PROJECT REPORT ON TOTAL QUALITY MANAGEMENT

CONCEPTUALIZATION
This is Total Quality Management Project Report. Human resource is the most important factor for any organization and success of any Organization is depending upon its resource .If human resource of organization is not happy with the organization. It will adversely affect the organization. The higher degree of commitment toward work will improve productivity and will decrease rejection cause due to human factor. So to make the people happy is the responsibility of the organization. So this study is helpful to measure the level of commitment toward work and to know the factor affecting the commitment level .

QUALITY:1. Quality means fit ness for use. 2. Quality means productivity, competitive cost, and timely delivery, total customer satisfaction. 3. Quality means conformance to specification and standard. 4. Conformance to requirements. 5. Quality is what the customer says 6. Quality means getting every one to do what they have agreed to do and to do it right the first time and every time.

TOTAL QUALITY :-

It means all the people of the organization are committed to product quality by doing right things right, first time, every time by employing organization resource to provide value to customer.

TOTAL QUALITY MANAGEMENT: It is the process designed to focus external/internal customer expectation preventing problems building ,commitment to quality in the workforce and promoting to open decision making.

TOTAL:
Every one associated with the company is involved in continuous improvement, in all functional area, at all level.

QUALITY:
Customer express and implied requirement is met fully.

MANAGEMENT:
Executive are fully committed Decision in a planned way. To maintain existing lever of quality. To improve existing lever of quality. Effective utilization of resource.

PRINCIPLES OF TQM:1.Delight the customer 2. Management by fact 3. People based management 4. Continuous improvement 5. Strong leadership 6. Quality system measure& record 7. Team work, Team accountable, correct problem 8. People oriented technology, speed.

FOUR C’S OF TQM
1. Commitment 3. Communication 2. Comptence 4. Continuous improvement

FACTOR AFFECTED THE COMMITMENT OF THE EMPLOYEES:General worker attitude toward the company. General worker attitude toward the supervisor. Lever of satisfaction toward job standard. The lever of consideration the supervisor shows to his subordination. The workload & work pressure level. The treatment of individual by the management

Worker attitude toward the fellow worker.The lever of worker’s satisfaction with the salaries The level of worker pride in the company and its activity Worker reaction to the formal communication network in the organization. Intrinsic job satisfaction level of the worker. .

OPERATIONALISATION OF THE CONCEPT:- I have studied on impact of employee’s commitment toward. Several articles have been published in different journals . I have explained earlier. they already have implemented TQM so through this study. These are the finding of various researchers.VIKALPA etc. magazines and newspaper such as HARVARD BUSINESS REVIEW. In the company. Focus of the problem: The main emphasis will be on to find out quality employee’s commitment toward their work as a result total quality implementation. For this purpose. They sum up various finding. . They found that apply TQM has directly increased their morale. increase the satisfaction lever and commitment toward their work. I measured the degree of implementation in the organization and what are the factor that are affected the commitment lever and to check how much they are satisfaction with the TQM implement.THE ECONOMIC TIMES. I have made the questionnaire which consisting of multiple-choice questions. Review of Existing literature: Many people have work on this topic. I have collected the data from them and after that I have tabulated them and interpreted them and give the recommendation.

But the effect of TQM on employees commitment in the company has so far not undertaken. 2. ~The management did not agree to disclose all the confidential data. ~Number of respondents are very less. RESEARCH METHODOLOGY Research methodology is a way to solve the research problem in a systematic manner. 3. This project has been done first time in the company. OBJECTIVE OF THE STUDY:The objectives of this study are: 1.To find the degree of TQM implemented in the organization. so clear conclusion can’t be drawn. To find out factor influencing the commitment. LIMITATION ~Employees of the organization may hide the fact. It may understand as a science of studying how the research is done .To study the level of commitment of employees toward their work.

60 FROM THE WORKER for the survey. RESEARCH DESIGN This research is of EXPLORATARY RESEARCH DESIGN . . I have prepared a questionnaire on the basis of the factors responsible for employee’s commitment in the organization. The methodology may differ from problem to problem. yet the basic approach towards the research remains the same.significantly. I have selected 100 employee 40 FROM THE STAFF. The sequence or steps followed have been explained as under: UNIVERSE AND SURVAY POPULATION The universe is the employee working at mill. ANALYSIS PATTERN Data collection: This data is primary data.I have used the questionnaire method for collecting the data. which I have been collected with the help of questionnaire.

But some of employees feel that there is no proper communication. RECCOMENDATIONS The suggestions I have given for the betterment are explained below:  It is very important to provide the opportunity to the employees of the organization to express their ideas or whatever they want to express. This also increases their commitment toward the work and toward the organization. Most of the facts related with the organization are hided by the management from the employees. . Most of the staffs member feel that their performance is properly measured in the organization. Some of the employee’s feel that thy have proper information about the policies.MACRO ANALYSIS (Inferences &Interpretation) The detailed analyses of the results are explained below: MOST OF EMPLOYEES FEELS THAT: Most of the staff member and worker feel that organization is quality conscious toward the employees. Most of the employees feel that they don’t get rewarded for their good performance. practices followed in the organization.

ALL THE INFORMATION PROVIDED WOULD BE KEPT CONFIDENTIAL.  Management should involve the workers representatives in managerial activities so that the transparency could be maintained and through this they can win the confidence of the employees.  There are regular review and comparison of current & past performance to detect gradual deterioration in the strategy. Do you think the organization is quality conscious toward employees? .  Self-potential system should be encouraged.  Proper cooperation should be necessary in the company. NOTE: THIS QUESTIONNAIRE IS PURELY FOR ACADEMIC PURPOSES.  Role clarity of each position should be defined and based on that individuals can plan their work accordingly.  Reward or Praise/appreciation works as magic for an individual and motivates them for work. Management should clear their vision mission and goals towards the employees in the organization.  Management should give due importance to mental relaxation &social cultural development of an employees who strives hard for the company.

YES NO Does the organization have the certification of ISO 9000? YES NO Is the organization providing quality assurance system & operation? YES NO Does the organization have quality circle? YES NO How many people are involved in quality circle? Below 10 above 10 above 15 can’t say How frequently the organizations have the meeting of quality circle? Weekly biweekly monthly yearly Do you about the agenda of information or any other information? YES NO Are the organization is going for the quality audit? YES NO can’t say .

Does your organization have quality information system? YES NO can’t say Are the information system is regularly updated? YES NO can’t say Do you think the organization used bench marking. b. please tell me the name of the benchmark organization? YES NO can’t say If yes. if any. then Org. a. Area Does the organization is going for the brain storming session? YES NO don’tknow Are you practicing the 5’s Japanese philosophy ? YES NO .

Does the organization have the certification of ISO 14000 or any other. if any please mention? YES NO don’tknow Are you practicing the six sigma for the error control? YES NO don’tknow A formal career planning process exist in the organization Strongly Agree Don’t know Agree Strongly disagree Disagree There is a shared vision of where your business is growing? Strongly Agree Don’t know Agree Strongly disagree Disagree Employees are kept updated with changes in job skills & job designs? Strongly Agree Don’t know Agree Strongly disagree Disagree .

Formal or informal method is followed for employees feedback and acting on that feedback? Strongly Agree Don’t know Agree Strongly disagree Disagree Does the organization provide right environment to apply your knowledge from new programs to the job? Very much Not at all Some whatLittle Do you feel that the organization is a good place to work? Yes No Sometimes Do you feel comfortable with rules and policy of the organization? Yes No Sometimes What types of relations are you having with your superior. Average Poor .  Their behavior is not good  There is no proper communication. peers and subordinates? Good If bad then why it is so?  They are not cooperating.

 All above

Do you feel that you can get ahead in the org. if you make an effort? Yes No Sometimes

Do you get any reward on your good performance? Yes No Sometimes

Do you find that your performance is properly measured in the organization? Yes No Sometimes

Do you find that your job makes the best use of your abilities? Yes No Some Times

Thank you for your kind co-operation.

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Quality Management [TQM] OBJECTIVE WISE ANALYSIS (Micro Analysis)
The analysis according to the objectives are explained below:

Do you think that this organization is QUALITY conscious toward employees? A. Yes B. No Staff % 87 13 Workers % 65 25

A B

This shows that about 87% staff and 65% worker agreed that organization is quality conscious toward employees.

Does the organization have the certification of ISO 9000? A. Yes B. No Staff % 100 0 Worker % 67 33

A. B.

This shows that 100% staff and 70% worker said that the organization have the certification of ISO 9000.

Is the organization provide quality assurance system& operation A. Yes B. No Staff % 80 20 Worker % 58 42

A. B.

This shows that 80% staff& app.65% worker think that organization providing quality assurance system &operation.

D.90% staff & 46% worker agreed with the statement . It shows that app. Staff % 22 54 14 10 Worker% 36 28 22 14 . B. Can’t say A. 54% workers said they don’t know about this. Yes B. Below 10 C. B. C. How many people are involved in the quality circle? A.Above 10 D. No Staff % 87 13 Worker % 46 54 A. Above 15 B.Does the organization have the quality circle? A.

No Staff % Worker % . Yearly Staff % 17 57 26 0 Worker% 35 42 23 0 A. Biweekly D.60 % staff & 42% worker says organization have the biweekly meeting of quality circle. D.It shows that about 54% staff says there are above 10 member in the quality circle. How frequently the organization have the meeting of quality circle ? A. It shows that app. Do you know about the agenda of information or any other information? A. Monthly B. Yes B. C. Weekly C. B.

A. 60 40 Above graph shows that 60% staff say that 14 86 they know about the agenda of the information but 86% worker say they don’t know about this. B. .

Yes B. No C. B. Can’t say Staff % 85 10 5 Worker % 26 24 50 A. . Yes B. B. No C. Can’t say Staff % 95 0 Worker % 15 31 A. C Above shows that 85% staff &26% worker says that organization is going for quality audit but 50% worker says they don’t know about the quality audit. Does the organization s have quality information system? A.Are the organization s going for the quality audit? A.

Do you think the organization s used benchmarking? D. No C. B.C 5 54 Above shows that 95% staff says that organization have quality information system &54 % worker says they don’t know about this. Can’t say Staff % 69 11 20 Worker % 55 11 34 A. C About 70 % staff & 55% worker says that organization regularly updated. Are the information system is regularly updated? A. Yes B. No . Yes E.

C Above table shows that 70%staff agreed with the statement. No C. Are the organization is practicing the 5’s Japanese philosophy? A. Don’t know Staff % 70 13 17 Worker % 3 0 97 A.but 97% worker say they don’t know about this. No . Can’t say Staff % 30 25 45 Worker % 8 0 92 A. B. B.F. Yes B. Does the organization s is going for brain storming session? A. Yes B. C This shows that 95%staff says that organization have quality information system but 54% worker say they don’t know about this.

Does the organization has the certification of ISO 14000 ? A.A. Don’t know Staff % 100 0 0 Worker % 53 16 31 A. C It shows that all of the respondent of staff & most of the worker category says that organization have ISO 14000.  A formal planning process exist in the organization? . B. Yes B. B. Staff % 90 10 Worker % 26 74 It shows that about the 90% staff and 26% worker says they are practicing this but 74% workers don’t know about this. No C.

Agree E. Strongly agree B. Disagree Staff % 18 12 20 30 20 Workers % 7 30 46 7 10 A B C D E It shows that about 50% of the respondent are agree with the statement but in worker category most of them are either disagree or don’t know. Strongly disagree C. .A. Don’t know D.

Agree E.60% disagree with the statement. Don’t know D. Strongly disagree C. Employees are keep updating with change in the job skill & job design? A.There is a shared vision of where the business is growing? A. Strongly disagree C. Don’t know . Strongly agree B. Disagree Staff % 22 5 25 45 3 Workers % 7 13 40 13 27 A B C D E It shows that about 50% staff of the respondent are agree with the statement but in worker category app. Strongly agree B.

.Agree B. are agree with the statement . Disagree Staff % 10 5 10 55 20 Workers % 3 15 13 45 24 A B C D E It shows that app. Disagree A B C D E Staff % 15 5 0 70 10 Workers % 2 21 7 40 30 Above table shows that app. Strongly disagree C. Formal& informal method is followed for employees feedback & acting on that feedback? A. 70% respondents are agree with the statement . 80% respondents of the staff and 45% from worker said that there are proper feedback system.D. Agree E. Strongly agree D. Don’t know E.

Strongly disagree C. are agree with the statement . Yes B. Agree E. Do you feel that this organization is a good place to work? A. No C.Does the organization provide right environment to apply knowledge from new programs to the job? A. Strongly agree B. Disagree Staff % Workers % A 5 5 B 75 28 C 10 13 D 7 46 E 3 8 Above table shows that 75% staff and 50% from worker said that organization provide the right environment to apply knowledge to the job Proper feedback system. Can’t say Staff % 80 5 15 Workers % 58 36 8 A B C . Don’t know D.

B. C. Good . Yes B. Do you feel comfortable with the rules and policies of the organization? A. No C. peers and subordinates? A.It shows that 80% staff&58% worker agreed with the statement. It shows that the employees of the staff category are more satisfied with the rules and policies of the organization then employees from the workers category.  What type of relations are you having with your superiors. Some times Staff % 55 20 25 Worker % 47 40 13 A.

 If bad. then why it is so? A. Poor Staff 90 10 0 Workers 34 50 16 A. B. C. It shows that most of the employees from the staff category are having good relationships with their superiors. They are not co-operating with you B. B. D.B. D. There behavior is not good C. C. . There is not proper communication. But most of the workers are having only satisfactory relationships. Average C. All of the above Workers 10 27 18 45 A. It shows that most of the worker take misbehaviour from their superior.

No C.  Do you get reward on your good performance? A. Do you feel that your performance is measured properly in the organization? . C. Sometimes Staff 45 25 30 Workers 24 72 4 This shows that most of the workers feels that they cant get ahead in the organization if they work hard but the attitude of employees of staff is just opposite. B. Yes A. B. Yes B. This shows that most of the staff members or workers have not get reward in the organization on their good performance. B. Sometimes Staff % 30 65 5 Workers % 22 68 10 A. No C. C.Do you feel that you can get ahead in the organization if you make efforts? A.

No C. Yes B. No C.A. . C. Most of the staff members thinks that their performance is properly measured in the organization but the workers feels just opposite of it  Do you find that your job makes the best use of your abilities? (For Managers) A. C. Sometimes Staff % 45 40 15 Workers % 26 67 7 A. B. B. Yes B. Sometimes Staff 55 30 15 A.

otherwise complex situations.It is expressed by the simple division of one number by another. Advantages of Ratio Analysis. Return on Capital Employed RATIO ANALYSIS Meaning of Ratio:. Ratio may be expressed in the following three ways : 1. Profitability Ratio or Income Ratio. It may be defined as the indicated quotient of two mathematical expressions. solvency.A ratio is simple arithmetical expression of the relationship of one number to another. capital structure and profitability of an organization. Kell and Bedford. Management Accounting “Ratio can assist management in its basic functions of forecasting. control and communication”. Liquidity Ratio. classification of Ratio. For example . According to Batty J. It is helpful tool to aid in applying judgement. if the current assets of a . Pure Ratio or Simple Ratio :. And sub objectives of this report is understand the Meaning of Ratio. Objective of Project Report : The main objective of the Project Report is Find the Ratio Analysis of company. “a ratio is an expression of the quantitative relationship between two numbers”.Ratio analysis is the process of determining and presenting the relationship of items and group of items in the statements.It shows that most of the staff members are feels that their job makes the best use of their abilities. Pure Ratio or Simple Ratio. Ratio Analysis:. Activity & Turnover Ratio. Ratio analysis can represent following three methods. According to Accountant’s Handbook by Wixon. It is helpful to know about the liquidity. planning coordination. Limitations of Ratio Analysis.

Percentage :.1000000 and its profit is Rs. Effective Control. LIMITATIONS OF RATIO ANALYSIS . Fixation of ideal Standards. For example . it is calculated how many times a figure is. 5. Helpful in comparative Study. Helpful in analysis of Financial Statements. the ratio of ‘Current assets to current liabilities’ will be 2:1. 200000 and its current liabilities are Rs. 4. 7. the relation between two figures is expressed in hundredth.200000 the ratio of profit capital. Helpful in Forecasting. Estimate about the trend of the business. ‘Rate’ or ‘So Many Times :. in term of percentage. 2. 2. For example. if a firm’s capital is Rs. Helpful in locating the weak spots of the business. in comparison to another figure.In this type .In this type. if a firm’s credit sales during the year are Rs. Study of Financial Soundness. is 200000/1000000*100 = 20% ADVANTAGE OF RATIO ANALYSIS 1. 3. 200000 and its debtors at the end of the year are Rs. 8. 40000 . It shows that the credit sales are 5 times in comparison to debtors. 3. 100000. its Debtors Turnover Ratio is 200000/40000 = 5 times. 6.business are Rs.

Liquidity Ratio a. Debt to Total Fund Ratio c. Effect of personal ability and bias of the analyst. 2. Comparison not possible if different firms adopt different accounting policies. Limited use of a single data.1. 6. 7. Ratio analysis becomes less effective due to price level changes. 8. Current Ratio b. Ratios alone are not adequate for proper conclusions. False accounting data gives false ratio. 4. 5. Fixed Assets to Proprietor’s Fund Ratio . Ratio may be misleading in the absence of absolute data. Quick Ratio or Acid Test Ratio B. Lack of proper standards. Debt Equity Ratio b. 3. Proprietary Ratio d. Leverage or Capital Structure Ratio a. CLASSIFICATION OF RATIO Ratio may be classified into the four categories as follows: A.

Average Collection Period d. Return on Shareholder’s Funds : . Creditors or Payables Turnover Ratio e. Net Profit Ratio c. Expenses Ratio (B) Profitability Ratio Based on Investment : I. Debtors or Receivables Turnover Ratio c. Gross Profit Ratio b. Return on Capital Employed II. Capital Gearing Ratio f. Operating Ratio d. Activity Ratio or Turnover Ratio a. Interest Coverage Ratio C. Average Payment Period f.e. Working Capital Turnover Ratio D. Fixed Assets Turnover Ratio g. Stock Turnover Ratio b. Profitability Ratio or Income Ratio (A) Profitability Ratio based on Sales : a.

