, 979 or INR 10, 469, 791,000,000
cores.)

Standard Life Group Companies:

 Standard Life Investment manages assets for the group as well as third parties and has a
record of strong investment performance.

 Standard Life Healthcare is one of the largest private medical insurance providers in the
UK.

 Standard Life Bank offers a range of mortgages and savings products and had mortgage
book of £ 10.6 billion as of 31st December 2005.

Joint venture: Stake Holding Pattern

26.00% 74.00%
HDFC Life Insurance Company Limited is one of India's leading 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) 26.00% of equity in the joint venture, while the rest in held by others.

♦ HDFC Life believes that stabling a strong and ethical foundation is an essential
prerequisite for long term sustainable growth. To ensure this we have concentrated our
focus on expansion of branch network, organizing an efficient well-trained sales force,
and setting up appropriate systems and process with optimum use of technology.

♦ As all these areas from the basic infrastructure for establishing the highest possible
customer service standards.

Key strengths:
Finical Expertise
As a joint venture of leading financial services groups, HDFC Life has the financial expertise
required to manage your long-term investments safety and efficiently.

Range of Solutions
We have a range of individual and group solutions, which can be easily customized to specific
needs. Our group solutions have been desired to offer you complete flexibility combined with a
low charging structure.

Track record so far

Our gross premium income for the year ending March 31, 2009, stood at Rs. 5,564.69 cores. The
company has covered over 10, 00,000 lives as of March 31, 2009.
Our core values are drilled down to all levels of employees, as these are inviolable. We continue
to promote high integrity in business practices and shun shortcuts and unethical practices, as we
wish to be perceived as an institution with high moral standing. Since our inception in 2000,
when Indian insurance space was opened for private participation, we have consistently focused
on setting benchmarks in all aspect on insurance business. Being the first private player to be
registered with the IRDA and the first to issue a policy on December 12, 2000, our differentiators
are.
Brief Profile of the Board of Directors:

Mr. Deepak S. Parekh is the Chairman of the Company. He is the Executive Chairman of
Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited
in a senior management position in 1978. He was inducted as a whole –time director of HDFC
Limited in 1985 and was appointed as its Extenuative Chairman in 1993.He is the Chief
Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Charted
Accountants (England & Wales).

Ms. Bharti Gupta Ramola Ms. Ramola served as a Partner at PwC during 1992-2017. She
currently serves on the Boards of SRF Ltd., Feedback Infrastructure Pvt. Ltd. and Villgro
Innovations Foundation. She is also on the Governing Body of the Lady Shriram College and the
Advisory Council of Transform Rural India (a Tata Trust initiative)

Mr. Keki M. Mistry joined the Board of Directors of the Company in December 2000. He is
currently the Managing Director of HDFC Limited. He joined HDFC Limited in 1981 and
became Executive Director in 1993. He was appointed as its Management Director in November
2000.

Mr. Ketan Dalal Mr. Dalal served as a Managing Partner (West) and Joint Tax Leader of
PwC India. He is also the Founder of Katalyst Advisors Private Ltd. (formerly Katalyst Advisors
LLP), a boutique structuring and advisory company.

Ms. Renu S. Karnad is Executive director of HDFC Limited, is a graduate in law and holds
a Master's degree in economics from Delhi University. She has been employed with HDFC
Limited since 1978 and was appointed as the 21 Executive Director in 2000. She is responsible
for overseeing all aspects of lending operations of HDFC Limited.

Mr. Suresh Badami Mr. Badami joined HDFC Life in October 2013. He is responsible for
managing the sales and distribution function of the Company as an Executive Director. He has
vast experience in business management, banking, financial services and sales & distribution.
Mr. Prasad Chandran Mr. Chandran is the former Chairman and Managing Director of
BASF India Limited (BASF). He was also the Chairman of CIBA India Limited and Cynamide
India Limited, before the two were merged into BASF.

Mr. VK Viswanathan Mr. Viswanathan is the former Chairman, and was also designated as
the Managing Director of Bosch Limited. He was the Country Head and President of Bosch
Group in India from February 2008. He was adjudged the best CEO in India by Business World
Magazine for the year 2012. He is Director on the Boards of several other prominent companies.

Mr. Sumit Bose Having joined the Indian Administrative Service in 1976, Mr. Bose has
served in various positions with the Government of Madhya Pradesh and the Government of
India, retiring as the Union Finance Secretary. He has also held positions of Secretary -
Disinvestment, Secretary - Expenditure, and Secretary – Revenue, in the Finance Ministry,
Government of India.

Mr. Ranjan Mathai Mr. Mathai joined the Indian Foreign Service in 1974. He has served as
the Foreign Secretary of India. He has also held the positions of High Commissioner of India to
the UK and Ambassador of India in France.

Ms. Vibha Padalkar Ms. Padalkar joined HDFC Life in August 2008. Prior to her
appointment with HDFC Life, Ms. Padalkar worked in varied sectors, such as global Business
Process Management, global FMCG, and in an international audit firm. Ms. Padalkar has been
felicitated twice by the Institute of Chartered Accountants of India, and several times by
Business Today as being amongst the 'Top 30 most powerful women in business'. She has vast
experience in business management, finance and risk management.

Insurance Companies in India (Competitors)

Before Insurance sector was opened to the private sector Life Insurance Corporation (LIC) was
the only insurance company in India. After the opening up of insurance sectors in India there has
been a glut of insurance companies in India. These companies have come up with innovative and
flexible insurance policies to cater to varying needs of the individual. Opening up of the
insurance sector has also forced LIC to tighten up its belt and deliver better service. All in all it
has been a bonanza for the consumer.

Major Life Insurance Companies In India Are:

Aviva life Insurance

SBI Life Insurance

Birla Sun Life Insurance

HDFC Standard Life Insurance

ICICI Prudential Life Insurance

ING Vysya Life Insurance

Kotak Mahindra Life Insurance

LIC

Max New York Life Insurance

Met Life India Insurance

Reliance Life Insurance

Shriram Life Insurance

TATA AIG Life Insurance

Bajaj Allianz Life Insurance

Study Design

Objective of the study

 To study the performance appraisal system of HDFC Life insurance Co Ltd.

 To asses the degree of awareness among employers and employees on performance
appraisal in HDFC Life Insurance Co Ltd.

 To know the satisfactory level and the comfortable level between the employers and
superiors.

 To asses weather the appraisal is done without any bias the employees.

 To know and identify merits and demerits of Performance Appraisal in HDFC Life
Insurance Co Ltd.
 INTRODUCTION OF PERFORMANCE APPRAISAL

In an informal sense, performance appraisal is as old as mankind itself. In a formal sense,

performance appraisal of an individual began in the we dynasty (A.D 261 – 265) in China.
Where an imperial rater appraised the performance members of the official family. In 1883 the
New York City Civil Services in the USA introduced a formal appraisal program shortly before
World War I. The US army adopted the Man to Man rating system for evaluating military
personnel. This early appraisal was called merit rating. In early 50’s, attention shifted to the
performance appraisal of technical professional and Managerial personnel.
Since then, the philosophy of performance appraisal has undergone tremendous changes.
Different expert has used different terms to describe this concept. The common terms used,
include merit rating, behavioral assessment, employee evaluation personnel review, staff
assessment, progress report and performance appraisal.
“Performance appraisal is the process of evaluating the performance & qualification of the
employees in terms of the requirements of the job for which he is employed, for the purpose of
administration including placement, selection for promotion, providing financial rewards & other
action which we required differential treatment among the group as distinguished from actions
affecting all members equally”.

BY HEYEL
“Performance appraisal determines who shall receive merit increase, counsel’s employees their
improvement; determines training needs; determines promo ability; identifies those who should
be transferred more over, it improves employee job performance; encourage employees to
express their views or to seek clarification on duties; broadens their capacity & potential;
promotes a more effective utilization of manpower and improves placement; facilitates selection,
reward and increase the analytical abilities of supervisors.”

BY RONALD BENJAMIN

PERFORMANCE APPRAISAL
Performance appraisal is one tool available to successfully manage performance
management process.
Performance appraisal may be defined as “The process by which an employees
contribution to the organization during a specified period is assessed.”
Performance appraisal is an important strategic management tool.
Performance Appraisal = Performance + Appraisal
Performance Defined as :-
 Altitudes and Traits
 Achievements of goals and outcomes
 Behaviors

Appraisal Defined as :-
 Measurement of facts, figures and means.
 Analysis of verifiable components of a given job.

Need For Performance Appraisal

To effect promotion based on competence and performance
To asses the training & development needs of the employees
To bridge the gap between the exiting performance & desired performance.
To help each employee to understand his own strengths & weakness.
They can be mechanism of increasing communication between the employee and his.
Supervising officer so that each employee gets to know the difficulties of his subordinates and
attempts to solve them.
It provides legally defensible reasons for making promotion, transfer, and reward and discharge
decision.
They can be instruments to provide an opportunity for employees for self reflection and goal
setting so that individually planned and monitored development takes place.
They can assist in a variety of personnel decisions by generating data about each employee
periodically.
Develop inter personal relationship
To help in salary increment
To prevent grievance & in-disciplinary activities
Provide information about the performance ranks.
Purpose Of Performance Appraisal

Purpose Of Performance Appraisal

Evaluation Development

1) Evaluation:

o Accurately measures performance

o Establishes performance standards that are clearly related to the

organizations missions and objectives.

o Develops employee where necessary or take corrective action where

appropriate.

o Provide continues feedback to employee about their performance.

Development

Assist the training and continued personal development of an employee.

Employee are more motivated committed and competent to achieve.