Return on Equity Shareholder’s Funds c.a. “Liquidity is the ability of the firms to meet its current obligations as they fall due”. Current Ratio:. Return on Total Shareholder’s Funds b. therefore. Quick Ratio or Acid Test Ratio a. The liquidity ratio. Current Ratio b. Flink. These ratio are used to assess the short-term financial position of the concern. are also called ‘Short-term Solvency Ratio’. Price Earning Ratio LIQUIDITY RATIO (A) Liquidity Ratio:. They indicate the firm’s ability to meet its current obligation out of current resources. Dividend Payout Ratio f. Earning and Dividend Yield g. Liquidity ratio include two ratio :a. Dividend Per Share e. In the words of Saloman J.It refers to the ability of the firm to meet its current liabilities. Formula: Current Ratio = Current Assets/ Current Liabilities .This ratio explains the relationship between current assets and current liabilities of a business. Earning Per Share d.

at least . This ratio can be improved by an equal decrease in both current assets and current liabilities. a current ratio of 2:1 is supposed to be an ideal ratio. Formula: Quick Ratio = Liquid Assets/ Current Liabilities ‘Liquid Assets’ means those assets. The higher ratio indicates the better liquidity position. Current Assets = Cash in Hand + Cash at Bank + B/R + Short Term Investment + Debtors(Debtors – Provision) + Stock(Stock of Finished Goods + Stock of Raw Material + Work in Progress) + Prepaid Expenses. If the ratio is less than 2:1. which will yield cash very shortly. Significance :. b.According to accounting principles. be twice of its current liabilities. the firm will be able to pay its current liabilities more easily. Quick Ratio:. It means that current assets of a business should.Quick ratio indicates whether the firm is in a position to pay its current liabilities with in a month or immediately. it indicate lack of liquidity and shortage of working capital.Current Assets:-‘Current assets’ includes those assets which can be converted into cash with in a year’s time. Current Liabilities = Bank Overdraft + B/P + Creditors + Provision for Taxation + Proposed Dividend + Unclaimed Dividends + Outstanding Expenses + Loans Payable with in a Year. Liquid Assets = Current Assets – Stock – Prepaid Expenses .‘Current liabilities’ include those liabilities which are repayable in a year’s time. The biggest drawback of the current ratio is that it is susceptible to “window dressing”. Current Liabilities :.

Preference Share Capital. this ratio expresses the relationship between long term debts and shareholder’s fund. Other Reserve and Credit Balance of Profit & Loss Account. Loan from Financial institutions and Public Deposits etc. Capital Reserve. LEVERAGE OR CAPITAL STRUCTURE RATIO (B) Leverage or Capital Structure Ratio :.This ratio disclose the firm’s ability to meet the interest costs regularly and Long term indebtedness at maturity. it is considered to be better. If it is more. This ratio is a better test of short-term financial position of the company. Share Premium.An ideal quick ratio is said to be 1:1. These include Debentures. Shareholder’s Funds :.These refer to long term liabilities which mature after one year. Second Approach : According to this approach the ratio is calculated as follows:Formula: Debt Equity Ratio=External Equities/internal Equities . These ratio include the following ratios : a.Significance :. General Reserve. Debt Equity Ratio:.This ratio can be expressed in two ways: First Approach : According to this approach. Bank Loan. Formula: Debt Equity Ratio=Long term Loans/Shareholder’s Funds or Net Worth Long Term Loans:. Mortgage Loan.These include Equity Share Capital.

Formula: Debt to Total Funds Ratio = Long-term Loans/Shareholder’s funds + Long-term Loans Significance :. Hence. debt to total funds ratio of 0. Formula: . c. If the debt equity ratio is more than that. as it indicates that more and more funds invested in the business are provided by long-term lenders. Lower than 2:1 debt equity ratio provides sufficient protection to long-term lenders.Generally. both equity and debt.Debt equity ratio is calculated for using second approach.. Significance :. good concerns keep the debt to total funds ratio below 67%. debt equity ratio of is considered safe. the better it is for long-term lenders because they are more secure in that case.e. Proprietary Ratio:. The lower this ratio. i. Payment of interest may become difficult if profit is reduced. Generally. Debt to Total Funds Ratio : This Ratio is a variation of the debt equity ratio and gives the same indication as the debt equity ratio.This ratio indicates the proportion of total funds provide by owners or shareholders. it shows a rather risky financial position from the long-term point of view. b. The lower ratio is better from the long-term solvency point of view. A higher ratio indicates a burden of payment of large amount of interest charges periodically and the repayment of large amount of loans at maturity.67:1 (or 67%) is considered satisfactory. In other words. debt is expressed in relation to total funds. the proportion of long term loans should not be more than 67% of total funds. In the ratio.This Ratio is calculated to assess the ability of the firm to meet its long term liabilities.

This ratio should be 33% or more than that. Normally . Net Worth) Significance :. If the ratio is low it indicates that long-term loans are less secured and they face the risk of losing their money. This will indicate the long-term financial soundness of business. Capital Gearing Ratio:. it would mean that proprietor’s fund are more than fixed assets and a part of working capital is provided by the proprietors.Proprietary Ratio = Shareholder’s Funds/Shareholder’s Funds + Long term loans Significance :. the proportion of shareholders funds to total funds should be 33% or more. d. Fixed Assets to Proprietor’s Fund Ratio :. e. because it means that the firm is less dependent on external sources of finance. the purchase of fixed assets should be financed by proprietor’s funds. A higher proprietary ratio is generally treated an indicator of sound financial position from long-term point of view.e. Formula: .This ratio is also know as fixed assets to net worth ratio. In other words.The ratio indicates the extent to which proprietor’s (Shareholder’s) funds are sunk into fixed assets. If this ratio is less than 100%..This ratio establishes a relationship between equity capital (including all reserves and undistributed profits) and fixed cost bearing capital. Formula: Fixed Asset to Proprietor’s Fund Ratio = Fixed Assets/Proprietor’s Funds (i.

f. This ratio is calculated as follows: Formula: Interest Coverage Ratio = Net Profit before charging interest and tax / Fixed Interest Charges Significance :.If the amount of fixed cost bearing capital is more than the equity share capital including reserves an undistributed profits). the main objective of using fixed cost bearing capital is to maximize the profits available to equity shareholders. Fixed Cost Bearing Capital = Preference Share Capital + Debentures + Long Term Loan Significance:. This ratio measures the margin of safety for long-term lenders. The high gearing will be beneficial to equity shareholders when the rate of interest/dividend payable on fixed cost bearing capital is lower than the rate of return on investment in business. it will be called high capital gearing and if it is less. Interest Coverage Ratio:. Thus. it will be called low capital gearing.This ratio indicates how many times the interest charges are covered by the profits available to pay interest charges.Capital Gearing Ratio = Equity Share Capital+ Reserves + P&L Balance/ Fixed cost Bearing Capital Whereas.This ratio is also termed as ‘Debt Service Ratio’. This higher the ratio. it is an unsafe position for the . If profit just equals interest. more secure the lenders is in respect of payment of interest regularly.

goods can be sold at a low margin of profit and even than the profitability may be quit high. The higher the ratio. Higher turnover ratio indicates the better use of capital or resources and in turn lead to higher profitability. ACTIVITY RATIO OR TURNOVER RATIO (C) Activity Ratio or Turnover Ratio :. Debtors Turnover Ratio :. these ratio are also called as ‘Turnover Ratio’. An interest coverage ratio of 6 or 7 times is considered appropriate. Turnover indicates the speed or number of times the capital employed has been rotated in the process of doing business. as nothing will be left for shareholders. Formula: Stock Turnover Ratio = Cost of Goods Sold / Average Stock Here. the better it is. In a business where stock turnover ratio is high.These ratio are calculated on the bases of ‘cost of sales’ or sales.This ratio indicates the relationship between credit sales and average debtors during the year : . therefore. It shows the speed with which the stock is rotated into sales or the number of times the stock is turned into sales during the year. Cost of goods sold = Net Sales – Gross Profit Average Stock = Opening Stock + Closing Stock/2 Significance:. Stock Turnover Ratio:.This ratio indicates the relationship between the cost of goods during the year and average stock kept during that year.lender as well as for the company also . It includes the following : a. since it indicates that stock is selling quickly. b.This ratio indicates whether stock has been used or not.

This ratio indicates the time with in which the amount is collected from debtors and bills receivables. Average Collection Period :.debts.Formula: Debtor Turnover Ratio = Net Credit Sales / Average Debtors + Average B/R While calculating this ratio. and so the lower the expenses of collection and increase in the liquidity of the firm. the better it is. c. provision for bad and doubtful debts is not deducted from the debtors. By comparing the debtors turnover ratio of the current year with the previous year. Credit Sales per day = Net Credit Sales of the year / 365 Second Formula :Average Collection Period = Average Debtors *365 / Net Credit Sales . the less the risk from bad. The more quickly the debtors pay. Formula: Average Collection Period = Debtors + Bills Receivable / Credit Sales per day Here. The higher the ratio. Significance :. since it indicates that amount from debtors is being collected more quickly.This ratio indicates the speed with which the amount is collected from debtors. it may be assessed whether the sales policy of the management is efficient or not. so that it may not give a false impression that debtors are collected quickly.

Formula:Average Payment Period = Creditors + B/P/ Credit Purchase per day .If the amount of credit purchase is not given in the question. if there is decrease in debt collection period. A higher debt collection period is thus.This ratio indicates the relationship between credit purchases and average creditors during the year . d. Creditors Turnover Ratio :.Average collection period can also be calculated on the bases of ‘Debtors Turnover Ratio’. d.This ratio indicates the speed with which the amount is being paid to creditors. the ratio may be calculated on the bases of total purchase. the better it is. Significance :. Formula:Creditors Turnover Ratio = Net credit Purchases / Average Creditors + Average B/P Note :. The higher the ratio. On the other hand. an indicates of the inefficiency and negligency on the part of management. since it will indicate that the creditors are being paid more quickly which increases the credit worthiness of the firm. Average Payment Period :.This ratio indicates the period which is normally taken by the firm to make payment to its creditors.This ratio shows the time in which the customers are paying for credit sales. it indicates prompt payment by debtors which reduces the chance of bad debts. The formula will be: Average Collection Period = 12 months or 365 days / Debtors Turnover Ratio Significance :.

Working Capital Turnover Ratio :. d. Fixed Assets Turnover Ratio :.This ratio is particular importance in manufacturing concerns where the investment in fixed asset is quit high. Compared with the previous year. because a shorter payment period implies that the creditors are being paid rapidly. as they had been used in the previous year. Net Fixed Assets = Fixed Assets – Depreciation Significance:. Formula :Working Capital Turnover Ratio = Cost of Goods Sold / Working Capital .This ratio reveals how efficiently working capital has been utilized in making sales.This ratio may also be calculated as follows : Average Payment Period = 12 months or 365 days / Creditors Turnover Ratio Significance :.The lower the ratio. it will show that fixed assets have not been used as efficiently.This ratio reveals how efficiently the fixed assets are being utilized. if there is increase in this ratio. If there is a fall in this ratio. Formula:Fixed Assets Turnover Ratio = Cost of Goods Sold/ Net Fixed Assets Here. e. the better it is. it will indicate that there is better utilization of fixed assets.

Closing Stock Working Capital = Current Assets – Current Liabilities Significance :. v.The main object of every business concern is to earn profits. iii. A low working capital turnover ratio indicates under-utilisation of working capital. Profitability ratios are calculated to provide answers to the following questions: i. It shows the number of times working capital has been rotated in producing sales. A business must be able to earn adequate profits in relation to the risk and capital invested in it. A high working capital turnover ratio shows efficient use of working capital and quick turnover of current assets like stock and debtors.Here. iv. Cost of Goods Sold = Opening Stock + Purchases + Carriage + Wages + Other Direct Expenses . Is the firm earning adequate profits? What is the rate of gross profit and net profit on sales? What is the rate of return on capital employed in the firm? What is the rate of return on proprietor’s (shareholder’s) funds? What is the earning per share? Profitability ratio can be determined on the basis of either sales or investment into business. The efficiency and the success of a business can be measured with the help of profitability ratio. ii. (A) Profitability Ratio Based on Sales : .This ratio is of particular importance in non-manufacturing concerns where current assets play a major role in generating sales. Profitability Ratios or Income Ratios (D) Profitability Ratios or Income Ratios:.

a) Gross Profit Ratio : This ratio shows the relationship between gross profit and sales. Formula :
Gross Profit Ratio = Gross Profit / Net Sales *100

Here, Net Sales = Sales – Sales Return Significance:- This ratio measures the margin of profit available on sales. The higher the gross profit ratio, the better it is. No ideal standard is fixed for this ratio, but the gross profit ratio should be adequate enough not only to cover the operating expenses but also to provide for deprecation, interest on loans, dividends and creation of reserves. b) Net Profit Ratio:- This ratio shows the relationship between net profit and sales. It may be calculated by two methods: Formula:
Net Profit Ratio = Net Profit / Net sales *100 Operating Net Profit = Operating Net Profit / Net Sales *100

Here, Operating Net Profit = Gross Profit – Operating Expenses such as Office and Administrative Expenses, Selling and Distribution Expenses, Discount, Bad Debts, Interest on short-term debts etc. Significance :- This ratio measures the rate of net profit earned on sales. It helps in determining the overall efficiency of the business operations. An increase in the ratio over the previous year shows improvement in the overall efficiency and profitability of the business.

(c) Operating Ratio:- This ratio measures the proportion of an enterprise cost of sales and operating expenses in comparison to its sales. Formula:
Operating Ratio = Cost of Goods Sold + Operating Expenses/ Net Sales *100

Where, Cost of Goods Sold = Opening Stock + Purchases + Carriage + Wages + Other Direct Expenses - Closing Stock Operating Expenses = Office and Administration Exp. + Selling and Distribution Exp. + Discount + Bad Debts + Interest on Short- term loans.
‘Operating Ratio’ and ‘Operating Net Profit Ratio’ are inter-related. Total of both these ratios will be 100.

Significance:- Operating Ratio is a measurement of the efficiency and profitability of the business enterprise. The ratio indicates the extent of sales that is absorbed by the cost of goods sold and operating expenses. Lower the operating ratio is better, because it will leave higher margin of profit on sales. (d) Expenses Ratio:- These ratio indicate the relationship between expenses and sales. Although the operating ratio reveals the ratio of total operating expenses in relation to sales but some of the expenses include in operating ratio may be increasing while some may be decreasing. Hence, specific expenses ratio are computed by dividing each type of expense with the net sales to analyse the causes of variation in each type of expense. The ratio may be calculated as : (a) Material Consumed Ratio = Material Consumed/Net Sales*100 (b) Direct Labour cost Ratio = Direct labour cost / Net sales*100 (c) Factory Expenses Ratio = Factory Expenses / Net Sales *100

(a), (b) and (c) mentioned above will be jointly called cost of goods sold ratio. It may be calculated as: Cost of Goods Sold Ratio = Cost of Goods Sold / Net Sales*100 (d) Office and Administrative Expenses Ratio = Office and Administrative Exp./ Net Sales*100 (e) Selling Expenses Ratio = Selling Expenses / Net Sales *100 (f) Non- Operating Expenses Ratio = Non-Operating Exp./Net sales*100

Significance:- Various expenses ratio when compared with the same ratios of the previous year give a very important indication whether these expenses in relation to sales are increasing, decreasing or remain stationary. If the expenses ratio is lower, the profitability will be greater and if the expenses ratio is higher, the profitability will be lower. (B) Profitability Ratio Based on Investment in the Business:These ratio reflect the true capacity of the resources employed in the enterprise. Sometimes the profitability ratio based on sales are high whereas profitability ratio based on investment are low. Since the capital is employed to earn profit, these ratios are the real measure of the success of the business and managerial efficiency. These ratio may be calculated into two categories: I. Return on Capital Employed II. Return on Shareholder’s funds I. Return on Capital Employed :- This ratio reflects the overall profitability of the business. It is calculated by comparing the profit earned and the capital employed to earn it. This ratio is usually in percentage and is also known as ‘Rate of Return’ or ‘Yield on Capital’.

Formula:
Return on Capital Employed = Profit before interest, tax and dividends/ Capital Employed *100

Where, Capital Employed = Equity Share Capital + Preference Share Capital + All Reserves + P&L Balance +Long-Term Loans- Fictitious Assets (Such as Preliminary Expenses OR etc.) – Non-Operating Assets like Investment made outside the business. Capital Employed = Fixed Assets + Working Capital Advantages of ‘Return on Capital Employed’: Since profit is the overall objective of a business enterprise, this ratio is a barometer of the overall performance of the enterprise. It measures how efficiently the capital employed in the business is being used.  Even the performance of two dissimilar firms may be compared with the help of this ratio.  The ratio can be used to judge the borrowing policy of the enterprise.  This ratio helps in taking decisions regarding capital investment in new projects. The new projects will be commenced only if the rate of return on capital employed in such projects is expected to be more than the rate of borrowing.  This ratio helps in affecting the necessary changes in the financial policies of the firm.  Lenders like bankers and financial institution will be determine whether the enterprise is viable for giving credit or extending loans or not.

shareholders can also find out whether they will receive regular and higher dividend or not. (b) Return on Equity Shareholder’s Funds:Equity Shareholders of a company are more interested in knowing the earning capacity of their funds in the business. A comparison of this ratio with that of similar firms will throw light on the relative profitability and strength of the firm. As such. Formula: . Whereas.This ratio reveals how profitably the proprietor’s funds have been utilized by the firm. These are several measures to calculate the return on shareholder’s funds: (a) Return on total Shareholder’s Funds :For calculating this ratio ‘Net Profit after Interest and Tax’ is divided by total shareholder’s funds. Return on Shareholder’s Funds :Return on Capital Employed Shows the overall profitability of the funds supplied by long term lenders and shareholders taken together. II. Return on shareholders funds measures only the profitability of the funds invested by shareholders. this ratio measures the profitability of the funds belonging to the equity shareholder’s. Total Shareholder’s Funds = Equity Share Capital + Preference Share Capital + All Reserves + P&L A/c Balance –Fictitious Assets Significance:. Formula: Return on Total Shareholder’s Funds = Net Profit after Interest and Tax / Total Shareholder’s Funds Where. With the help of this ratio.

If the ratio is high. .This ratio measure the profit available to the equity shareholders on a per share basis. Equity Shareholder’s Funds = Equity Share Capital + All Reserves + P&L A/c Balance – Fictitious Assets Significance:. It is a true measure of the efficiency of the management since it shows what the earning capacity of the equity shareholders funds. (d) Dividend Per Share (D.S. All profit left after payment of tax and preference dividend are available to equity shareholders. Formula: Earning Per Share = Net Profit – Dividend on Preference Shares / No.P.) :.This ratio helpful in the determining of the market price of the equity share of the company. it is better.):.Return on Equity Shareholder’s Funds = Net Profit (after int. of Equity Shares Significance:.P. tax & preference dividend) / Equity Shareholder’s Funds *100 RATIO ANALYSIS Where. because in such a case equity shareholders may be given a higher dividend. (c) Earning Per Share (E.This ratio measures how efficiently the equity shareholder’s funds are being used in the business.Profits remaining after payment of tax and preference dividend are available to equity shareholders.. The ratio is also helpful in estimating the capacity of the company to declare dividends on equity shares.S.