 Methods Of
Performance Appraisal

Traditional Method Modern Method

Straight Ranking Method Assessment Center

Man to Man Comparison Method Appraisal by Result or Method By

Grading Objective

Graphic Rating Method Human Asset Accounting Method

Forced Distribution Method Behaviorly Anchored Rating Scales

Check List

Free from Easy Method

Critical Incident

Group Appraisal

Field Review Method

Advantages
I. It is easy to understand, use and permits a statistical tabulation of scores.
II. The scores indicate the worth of every individual.
III. It’s the most common evaluation tools in use today.
Disadvantage
Its arbitrary and rating is generally subjective.
It assumes that each characteristics is equally important for all jobs.
 The person who is making the judgements is freed from direct “quantitative” terms in
marketing his decision of merit on any quality.
The person whom is making the judgement can makes as fine discrimination of merit.
Use Of Performance Appraisal

Performance Compensation Informational

Improvement Adjustment Inaccuracies

Use Of
Performance Appraisal

Staffing Process Carrer Planning Placement

Deficiencies And Development Decisions

Performance Improvement:-
Performance appraisal helps in improving the performance of employee through work planning,
skill identification and potential development motivation, learning and development activities are
fulfill in employee’s performance.

Compensation Adjustment:-
When employees give superior performance are rewarded through increase in their compensation
to motivate them to further excel in their job. Performance appraisal most popular differentiates
compensation of employee for performance reason.

Information in accuracies:-
Performance appraisal provides opportunity to employees and their managers to share
information ideas, requirements, expectations and feedback to remove any misunderstanding
between the manager and the employee.

Placement division:-
Performance appraisal is a technique for making decision on employee placements like
promotion, demotion, transfer, relocation, reassignment etc.

Career Planning and Development :-

Performance appraisal give the original data and information about the current performance level
and development needs of employees. By this process we identified the career planning and
developmental need.

Staffing Process Deficiencies :-

By performance appraisal, we identifying the performance and potentialities for future
development of employees. So the accuracy and reliability of recruitment and selection process
can be judge. So the appraisal is test of reliability and validity of selection process and
appropriate adjustment can accordingly be undertaken.
ADVANTAGES OF PERFORMANCE APPRAISAL

Advantages of
Performance Appraisal

Organization
Individual level Team Level level

Individual Level :-
 Recognition of past effort
 Development requirement can be uncovered

Team Level :-
 Alignment of effort with objective.
 Motivation of team members

Organization Level:-
 Development of human resources.
 Achievement of key objective.
 Best and focused utilization of human resources.
FACTORS AFFECTING PERFORMANCE APPRAISAL

Motivating Reinforcement

Factors Affecting
Performance Appraisal

Organization Behavior Modification

Motivation :-
Motivation are the forces that energize direct and sustain a person efforts.
Motivated people with adequate ability and understanding of the job, will be more productive.

Reinforcement :-
Behavior followed by positive nature probably will be repeated. Reinforce led to positive
consequences that motivate behavior.

Organization Behavior Modification :-

Reinforcement in organizational setting can be used by people’s behavior and improves
performance by systematically managing work.
BENEFITS OF PERFORMANCE APPRAISAL

Benefits Of
Performance Appraisal

Benefits to Benefits to
Organization Employees

Benefits to Organization :-
 Documentation of performance appraisal and feedback may be needed for legal defense.
 Appraisal provides a rational basic for constructing a bonus or merit system.
 Appraisal dimensions and standards can help to implement strategic goals and clarify
performance expectations.

Benefits to employee :-
 Performance appraisal is as important for good performers as for weak employee.
 Performance feedback is needed and desired for brining about improvement in performance.
 Assessment and recognition of performance levels can motivate employee to improve their
Performance.
 PERFORMANCE APPRAISAL RULES IN HDFC LIFE DELHI

 TITLE:
PERFORMANCE APPRAISAL aims at creating alignment of your goals with those of the
company and enables you to effectively manage performance – for yourself and your team.
Performance Appraisal Report is an Index of an Employee/Executive's works performance over a
given period of time. It is crucial for his/her Career Growth as it indicates the Strengths,
Weaknesses (if any), Training needs, Nature of job being performed, problems faced in work
situation.

 OBJECTIVES:
 The objectives of the Performance Appraisal System are:

 To set Norms and Targets of Work Performance, as well as, to monitor the Work
Progress of
 Employees.

 To facilitate placement of Employees in accordance with their suitability for different

types of
 Assignments,

 To provide an Objective basis for determination of Merit, Efficiency and Suitability for
the
 purpose of promotion.
  To identify areas requiring exposure for Training/Development.

EVALUATION:

The Performance Appraisal System seeks to evaluate:

 The Work Performance of an Employee on the present job in relation to the expected
levels of
 performance, both qualitative and quantitative.

 The extent of development achieved by the employee during the period under review.

 Evaluation of behavioral Attributes Attitudes and Abilities.

 Evaluation of potentials for assuming higher responsibility.

COVERAGE:

The appraisal shall cover

 Performance during the period from 1s1 April to 31st March of every year.

 All regular employees of the company. There shall, however, be 5 different Formats for:

 Class III and IV

 E-0

 E-1 to E-3

 E-4 to E-6

DEFINITIONS:
Executive: An executive is a person employed under the authority of HDFC LIFE in any of the
Executive grades but shall not include a Trainee (Technical or Non-Technical). This would not
include Directors or any of the other person appointed by the President of India, for any of the
offices in HDFC LIFE or its subsidiaries and associated offices.

Appraisal Year: The appraisal period is 12 months of financial year between 1 st April of a year
to 31st March of succeeding year.
Appraisee:
a) An appraise is an executive who has worked under the direct control and supervision of
another executive for a minimum period of 4 months within the time span of 1s1 April -
31s1 March (12 months) in an Appraisal year;
b) Seconded Appraise is an executive who belongs to a Professional Group but works under
the direct control of different group.

Appraisers:
There are two levels of appraisers. The First Appraiser, also called Reporting Authority, means
an executive under whose direct control and supervision the Appraise operates. In case of
seconded appraise, immediate functional senior executive (who may be equal in status to the 18t
Appraiser) could be the Joint Appraiser with the Reporting Authority, and he would only record,
whether or not agrees with the observations of the first Appraiser.

The second Appraiser also called Reviewing Authority means a senior executive who oversees
the activities of the Appraise and who offers professional advice to, or controls, the first
Appraiser. Normally, the assessment of performance of an Appraise is considered in detail by
these two Appraisers and they should briefly explain the rationale for the grade Specific
observation must be recorded for very high or low grading in comments column.

PROCEDURE:

PAR/ACR in respect of an employee is required to be assessed/written by levels indicated

below:-
By the Reporting Officer under whom employee is working,
By the Reviewing Officer
Class III/IV& E-0 employees:
The reporting officer for writing PAR of an employee of Class III/IV and E-0 level category will
be the executive under whose control the employee is working. The Reviewing officer will be of
one grade above the grade of Reporting Officer.
The PARs in respect of Class III and IV employees duly reviewed/accepted is maintained at
Region/Institutes/Headquarters Group-wise in the concerned establishment section/ PAR
Sections.

The PAR in respect of E-0 to E-6 level executives are being maintained in PAR Department at
Headquarters of R&P Division. As regards, E-7 and above all such reports which are received
from Regions/Institutes/Headquarters are maintained at Chairman-cum-Managing Director's
office.

The Reporting officer will be the officer to whom the executive reports for his day to day work.
Review of the PAR will be done by the executives to whom the Reporting officer is responsible
for his functions. Accepting authority will be the executive higher than the Reviewing officer at
different stages depending upon the nature of the grades, as per delegation of Powers in PAR
Rules.

The Performance Appraisal Reports of Executives of E-6 level i.e.

Deputy General Manager and above will be submitted to concerned Functional Director for final
review and acceptance.

The Performance Appraisal Reports of Executives of E-5 level i.e. CM and equivalent will be
reviewed by the RD/ED/Nominee of the Director concerned.

The Performance Appraisal Reports of executives up to E-4 level i.e. Manager and equivalent
would be reviewed by the Functional Head/GM/GGM not less than E-7.

ACCEPTING AUTHORITY:
A very senior officer who is designated under the Rules (refer to Annexure VII) to relook at
the performance of the Appraise, and review the observations of the first and second Appraisers.
He would finally determine and evaluate the performance of the Appraise. In case of disparity
between his assessment and that of the first and second Appraisers, he has to record the basis of
his revised assessment. He is expected to record specifically his comments in cases of overall
performance grading A+ or D, and low score for personality traits by either of the earlier two
Appraisers.

PERFORMANCE APPRAISAL REPORTS (PAR) OFFICER:

The PAR activities are a part of personnel function, but the PAR system is essentially based on
support of various departments. This demands that a senior officer not less than E4 of the
personnel department is designated as PAR Officer, who will have responsibility to respond
quickly to the enquiry. Each Regional Office/Institute will have a PAR Officer. PAR Officer will
report directly to Head of P&A in Regional Offices, who has the over all responsibility of
development of human resources. In respect of offices in HDFC LIFE, Corporate PAR Officer
will function under G.M.( Recruitment and Promotion).

APPRAISAL YEAR FOR PROBATIONARY PERIOD:

The Appraisal year will apply in cases of all Regular executives of HDFC LIFE
Special Forms and relevant instructions already exist for assessment of performance during the
probationary period mentioned above, and these would continue to be operative in the future. It
is essential that the process of assessing-performance for completion of the probation period
commences immediately after the end of the prescribed time, and decision of the appropriate
authority is communicated to the concerned executive within six weeks. This will ensure that
further appraisal of the executive as Regular employee is not delayed.