P.P.P. and D.This ratio is closely related to E. = Dividend paid to Equity Shareholders/ Total Net Profit belonging to Equity Shareholders*100 OR D.S. are calculated on the basis of the book value of shares. is the dividend distributed to equity shareholders divided by the number of equity shares.S. this ratio is calculated on the basis of the market value of share .P. D. Out of these profits is retained in the business and the remaining is distributed among equity shareholders as dividend. Formula: D.But of these are not distributed among them as dividend .S.P.S. *100 (f) Earning and Dividend Yield :.S.P.It measures the relationship between the earning available to equity shareholders and the dividend distributed among them. = D.P.S.P. :. Formula: D.P. / E.P. While the E.P. and D. of Equity Shares *100 (e) Dividend Payout Ratio or D. = Dividend paid to Equity Shareholder’s / No.S.S.

Funds. furniture. debtors & inventories. Significance :. building.term or current assets such as cash.Price earning ratio is the ratio between market price per equity share & earnings per share.day expenses etc.This ratio shows how much is to be invested in the market in this company’s shares to get each rupee of earning on its shares.Meaning of Working Capital Capital required for a business can be classified under two main categories via.to-day operations. invested in current assts keep revolving fast and are being constantly converted in to cash .E. 1) 2) Fixed Capital Working Capital Every business needs funds for two purposes for its establishment and to carry out its day. Home Project Report . marketable securities. Funds are also needed for short-term purposes for the purchase of raw material. payment of wages and other day – to. In simple words.) Ratio:. thus. Investments in these assets represent that part of firm’s capital which is blocked on permanent or fixed basis and is called fixed capital. These funds are known as working capital. This ratio is used to measure whether the market price of a share is high or low.Working Capital Management WORKING CAPITAL . working capital refers to that part of the firm’s capital which is required for financing short. etc.(g) Price Earning (P. The ratio is calculated to make an estimate of appreciation in the value of a share of a company & is widely used by investors to decide whether or not to buy shares in a particular company. land. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m.

Gross working capital Net working capital The gross working capital is the capital invested in the total current assets of the enterprises current assets are those Assets which can convert in to cash within a short period normally one accounting year. it is also known as revolving or circulating capital or short term capital. 2.and this cash flows out again in exchange for other current assets. b. Inventories of stock as: a. CONCEPT OF WORKING CAPITAL There are two concepts of working capital: 1. c. Raw material Work in process Stores and spares . CONSTITUENTS OF CURRENT ASSETS 1) 2) 3) 4) 5) Cash in hand and cash at bank Bills receivables Sundry debtors Short term loans and advances. Hence.

Short term loans. 2. CONSTITUENTS OF CURRENT LIABILITIES 1. . which are intended to be paid in the ordinary course of business within a short period of normally one accounting year out of the current assts or the income business. Finished goods 6. 4. say: NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES. the term working capital refers to the net working. Net working capital can be positive or negative. Marketable securities. Prepaid expenses 8. In a narrow sense. or. Dividends payable. Accrued or outstanding expenses. Accrued incomes. 7. advances and deposits.d. When the current assets exceeds the current liabilities are more than the current assets. Bank overdraft. Current liabilities are those liabilities. Temporary investment of surplus funds. Net working capital is the excess of current assets over current liability. 9. 3.

to app. . however. The gross concept is sometimes preferred to the concept of working capital for the following reasons: 1. 3. The net working capital concept. It take into consideration of the fact every increase in the funds of the enterprise would increase its working capital. This concept is also useful in determining the rate of return on investments in working capital. 2. if it does not amt.5. Of profit. is also important for following reasons: • It is qualitative concept. Every management is more interested in total current assets with which it has to operate then the source from where it is made available. Provision for taxation . 6. Bills payable. 4. • IT indicates the margin of protection available to the short term creditors. Sundry creditors. The gross working capital concept is financial or going concern concept whereas net working capital is an accounting concept of working capital. 7. It enables the enterprise to provide correct amount of working capital at correct time. Both the concepts have their own merits. which indicates the firm’s ability to meet to its operating expenses and short-term liabilities.

• • It is an indicator of the financial soundness of enterprises. It suggests the need of financing a part of working capital requirement out of the permanent sources of funds. .

finished goods and cash balance. working capital may be classified as:   Permanent or fixed working capital.CLASSIFICATION OF WORKING CAPITAL Working capital may be classified in to ways: o o On the basis of concept. On the basis of concept working capital can be classified as gross working capital and net working capital.in-process. The capital . Variable working capital can further be classified as seasonal working capital and special working capital. On the basis of time. As the business grow the requirements of working capital also increases due to increase in current assets. This minimum level of current assts is called permanent or fixed working capital as this part of working is permanently blocked in current assets. Temporary or variable working capital PERMANENT OR FIXED WORKING CAPITAL Permanent or fixed working capital is minimum amount which is required to ensure effective utilization of fixed facilities and for maintaining the circulation of current assets. Every firm has to maintain a minimum level of raw material. TEMPORARY OR VARIABLE WORKING CAPITAL Temporary or variable working capital is the amount of working capital which is required to meet the seasonal demands and some special exigencies. On the basis of time. work.

Temporary working capital differs from permanent working capital in the sense that is required for short periods and cannot be permanently employed gainfully in the business. increases their efficiency. IMPORTANCE CAPITAL  SOLVENCY OF THE BUSINESS: Adequate working capital helps in maintaining the solvency of the business by providing uninterrupted of production.  Goodwill: Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill.  Cash Discounts: Adequate working capital also enables a concern to avail cash discounts on the purchases and hence reduces cost. OR ADVANTAGE OF ADEQUATE WORKING . Wages And Other Day TO Day Commitments: It leads to the satisfaction of the employees and raises the morale of its employees.  Regular Supply of Raw Material: Sufficient working capital ensures regular supply of raw material and continuous production. reduces wastage and costs and enhances production and profits.required to meet the seasonal need of the enterprise is called seasonal working capital. etc.  Regular Payment Of Salaries. Special working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing for conducting research.  Easy loans: Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms.

DISADVANTAGES OF REDUNDANT OR EXCESSIVE WORKING CAPITAL 1. EXCESS OR INADEQUATE WORKING CAPITAL Every business concern should have adequate amount of working capital to run its business operations. It should have neither redundant or excess working capital nor inadequate nor shortages of working capital.  Quick And Regular Return On Investments: Sufficient working capital enables a concern to pay quick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future. it is the inadequate working capital which is more dangerous from the point of view of the firm. Excessive working capital means ideal funds which earn no profit for the firm and business cannot earn the required rate of return on its investments. 2. Redundant working capital leads to unnecessary purchasing and accumulation of inventories. . confidence.  Ability To Face Crises: A concern can face the situation during the depression. high morale which results in overall efficiency in a business. Exploitation Of Favorable Market Conditions: If a firm is having adequate working capital then it can exploit the favorable market conditions such as purchasing its requirements in bulk when the prices are lower and holdings its inventories for higher prices. Both excess as well as short working capital positions are bad for any business.  High Morale: Adequate working capital brings an environment of securities. However.

production and sales. etc. . the values of shares may also fall. and realization of cash. Thus working capital is needed for the following purposes: • • • • • For the purpose of raw material. Excessive working capital implies excessive debtors and defective credit policy which causes higher incidence of bad debts. Due to lower rate of return n investments. advertising. The need for working capital arises due to the time gap between production and realization of cash from sales. The redundant working capital gives rise to speculative transactions DISADVANTAGES OF INADEQUATE WORKING CAPITAL Every business needs some amounts of working capital. There are time gaps in purchase of raw material and production. To meet the selling costs as packing. If a firm is having excessive working capital then the relations with banks and other financial institution may not be maintained.3. 7. To provide credit facilities to the customer. It may reduce the overall efficiency of the business. 4. components and spares. There is an operating cycle involved in sales and realization of cash. 5. To pay wages and salaries To incur day-to-day expenses and overload costs such as office expenses. 6.

2. generally larger will be the requirements of the working capital. and no funds are tied up in inventories and receivables. work-in-progress. The requirement of the working capital goes on increasing with the growth and expensing of the business till it gains maturity. Greater the size of the business. On the other hand the trading and financial firms requires less investment in fixed assets but have to invest large amt. The amount needed for working capital depends upon the size of the company and ambitions of its promoters.• To maintain the inventories of the raw material. stores and spares and finished stock. one has to study the business under varying circumstances such as a new concern requires a lot of funds to meet its initial requirements such as promotion and formation etc. FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS 1. There are others factors also influence the need of working capital in a business. water supply and railways because they offer cash sale only and supply services not products. These expenses are called preliminary expenses and are capitalized. Greater the size of the business unit. SIZE OF THE BUSINESS: greater is the requirement of working capital. of working capital along with fixed investments. For studying the need of working capital in a business. NATURE OF BUSINESS: The requirements of working is very limited in public utility undertakings such as electricity. PRODUCTION POLICY: If the policy is to keep production steady by accumulating inventories it will require higher working capital. 3. At maturity the amount of working capital required is called normal working capital. .

SEASONALS VARIATIONS: Generally.4. 6. Longer the cycle larger is the requirement of working capital. RATE OF STOCK TURNOVER: There is an inverse co-relationship between the question of working capital and the velocity or speed with which the sales are affected. . DEBTORS CASH FINISHED GOODS RAW MATERIAL WORK IN PROGRESS 7. a firm requires larger working capital than in slack season. So working capital is directly proportional to the length of the manufacturing process. WORKING CAPITAL CYCLE: The speed with which the working cycle completes one cycle determines the requirements of working capital. of working capital as compared to a firm having a low rate of turnover. 5. during the busy season. LENTH OF PRDUCTION CYCLE: The longer the manufacturing time the raw material and other supplies have to be carried for a longer in the process with progressive increment of labor and service costs before the final product is obtained. A firm having a high rate of stock turnover wuill needs lower amt.

optimistic expansion of business. Generally rise in prices leads to increase in working capital. monopoly conditions. EARNING CAPACITY AND DIVIDEND POLICY: Some firms have more earning capacity than other due to quality of their products. rise in prices. Such firms may generate cash profits from operations and contribute to their working capital. On the contrary in time of depression. Management ability. difficulties are faced in collection from debtor and the firm may have a large amt. of working capital and vice-versa. of working capital due to rise in sales. Others FACTORS: These are:    Operating efficiency. there is need for larger amt. of working capital. etc. sales decline. PRICE LEVEL CHANGES: Changes in the price level also affect the working capital requirements. Irregularities of supply. RATE OF GROWTH OF BUSINESS: In faster growing concern. The dividend policy also affects the requirement of working capital. A firm maintaining a steady high rate of cash dividend irrespective of its profits needs working capital than the firm that retains larger part of its profits and does not pay so high rate of cash dividend. 11. etc. we shall require large amt. CREDIT POLICY: A concern that purchases its requirements on credit and sales its product / services on cash requires lesser amt. 9. BUSINESS CYCLE: In period of boom.8. the business contracts. . of working capital. when the business is prosperous. 12. 10.

liquidity and structural health of the organization. 2. So working capital management is three dimensional in nature as 1. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained. Banking facilities. liquidity and risk. current liabilities. it is neither adequate nor excessive as both the situations are bad for any firm. Importance of labor. It is concerned with the decision about the composition and level of current liabilities. WORKING CAPITAL MANAGEMENT POLICES of a firm has a great on its probability. etc. i.e. It concerned with the formulation of policies with regard to profitability. 3.    Import policy. . Asset structure. There should be no shortage of funds and also no working capital should be ideal. MANAGEMENT OF WORKING CAPITAL Management of working capital is concerned with the problem that arises in attempting to manage the current assets. It is concerned with the decision about the composition and level of current assets.

WORKING CAPITAL ANALYSIS As we know working capital is the life blood and the centre of a business. Adequate amount of working capital is very much essential for the smooth running of the business. And the most important part is the efficient management of working capital in right time. The liquidity position of the firm is totally effected by the management of working capital. So, a study of changes in the uses and sources of working capital is necessary to evaluate the efficiency with which the working capital is employed in a business. This involves the need of working capital analysis. The analysis of working capital can be conducted through a number of devices, such as: 1. 2. 3.

Ratio analysis. Fund flow analysis. Budgeting.

1.

RATIO ANALYSIS

A ratio is a simple arithmetical expression one number to another. The technique of ratio analysis can be employed for measuring short-term liquidity or working capital position of a firm. The following ratios can be calculated for these purposes: 1. Current ratio. 2. Quick ratio

3. Absolute liquid ratio 4. Inventory turnover. 5. Receivables turnover. 6. Payable turnover ratio. 7. Working capital turnover ratio. 8. Working capital leverage 9. Ratio of current liabilities to tangible net worth.

2.

FUND FLOW ANALYSIS

Fund flow analysis is a technical device designated to the study the source from which additional funds were derived and the use to which these sources were put. The fund flow analysis consists of:

a. b.

Preparing schedule of changes of working capital Statement of sources and application of funds.

It is an effective management tool to study the changes in financial position (working capital) business enterprise between beginning and ending of the financial dates.

3.

WORKING CAPITAL BUDGET

A budget is a financial and / or quantitative expression of business plans and polices to be pursued in the future period time. Working capital budget as a part of the total budge ting process of a business is prepared estimating future long term and short term working capital needs and sources to finance them, and then comparing the budgeted figures with actual performance for calculating the variances, if any, so that corrective actions may be taken in future. He objective working capital budget is to ensure availability of funds as and needed, and to ensure effective utilization of these resources. The successful implementation of working capital budget involves the preparing of separate budget for each element of working capital, such as, cash, inventories and receivables etc.

ANALYSIS OF SHORT – TERM FINANCIAL POSITION OR TEST OF LIQUIDITY The short –term creditors of a company such as suppliers of goods of credit and commercial banks short-term loans are primarily interested to know the ability of a firm to meet its obligations in time. The short term obligations of a firm can be met in time only when it is having sufficient liquid assets. So to with the confidence of investors, creditors, the smooth functioning of the firm and the efficient use of fixed assets the liquid position of the firm must be strong. But a very high degree of liquidity of the firm being tied – up in current assets. Therefore, it is important proper balance in regard to the liquidity of the firm. Two types of ratios can be calculated for measuring short-term financial position or short-term solvency position of the firm. 1. 2.

Liquidity ratios. Current assets movements ‘ratios.

CURRENT RATIO QUICK RATIO ABSOLUTE LIQUID RATIO 1. The current assets should either be liquid or near about liquidity. CURRENT RATIO Current Ratio.A) LIQUIDITY RATIOS Liquidity refers to the ability of a firm to meet its current obligations as and when these become due. The sufficiency or insufficiency of current assets should be assessed by comparing them with short-term liabilities. On the other hand. 2. 3. The short-term obligations are met by realizing amounts from current. the following ratios can be calculated: 1. These should be convertible in cash for paying obligations of short-term nature. floating or circulating assts. also known as working capital ratio is a measure of general liquidity and its most widely used to make the analysis of short-term financial position or liquidity of a firm. To measure the liquidity of a firm. Thus. It is defined as the relation between current assets and current liabilities. CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITES The two components of this ratio are: . if the current liabilities cannot be met out of the current assets then the liquidity position is bad. If current assets can pay off the current liabilities then the liquidity position is satisfactory.

The current ratio of company is more than the ideal ratio. bill receivables. CALCULATION OF CURRENT RATIO (Rupees in crore) e. On the hand a low current ratio represents that the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time. Its current assets are more than its current liabilities. A ratio equal or near to the rule of thumb of 2:1 i.42 2.12 20. Year Current Assets Current Liabilities Current Ratio 2006 81.03:1 2008 13.96:1 2007 83.g. sundry debtors.08:1 Interpretation:As we know that ideal current ratio for any firm is 2:1.e. A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time. If we see the current ratio of the company for last three years it has increased from 2006 to 2008.29 27.58 4. current assets double the current liabilities is considered to be satisfactory. inventories and work-in-progresses. Current liabilities include outstanding expenses. bill payable.57 33. . marketable securities.6. This depicts that company’s liquidity position is sound. dividend payable etc.1) 2) CURRENT ASSETS CURRENT LIABILITES Current assets include cash.48 4.

As a rule of thumb ratio of 1:1 is considered satisfactory. QUICK RATIO Quick ratio is a more rigorous test of liquidity than current ratio. It measures the firms’ capacity to pay off current obligations immediately. a firm having a low liquidity position if it has fast moving inventories.2. Quick ratio may be defined as the relationship between quick/liquid assets and current or liquid liabilities. On the other hand. (Rupees in Crore) . Debtors. However. CALCULATION OF QUICK RATIO e. a firm having high quick ratio may not have a satisfactory liquidity position if it has slow paying debtors. A high ratio is an indication that the firm is liquid and has the ability to meet its current liabilities in time and on the other hand a low quick ratio represents that the firms’ liquidity position is not good. It is generally thought that if quick assets are equal to the current liabilities then the concern may be able to meet its short-term obligations. QUICK RATIO = QUICK ASSETS CURRENT LIABILITES Where Quick Assets are: 1) 2) 3) Marketable Securities Cash in hand and Cash at bank. An asset is said to be liquid if it can be converted into cash with a short period without loss of value.g.

58 .14 27.6 : 1 2007 47.69 27.48 1.09 : 1 2008 5. So absolute liquid ratio should be calculated together with current ratio and acid test ratio so as to exclude even receivables from the current assets and find out the absolute liquid assets.55 33.Year Quick Assets Current Liabilities Quick Ratio Interpretation : 2006 44.8 : 1 A quick ratio is an indication that the firm is liquid and has the ability to meet its current liabilities in time.42 .42 1.58 2. The ideal quick ratio is 1:1. debtors and bills receivable are generally more liquid than inventories.3 : 1 2008 61. This shows company has no liquidity problem.43 20. e. ABSOLUTE LIQUID RATIO Although receivables.17 : 1 (Rupees in Crore) 2007 1. Year Absolute Liquid Assets Current Liabilities Absolute Liquid Ratio Interpretation : 2006 4.79 20. 3. Company’s quick ratio is more than ideal ratio. Absolute Liquid Assets includes : ABSOLUTE LIQUID RATIO = ABSOLUTE LIQUID ASSETS CURRENT LIABILITES ABSOLUTE LIQUID ASSETS = CASH & BANK BALANCES.06 33.g.15 : 1 . yet there may be doubts regarding their realization into cash immediately or in time.48 .