APPRAISAL FOR PART-PERIOD:

The minimum period of 4 months of linkage between the Appraise and Appraisers (Reporting
Authority, Reviewing Authority and Accepting Authority) may be disturbed due to transfers etc.,
in some cases. The guiding principle for ensuring fair assessment in the event of loss of linkage
(minimum 4 months) in such cases would be as under:
A minimum of 4 months interaction period must subsist between the Appraise and the first
Appraiser, In case this is not so, the second Appraiser would make his comments on the
performance of the Appraise. In case he had the opportunity of overseeing activities of the
executive for a minimum of 4 months during the Appraisal period in consultation with the
existing new Reporting Authority, i.e., first Appraiser.
In case there is less than 4 months interaction between the Appraise and the second Appraiser,
the necessity of having second Appraiser would be waived, and the final assessment will be
made by the Accepting Authority on the basis of the report (formal or informal) of either first or
second level Appraiser or both,

In case of an Appraiser’s transfer when he has worked for less than 4 months period with the
Reporting Authority, the erstwhile Reporting

Authority will forward Part-Period report about the Appraiser’s performance to the appropriate
Authority (in this case the new Reporting Authority). This report will be attached to the PAR
formal when the appraisal procedure is initiated for the executive for current year. The new
Reporting Authority/ Reviewing Authority may consider the Part-report for assessing the
Appraiser’s performance for the total year, and refer to this in his assessment.

The Reviewing Authority would also be subjected to the limitation of 4 Month’s period of inter-
action between the Appraise and him (Appraiser). In case this condition is not satisfied the
concerned Accepting Authority will finally record his assessment in consultation with the first
and or second Appraiser who have known the Appraise while assigning final grade to the
appraise.

APPRAISAL IN SPECIAL CASES:

In case an executive who has worked in a number of positions of short Duration during 12 month
period, the assessment will be made by the Reviewing Authority/Accepting Authority currently
associated with the Appraise. In case none of the above mentioned employees has the benefit of
assessing the performance for the prescribed minimum period of 4 months, this may be duly
recorded, and the Accepting Authority should complete the PAR

Employee on Study Leave:

The Reporting Officer/PAR officer is to initiate action to secure a Report from the Head of
Institute where the appraise has been placed for advanced learning / training without waiting for
the appraise to fill the personal details etc. The Appraiser would prepare summary report about
his performance on the basis of the report received from the Institutional Head.
In the event of the non-compliance on the part of the Institution to send a report, appraise be
advised to send a report of his studies to the appraiser through the Institutional Head.

Employee on Long Leave:

In case an appraise is on medical leave (for 4 months or more), the Reporting Officer in this case
would record the nature of medical problem/ reasons for long medical leave. The medical report,
if available, be attached with the PAR.

Employees on Suspension for alleged misconduct:

The Reporting Officer will initiate action without waiting for the Appraise to fill in personal data
etc. He will record his observations about the Appraise which may not deal with his performance
as an employee but make reference of his conduct, during the period of suspension, if so desired.

Erring Appraise:
In case where an Appraise deliberately does not fill in the personal data or record job parameters
/ achievements within the prescribed time limit, this deliberate delinquency, may be recorded by
the Reporting Officer. The Appraiser would initiate action on other aspects of performance
appraisal as per Rules.

THE GRADING SYSTEM:

The Block numerical values have been assigned to assist the 1st Appraiser in making an overall
assessment. The overall total score for determining a grade is merely a guide and the final grade
may be at variance with the total score. The second Appraiser i.e. the Reviewing Authority and
the Accepting Authority, have to take an overall view, both of the performance and the
personality of the appraise, while determining the 'FINAL GRADING'. The Accepting Authority
will arrive at the Final Grading by judiciously weighing the assessment of Reviewing Authority,
who may belong to functional discipline of the Appraise along with the detailed assessment of
the Reporting Authority.

The overall rating in grades in respect of appraisals would be as under:

A+ - Exceptional {rare occasions)

A - Top Performer
B - Very Good
C - Adequate
D - In Adequate

The final grade given by the Accepting Authority after detailed and cfue consideration to the
rating by the 1st and 2nd Appraisers, will be the DECISIVE GRADE of the Appraise executive.
In case this final rating is different from those of the 1sl and 2nd appraiser, adequate justification
MUST be mentioned by the Accepting Authority. There must be adequate explanation by the 1st
and 2nd appraisers and the Accepting Authority for any grade assigned to the appraise. In the
absence of adequate explanation the report will be considered incomplete and returned back to
the appraisers for conforming to the directives contained in the instructions.

THE GRADES
The performance categories are defined as follows:
EXCEPTIONAL (A+)
This is a person whose job performance and personality attributes are clearly remarkable. This
person meets or exceeds Company's highest standards and achieves extraordinary results in
extraordinary circumstances. A rare individual who achieves this once in a while.

TOP PERFORMER (A)

This is some one whose job performance is noteworthy and he makes valuable contribution to
the organization. He does not have any negative personality attributes. He is one of the top
performers.