Depending upon the purpose. INVENTORY TURNOVER OR STOCK TURNOVER RATIO : . B) CURRENT ASSETS MOVEMENT RATIOS Funds are invested in various assets in business to make sales and earn profits. large is the amount of sales and profits. These are : 1. In India. 4. a number of turnover ratios can be calculated. Current assets movement ratios measure the efficiency with which a firm manages its resources. The efficiency with which assets are managed directly affects the volume of sales. The better the management of assets. But there is nothing to be worried about the lack of cash because company has reserve. it is important to calculate the turnover ratio. borrowing power & long term investment. Inventory Turnover Ratio Debtors Turnover Ratio Creditors Turnover Ratio Working Capital Turnover Ratio The current ratio and quick ratio give misleading results if current assets include high amount of debtors due to slow credit collections and moreover if the assets include high amount of slow moving inventories. 1. firms have credit limits sanctioned from banks and can easily draw cash. 2. 3.These ratio shows that company carries a small amount of cash. As both the ratios ignore the movement of current assets. These ratios are called turnover ratios because they indicate the speed with which assets are converted or turned over into sales.

Every firm has to maintain a certain amount of inventory of finished goods so as to meet the requirements of the business. AVERAGE STOCK = OPENING STOCK + CLOSING STOCK 2 (Rupees in Crore) Year Cost of Goods sold Average Stock Inventory Turnover Ratio Interpretation : These ratio shows how rapidly the inventory is turning into receivable through sales. the lesser amount of money is required to finance the inventory. poor quality of goods. In 2007 the company has high inventory turnover ratio but in 2006 110.2 36. Because it is harmful to hold more inventory as some amount of capital is blocked in it and some cost is involved in it. Usually a high inventory ratio indicates an efficient management of inventory because more frequently the stocks are sold . INVENTORY TURNOVER RATIO = COST OF GOOD SOLD AVERAGE INVENTORY Inventory turnover ratio measures the speed with which the stock is converted into sales. But the level of inventory should neither be too high nor too low. dull business.6 73.59 1.75 times .8 55. Where as low inventory turnover ratio indicates the inefficient management of inventory.5 times 2007 103.42 2. A low inventory turnover implies over investment in inventories. It will therefore be advisable to dispose the inventory as soon as possible.8 times 2008 96.35 1. stock accumulations and slow moving goods and low profits as compared to total investment.

5 243 days 2007 365 2.8 202 days DEBTORS TURNOVER RATIO : A concern may sell its goods on cash as well as on credit to increase its sales and a liberal credit policy may result in tying up substantial funds of a firm in the form of trade debtors. So liquidity position of a concern also depends upon the quality of trade debtors. In the company inventory conversion period is decreasing. 3. 2006 365 1. INVENTORY CONVERSION PERIOD: INVENTORY CONVERSION PERIOD = 365 (net working days) INVENTORY TURNOVER RATIO e. 2.g. This shows the efficiency of management to convert the inventory into cash. a) b) Debtors Turnover Ratio Average Collection Period .75 times.8 130 days 2008 365 1. Year Days Inventory Turnover Ratio Inventory Conversion Period Interpretation : Inventory conversion period shows that how many days inventories takes to convert from raw material to finished goods. Trade debtors are expected to be converted into cash within a short period and are included in current assets.2008 it has reduced to 1. This shows that the company’s inventory management technique is less efficient as compare to last year. Two types of ratio can be calculated to evaluate the quality of debtors.

AVERAGE DEBTORS= OPENING DEBTOR+CLOSING DEBTOR 2 e. This ratio should be compared with ratios of other firms doing the same business and a trend may be found to make a better interpretation of the ratio.5 times AVERAGE COLLECTION PERIOD : .3 times 2008 169.DEBTORS TURNOVER RATIO = TOTAL SALES (CREDIT) AVERAGE DEBTORS Debtor’s velocity indicates the number of times the debtors are turned over during a year. The higher the values or turnover into sales.50 7. Year Sales Average Debtors Debtor Turnover Ratio Interpretation : This ratio indicates the speed with which debtors are being converted or turnover into sales.33 9. the more efficient is the management of credit. Now their credit policy become liberal as compare to previous year. The higher the values of debtors turnover. 4.6 times 2007 151. Generally higher the value of debtor’s turnover ratio the more efficient is the management of debtors/sales or more liquid are the debtors. Whereas a low debtors turnover ratio indicates poor management of debtors/sales and less liquid debtors.5 18. This shows that company is not utilizing its debtors efficiency.5 22.g.0 17.19 8. But in the company the debtor turnover ratio is decreasing year to year. 2006 166.

Average Collection Period = No.3 44 days 2008 365 7. It also helps to analysis the credit policy adopted by company. In the firm average collection period increasing year to year. It shows that the firm has Liberal Credit policy.6 38 days 2007 365 8. This ratio measures the efficiency with which the working capital is used by the firm. This ratio indicates the number of times the working capital is turned over in the course of the year. It measures the quality of debtors. shorter the average collection period the better is the quality of debtors as a short collection period implies quick payment by debtors and vice-versa. Generally. 5. WORKING CAPITAL TURNOVER RATIO : Working capital turnover ratio indicates the velocity of utilization of net working capital.5 49 days . These changes in policy are due to competitor’s credit policy. A higher ratio indicates efficient utilization of working capital and a low ratio 2006 365 9. Average Collection Period = 365 (Net Working Days) Debtors Turnover Ratio Year Days Debtor Turnover Ratio Average Collection Period Interpretation : The average collection period measures the quality of debtors and it helps in analyzing the efficiency of collection efforts. of Working Days Debtors Turnover Ratio The average collection period ratio represents the average number of days for which a firm has to wait before its receivables are converted into cash.

5 62.87 3.0 53. In 2008.09 1. Working Capital Turnover Ratio = Cost of Sales Net Working Capital Working Capital Turnover = Sales Networking Capital e.64 = .4 2008 169. Year Sales Networking Capital Working Capital Turnover Interpretation : This ratio indicates low much net working capital requires for sales. Thus this ratio is helpful to forecast the working capital requirement on the basis of sale.g.01 2006 166.08 2007 151.69 2007-2008 75. in Crores) Year Inventories Interpretation : 2005-2006 37. the reciprocal of this ratio (1/1.52 2. But a very high working capital turnover is not a good situation for any firm.indicates otherwise.609) shows that for sales of Rs.5 103. INVENTORIES (Rs.15 2006-2007 35.64 . 1 the company requires 60 paisa as working capital.

So the organization should have sufficient cash to meet various requirements. Cash is needed to keep the business running on a continuous basis. in 2006-2007 is 43% and in 2007-2008 is 54% of their current assets. So in 2008. If any company wants to manage its working capital efficiency.05 2007-2008 25. The company should try to reduce the inventory upto 10% or 20% of current assets.94 2005-2006 4.05 . In India it constitute one third of current assets.79 2007-2008 5. The above graph is indicate that in 2006 the cash is 4.1% cash balance. The graph shows that inventory in 2005-2006 is 45%.Inventories is a major part of current assets.33 2006-2007 19.69 2006-2007 1. The result of that it disturb the firms manufacturing operations. it is increased upto approx. in Crores) Year Cash Bank Balance Interpretation : Cash is basic input or component of working capital. CASH BNAK BALANCE : (Rs. In 2008. DEBTORS : (Rs. in Crores) Year Debtors Interpretation : Debtors constitute a substantial portion of total current assets. it has to manage its inventories efficiently. the company has no problem for meeting its requirement as compare to 2007.69 crores but in 2007 it has decrease to 1. 5.79. The above graph is depict that there is 2005-2006 17.

This increase is arise because there is approx. 2005-2006 27.increase in debtors. In 2008 the current liabilities of the company increased.42 2006-2007 20. Increase in current assets shows the liquidity soundness of company. CURRENT ASSETS : (Rs.57 CURRENT LIABILITY : (Rs. But still increase in current assets are more than its current liabilities.15 2007-2008 136. in Crores) Year Current Assets Interpretation : This graph shows that there is 64% increase in current assets in 2008.29 2006-2007 83.48 NET WOKRING CAPITAL : (Rs. 50% increase in inventories. in Crores) Year Current Liability Interpretation : Current liabilities shows company short term debts pay to outsiders. in Crores) . It represents an extension of credit to customers. The reason for increasing credit is competition and company liberal credit policy.58 2007-2008 33. 2005-2006 81.

The increase in working capital arises because the company has expanded its business. It should not be too less or not too excess. RESEARCH METHODOLOGY The methodology. IV. COMMON-SIZE P/L A/C COMMON-SIZE BALANCE SHEET COMPARTIVE P/L A/C COMPARTIVE BALANCE SHEET TREND ANALYSIS RATIO ANALYSIS The above parameters are used for critical analysis of financial position. it becomes clear how the financial manager handles the finance matters in profitable manner in the critical challenging atmosphere. I have adopted for my study is the various tools.87 2006-2007 62. With the evaluation of each component.09 Working capital is required to finance day to day operations of a firm. . which basically analyze critically financial position of to the organization: I. the recommendation are made which would suggest the organization in formulation of a healthy and strong position financially with proper management system. the financial position from different angles is tried to be presented in well and systematic manner.Year Net Working Capital Interpretation : 2005-2006 53. V. VI. In the company there is increase in working capital. II. There should be an optimum level of working capital. III. By critical analysis with the help of different tools.53 2007-2008 103.

the term ‘financial statements’ generally refers to the two statements (1) The position statement or Balance sheet. through the evaluation of various percentage.I sincerely hope. To provide reliable financial information about economic resources and obligation of a business firm. as in the case of balance sheet or may reveal a series of activities over a given period of time. 2. as in the case of an income statement. To provide other needed information about charges in such economic resources and obligation. 4. ratios and comparative analysis. OBJECTIVES OF FINANCIAL STATEMENTS: According to accounting Principal Board of America (APB) states The following objectives of financial statements: 1. LIMITATIONS OF FINANCIAL STATEMENTS: Though financial statements are relevant and useful for a concern. (2) The income statement or the profit and loss Account. Thus. ANALYSIS OF FINANCIAL STATEMENTS FINANCIAL STATEMENTS: Financial statement is a collection of data organized according to logical and consistent accounting procedure to convey an under-standing of some financial aspects of a business firm. The analysis and interpretation of these statements must be done carefully otherwise misleading conclusion may be drawn. To provide financial information that assets in estimating the learning potential of the business. 3. It may show position at a moment in time. still they do not present a final picture a final picture of a concern. To provide reliable information about change in net resources (recourses less obligations) missing out of business activities. the organization would be able to conquer its in efficiencies and makes the desired changes. The utility of these statements is dependent upon a number of factors. .

the balance sheet loses the significance of being an index of current economics realities. So fixed assets are shown at cost less accumulated deprecation. The concern is expected to continue in future. The value of assets decreases with the passage of time current price changes are not taken into account. during the life of a concern. Financial statements have been prepared for different accounting periods. The financial statements are expressed in monetary value. FINANCIAL STATEMENT ANALYSIS . there are certain assets in the balance sheet which will realize nothing at the time of liquidation but they are shown in the balance sheets. profit & loss A/c is that they do not give all the information regarding the financial operation of the firm. The costs and incomes are apportioned to different periods with a view to determine profits etc. The actual value can only be determined when the business is sold or liquidated.Financial statements suffer from the following limitations: 1. 4. The existence of contingent assets and liabilities also make the statements imprecise. So financial statement are at the most interim reports rather than the final picture of the firm. The balance sheet is prepared on the presumption of a going concern. 3. the profitability shown by the income statements may be represent the earning capacity of the concern. Similarly. The value of fixed assets in the balance sheet neither represent the value for which fixed assets can be sold nor the amount which will be required to replace these assets. liabilities etc. the financial position and operation of the firm. Moreover. Nevertheless. Thus. The financial statements are prepared on the basis of historical costs Or original costs. The basic limitation of the traditional financial statements comprising the balance sheet. and the profit & loss A/c shows the result of operation during a certain period in terms revenue obtained and cost incurred during the year. Financial statements do not given a final picture of the concern. The allocation of expenses and income depends upon the personal judgment of the accountant. The data given in these statements is only approximate. 5. they provide some extremely useful information to the extent the balance sheet mirrors the financial position on a particular data in lines of the structure of assets. so they appear to give final and accurate position. The statement are not prepared with the keeping in view the economic conditions. There are certain factors which have a bearing on the financial position and operating result of the business but they do not become a part of these statements because they cannot be measured in monetary terms. generally one year. 2.

It is the process of identifying the financial strength and weakness of a firm from the available accounting data and financial statements. These are:• • • Profit & Loss account ratios Balance Sheet ratios Composite ratios Project Description : Title : Working Capital Management of ____________ Pages : 73 Category : Project Report for MBA We made this project of various companies like Reliance Industries. Dabur India Ltd. Grasim Industries. its cost is Rs. CLASSIFICATION OF RATIOS Ratios can be classified in to different categories depending upon the basis of classification The traditional classification has been on the basis of the financial statement to which the determination of ratios belongs. which are connected with each other in some manner. etc. 2499/. The analysis is done CALCULATIONS OF RATIOS Ratios are relationship expressed in mathematical terms between figures..only without Synopsis .

com We will send you a hardcopy with hard binding and a softcopy in CD from courier. If you need this project.and Rs. .only with synopsis. TABLE OF CONTENTS · · · · · · · · · · INTRODUCTION TO BANKING SECTOR OBJECTIVES OF THE STUDY RESEARCH METHODOLOGY ANALYSIS AND INTERPRETATION FINDINGS RECOMMENDATIONS LIMITATIONS CONCLUSION BIBLIOGRAPHY ANNEXURE OBJECTIVES OF THE STUDY Primary Objective: · To know the various HR implications in private banks. 2999/. mail us at this id : bkm@allprojectreports.

To survive and flourish in the present day corporate-jungle. customization. variety. This requires responding to customers' needs for quality. It is true in many organizations that before an employee is fitted into a harmonious working . working cooperatively in teams and 'changing hats' and shifting from job to job as well. areas. To know the various retention practices used in banks? To know the motivational factors used by the banks? To know whether training and development programs are conducted b the banks or not To know the cause of their problems related with : 1.Secondary Objective: · · · · · To know whether employees are satisfied with their jobs or not. convenience and timeliness. Training has increased in importance in today's environment where jobs are complex and change. The purpose of this chapter is make the student understand the basic principles. companies should invest time and money in upgrading the knowledge and skills of their employees constantly.5p/Training The game of economic competition has new rules.Training Need / Identification and Importance of Training for Employees TRAINING EFFECTIVENESS . Rapidly. sophisticated designs and improved ways of selling. Meeting these new standards requires a workforce that is technically trained in all respects. Firms should be fast and responsive. 2. by lazily setting aside a few hours a year. and methods of training currently in use in the corporate circles. It requires people who are capable of analyzing and solving job related problems. For. Need for Training After employees have been selected for various positions in an organization. Their Health Problem Dissatisfaction Project Report . Companies that pay lipservice to the need for training. will soon find themselves at the receiving end when talented employees leave in frustration and other employees find it difficult to beat rivals with new products. any company that stops injecting itself with intelligence is going to die. training them for the specific tasks to which they have been assigned assumes great importance.

The essential features of training may be stated thus: • Increases knowledge and skills for doing a particular job. A trainee learns new habits. Instruction. Training is needed to serve the following purposes: • Newly recruited employees require training so as to perform their tasks effectively. changing what employees know. In the face of rapid technological changes. he is given adequate training. . They can be placed on various jobs depending on organizational needs. • • • • • Training is needed to make employees more productive and useful in the long-run. coaching help them to handle jobs competently. guidance. this is an absolute necessity. Training enables an employee to do his present job more efficiently and prepare himself for a higher-level job. the' employee can change jobs quickly. improve his performance levels and achieve career goals comfortably Training is necessary to make employees mobile and versatile. without any wastage. refined skills and useful knowledge during the training that helps him improve performance. Existing employees require refresher training so as to keep abreast of the latest developments in job operations. Training is needed to bridge the gap between what the employee has and what the job demands. Training is the act of increasing the knowledge and skills of an employee for performing a particular job. knowledge and behaviors • Focuses attention on the current job. The major outcome of training is learning. Training is necessary to prepare existing employees for higher-level jobs (promotion). their attitudes toward their work or their interactions with their co-workers or supervisors • Tends to be more narrowly focused and oriented toward short-term performance concerns. how they work. After training. it bridges the gap between job needs and employee skills. Training is necessary when a person moves from one job to another (transfer). it is job specific and addresses particular performance deficits or problems • Concentrates on individual employees.relationship with other employees.

Thus. They use machines. accidents on the job. They can turn out better quality goods by putting the materials. Training improves the knowledge of employees regarding the use of machines and equipment. greater job satisfaction and lower labour turnover. They can handle jobs with confidence. Hence. it can enable employees to cope with . he will find employment more easily. Wastage is thus eliminated to a large extent. Employees can avoid mistakes. tools and equipment to good use. tools. as they know how to handle operations properly. There will be fewer accidents. Importance Training offers innumerable benefits to both employees and employers. Their morale would be high. Training helps an employee to move from one organization to another easily.Training is needed for employees to gain acceptance from peers (learning a job quickly and being able to pull their own weight is one of the best ways for them to gain acceptance). Hence. Trained workers can show superior performance. Training makes employees more efficient and effective. Training enables employees to secure promotions easily. fewer mistakes. trained workers need not be put under close supervision. They will be more satisfied on their jobs. and materials in a proper way. Also. The importance of training can be studied under the following heads: Benefits to the business: Trained workers can work more efficiently. they can produce more with minimum effort. By combining materials. They can realise their career goals comfortably. It makes the employee more productive and more useful to an organization. He can be more mobile and pursue career goals actively. training can contribute to higher production. They can turn out better performance. Training makes employees more loyal to an organization. They will be less inclined to leave the unit where there are growth opportunities Benefits to the employees: Training makes an employee more useful to a firm. tools and equipment in a right way.

The reactions may be mild or wild. The selected model should provide the right kind of behavior to be copied by others. done and presented. If we want to change people. the results may be disastrous: good performers may quit in frustration. These benefits accrue to both the trainee and the organization. If he rewards poor performance. Reinforcement If a behavior is rewarded. if managers understand the principles behind the training process.organizational. A bank officer would want to do a postgraduate course in finance. Children learn by modelling parents and older children. The reinforcement principle is also based on the premise that punishment is less effective in learning than reward. As experts put it. he pays attention to what is being said. fewer mistakes. training efforts must invariably follow certain learning-oriented guidelines. People avoid certain behaviors that invite criticism and punishment. Positive reinforcement consists of rewarding desired behaviors. intention to learn is important. People learn more quickly when the material is important and relevant to them. Punishment is a pointer to undesirable behaviors. it causes pain to the employee. Modelling Modeling is simply copying someone else's behavior. they are quite comfortable with the process by the time they grow up. Motivation to learn is influenced by the answers to questions such as: How important is my job to me? How important is the information? Will learning help me progress in the company? etc. Passive classroom learning does not leave any room for modeling. Learning is usually quicker and long-lasting when the learner participates actively. Learning Principles: The Philosophy of Training Training is essential for job success. it would be a good idea to have videotapes of people showing the desired behavior. "managers tend to manage as they were managed" Motivation For learning to take place. Both the external rewards (investments. praise) and the internal rewards (a feeling of pride and achievement) associated with desired behaviors compel subjects to learn properly. To this end. for example. it probably will be repeated. Most people. never forget how to ride a bicycle because they took an active part in the learning process. accidents may go up. if it earns him increments and makes him eligible for further promotions. To be effective. When the employee is motivated. It can lead to higher production. greater job satisfaction and lower turnover. He mayor may not repeat the mistakes. A great deal of human behaviour is learned by modelling others. social and technological change. and productivity may suffer. Effective training is an invaluable investment in the human resources of an organization. Action taken to repeal a . When administered. the trainer must reward desired behaviors only.

For maximum benefit. The trainee after learning the right behaviour is motivated to do things in a 'right' way and earn the associated rewards. To be a swimmer. Applicability of Training Training should be as real as possible so that trainees can successfully transfer the new knowledge to their jobs.and identify with .the types of situations they can come across on the job. instead of covering it all in one day. A broad overview of what the trainee would be doing on the job should be given top priority. . New employees learn better if the orientation programme is spread over a two or three day period. Positive feedback (showing the trainee the right way of doing things) is to be preferred to negative feedback (telling the trainee that he is not correct) when we want to change behaviour. spaced practice is usually the best. 'massed' practice is usually more effective. This incremental approach to skill acquisition minimises the physical fatigue that deters learning. For memorizing tasks.person from undesirable action is punishment. If administered properly. Whole Learning The concept of whole learning suggests that employees learn better if the job information is explained as an entire logical process. Feedback People learn best if reinforcement is given as soon as possible after training. so that they can see how the various actions fit together into the 'big picture'. Imagine the way schools ask the kids to say the Lord's prayer aloud. punishment may force the trainee to modify the undesired or incorrect behaviors. Spaced Practice Learning takes place easily if the practice sessions are spread over a period of time. If he is off the track. you should plunge into water instead of simply reading about swimming or looking at films of the worlds' best swimmers. if learning has to take place quickly. somebody must put him back on the rails. The errors in such cases must be rectified immediately. practice sessions should be distributed over time. Can you memorise a long poem by learning only one line per day? You tend to forget the beginning of the poem by the time you reach the last stanza. Learning is enhanced when trainees are provided ample opportunities to repeat the task. Active Practice 'Practice makes a man perfect': so said Bacon. Every employee wants to know what is expected of him and how well he is doing. The training situations should be set up so that trainees can visualise . For 'acquiring' skills as stated by Mathis and Jackson. Research studies have also indicated that it is more efficient to practice a whole task all at once rather than trying to master the various components of the task at different intervals.

operating a machine. the staff and the products or services offered by the company.Environment Finally. Technical Skills The employee is taught a specific skill (e. Generally speaking. Social Skills The employee is made to learn about himself and others. and to develop a right mental attitude towards the job. the pace of learning slows down as opportunities for improvement taper off. environment plays a major role in training. handling computer etc. The principal focus is on teaching the employee how to be a team member and get ahead. The process here is fairly simple. well spaced rest periods are more likely to learn than employees whose training conditions are less than ideal. The need for training in basic skills (such as reading. computing. In addition to improving the skills and knowledge of employees. writing. Skills training: This type of training is most common in organisations. It is natural that workers who are exposed to training in comfortable environments with adequate. a training programme will go a long way in obt8ining employee loyalty. We focus here on the types of training that are commonly employed in present-day organisations. training aims at moulding employee attitudes: When administered properly.) so that he can acquire that skill and contribute meaningfully. Types of Training There are many approaches to training.g. The aim is to make the new employee fully aware of what goes on inside and outside the company. Knowledge Here the trainee learns about a set of rules and regulations about the job. Techniques This involves the application of knowledge and skill to various on-the-job situations. support and commitment to company activities. Thereafter.. Areas of Training The Areas of Training in which training is offered may be classified into the following categories. . colleagues and the company. learning is very fast at the beginning.

leading others) is identified through assessment. By organising short-term courses which incorporate the latest developments in a particular field.speaking. Eli Lilly and Company (India). listening. Before employing these methods. There are many approaches to cross functional training. encourage trainees to learn by doing. Content tasks specify the team's goals such as cost control and • • • . content tasks and group processes. for example. encourages cross-functional movements to make the organisation equally attractive to both specialists and generalists. they become more adaptable and versatile (2) they can better engineer their own career paths (3) they not only know their job well but also understand how others are able to perform under a different set of constraints (4) A broader perspective increases workers' understanding of the business and reduces the need for supervision (5) when workers can fill in for other workers who are absent. Refresher training: Rapid changes in technology may force companies to go in for this kind of training. Several methods are available for imparting these basic skills in modern organisations (such as lectures. It is conducted at regular intervals by taking the help of outside consultants who specialise in a particular descriptive. it is easier to use flexible scheduling. Job rotation can be used to provide a manager in one functional area with a broader perspective than he would otherwise have. managing oneself. give feedback on progress toward meeting learning objectives.). coaching etc. High performing workers can act as peer trainers and help employees develop skills in another area of operation. Cross functional training provides the following benefits to an organisation (and the workers as well) (1) Workers gain rich experience in handling diverse jobs. Specific training objectives are set and training content is developed to meet those objectives. knowing how to learn. Cross-functional Training: Cross-functional Training involves training employees to perform operations in areas other than their assigned job. respect and consider participant responses and use these as a resource. on-the-job. which is increasingly in demand as more employees want to spend more time with their families. managers should: • • • • • • explain how the training will help the trainees in their jobs. apprenticeship. relate the training to the trainees' goals. Team Training: Team training generally covers two areas. working as part of a team. the company may keep its employees up-to-date and ready to take on emerging challenges. problem solving. Departments can exchange personnel for a certain period so that each employee understands how other departments are functioning.

how they participate etc. preparing recipes for colleagues at a restaurant. The training basically throws light on (i) how members should communicate with each other (ii) how they have to cooperate and get ahead (iii) how they should deal with conflictfull situations (iv) how they should find their way.for example how they interact with each other. They are using outdoor experiential training techniques to develop teamwork and team spirit among their employees (such as scaling a mountain. how they sort out differences. nowadays. break the rules. • Creativity training: Companies like Mudra Communications. Companies are investing heavy amounts. go out of the box and devise unexpected solutions. trainers often focus on three things: (a) Breaking away: In order to break away from restrictions.). Wipro encourage their employees to think unconventionally. In creativity training. using collective wisdom and experience to good advantage. take risks. Titan Industries. Postpone judgment: Don't reject any idea Create alternative frames of reference Break the boundary of thinking Examine a different aspect of the problem Make a wish list of solutions Borrow ideas from other fields Look for processes to change or eliminate Think up alternative methods Adopt another person's perspective Question all Assumptions. Group processes reflect the way members function as a team . in training new employees to listen to each other and to cooperate.problem solving. the trainee is expected to (i) identify the dominant ideas influencing his own thinking (ii) define the boundaries within . sailing through uncharted waters. crossing a jungle etc.

The trainee should allow his mind to wander over alternatives freely.while designing a training programme.which he is working (iii) bring the assumptions out into the open and challenge everything (b) Generate new ideas: To generate new ideas. appreciate the importance of sticking to rules. Functional literacy programmes focus on the basic skills required to perform a job adequately and capitalise on most workers' motivation to get help in a particular area. • Diversity Training: Diversity training considers all of the diverse dimensions in the workplace race. books. Functional illiteracy (low skill level in a particular content area) may be a serious impediment to a firm's productivity and competitiveness. simple mathematical tests. the trainee should not try to kill off ideas too quickly. It aims to create better crosscultural sensitivity with the aim of fostering more harmonious and fruitful working relationships among a firm's employees. culture. education. articles. look at the problem from all possible angles and list as many alternative approaches as possible. age. home assignments. He should allow ideas to grow a little. which offers the knowledge. the trainee should open up his mind. and commit avoidable mistakes. The programme covers two things: (i) awareness building. etc. especially at the lower levels. skills and abilities at the . gender. writing or arithmetic skills. which helps employees appreciate the key benefits of diversity. situations). in such situations. On the job training is provided when the workers are taught relevant knowledge. overcoming inhibitions. Brainstorming (getting a large number of ideas from a group of people in a short time) often helps in generating as many ideas as possible without pausing to evaluate them. switch over from one perspective to another. speak and work well with others could often come in the way of discharging duties. skills and abilities required for working with people having varied backgrounds. Literacy Training: Inability to write. Tutorial programmes. cross fertilising ideas and getting away from patterned thinking. and (ii) skill building. disabilities. It helps in releasing ideas. are generally used in all company in-house programmes meant to improve the literacy levels of employees with weak reading. • • Training Methods Training methods are usually classified by the location of instruction. they should be held back until he is able to generate as many ideas as possible.. reading and writing exercises. ideas and backgrounds . may fail to understand safety messages. (c) Delaying judgement: To promote creative thinking. Expose himself to new influences (people. -arrange cross fertilization of ideas with other people and use analogies to spark off ideas. lifestyles. Workers.

1. Finally. • While learning. Demonstrations by the trainer and practice by the trainee are repeated until the trainee masters the right way to handle the job. the employee does the job independently without supervision. with a clear focus on the relevance of training. requires that trainees learn at a location other than the real work spot. off-the-job training. Job Instruction Training (JlT) The JIT method (developed during World War II) is a four-step instructional process involving preparation. • The trainee gains confidence quickly as he does the work himself in actual setting with help from supervisor. Next. Some of the widely used training methods are listed below. the employee is permitted to copy the trainer's way. its purpose and its desired outcomes. waste materials. 2. A trainer. on the other hand. cause accidents frequently. easy to explain and demonstrate within a short span of time. performance try out and follow up.actual workplace. transference of knowledge and skills will be poor. 3. • Experienced workers cannot use the machinery while it is being used for training. supervisor or coworker acts as the coach. The trainer shows a right way to handle the job. Also. presentation. . The trainer demonstrates the job in order to give the employee a model to copy. The trainee receives an overview of the job. Demerits: • The trainee should be as good as the trainer if the trainer is not good. mistakes can be corrected immediately. It is used primarily to teach workers how to do their current jobs. The four steps followed in the JIT methods are: 1. Merits: • Trainee learns fast through practice and observation. 4. • It is most suitable for unskilled and semi-skilled jobs where the job operations are simple. • It is economical as it does not require any special settings. trainee may damage equipment.

obviously. conducts lot of decision making meetings with trainees. the supervisor explains things and answers questions. It involves a continuous process of learning by doing. interpersonal and political skills are generally conveyed in such a relationship from the more experienced person. he throws light on why things are done the way they are.2. It involves: • • • • • explaining appropriate ways of doing things making clear why actions were taken stating observations accurately offering possible alternatives / suggestions following up 3. Coaching: Coaching is a kind of daily training and feedback given to employees by immediate supervisors. unplanned training and development activity provided by supervisors and peers. doing a full day's work may be more important than putting the learner on track. Mentoring : Mentoring is a relationship in which a senior manager in an organisation assumes the responsibility for grooming a junior person. coaching can be a taxing job in that the coach may not possess requisite skills to guide the learner in a systematic way. procedures are agreed upon and the trainee is given enough authority to make divisions and even commit mistakes. violating company policies or practices or having performance problems an employee needs help with a new skill following a formal training programme. Effective working. Technical. A . he offers a model for trainees to copy. In coaching. Of course. requires patience and communication skills. Sometimes. It may be defined as an informal. When to use coaching usefully? Coaching could be put to good use when: • • • • • an employee demonstrates a new competency an employee expresses interest in a different job within the organisation an employee seeks feedback an employee is expressing low morale.

These include: Role modeling: Mentors offer mentees a pattern of values and behaviours to imitate Acceptance and confirmation: mentors offer support. • 1. Mentors also help people to learn about the organisation's culture and understand why things are done in certain ways. supporter and facilitator in the realisation of the vision the young person (protege) has about the kind of 1ife he wants as an adult. and identify effectiveness in a professional role. spouse. These include: Sponsorship: Where mentors actively nominate a junior person (called 'mentee') for promotions or desirable positions. 4. Career functions: Career functions are those aspects of the relationship that enhance career advancement. 5. guidance and encouragement to mentees so that they can solve the problems independently and gain confidence in course of time. Challenging assignments: Mentors help mentees develop necessary competencies through challenging job assignments and appropriate feedback. Counseling: Mentors help mentees work out their personal problems. exemplar. Here mentors offer practical advice on how to accomplish objectives and gain recognition from others. 2. and most importantly. depending on the prevailing work culture and the commitment from the top management. In a work situation. if management invests time and money in such relationship building exercises. . Formal mentoring can be very fruitful. such mentoring can take place at both formal and informal levels. offer advice on what works and 3. Psychological functions: Psychological functions are those aspects that enhance the mentee’s sense of competence. 7. Exposure and visibility: Where mentors offer opportunities for mentees to interact with senior executives. Mentors create opportunities clients to prove their worth to demonstrate clearly what they have to offer. Coaching: Mentors help mentees to analyse how they are doing their work and to define their aspirations. host. learn about what to do and what not to do. Protection: Mentors shield the junior person from harmful situations/seniors. counsellor.mentor is a teacher. 8. guide. developerr of skills and intellect. • 6. The main objective is to he1p an employee attain psychological maturity and effectiveness and get integrated with the organisation. demonstrate their abilities and exploit their potential.

4. bosses and customers) Mentoring in India is based on the time-honoured guru-shishya relationship where the guru would do everything to develop the personality of the shishya. especially when the trainees are rolled on various jobs at frequent intervals. This helps him to have a general understanding of how the organisation functions. Polaris.. Neyveli Lignite Corporation. In such a case.from a series of advisors. Not all mentors are well prepared to transfer their skills and wisdom to their junior colleagues. 9. For slow learners. job rotation can be quite expensive. facilitating future cooperation among departments. 2002). job rotation allows trainees to build rapport with a wide range of individuals within the organisation. Proctor & Gamble have given a lot of importance to mentoring programmes. Today's manager's commands may be replaced by another set from another manager! Further. Mentors who are dissatisfied with their jobs and though who teach or narrow or distorted view of events may not help a protege's development. with contrasting styles of operation. Trainees can become confused when they are exposed to rotating managers. there is little room to integrate resources properly. Job rotation may pose several problems. subordinates. 25 Oct. Intel. Apart from relieving boredom. When young people are bombarded with conflicting viewpoints about how things should go . and do everything to demonstrate improved performance and prepare themselves for greater responsibility. skills and experiences in a systematic way and (iii) mentees believe in the whole process and carry out things in an appropriate manner. mentoring is not without its problems. Mentoring can succeed if (i) there is genuine support and commitment from top management (ii) mentors take up their job seriously and transfer ideas. Of course. trainees do not usually stay long enough in any single phase of the operation to develop a high degree of expertise. and guidance. Coca-Cola India have used mentoring systems to good effect in recent times (Economic Times. promotions or replacements become inevitable. Job Rotation : This kind of training involves the movement of trainee from one job to another. Friendship: Mentors offer practical help and support to mentees so that they can indulge in mutually satisfying social interactions (with peers. because they must be acquainted with different people and techniques in each department. Development costs can go up and productivity is reduced by moving a trainee into a new position when his efficiency . The purpose of job rotation is to provide trainees with a larger organisational perspective and a greater understanding of different functional areas as well as a better sense of their own career objectives and interests. Organisations like General Electric. The cross-trained personnel offer a great amount of flexibility for organisations when transfers.what doesn't. A substantial amount of managerial time is lost when trainees change positions. going even gone to the extent of penalising senior managers if they fail to develop leadership skills among subordinates. Companies like TISCO. offering emotional support. they may find it difficult to get ahead with confidence.

The above on-the-job methods are cost effective. the trainee is separated from the job situation and his attention is focused upon learning the material related to his future job performance. Very few problems arise in the· case of transfer of training because the employees learn in the actual work environment where the skills that are learnt are actually used. and not be a standard sequence that all trainees undergo. old skills may get outdated quickly. upon completion of their programmes. An internship is a kind of on-the-job training that usually combines job training with classroom instruction in trade schools. Poor learners may damage machinery and equipment. trainees are asked to solve an actual organisational problem. Off-the-Job Methods Under this method of training. It helps them to develop team spirit and work unitedly toward common goals. Workers actually produce while they learn. However. it should be tailored to the needs. Intelligent and aggressive trainees. Since immediat. Coaching. there is very little benefit to the trainee. is similar to apprenticeship because the coach attempts to provide a model for the trainee to copy.e feedback is available. Since the trainee is not distracted by job requirements. Experienced workers cannot use the facilities that are used in training. as explained above. Trainees who spend years learning specific skills may find. Inexperienced trainees may fail to handle new tasks in an efficient way. may find the system to be thoroughly boring as they continue to perform more or less similar jobs without any stretch. pull and challenge. coach or trainer. The trainees have to work together and offer solution to the problem. on the offer hand. issues and processes governing the organisation. Apprentices are trainees who spend a prescribed amount of time working with an experienced guide. Assistantships and internships are similar to apprenticeships because they also demand high levels of participation from the trainee. Finally. 6 Committee Assignments In this method. It is also likely that in these days of rapid changes in technology. To get the best results out of the system.levels begin to improve at the prior job. Slow learners may need additional training time. managers should very well understand that committee assignments could become notorious time wasting activities. 5 Apprenticeship Training Most craft workers such as plumbers and carpenters are trained through formal apprenticeship programmes. they motivate trainees to observe and learn the right way of doing things. Assigning talented employees to important committees can give these employees a broadening experience and can help them to understand the personalities. Those who learn fast may quit the programme in frustration. that the job skills they acquired are no longer appropriate. he can focus his entire . colleges or universities. People have different abilities and learn at varied rates. interests and capabilities of the individual trainee. One important disadvantage ofthe apprenticeship methods is the uniform period of training offered to trainees. On-the-job methods may cause disruptions in production schedules. if the trainer does not possess teaching skills.