VERY GOOD (B)

This is an individual whose performance consistently meets company's expectations. This is a
person who is unquestionably above average.

ADEQUATE (C)
This is a person whose overall performance meets basic requirements of the job and the basic
targets.

IN-ADEQUATE (D)
This is an individual who needs to improve his or her performance and has not achieved results
in spite of guidance and counseling by appraisers. This aspect must be specially stated in the
comments/remarks column of the PAR format by the appraisers.

ACHIEVING ORGANIZATION GOALS

The achievement of an organization’s goals rests with its people. The more talented the people
and the better they are managed and coordinated toward those goals the greater the chance of
success. Performance appraisal is all about providing a way to do this.

The appraisal process starts with a manager and employee setting goals for the year together. The
most effective goals are measurable and have easy to understand performance standards.

CHAPTER-2
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY
In order to carry out the proposed study data are to calculated and analysis is accordingly. There
are two main sources of data collection i.e. primary data and secondary data.

Primary data :- it mean collection of the information for the first time. In order to collect
such type of information QUESTIONNAIRES were constructed and information was collected
from the respondents.

Secondary Data :-
In order to carry out my project successfully I have relied on the Secondary data already
available. Secondary data includes:-
 Annual reports of HDFC LIFE
 Website of HDFC LIFE i.e. www.hdfcslic.org
 Monthly publications of HDFC LIFE i.e. corporate finance report.
 Libraries of HDC SLIC and many publication available in the Library of HDFC LIFE
Academy.
 Field Work:
Fieldwork is done for the purpose of collection of data. The fieldwork involved here are:
Regular research to gather information on the relevant topic and have them compiled according
to the
project specification.
For getting proper guidance for the project, often discussion with the guide
Objective of the Study
 To study the performance appraisal system in the organization.
 To find out how the performance of employees is assessed.
  To review how the performance appraisal system helps in placement, selection,
promotion and transfer of the employees.
 To find out the problems faced by the staff in preparing their BBO‟s (Business Building
Objective).
 To offer suggestions and recommendation regarding the existing performance appraisal
system in the company.

RESEARCH DESIGN
Research design in the conceptual structure with in which research is conducted, it constitute the
blue print for the collection measurement and analysis of data for the preparation of effective
research.

 Sample size :- Number of person on which the actual survey is conducted. The simple
size of employee working in the service sector

 Sample procedure:- Simple random sampling is used as a means to collect data from the
target population.

 Data collection instrument :- The study is based upon the analysis and interpretation of
questionnaire and schedule prepared to gather information relevant to the awareness. The survey
instrument included 16 open ended question in the beginning of the questionnaire the
demographic data and information about the number of years employee are working in HDFC
LIFE is collected.

 Mode of analysis:
The methods used to analyze the data are as follows:

1) To study the importance of performance appraisal in the organization.

2) To find out whether the employees are satisfied with the present performance appraisal system
or not.

3) Interpret and analysis of the data and present it in a proper manner.

4) Uses of Microsoft excel for preparation of graph.

CHAPTER – 3
Literature Review
 LITERATURE REVIEW

Major Insurance Industry Trend

Although the insurance sector has had at least one spectacular disaster during the current

financial crisis, in the shape of the huge losses sustained by American International Group

(AIG), it has, by and large, not been nearly as badly damaged by the crisis as the

global banking sector.

In a considered paper on the impact on the sector of the crisis, Zurich Re author, Marian Bell,

argues that although insurers and banks are both suppliers of financial services, and together

constitute the bulk of the financial services industry, they remain very distinct businesses, with

different regulatory regimes, and a different approach to risk. Thus, it is not surprising that the

financial crisis has affected the two related businesses of banking and insurance differently

The insurance sector has been exposed to the current financial crisis in several ways. It invests in

equities, and, substantially, in banking stocks (which gives it exposure to bank losses through

share price losses in its investment portfolio), and in corporate investment grade bonds, about

60% of which come from the finance sector. Insurance companies have also, in recent years,

become much more involved in the capital markets, with some insurance lines being securitized

and sold to the capital markets

However, this does not pose as great a risk as the banks investing in asset-backed securities,

many of which turned toxic as the US subprime mortgage crisis developed. The International

Association of Insurance Supervisors (IAIS), which represents insurance regulators and

supervisors from some 190 jurisdictions around the world, has a clear view of the global

insurance industry. In a communiqué issued on December 17, 2008, it said that the global
reinsurance sector “remains resilient amid the financial crisis.”
The IAIS made the remarks in the context of publishing its fifth annual overview of the financial

conditions of reinsurers, the Global Reinsurance Market Report 2008. The overview assessed the

reinsurance market’s stability and interrelated risks, as well as the impact of the current turmoil

on the sector’s ability to transact business. The point is that reinsurers, who can be thought of as

the companies to which insurance organizations hand off some of their book risk, so as to dilute

their own positions, play an important role in the functioning of efficient insurance markets

across the world. They act like shock absorbers, particularly in providing disaster coverage.