Theory can be related to practice in this method. such as the production manager. This method is. The duration of this training ranges from a few days to a few weeks. The major limitation of the lecture method is that it does not provide for transfer of training effectively. Conference/discussion approach: In this method. e. The instructor organizes the material and gives it to a group of trainees in the form of a talk. Thus. To be effective. When big organisations use this method. foreman. Behaviourally Experienced Training . mockups and slides. The participants play the role of certain characters. Material. doing and practice. shorthand. files and equipment . the lecture must motivate and create interest among the trainees. This type of training is commonly used for training personnel for clerical and semiskilled jobs. Programmed instruction: This method has become popular in recent years. Those individuals who have a general educational background and whatever specific skills are required such as typing. thus. The trainee goes through these units by answering questions or filling the blanks. a group-centered approach where there is a clarification of ideas. Vestibule training: In this method. Even the trainee's presentation can be taped for self confrontation and selfassessment. c. workers and the like. b. d. This method is mostly used for developing interpersonal interactions and relations. . An advantage of lecture method is that it is direct and can be used for a large group of trainees. etc.concentration on learning the job rather than spending his time in performing it. There is an opportunity for freedom of expression for the trainees.may be provided with specific instructions to handle their respective jobs. superintendents. in some cases the lectures are videotaped or audio taped. Off-the-job training methods are as follows: a. communication of procedures and standards to the trainees. Role playing: It is defined as a method of human interaction that involves realistic behaviour in imaginary situations. The conference is. recording. This method of training involves action. filing. indexing. maintenance engineers. the trainer uses audio-visual aids such as black boards. quality control inspectors. actual work conditions are simulated in a classroom. The subject matter to be learned is presented in a series of carefully planned sequential units. thus.those that are used in actual job performance are also used in the training. costs and time involved are reduced. mechanical engineer. expensive and time-consuming. These units are arranged from simple to more complex levels of instruction. Lecture method: The lecture is a traditional and direct method of instruction. the trainer delivers a lecture and involves the trainee in a discussion so that his doubts about the job get clarified. office equipment operation.

These are discussed elaborately in the section covering Executive Development Programmes. Ultimate value: It. sales turnover and the like. viz. Organisation: This evaluation measures the use of training. and to the individual goals like development of personality and social goals like maximising social benefit. Sensitivity training or laboratory training is an example of a method used for emotional learning. learning and change in the job behaviour of the department/organisation in the form of increased productivity. morale. Here employees can learn about behaviour by role-playing in which the role players attempt to act their part in respect of a case. The basis of evaluation and the mode of collection of information necessary for evaluation should be determined at the planning stage. Evaluation helps in controlling and correcting the training programme. Reactions: Trainee's reactions to the overall usefulness of the training including the coverage of the topics. Evaluation of a Training Programme The specification of values forms a basis for evaluation. Job behaviour: This evaluation includes the manner and extent to which the trainee has applied his learning to his job. trainer's ability and trainee's ability are evaluated on the basis of quantity of content learned and time in which it is learned and learner's ability to use or apply the content learned. 4. the techniques used to clarify things. as they would behave in a real-life situation. cases. The process of training evaluation has been defined as any attempt to obtain information on the effects of training performance and to assess the value of training in the light of that information. profitability. growth. incidents. a better understanding of oneself and others. 5. job behaviour. often throw light on the effectiveness of the programme.Some training programmes focus on emotional and behavioural learning. 2. Hamblin suggested five levels at which evaluation of training can take place. . The focus of experiential methods is on achieving. Potential questions to trainees might include: (i) What were your learning goals for the programme? (ii) Did you achieve them? (iii) Did you like this programme? (iv) Would you recommend it to others who have similar learning goals? ( v) what suggestions do you have for improving the programme? (vi) Should the organisation continue to offer it? Learning: Training programme. through group processes.. learning. reactions. 1. is the measurement of ultimate result of the contributions of the training programme to the company goals like survival. group discussions and short assignments are also used in behaviourallyexperienced learning methods. organisation and ultimate value. Business games. quality. 3. etc. the method of presentation.

Cost benefit analysis: The costs of training (cost of hiring trainers. discharges. time spent. which in turn can be examined on the basis of decrease in employee turnover. tools to learn. opportunity cost of trainers and trainees) could be compared with its value (in terms of reduced learning time.) should be provided to the instructors. Training Programme of Company PurposeTo establish and maintain a documented procedure for identifying and providing training to all the employees of the organization with essential skill and knowledge so as to achieve desired quality and productivity goals. dismissals. The training evaluation information (about costs. production stoppage. improved learning. Tests: Standard tests could be used to find out whether trainees have learnt anything during and after the training. • Feedback: After the evaluation. the situation should be examined to identify the probable causes for gaps in performance. etc. grievances. views of trainees. The training evaluator should follow it up sincerely so as to ensure effective implementation of the feedback report at every stage. Some of these are: • • • • • Questionnaires: Comprehensive questionnaires could be used to obtain opinions. reactions. wastage. Interviews: Interviews could be conducted to find the usefulness of training offered to operatives. superiors and peer groups about the training. Company's personnel involved in quality system. accidents. . absenteeism. etc. correction and improvement of trainees' activities. trainees and other parties concerned for control.Methods of Evaluation Various methods can be used to collect data on the outcomes of training. ScopeThis procedure is applicable to all employees. Human resource factors: Training can also be evaluated on the basis of employee satisfaction. Studies: Comprehensive studies could be carried out eliciting the opinions and judgements of trainers. superior performance) in order to evaluate a training programme. outcomes. training centre.

Emergent Training – The Emergent training programme is a supplementary training programme both for individual and collective persons which is imparted during the course of work to take care for unforeseen or uncatered training requirements arisen due to installation of new machine. is prepared on format and circulated to all heads of department and is updated. system. procedure etc. at Head office is approved by from Chairman cum Managing Director. Training of the senior personnel at Factory Is also catered for at Head Office on receipt of requirement from HRD Executive. is fixed up and concerned person is intimated through Heads of Department. If required in case of additional training needs. The annual Training Prog. Training is conducted either through “Planned Training Programme” “Emergent Training Programme” which is organized by the HRD Department Planned TrainingThe planned training programme is drawn on annual basis both for individual and group of persons for collective training at the beginning of Calendar Year by Manager HRD and HRD Executive of factory. The departmental Heads drawn out the training requirements on the training requisition slip and sent it to HID Dept. Identification of such training need is done by the concerned HOD at Head Office and HOD/Supervisor at factory and accordingly forwards their request. Conduct of Training HRD Head at HO & HRD (Executive) at factory ensures that identified training in their respective areas is conducted as scheduled. venue etc. The procedure as in case of planned training is followed there after. . liaison with the agency is done and dates. Annual training Prog. In case of External training.Training Process Training is provided both “In House” and through “Outside Agencies” Which could be for an individual or for group of persons as a collective training.

For In-House training. Besides. Processing of Rice (value addition In Rice) Knowledge about rice trade Operational and maintenance of dryer & Cleaning Plant Silo storage Techniques Scientific Instrumentation Finished goods quality control Trouble shooting PURPOSE OF PROJECT . necessary resource/infrastructure is also provided for effective training. External Trainers for the Company are: Father Son & Company Skill & Thoughts Logic Consultant Topics covered under Training Programme EFT Act & Scheme Provisions Rigid and Semi Rigid Packaging Principles of Contract Labour Act Self-motivational & Attitudinal Seminar Organic farming Training about operations in the company. date/Venue is fixed up with identified faculty and concerned individual is informed through Heads of Department.

the boss or the coworkers. job satisfaction represents several related attitudes. They will be job . they will probably have a negative attitude toward the work. learning and personality. job satisfaction is often determined by how well outcomes meet or exceed expectations. it can only be inferred. Factors determining job satisfaction • Factors affecting jobs are the main factors of job satisfaction. To improve Organizational Climate and increase the morale of employees.satisfied. For example if organizational participants feel that they are working more harder than others in the department but are receiving fewer rewards." Job satisfaction is a result of employees' perception of how well their job provides those things that are viewed as important. which provide maximum .To know the effectiveness of the training programme conducted by the company. Second. quality of physical environment in which they work. job satisfaction is an emotional response to a job situation. To know whether training programme is conducted successfully or not. There are three generally accepted dimensions to job satisfaction. Job satisfaction Job satisfaction is in regard to one's feeling or state of mind regarding the nature of their work. as such it cannot be seen. colleagues. Third. Skill variety autonomy and significance are challenging tasks. reward systems. which may be challenging work. degree of fulfillment in there work etc. They will be dissatisfied. Locke gives a comprehensive definition of job satisfaction as involving cognitive. It can be influenced by a variety of factors e. effective and evaluative reactions or attitudes and states it is "a pleasurable or positive emotional state resulting from the appraisal of one's job or job experience. To know whether employees are aware about their responsibilities and authorities or not. they are likely to have a positive attitude toward the job. working conditions. First. To know about the work culture of the organization. if they feel they are being treated very well and are being paid equitably.: quality of one's relationships with there supervisor. On the other hand.g.

Many people feel bored if a job is too simple and routine. responsibilities and social status are the factors that are said to be providing satisfaction to employees. they require more award and recognition. The other dimension is participation or influence. etc. promotion avenues. There seem to be two dimensions of supervisory style that affect job satisfaction. The physical conditions. • • The relationships between the employees and the managers have an important bearing on job satisfaction. etc are satisfaction factors. but many employees also enjoy simple and routine jobs. Employees feel satisfied when their views are listened to and regarded by their higher authorities Personal attitude and perceptions are the employees' angles of satisfaction. providing advice and assistance to the individual. temperature. willingness. • Fairness in promotion. and communicating with the associate on a personal as well as an official level . • • • It commonly is manifested in ways such as checking to see how well the employee is doing. people prefer to work hard while in an adverse atmosphere people avoid work. Reward systems. Working condition not only include physicals of the work but also the working relationships in the organization. Job satisfaction is greater in case the higher authority is sympathetic. which should be taken into consideration while motivating people to arrive at job satisfaction Feedback from the job itself and autonomy are two of the major job-related motivational factors. i. • Working conditions influence employee's level of satisfaction. are the light. equitable rewards.satisfaction to employees. In most case. which is measured by the degree to which a supervisor takes a personal interest and cares about the employee. equal pay for equal work. A recent found that career development was most important to both younger and older employees. unbiased attitude of management. Under conducive working condition.e. One is employee centeredness. friendly and willing to help the employees.conditioned atmosphere with computer facilities. It increases the working capacity of the employee. for example. . Supervision is another moderately important of job satisfaction. • The job characteristics are important factors for providing satisfaction. this approach leads higher job satisfaction. as illustrated by managers who allow their people to participate in decisions that affect their own jobs. A clerk working under routine conditions likes to work hard in an air . Money is important to employees having unfulfilled basic needs.

if job satisfaction is high. many variables enter into the decision to stay home besides satisfaction with the job. advice. other variables enter into an Employees decision to quit besides job satisfaction. and assistance to the individual member. the research to date indicates that there is no strong linkage between satisfaction and performance. typically there will be an increase in turnover because will being looking for better opportunities with other organization. will there be performance problems and ineffectiveness? The following sections examine the most important of these. For example. Some people cannot see them selves working anywhere else. the most important of which is reward. but it does seem to help. may playa role. As with turnover. It is important to know. keep turnover low. Satisfaction and turnover: Unlike that between satisfaction and performance. The relationship may even be more complex than others in organization behavior. Another factor is the general economy. satisfaction relates to outcomes variable. High job satisfaction will not. research among state . serves as a source of support. will the employee perform better and the organization be more effective? I f job satisfaction is low. they will be satisfied. For example. and commitments to the organization. there seem to be many possible-moderating variables. age tenure in the organization. comfort. On the other hand. The best conclusion about satisfaction and performance is that there is. and is likely to result in greater performance effort. job satisfaction in and of itself is a desirable outcome. especially a "tight" team. For example. and empirical analyses have questioned and argued against these results. Satisfaction and performance: Most assume a positive relationship. so they remain regardless of how dissatisfied they feel. research has uncovered a moderately negatively relationship between satisfaction and turnover. if there is considerable job dissatisfaction.• Friendly. definitely a relationship. Outcomes of job satisfaction To society as a whole as well as from an individual employee's standpoint. methodological. For example. Conceptual. there is likely to be high turnover. The group. Obviously. in and of itself. Satisfaction and absenteeism: Research has only demonstrated a weak negative relationship between satisfaction and absenteeism. there are moderating variables such as the degree to which people that there job are important. If people receive reward they feel are equitable. For example. if at all. cooperative coworkers or team members are a modest source of job satisfaction to individual employees.

It is an important activity for the origination to conduct appropriate and related programme for its employees. adaptability and ability to work as part of a team. Additionally. Recruitment and selection of Insurance Companies PREFACE People are a company’s most important assets. This also helps the employees of the organization to know about his job and organization very well. They can make or break the fortunes of a business. It is also becoming increasingly important. These must be related to employees and their jobs. it is important to remember that although job satisfaction will not necessarily result in absenteeism. low job satisfaction more likely to bring about absenteeism. In today’s highly competitive business environment placing the right people in the right position is very critical for the success of any organization.govt. So the top management must concentrate on the training programs and organize them in such a way that maximum number of employees wants to attend these programs. This also helps in better communication and relation among the organization wants to grow rapidly. The recruitment and selection decision is of prime importance as it is the vehicle for obtaining the best possible person-to-job fit that will. Their skills can be improved with the help of training programs. that new recruits show a willingness to learn. contribute significantly towards the Company's effectiveness. Significance of Study Every organization desires that it will grow continuously and make and retain its position in the competitive and continuously changing market environment. . then it is essential for it to conduct periodically training programmes for its employees to improve the skills and knowledge. Employees has found those who believed that there was important had lower absenteeism than did who did not feel this way. as the Company evolves and changes. But all the employees may not have the desired skills. so that may be able to understand the terms required for the completion of his job. For this purpose the employees of the organization must be skilled and talented.

ICICI Prudential Life insurance is one of India's leading financial institutions offering complete financial solutions that encompass every sphere of life. During the training period I have studied deeply the process of hiring in ICICI Prudential Life insurance and did a SWOT analysis of ICICI Prudential Life Insurance to find out the existing shortcomings and and potential threats thereby recommended suggestions.The Recruitment & Selection procedure ensures that these criteria are addressed In this project I have studied Recruitment and Selection process of ICICI Prudential Life Insurance and attempted to provide some ways so as to make recruitment more effective and to reduce the cost of hiring an employee. I am privileged to be one of the students who got an opportunity to do my training with ICICI Prudential Life Insurance. In a short span of time. . My involvement in the project has been very challenging and has provided me a platform to leverage my potential in the most constructive way.ICICI has set an example by having a steady and confident journey to growth and success.

the skills and talent of a person cannot be emulated.This project however is an attempt to share as best as possible my experience in corporate world with all my colleagues and my faculty. All practices of marketing and finances can be easily emulated but the capability. Hence. Selecting the wrong candidate or rejecting the right candidate could turn out to be costly mistakes for the organization. In the competitive scenario it has become a challenge for each company to adopt practices that would help the organization stand out in the market. Therefore a . Many private players have entered the economy thereby increasing the level of competition. it is important to have a well-defined recruitment policy in place. Thus the best services offered to the consumers are result of the genius brains working behind them. I would be delighted to receive reader’s comments which maybe valuable lessons for my future projects. The Financial market has been witnessing growth which is manifold for last few years. organizations have to respond quickly to requirements for people. EXECUTIVE SUMMARY In today’s rapidly changing business environment. Human Resource in this regard has become an important function in any organization. The competitiveness of a company of an organization is measured through the quality of products and services offered to customers that are unique from others. which can be executed effectively to get the best fits for the vacant positions.

insurance happens to be a mega opportunity in India. The various recommendations suggested have been the result of the study. The idea is to generate ways of dealing with high attrition and making hiring process manageable and efficient. Thus. Together with banking sector it adds about 7% to the GDP.recruitment practice in an organization must be effective and efficient in attracting the best manpower. 450m. Like in the case of BPO’s. recruitment is an ongoing process carried through out the year. Coverage –The extent and limitation With largest number of life insurance policies in force in the world. Its business is growing at 15-20% annually and presently is of the order of Rs. Insurance sector too faces the problem of attrition. The project is based on the study of recruitment process. Data Used There were mainly two sources of data collection Ø Ø Ø Ø v Ø Ø Primary data: Survey method Personal interview with candidates In depth conversation with the placement agency Secondary data: Study of recruitment policy Websites .

Ø Published articles Research methodology used v v v v v Study of recruitment and selection at ICICI Prudential Life Insurance by the manual provided by the HR department. information from the new employees.1 Introduction Of The Insurance Industry . Huge investment of time. Introduction 1. reading the material provide internally by the organization. the areas where improvement can be bought about can be identified. It will also involve recruitment and selection processes. Huge recruitment cost. Web sites Journals Magazines Books Findings v v v Recruitment is done throughout the year more during the months of MayJune and Oct-Nov. I would be going through the recruitment policies of the company. Thus the whole research would be done under the guidance of external guide. By active participation in the recruitment process. To pursue these.

LIC Act. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. with a capital contribution of Rs. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. the first Indian life insurance company started its business. it rose to 176 companies with total business-in-force as Rs. the first general insurance company established in the year 1850 in Calcutta by the British. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. set up.22. From 44 companies with total business-in-force as Rs. can trace its roots to the Triton Insurance Company Ltd.298 crore in 1938. the first life insurance company on Indian soil started functioning. LIC formed by an Act of Parliament. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. viz. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. 5 crore from the Government of India. Though the concept of insurance is largely a development of the recent past. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. the first company to transact all classes of general insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. on the other hand. .. Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company. The General insurance business in India. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. 1870: Bombay Mutual Life Assurance Society. The first two decades of the twentieth century saw lot of growth in insurance business.44 crore. 1956.Overview The story of insurance is probably as old as the story of mankind.

Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. frames a code of conduct for ensuring fair conduct and sound business practices. In the private sector 14 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies. Insurance happens to be a mega opportunity in India. The Insurance sector. lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. With largest number of life insurance policies in force in the world. Yet. India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. it adds about 7 per cent to the country’s GDP. 1972: The General Insurance Business (Nationalisation) Act. 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.. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion.1957: General Insurance Council. to some extent. 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. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. . 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. This itself is an indicator that growth potential for the insurance sector is immense. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. Together with banking services. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. a wing of the Insurance Association of India. can enable investments in infrastructure development to sustain economic growth of the country. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. 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. 1972 nationalised the general insurance business in India with effect from 1st January 1973.

That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. smart marketing and aggressive distribution.insured with no flexibility or transparency in the products.03 over last year. The new business premiums of the 12 private players has tripled to Rs 1000 crore in 2002. Indians. Innovative products. not as a product giving protection. are now suddenly turning to the private sector and snapping up the new innovative products on offer. The private insurers also seem to be scoring big in other ways. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. nearly all private insurers are fast. who have always seen life insurance as a tax saving device. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income.they are persuading people to take out bigger policies. The state owned LIC sold insurance as a tax instrument.Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. With the entry of the private insurers the rules of the game have changed.forwarding the second phase of their expansion plans. Major Insurance Players Licenses have been issued for the following companies Ø Ø Ø Ø Ø Ø Ø ICICI Prudential Life Insurance Limited ICICI Prudential Life Insurance Company Limited HDFC Standard Life Insurance Company Limited Birla Sun Life Insurance Company Limited TATA AIG Life Insurance Company Limited Max New York Life Insurance Company Limited SBI – Cardiff Life Insurance Company Limited . Buoyed by their quicker than expected success. Most customers were under.

Towards achieving this objective.Ø Ø Ø Ø Ø Ø Ø ING Vysya Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited MetLife Life Insurance Company Limited Aviva Life Insurance Company Limited AMP Sanmar Life Insurance Company Limited Sahara India Life Insurance Limited Sri Ram Life Insurance Limited Protection of the interests of policyholders: IRDA has the responsibility of protecting the interest of insurance policyholders. the Authority has taken the following steps: .

v IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language. it has diversified into retail banking and is the largest private bank in . and policyholders' servicing. speedy settlement of claims. v All insurers are required to set up proper grievance redress machinery in their head office and at their other offices. a premier financial powerhouse and Prudential plc. v It is obligatory on the part of the insurance companies to disclose clearly the benefits. Today. setting up of grievance redressal machinery.2 COMPANY PROFILE ICICI Prudential Life Insurance ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank. The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract. The advertisements issued by the insurers should not mislead the insuring public. claims procedure in both life and non-life. 1. a leading international financial services group headquartered in the United Kingdom. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim. ICICI was established in 1955 to lend money for industrial development. terms and conditions under the policy. v The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.

product range and customer base. and Prudential plc. 23. by The Economic Times .780 crore and wrote nearly 615. For the financial year ended March 31. distribution channels and technology based delivery. 2005. 1 private life insurer in the country. ICICI Prudential's capital stands at Rs. a leading international financial services group headquartered in the United Kingdom.72 billion.the country. India's Number One private life insurer. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The Company aims to achieve this by striving to provide world class service levels through constant innovation in products. As we grow our distribution. ICICI Prudential is currently the No. with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. For three years in a row. Prudential plc was established in 1848 and is presently the largest life insurance company in UK. Total capital infusion stands at Rs.72 billion with ICICI Bank and . ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. ICICI Prudential has been voted as India's Most Trusted Private Life Insurer. FACT SHEET THE COMPANY ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank.AC Nielsen ORG Marg survey of 'Most Trusted Brands'. 23. we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India.000 policies.a leading international financial services group headquartered in the United Kingdom. the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank-one of India's foremost financial services companies-and Prudential plc. The Company has already taken significant steps to achieve this goal. The Company recognizes that the driving force for gaining sustainable competitive advantage in this business is superior customer experience and investment behind the brand. a premier financial powerhouse.

2007. The company has over 23 bancassurnace partners. Sangli Urban Co-operative Bank. The AAA (Ind) rating is the highest rating. ICICI Prudential is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. with a wide range of flexible products that meet the needs of the Indian customer at every step in life. The company has assets held to the tune of over Rs. the company garnered Rs. South Indian Bank. 987 crore of weighted retail + group new business premiums and wrote over 450. Distribution ICICI Prudential has one of the largest distribution networks amongst private life insurers in India. Baramati Cooperative Bank. Jalgaon Peoples Co-operative Bank. The Haryana State Cooperative Bank and Imphal Urban Cooperative Bank Limited. . having tie-ups with ICICI Bank. For the past six years. 1 private life insurer in the country. ICICI Prudential has retained its position as the No. For the first quarter ended June 30. Idukki District Co-operative Bank. Ernakulam Bank. 18. to create a customized solution for each policy holder. Ballia Kshetriya Gramin Bank. and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims.000 advisors. Its products can be enhanced with up to 4 riders. customer-centric products that meet the needs of customers at every life stage. Lord Krishna Bank. Shamrao Vithal Co-op Bank. Savings Solutions • Save’n’Protect is a traditional endowment savings plan that offers life protection along with adequate returns. Products Insurance Solutions For Individuals ICICI Prudential Life Insurance offers a range of innovative.400 crore. 9 Bank of India sponsored Regional Rural Banks (RRBs). Federal Bank.Prudential plc holding 74% and 26% stake respectively. Bank of India.000 retail policies in the period. It has a strong presence across India with over 680 branches and over 235.

expenses for a child’s higher education or purchase of an asset. It is available in 3 options – level term assurance. The policy is designed to provide money at important milestones in the child's life. LifeLink Super is a single premium Unit Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market. Education Insurance Plans · Education insurance under the SmartKid brand provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. SmartKid plans are . level term assurance with return of premium and single premium. Protector.• • • • • CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child’s marriage. Child Plans · SmartKid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. Premier Life Gold is a limited premium paying plan that offers customers life insurance cover till the age of 75. LifeTimeSuper offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Balancer and Maximiser. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. which offers life cover at very low cost. The policy is designed to provide money at important milestones in the child’s life. SmartKid plans are also available in unit-linked form – both single premium and regular premium. InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner. Each offer 4 fund options — Preserver. · Protection Solutions • • LifeGuard is a protection plan.

Health Solution • Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance. with flexibility in both the accumulation and payout stages.also available in unit-linked form . Market-linked retirement products LifeTime Super Pension is a regular premium market-linked pension plan. total and permanent disability. .000 u/s 80C. irrespective of the actual medical expenses. Hospital Care*: Hospital Care offers a Cashless hospitalization facility in more then 3000 network hospitals Crisis Cover : is a 360-degree product that will provide long-term coverage against 35 critical illnesses. and death · · · · Note (*) products Re-launched on 1st July 2006 Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100. Health Assure Plus offers the added advantage of an equivalent life insurance cover Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Diabetes Care and Diabetes Care Plus*: 1st ever critical illness insurance cover for diabetics.both single premium and regular premium Retirement Solutions • • • • ForeverLife is a retirement product targeted at individuals in their thirties.

Income Benefit: This rider pays the 10% of the sum assured to the nominee every year. 4. It is available on SmarKid. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. the beneficiary will be entitled to twice the sum assured as additional benefit. 5.ICICI Pru Group Gratuity Plan: ICICI Pru’s group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. which can be added to the basic policy at a marginal cost. If the death occurs while traveling in an authorized mass transport vehicle. SecurePlus and CashPlus Waiver of Premium: In case of total and permanent disability due to an accident. Flexible Rider Options ICICI Pru Life offers flexible riders. 2. ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution helps provide affordable cover to members of a group. 3. The cover could be uniform or based on designation/rank or a multiple of salary. Accident & Disability Benefit: This rider option pays 10% the sum assured under the rider every year till next 10 years on Accidental Permanent Disability of 2 Organs. Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. depending on the specific needs of the customer. . till maturity. the premiums are waived till maturity. in the event of the death of the life assured. Benefits are payable to the insured for medical expenses prior to death. This rider is available with SecurePlus and CashPlus. the beneficiary receives an additional amount equal to the rider sum assured under the policy. 1. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. Accident Benefit: If death occurs as the result of an accident during the term of the policy.

mid & small cap companies) & debt portfolio. 3) Balancer :An investment option with investment in a mix of equity and debt oriented instruments. 6) Flexi balanced:Balance of capital appreciation and stable returns from an equity (large.mid and small cap companies. 2) Maximiser :- An investment option with investment in equity and equity related instruments. 1) Protector:- An Investment Option with investment indebt and money market instruments. This they hope to achieve through . 4) Preserver :- An investment option with investment in low-risk instruments like cash and call money markets. Long term returns from an equity portfolio lare.Choice of Six Investment Options :ICICI prudential offers you the opportunity of selecting between investment options to match your investment priorities. Vision and Mission Their vision is to make ICICI Prudential Life Insurance Company the dominant new insurer in the life insurance industry. 5) Flexi Growth:New Fund (NFO) launched in March 2007.

ICICI Prudential has recruited and trained more than 1. 90. Lord Krishna Bank. as well as over 300 corporate agents and brokers. The company has 9 bank partnerships for distribution. South Indian Bank. Tel: 494 3232 . it leverages its stateof-the-art IT infrastructure to provide superior quality of service to customers RegisteredOffice : ICICI Towers 9thfloor. It has also tied up with NGOs. The success of the organisation will be founded on its strong focus on values and clarity of purpose. focus on service. having commenced operations in 150 cities and towns in India. Bandra-Kurla Complex Mumbai . Federal Bank.their commitment to excellence. they feel that tere will be no limits to their growth. Further.400 051. DISTRIBUTION ICICI Prudential has one of the largest distribution networks amongst private life insurers in India. They believe that they can play a significant role in redefining and reshaping the sector. having agreements with ICICI Bank. Bank of India. These include: · · · Understanding the needs of customers and offering them superior products and service Building long lasting relationships with their partners Providing an enabling environment to foster growth and learning for their employees And above all building transparency in all our dealings. Given the quality of their parentage and the commitment of their team. stretching from Bhuj in the west to Guwahati in the east. speed and innovation. MFIs and corporates for the distribution of rural policies. and Jammu in the north to Trivandrum in the south. and some co-operative banks. and leveraging our technological expertise.000 insurance advisors to interface with and advise customers.

Earning. world-class solutions. Find the Next Chapter . New Delhi-110011. So you live your life to the fullest.. learning . Tel: 601 3232 ICICI Prudential Life Insurance opens office in Dubai In a move to consolidate its position in the Gulf region... solutions with a lot of common sense.. 1 private life insurance company. India's No.. Solutions that take care of your four basic financial needs ..Tel:46554405 Delhi office : 3rd floor Videocon Towers E-1.RECRUITMENT AND SELECTION RECOMMENDATIONS conclusion. Rani Jhansi Road New Delhi . Investing and Spending. today opened its representative office in Dubai.. Put simply.110055. ICICI Prudential Life Insurance (ICICI Prudential).Regional Office : 8th floor EROS Coorporate Tower. Saving. Project Report Recruitment-Selection Process Insurance Companies OBJECTIVES OF THE PROJECT . becoming the first private life insurer from India to open an office in the Emirate.. sans worries. At ICICI Prudential we offer pragmatic.Nehru place.

It therefore requires great amount of research work. Without any objective a task is rendered meaningless. The methodology adopted was planned in advance so as to collect data in the most organized way. unit mangers mostly in the sales profile. Since my summer training was in the months of May-June. recruitment is all time high during May-June and Oct-Nov.Every task is undertaken with an objective. The attrition is high among the sales managers. Thus it is only after March that people move out of the companies. At ICICI Prudential Life Insurance. . The recruitment is high during these months due to the fact that March and September are half year closing and business is high during Jan-Mar. This project is centered on identifying best hiring practices in the insurance industries. The main objectives for undertaking this project are:    To understand the internal Recruitment process at ICICI Prudential Life Insurance To identify areas where there can be scope for improvement To give suitable recommendation to streamline the hiring process METHODOLOGY The insurance sector is marked with a high level of attrition and therefore recruitment process becomes a crucial function of the organization. it gave me the opportunity of involving myself directly with the recruitment process and analyzing the process so that suitable recommendations can be given.

P. U. location etc. we were asked to go through the HR policies of ICICI Prudential Life Insurance so that we get a better understanding of the process followed by them. .   The first task was to understand the various job profiles for which recruitment was to be done.  When a candidate cleared his first round. he is then made to take an online aptitude test. If they think that the candidate was good to hire or not.  Since we received many resumes. Then the candidates INTERVIEW EVALUATION SHEET which is provided by interviewer was crosschecked by the HR team. If he cleared his cut-off he was given another test. his scores were checked. Before any task was undertaken.  I had the responsibility to make sure that candidates complete all formalities and had to regularly follow up with them. it was essential that a database be maintained to keep a track. contact number. which has the exclusive rights to assign test.My area of focus was the recruitment and selection particularly at ICICI Prudential Life Insurance.P and Rajasthan. candidates went through a telephonic interview to validate the information mentioned in their resume. The next step was to explore the various job portals to search for suitable candidates for the job profile. codes to the candidates. It the HR department. Each code was unique and could be used only once by a candidate.   I was involved in assigning codes and administering the test Once the candidate completed his first assessment. I was particularly involved with the sourcing of candidates for the regions outside Delhi such as M. I was directly involved with the recruitment for candidates for the sales profile. PACE containes all the information of a candidate such as name. We created the online aptitude test. I update all the records of the new joinees in that tracker. ICICI has their own database named as “PACE”. It was convenient method than to stock up piles of papers.  A candidate matching the desired profile was then lined for the first round of Face to Face interview in their respective cities.   Firstly the candidate had filled up the personal data form(pdf).  Once the search criteria were put.

   The external guide maintained a regular updating of the database. Database for the resumes received through mails and response of advertisement.Random sampling. Understanding what kinds of database are maintained and how they help in keeping a record. Third Fourth week :. the database for employee referrals. I was also involved in maintaining a track of test codes given. RESEARCH METHODOLOGY Date Source Primary Secondary ::Through Questionnaires Through Internet. Second week :-Collecting the primary and secondary data. Sixth week :-Conducting the survey in RO. Journals.80 Sample Area : . . News papers and Misc. Sample Size : .Structured Questionnaire.work done in Delhi regional Office. PROJECT SCHEDULE :- First 1 week :-Training program from the company. Data Collection Procedure :. Sample procedure :.Study Recruitment & Selection Process Fifth week :-Designing the questionnaire .Survey Research Instrument :.

Limitations of the study Every task is undertaken with an objective and accomplishment of this objective determines our success. Task: Candidates were to be searched from the job portals and called up to be scheduled for an interview.Seventh week :-Analysis of Data Collection. Difficulties:  Candidates were reluctant to talk at times. Task: The recruitment at ICICI Prudential Life Insurance involved a lot search from the database and calling up candidates to check whether they fit the job specification.  Run out of database many times since most of them would have already been contacted. Eighth week :-Final Report preparation and presentation.  Candidates who were scheduled for interview would not turn up. Difficulties: .  Candidates who were contacted were not interested in Insurance on many occasions.

the availability of phone was limited.  At times many people had for couple of hours to work on the computer. Recruitment is the process by which organizations locate and attract individuals to fill job vacancies. Difficulties:  Did not secure cooperation easily. Most organizations have a . so there was greater coordination required with respect to its usage and maintains a time slot so that other person has a chance to use. A summer trainees we could not separate systems to work on.  People did not disclose much about their employee details. Task: Inter company analysis through survey and questionnaire filling. Topic Information RECRUITMENT AND SELECTION “The art of choosing men is not nearly so difficult as the art of enabling those one has chosen to attain their full worth”.  Since STD calls had to be made.  People asked lot of counter question so convincing them was a major task.

The next step is careful examination of the job and enumeration of skills. even the most accurate selection system is of little use Recruiting begins when a vacancy occurs and the recruiter receives authorization to fill it.Human resource Managing director Amendments and deviations: . 1 2 Head. Authorization: S. With successful recruiting to create a sizeable pool of candidates.continuing need to recruit new employees to replace those who leave or are promoted in order to acquire new skills and promote organizational growth. selecting and appointing personnel on the permanent rolls of an organization. Recruitment follows HR planning and goes hand in hand with selection process by which organizations evaluate the suitability of candidates. Other steps follow:  Creating an applicant pool using internal or external methods  Evaluate candidates via selection  Convince the candidate  And finally make an offer Scope: To define the process and flow of activities while recruiting. abilities and experience needed to perform the job successfully.No Authorized Signatory .

The process is aimed at defining the series of activities that needs to be performed by different persons involved in the process of recruitment. the onus of effective implementation and compliance with the process rests with the heads of the respective functions and departments who are involved in the recruitment and selection process.Any amendments to and deviations from this policy can only be authorized by the Head-human Resources and the Managing Director. The HR department would set the recruitment norms for the organization. the checks and control measures to be adopted and information that has to be captured. Exclusions: The policy does not cover the detailed formalities involved after the candidate joins the organization. ACTIVITY FLOW The organization philosophy should be kept in mind while formulating the recruitment procedure. However. Recruitment and Selection is conducted by:  HR & Branch Manager  Functional Head RECRUITMENT PLANNING .

Recruitment planning on the basis of budget A. The annual budget would specify the manpower requirement of the entire organization. The manpower planning process for the year would commence with the company’s budgeting activity. estimated separations and replacements therefore. at different levels. in various functions/departments. which is the cost allotted towards the recruitment of the budgeted staff and the replacement of the existing employees. The Regional HR’s would undertake the planning activity and necessary preparations in advance of the anticipated requirements. The respective Functional heads would submit the manpower requirements of their respective functions/ departments to the board of Directors as part of the annual business plan after detailed discussion with the head of human Resource Function along with detailed notes in support of the projected numbers assumptions regarding the direct and indirect salary costs for each position. at different geographical locations and the timing of the individual requirements. A copy of the duly approved manpower plan would be forwarded by the HR department for their further actions during the course of the year. C. as monthly and quarterly activities on the basis of the approved budget. The manpower plan would also clearly indicate the exact time at which the incumbent should be on board in such a way that the Regional HR has adequate notice for the time lapses involved in sourcing any other activities. B. It would also specify the requirement budget. .

SOURCING OF SUITABLE CANDIDATES Selection of Sources Regional HR would tap various sources/channels for getting the right candidate. volumes of recruitment and any other relevant factors.D. The vacancies sought to be filled or being filled shall always be within the approved annual manpower budget and no recruitment process shall be initiated without the formal concurrence of the Head of the Regional HR under any circumstance. Review of Manpower Plans and Additional Manpower A. In the event of any new position or any deviations to the original plans. The recommendations would normally require a formal approval of the Managing Director. to signify the final decision taken regarding the recommendations. . Depending on the nature of the position/grade. details of the positions maybe forwarded to the VP-HR along with the adequate supporting information. Head of the Regional HR shall also have the responsibility to monitor the appointments being considered at any point of time with specific respect to the duly approved manpower budgets. VP-HR may record the summary of his discussion with the Managing Director and the MD’s approval on the recommendations. Review of manpower budgets shall take place on a quarterly basis. the Regional HR would use any one multiple sources such as:  Existing database (active application data bank). Alternately.