The reinsurance business, as is true for the whole insurance sector, is very cyclical, with good
years and bad years. Another cycle in the sector is that of hard pricing versus soft pricing. Hard
pricing, basically, takes over after the sector has endured one or more particularly bad years, and
the cost of insurance across a whole range of lines of business rises sharply. Normally, the
capacity in the industry is enough to ensure that competition for business keeps prices on the low
side. Any insurance company that tries to raise prices finds its customers going elsewhere, so no
single organization has the power to “harden” prices. This can only happen when capacity is
taken out of the industry, again, usually after companies have made losses through massive
payouts on disasters.

The IAIS points out that, following record losses in 2005, particularly hurricane losses and flood
damage, both 2006 and 2007 were profitable years for the reinsurance sector. This gave the
sector a solid financial base to weather the challenges of the financial crisis, the IAIS says.

Zurich Re, in its report, quotes the IAIS as saying that no insurers have, so far, experienced
“liquidity difficulties as a result of the recent market turmoil.” They have all remained open for
business, and have been transacting business in a way that the banks clearly have not.

In all, the Zurich Re report says, insurers’ exposure to the toxic asset-backed securities market
amounts to no more than 1% of assets in aggregate. In effect, the report says that the upturn in
the insurance industry’s pricing cycle in 2008, with prices hardening in some lines of business,
led insurers to start redeploying their capital away from potentially “dodgy” derivatives
investments, and back into their core lines of business.

It is important to understand the difference between the types of risk run by the two sectors. As
the Zurich Re report notes, the banking sector invested in products where the underlying risk is a
financial or market risk (such as credit worthiness, price volatility, or exchange-rate volatility).
Insurance-linked securities, on the other hand, are products where the underlying risk is a real
event, such as a natural catastrophe, a fire, or a motor accident. The various types of financial
risk can, in some circumstances, all turn out to be related, creating a “perfect storm.” With
insurance risk, however, the events are fundamentally unrelated and uncorrelated. They are non-
systemic, idiosyncratic risks. This means that in financial risksthe risk can be aggregated in ways
that prevent hedging strategies from working (all prices fall when markets collapse). “The risks
cannot be diversified away by investing in other financial and market risks,” the report says. In
contrast, insurance-linked securities offer the prospect of diversification and are not subject to
the same degree of contagion as financial risk. Here again, this explains why the insurance sector
has come out of the crash better than the banking sector.
 CHAPTER – 4
DATA ANALYSIS AND FINDINGS
 SURVEY

Opinions No. Of Respondents Percentage

Yes 42 59.2%
No 18 25.4%
Maybe 11 15.5%

Total 71 100%
From the above it is evident that 59.2% of the employees feel that
performance appraisal is quite essential for any organization.

Opinion No. Of Respondent Percentage

Yes 50 70.4%
No 8 11.3%
Maybe 13 18.3%
Total 71 100%
 From the above data it is evident that 70.4% of the respondents feel
that performance appraisal is very essential in the organization,
where as 11.3% employees feel it is not essential in organization.

Opinion No. Of Respondents Percentage

Yes 50 70.4%
No 7 9.9%
Maybe 14 19.7%
Total 71 100%
From the above data it shows that 70.4% of employees feel that organization
facilitate growth & learning due to performance appraisal, where as 9.9% of
employees feel that organization does not provides growth & learning of
employees and 19.7% employees are not sure.

Opinion No. Of Respondents Percentage

Agree 50 70.4%
Disagree 21 29.6%
Total 71 100%
From the above data it is evident that 70.4% of the employees feel that the
performance appraisal system really assesses the quality of an employee,
where as 29.6% feel that it does not assesses the quality of an employee.

Opinion No. Of Respondent Percentage

Quarterly basis 30 42.3%
Half-yearly basis 22 31%
Annual basis 19 26.8%
Total 71

From the above data it is evident that 26.8%of the employees feel that
performance appraisal should be done on annual basis & 31% of the
employees feel should be in done on half yearly basis 42.3% of the employees
feel should be done in quarterly basis.

Opinion No. Of Respondent Percentage

Strongly Agree 16 22.5%
Agree 45 63.4%
Strongly Disagree 3 9.9%
Disagree 7 4.2%
Total 71 100%
From the above data it is evident that 63.4% of the employees „agree‟ that
performance appraisal system of the organization distinguishes performs &
non performers, where as 22.5% strongly agree and 14.1% disagree doesn‟t
distinguishes performers & non-performers.

Opinion No. Of Respondent Percentage

Yes 58 81.7%
No 13 18.3%
Total 71 100%
From the above it shows that 81.7% of the employees feel that periodic
performance appraisal of the employee is required for maintaining efficiency
of individual and organization and above 18.3% of the employees feel that it is
not required to maintained.

Opinion No. Of Respondent Percentage

Yes 32 45.1%
No 16 22.5%
Maybe 23 32.4%
Total 71 100%
From them above data it shows that 45.1% of the employees are aware on
which their performance is appraised but 22.5% of the respondents feel that
they are not aware of the basis on which their performance is appraised.

Opinion No. Of Percentage

Respondent
Seniority 9 12.7%
Performance 26 36.6%
Recommendation & 5 7%
Trade Union Influence
Both A & B 31 43.7%
Total 71 100%
From the above data it shows that 36.6% of the employees feel that
performance appraisal in railways is based upon performance 43.7% feel that
it based on both performance and recommendation 7 trade union.

Opinion No. Of Respondent Percentage

Yes 63 88.7%
No 8 11.3%
Total 71 100%

From the above data it shows that 88.7% of the employees feel that
performance appraisal is contributor to encourage better job, but 11.3% of
the employees feel that it is not a contributor for job.
 Opinion No. Of Respondent Percentage
Strongly Agree 19 26.8%
Agree 38 53.5%
Strongly Disagree 11 15.5%
Disagree 3 4.2%
Total 71 100%
From the above data it shows that 80.3% of the employees feel that appraisal
system discovers potential and make their short comings and 19.7%
employees feel that it does not discover potential.

Opinion No. Of Respondent Percentage

Strongly Agree 6 8.5%
Agree 47 66.2%
Strongly Disagree 7 9.9%
Disagree 11 15.5%
Total 71 100%
From the above data it shows that 74.7% of the employees agrees with the
above statement and 25.4% disagree.

Opinion No. Of Respondent Percentage

Written Form 18 25.4%
Oral Form 8 11.3%
Open Communication 33 46.5%
No Need 12 16.9%
Total 71 100%
From the above data it is evident that most of the employees feel that their
performance should be communicated to them in a Open form.

Opinion No. Of Respondent Percentage

Formal 51 71.8%
Informal 20 28.2%
Total 71 100%

From the above data it’s evident that 71.8% feel of the employees feel that
counseling in an organization should be of formal kind and 28.2% of
employees feel counseling should of informal kind.
 Opinion No. Of Percentage
Respondent
Formality 12 16.9%
Identifies Strength & 37 52.1%
Weakness of the Employee
To know the areas of need 22 31%
for development
Total 71 100%

From the above data it’s evident that 31% of the employees feel that
counseling is used to know the areas of development and 16.9% feel that it is
just a formality and 52.1% feel that it identifies the strength & weakness of
the employees.

Opinion No. Of Respondent Percentage

Frequently 21 29.6%
Sometimes 30 42.3%
Rarely 15 21.1%
Never 5 7%
Total 71 100%
From the above data it’s evident that 42.3% of the employees said that they
sometimes and 29.6% frequently speak with their superiors about
performance.

Opinion No. Of Respondent Percentage

Strongly Agree 18 25.4%
Agree 32 45.1%
Strongly Disagree 11 15.5%
Disagree 10 14.1%
Total 71 100%
From the above data it’s evident that 70.5% of the employees are strongly
agree and 29.6% agree that training & development the quality of the
employees in the organization.

Opinion No. Of Respondent Percentage

Strongly Agree 11 15.5%
Agree 43 60.6%
Strongly Disagree 7 9.9%
Disagree 10 14.1%
Total 71 100%
Almost 76.1% of the respondents agree that counseling is helpful in improving
the performance.

Opinion No. Of Respondent Percentage

Strongly Agree 6 8.5%
Agree 38 53.5%
Strongly Disagree 7 9.9%
Disagree 20 28.2%
Total 71 100%
Only 62% of respondents agree that the company gives them non-monetary
incentives to motivate them, and 38.1% disagree on this aspect.

Opinion No. Of Respondent Percentage

Strongly Agree 2 2.8%
Agree 49 69%
Strongly Disagree 7 9.9%
Disagree 14 18.3%
Total 71 100%
Only 71.8% of the respondents agree that the overall present Appraisal
System of HDFC LIFE is satisfactory. On the contrary 28.2% of the
respondents feels that the overall present appraisal system of HDFC LIFE is
not satisfactory.

CHAPTER-4
CONCLUSION
 CONCLUSION

The basic lacuna in the scheme observed by us is due to the fact that job parameters are not
explicitly laid sown in the beginning of the year or through mutual consent between the appraiser
and the appraise, which has been the central consideration in the existing scheme.

Also the present scheme is not at all transparent, which is unable to motivate the employee, as he
is unaware of his ACR grading. For this, a mechanism should be introduced in the system to
make the individual aware of his ACR grading of the precious year, to provide him an
opportunity for the future improvement and development.

Also counseling should be made effective by involving the individual to suggest measures for
solving his problems and developmental needs. Counseling should be held regularly at fix
intervals for the employees having been awarded adequate and inadequate grading.

The performance appraisal system at HDFC LIFE has certain loopholes which need to be
eliminated for the efficient and effective working of the employees and also for the better overall
growth of the organization on the whole.