 Employee referral as per any company scheme that may be approved from time to time.  Job websites and  Any other appropriate sources.  Direct recruitment from campuses/academic institutes. relative efficacy and cost considerations would play a role in the choice of the appropriate sourcing mechanism. Regional HR may obtain assistance from the company’s marketing department and/or any external advertising agencies for the preparation of the .  Headhunting firms particularly for senior positions.  Placement Agencies (particularly for positions of Managers and above). Number of positions. specialist positions and critical positions. depending on the specifics of each position for which recruitment advertisements are to be released.  Advertisement in the internet/newspapers/magazines/company’s sites/job sites or any other media. criticality of positions and the urgency of the positions. The norms for using any of the sources are not water tight. ADVERTISEMENTS  All recruitment advertisements (in any form and any medium) shall always conform to the KLI compliance norms and would not be released by any department or branch without the approval of the VP-HR. confidentiality requirements.

norms regarding the identification of the appropriate institutes.contents.  The media for releasing advertisement would depend on the level of the position being considered and the urgency of the requirements. from academic institutes of appropriate standards/reputation/grade. constitution of the selection panels. Placement Agencies/Headhunting Agencies  Depending upon the vacancies. number of candidates to be recruited into different positions. Key features of the positions as notified by the Functional Heads would normally form a part of the advertisement text. depending on the specific features of the position. internet sites and business magazines. Screening the candidates First level screening The Candidates would be screened by the HR Manager/Branch Manager for the respective locations. timings of the recruitment. in the requisite numbers and at the compensation/stipend amounts to be formally approved of the VP-HR. choice of the appropriate selection process and the tools thereof shall be decided by the Head of the Regional HR in consultation with the VP-HR. fresher fitting different description listed above may be recruited from time to time. Plans for such recruitment need specific special approval of VP-HR.  The advertisement mode that could be broadly specified as newspapers (local or mainline depending on requirements). Screening would be on the basis of the profile of the candidate and the departmental requirements. .

once such test is selected approved by the company. d. once such a test is finalized. c. Tied Agency Sales Manager candidates short listed by the BM have will then take sales Aptitude test. etc f. For the final selection. the regional Manager (Business Heads for HO) will . e. Personality fit of the candidate into the profile. In case of need. networking ability. interpretation and the generation of interview probes from that test will also be done at this time. Basic skill level on our set of requirements.This assessment will be with respect to: a. b. Second Level Screening Aptitude Test If the first assessment is positive. g. Explain the role of Sales manager to the applicant and check the acceptance of the candidate for the same. The scoring. People who qualify the minimum criteria on this test will be put up on to the Functional Head (VP’s in case of HO) for functional assessment and suitability into the role. say numerically ability. Motives of the person to join the company and whether focus is in the short term or is a long term player. the candidates will give the aptitude test. the Regional HR may take a Tele interview of the candidate for further assessment process. Aptitude/attitude of the candidate. The general profile of the candidate. Establish the annual guaranteed cash compensation of the individual and check whether the person would fit into the system.

The chart specifying the Minimum approval level for each level of recruitment is specified below: Category Branch Manager/Chief CSE/ADVISORS BIC BM/CM SM Manager Yes Yes Yes Yes Area Manager/AVP/VP No Yes Yes Yes Business Managing Heads No No Yes Yes Director No No No Yes General Norms regarding interview Process: A. They may insist on seeing the proof of the claims made by the candidate regarding qualifications. soon after the interview is over. considering for another position) shall be forwarded to the associated Recruitment Manager/ Head of Regional HR. B. at their discretion. decide to meet the candidate on more than one occasion or to refer the candidate to another panel. Interviews should consider the entire data provided by the candidate either through the formal CV or otherwise before coming to a conclusion about the candidate. Individual panel members have the option of appending their additional remarks/observations. qualitative observations about the candidate and overall decision regarding selection or otherwise (including a decision to defer the induction. Ratings on various attributes of the candidates shall be recorded in the interview evaluation sheet. They may. experience and other achievements.meet the candidates short listed by the branch manager/VP. No selection will be treated as final unless the IES form is filled . Along with these numerical ratings. referral to another panel.

along with the interviewer’s recommendations and Reference check form should be forwarded by the recruitment managers to recruitment head. respective branch/regional heads would undertake this co-ordination. Suitably appropriate IES formats may be created for specific positions. job requisition no. educational details. An appropriate formal communication shall be sent to the candidate whose candidature is not being taken forward. if any.reference check details. by the recruitment team/associated line managers.comprehensively. B. after taking mutual convenience into account. Interview evaluation sheet . C. In the case of . CV. For field positions. or details of the verbal/telephonic communications provided to the candidate shall be recorded on the candidates papers. Specific points to be probed during the reference check process. D. After the final round. Fitment of the candidate into a grade and compensation fitment shall be on the assumption of authenticity of the information provided in the CV/application form. must also be clearly recorded and high lightened on the IES forms. if the candidate is selected. Scheduling and the venue of the interviews would be handled by the recruitment team in consultation with the short listed candidate and the selection panel members.. the complete set of papers Personal Data Form. Administrative Actions Regarding Interviews A. Any discrepancies noticed by the panel members regarding the authenticity of the data provided by the candidate should be specifically and formally recorded on the IES form and suitably high lightened. C.

For all other functions.interviews taking place at the branch/regional levels. They may seek the assistance of the recruitment managers. at the discretion of the VP-HR. provided the compensation does not exceed 20% of the candidates current cash salary. In appropriate cases. similar noting should be recorded on the individual candidate’s papers. a deviation may be referred to the Managing Director. Any candidate being offered a CTC of more than 4lacs will need the sign off from HEAD-HR. for the MD’s formal approval. Reference checks process should not normally be initiated unless the candidate has indicated his firm acceptance of the offer being made by us. In the case of sales-Tied Agency functions. Any fitment beyond this norms will need the approval of Head-HR. whenever required. A second reference check will be done if considered necessary. Normal. the branch managers will be allowed to fix the salary and grade of the incoming sales manager. B. Negotiations of the terms and conditions and other pre-appointment formalities A. . Responsibility for negotiations and finalization of the terms shall rest with the best Branch Manager/Associated Manager. the compensation and grade would be fixed post a discussion between the Head of the Regional HR and the associated AVP/VP. reference checks should be undertaken with at least one reference. Responsible officials from the former employers. HR will forward a worksheet to support the BM’s to evaluate the appropriate cash CTC of the incumbent. Reference checks A.

B. Depending on the seniority and any other considerations about the positions. Any candidate whose credentials are doubtful shall not be recruited. VP-HR would normally consult the functional head concerned. satisfactory reference check reports and medical fitness. C. the matter may be to the VP-HR for a final decision. Close relatives and friends cannot be considered as references. a reference should be made with a senior official of the candidate’s current employer. In case the candidate is currently un-employed.academic institutes and/or any other eminent personalities can be considered as appropriate references.  Personal Data form . Wherever feasible and considered appropriate. When a recruitment Manager is fully satisfied about the selection of the right candidate and about completion of all the formalities connected with the appointment of candidate including requisite documentation. before coming to conclusions. The format of reference check is to be used as a framework for conducting the process. he/she would forward the relevant papers listed below to the head of recruitment. fresher and life advisors as sales Managers no reference checks will be required. Employment offer letter A. reference should be made with the latest employer. Where the minimum two reference checks are not possible (particularly with the current employer) or where there is a mixed response from different sources. In case of recruitment of Management trainees.

 Employment details.  Language Proficiency.  1 Month Salary Slip of Last Employer. Employee requisition form duly filled by the regional Head/Branch Manager  Interview evaluation sheet filled by the regional head/Branch manager/interviewer with his/her comments. Document check list for every grade is as follows:  Authorization Release Form.  Two Professional references.  Highest Education certificate.  Highest Education marksheet.  1 Month Salary Slip of Current Employer.  Latest and updated resume of the candidate  Photocopy of the appointment letter of the last employer or latest salary slip. . B.  Background check Form.  Relieving Letter of last Employment.

C. Employee services team will issue offer letter. the ‘offer’ has not taken place in formal sense. It would be the responsibility of the Branch Manager/HR Manager to ensure that the accepted copy of the offer letter is forwarded to the employee service team within a week of receipt of the offer letter. Regional HR manager will take the signature of Head-HR on the employee requisition form and forward the papers to the employee service team for issuance of the offer letter. Candidate would be expected to fulfill various joining formalities. and send the same to the concerned Branch Manager/ HR Manager.  2 Passport Size Photograph. which are also formally communicated to him/her in the form of a checklist that is attached to the letter of offer. The employee service team will follow up Branch Manager/Regional HR Manager for the joining of the candidate and will collect all relevant documents from the candidate including the joining report. before issuing the appointment letter. D. F. The Regional HR head shall have the overall responsibility and accountability to maintain the templates of the offer letters and also for drafting of suitable non-standard terms to any specific candidate. E. to be signed by the National Recruitment Manager or Chief Manager-HR. Proof of Residence. Till this letter is issued. A copy of the offer letter shall be duly signed and returned to the candidate. The employee service team may enlist the help of the Branch Manager to ensure that all necessary documents within .

If the person does not submit the relieving letter from the previous organization. G. H. This advance will be adjusted once the person gets included in the subsequent month’s payroll. time and cost consideration of the company in accordance with the approved manpower budget.ten days o the person joining. After the of all necessary documents. within three months of joining. Once the documentation is complete for the new joinee (including the accepted appointment letter). An illustrative list of the key deliverables of these incumbents . where required to be submitted as per the table given above.  Ensuring inductions as per quality.  Creation of quarterly and monthly recruitment plans the recruitment and selection process as outlined. Key tasks of Regional HR Head Regional HR Head will have the authority and responsibility to administer/implement is listed below. people who may have joined before 20th of the month but have not been included in the payroll for the month because of delay in receipt of papers will be given ad-hoc salary advance (up to maximum of 65% of the pro rated salary). the employee service team will send the appointment letter to the new joinee. numbers. the employee service manager can put their salary on hold till such time as the said documents are received.  Creation of appropriate sourcing mechanism along with tracking the performance of these mechanisms.

institutes.  Effective internal communication with user departments and line managers including making the standard recruitment formats and other templates easily available to such users and notifying the modifications to such formats and templates. campuses. and any other employment-market information.  Monitoring recruitment costs  Complete documentation for the entire recruitment and selection process for easy and quick retrieval in a readily auditable format . templates and any other mechanisms to ensure smooth execution of the process requirement. academic/professional institutes and any other including the custody of the formal agreements . consultants. scheduling etc. placement agencies. along with timely improvements thereto  Assistance to user department and line managers including in interviewing/selection support. tracking timely payments and adjusted thereto  Creation of comprehensive and appropriate tools. documents. Effective coordination with external parties such as candidates. linkages. placement agencies.  Creation and maintenance of appropriate and high-quality MIS for current and future needs of the organization. including publication/circulation of appropriate reports there from to the relevant users within the company.  Creation and maintenance of qualitative information base regarding candidates.

Proper reference checks to ensure that only bonafide candidates are appointed. . deviation. etc for the purpose of improvement to recruitment and selection process. Adequate number of channel partners to generate footfalls for each location. etc and identifying the key areas for improvement in the formal recruitment and selection process document. SWOT Analysis of ICICI Prudential Life Insurance’s Recruitment Process Strengths Brand equity of Kotak Mahindra Bank. Timely and effective communication with all internal and external parties including the candidates  Tracking the progress of the selected candidates including resignation. Rigorous Pre-Hiring assessment tests to understand aptitude and personality of candidates. extensions of probation periods/training period. Lengthy pre-offer formalities. Footfall MIS being maintained at Weaknesses Pre assessment tests are costly. Huge employee turnover. Conversion of footfalls is low.  Effective coordination with the post recruitment arm of the Human Resource function  Documentation and creating MIS regarding waiver.

Increasing spill over as a candidate has more than one offer at the time of making a job shift. Same channel partners are handling all insurance companies. or candidates who make it through screening may wait weeks to interview with a hiring manager. senior level candidates hesitate to meet HR of other companies for the fear of grapevine. RECOMMENDATIONS & SUGGESTIONS Compress the "white space" in your hiring process. This leads to same pool of candidates being circulated to all partners. Often the longest delays occur between critical selection events. frequent and easy mobility for employees. As the insurance industry is small. Make blue form brief and to the point. . For example.each branch locally by Admin. Tie up with recruitment agencies on supplying fixed number of footfalls week on week. Threats Increasing number of private players in insurance sector creates ample choices. a recruiter may need several weeks to screen a few hundred resumes from the Web job boards. Reduce turn around time of making an offer. and virtually assure you'll lose talented candidates. Develop exclusive contract with channel partners to meet the manpower requirements. Opportunities Campus recruitments have huge potential for fulfilling manpower requirements cost effectively. waste time. White Spaces are delays in hiring process that are unproductive.

this will make sure that the candidates do not hold casual attitude and take the recruitment process more seriously. Therefore. Additionally it can send across a positive image about the company. It must be made mandatory for the candidates to take the test. Know what you're looking for in candidates. Therefore it is recommended that more and more consultants should be tied up from multiple segments to attract large pool of new and fresh talent.Here at ICICI Prudential Life Insurance. This can also be circulated to internal . the delays occur when the outstation candidates are called for interviews at Regional branches like Delhi and Mumbai. Technology (such as automated or Web-based tracking) is ideal for eliminating unnecessary steps and reducing delays. It is recommended to reduce the turnaround time for the recruitment and selection process. Sometimes. because of busy schedule of senior managers and sometimes because of tight schedule of candidate. It is observed that the candidates sourced by placement agencies and send for further rounds of interviews are rarely found suitable by the hiring managers. in case there is need to utilize the service of a placement agency. White space in recruitment can be compressed by the use of IT also. then it is recommended that these placement agencies be given a well drafted job description and job specification. This delay could be minimized by scheduling interviews in the regional locations. filling up forms etc within the stipulated time. there often comes the problem of duplication of data. the interview has to be postponed. Tie up with more & more consultants from multiple segments Since the limited placement agencies are sourcing candidates to all insurance companies.

Currently. Thus making efficient utilization of the existing resources.employees under the employee referral scheme. it is recommended that unnecessary details should not be asked before we make the final offer to the candidate. education levels. infrastructure etc. Blue form should be made consise. job boards constitute the biggest use of the Web. This factor must be given importance since Indian society is divided on various parameters such as education. offering access to thousands of resumes within . This is very time consuming and even after taking these details from candidate its not sure that offer will be made or not. Reduce the pre offer formalities: Pre-offer documentation includes filling of a lengthy Blue form which includes all personal. This will help people to get a clearer picture and provide for most suitable candidates. language. A test with high level of English and complicated sentence structure can be a hurdle in areas where language itself is barrier. So. Web-based technology lets you increase hiring speed and quality while reducing costs. Blend technology into every aspect of your recruiting and hiring process. Since applying common test for all candidates across entire country can overshadow a candidates capabilities. One size doesn’t fits all An effort must be made to study local condition. This also becomes frustrating for the candidate sometimes. educational and professional details of candidate. An option is to have different tests for different regions.

and keep in touch through e-mail. How do you keep a pool active? Some companies send their newsletters to pool candidates. and tracking. candidate assessment and testing. Build and manage your candidate pool as a precious resource. A personorganization helps to assess how well a candidate is suited the organization. motivations. A "candidate pool" is a group of individuals who have shown interest in working for your company and are qualified for and ready to fill certain positions. But the Web can also be a powerful tool for screening and qualifying that flood of resumes. Rather than undertaking the time-consuming process of filling one job at a time. Work the Web wisely and you save time for recruiters and hiring managers and nab top candidates before your competitors can. Companies have begun to use the Web to collect and instantly match data on candidate skills.hours. especially those with a . Other uses of Web-based technology include online interviewing. method must be devised to check for person-organization fit. It will help the organization to retain its employees for a longer period of time and less burden on recruitment staff. applicant self-scheduling. Whether the attitude he/she carries will promote both organizational as well personal goals. This takes a great importance especially when attrition is high. and experiences against job criteria. give them product coupons. But many organizations. you draw on the candidate pool and fill jobs as they become available. Pool management is not easy in a tight labor market --good candidates often go elsewhere.  It is recommended that apart from the person-job fit.

Therefore it makes recruitment a critical function in the organization. Therefore recruitment in this regard becomes an important function. A candidate when invited for a interview must be attended as soon as possible and should be made to wait for hours together. are able to fill positions quickly using the pool concept. It is only when organization is recognized for its quality that it can build a stability with its customers. The organization must constantly improvise in its recruitment process so that it is able to attract best in . Thus an organization must be able to stand out in the crowd. Create winning impression even on those who are not selected Its very important to create a favorable impression of your organization on all those who come for interview. Those who are not selected in the first round of personal interview should also carry this impression that they have missed the opportunity to work in a great company. there must a proper coordination of the interview of the candidate and greater degree of professionalism. a good impression about the will make him recommend the name to his people. In order to grow and sustain in the competitive environment it is important for an organization to continuously develop and bring out innovations in all it activities.reputation as a great place to work. For this. The first step in this direction is to ensure competitive people come in the organization. Interviews conducted on a scheduled time leave a good impression on the candidate. Even if he is not selected. CONCLUSION Insurance is confronted with high attrition rate.

Convince people about the job profile and to sell the job to the prospective candidate.the industry in order to serve the best. Reply to official mails. Managing HR department in the absence of HR manager.. Following up with the candidates during the entire selection process. I am privileged to have undergone training at ICICI Prudential Life Insurance....... LEARNINGS Every endeavor undertaken to accomplish challenging goals.. As learning never stops. Prioritize issues according to their importance. In brief my learning and achievements can be summarized as under: Understanding of person and profile fit.. Learning about salary fitments. Thus the organization must look out for methods that can enable it to adopt best recruitment practices. my learning at Kotak has come from a lot of exposure.. Communicating with the corporate. implications and significance. Performance appraisals.. Back to the main Menu ... Learned to convince candidates about the offer rolled out and making them accept the offer through effective communication.. Handling queries received from various quarters. on the job training and close interaction with the corporate.... . Field work exposure to tap candidates that further strengthened the learning. its various types.Analysis & interpretations of recruitments and selection . Find the Next Chapter .. can only be successful under the experienced and encouraging guidance..

.....Do you have a clearly stated Recruitment & Selection Policy ? • Yes • No • To some extent 2) What are the quality of ICICI Prudential Life Insurance Company recruitment System:• Quick Response time for requirement • Bringing in Quality People • Proper coordination with other team or department • Efficient Maintenance & Updating of Database 3)What Recruitment Sources are used? • Advertisement • Employee Referral • Consultant • Portals • All of these….. Q1...Back to the main Menu . ......

5)Which source of Recruitment is better for companies:(i) Internal Source (ii) External Source (iii) Depends on Situation & Post…………………………………… 6)Rank the Qualities in the order of your preference on the basis of which you select candidate:• Qualification • Experience • Skills • Personality • Depend on Job Variety 7) How many Stages are followed in selection procedure:• 2 • 3 • 4 8) Does ICICI Prudential ask candidates to enter into BONDS with them:• Yes . Transfer & Promotion:(i) Yes (ii) No If Yes than for which type of post………………………………….4)Does ICICI Prudential adopt Internal Recruitment Source i.e.

Is the estimation of Recruitment Process cost is done? • Yes • No Back to the main Menu .... Q9......• No If Yes then what kind of Job or Department…………………………...... .

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