CHAPTER 1.

INTRODUCTION

INTRODUCTION

T h e p r e s e n t b u s i n e s s o f t h e w o r l d i s f u l l o f c o m p l e x i t i e s a n d d yn a m i s m to overcome all complexities (like heterogeneous skill, awareness towards right) is the major task for any business organization. With the rapid changes taking place in technology -especially in information t e c h n o l o g y, a l l H R p e r s o n n e l h a v e t h e n e e d t o c o p e w i t h e x p e c t a t i o n s t o p e r f o r m a n y t i m e , a n yw h e r e .

They have to constantly upgrade their skills and retain themselves in order to keep abreast with technological changes; the age of k n o w l e d g e e m p l o y e e h a s a r r i v e d . E a c h e m p l o ye e n o w w a n t s h i s r o l e to be wholesome and meaningful with job satisfaction being a primary consideration for performance.

A major HR challenges is to retain highly volatile knowledge e m p l o ye e s w h o h a s a h e i g h t e n e d s e n s e o f s e c u r i t y, s e l f b e l i e f & a c o r r e s p o n d i n g a b i l i t y f o r j o b m o b i l i t y. I f h e i s n o t s a t i s f i e d w i t h h i s w o r k h e w i l l m o v e o n . E m p l o ye e s R e t e n t i o n h a s t h e r e f o r e b e c o m e a major challenge especially with the looming specter of better salaries and compensation packager being offered by Multinationals.

Management of human resource in HDFC LIFE is a very big ex ercise a n d c o m p r i s e s w i d e r a n g e o f a c t i v i t i e s i . e . E m p l o ye e r e l a t i o n e t c . & i t s ultimate goal is Human Resource Development of the organization .

O r g a n i z a t i o n s a r e l i k e a s o c i a l s ys t e m . T h e y c o m b i n e T e c h n o l o g y a n d Human beings together and the later being most important because unlike machines, people are more responsive. They feel, think and act. Given a proper environment of oneness and avenues for development, they can take an organization to glorious heights.

I n t o d a y s E n v i r o n m e n t H u m a n R e l a t i o n s p l a y a v e r y i m p o r t a n t r o l e in the success of any Enterprise. The knowledge of proper

understanding of Human Relations is extremely necessary for every manager irrespective of his level and discipline, for appropriate handling of men and getting the best out of them. Man constitutes

the most important resources of any enterprise while all the other resources like machinery and money depreciate, in value. Human Resource is the only resource, which appreciates & has to be handled with utmost care. The best industrial relations are achieved by atm osphere of one Single Family Unit and keenness to develop a team of self -motivated members who enjoy working with the organization. There is no unanimity as to

the meaning & scope of industrial relations, since different teams such a s L a b o r M a n a g e m e n t R e l a t i o n , E m p l o ye e & E m p l o ye e R e l a t i o n , U n i o n & Management Relations, Personnel Relation, Human Relation etc. are used. In its strict sense between the term Industrial & Relations in a means unit or the an

relationship

management

workers

e s t a b l i s h m e n t o r a n I n d u s t r y. I n w i d e r s e n s e , i t m e a n s t h e r e l a t i o n s h i p between the workers and management, union & workers and union and m a n a g e m e n t i n a n I n d u s t r y. There are three main parties who are actively associated with any industrial relations are the management, w orkers and the state.

F u n d a m e n t a l l y, t h e t e r m i n d u s t r i a l r e l a t i o n s r e f e r s t o a n o r g a n i z a t i o n o f r e l a t i o n s b e t w e e n t w o p a r t i e s r e p r e s e n t i n g e m p l o ye e s a n d e m p l o ye e regarding matter of collective interest.

Apart from the primary objective of bringing abo ut sound and healthy r e l a t i o n s b e t w e e n e m p l o ye e s & e m p l o y e e s , I n d u s t r i a l r e l a t i o n a i m s ,

T o f a c i l i t a t e p r o d u c t i o n a n d p r o d u c t i v i t y. To safe guard the rights & interest of both Labour and Management by their mutual cooperation.

To achieve a sound, harmonious and mutual beneficial labour management relation.

To avoid unhealthy atmosphere in the industry stoppage of work, go slows, strikes, lockouts.

A AB BO OU UT TT TH HE EC CO OM MP PA AN NY Y

HDFC Life, one of India's leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India's leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.

HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others.

HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the added advantage of customizing the plans, by adding optional benefits called riders, at a nominal price. The company currently has 25 retail and 9 group products in its portfoli o, along with 10 optional rider benefits catering to the savings,

investment, protection and retirement needs of customers.

HDFC Life continues to have one of the widest reaches among new insurance customers companies in over with about 500 branches The in India touching also

900

cities

and

towns.

company has

established a liaison office in Dubai. HDFC Life has a strong presence in its existing markets with a strong base of Financial Consultants.

Our Vision & Values

Our Vision 'The most successful and admired life insurance company, which means t h a t w e a r e t h e m o s t t r u s t e d c o m p a n y, t h e e a s i e s t t o d e a l w i t h , o f f e r t h e b e s t v a l u e f o r m o n e y, a n d s e t t h e s t a n d a r d s i n t h e i n d u s t r y ' . 'The most obvious choice for all'. Our Values Values that we observe while we work:

Integrit y Innovation Customer centric People Care "One for all and all for one" Team work Joy and Simplicity

HDFC LIMITED:-

HDFC is Indias leading housing finance institution and has build more than 23.00,000 hoses since its corporation in1977 I n f i n a n c i a l ye a r 2 0 0 3 - 0 4 t h e a s s e t s u n d e r m a n a g e m e n t c r o s s e d R s . 36,000 crore As at March 31st, 2004, outstanding deposits stood at Rs. 7840 crores. He depositor base now stands at around 1 million depositors Presented the dream home, award for the best housing finance provider in 2004 at the 3 rd annual outlook money awards

THEIR MISSION (as stated in the Company's website):

To be the top new life insurance company in the market.

Their MISSION statement comprises of:

Customer service of the highest order Value for money for customers P r o f e s s i o n a l i s m i n c a r r yi n g o u t b u s i n e s s Innovative products to cater to different needs of different customers

Use of technology to improve service standards Increasing market share

THEIR VALUES: SECURITY: Providing long term financial security to our policy holders will be our constant endeavor. We will be doing this by offering life insurance and pension products.

 TRUST: We appreciate the trust placed by our policy h olders in us. Hence, we will aim to manage their investments very carefully and live up to this trust. INNOVATION: Recognizing the different needs of our customers, we will be offering a range of innovative products to meet these needs.

BOARD OF DIRECTORS:Brief Profile of The Board of Directors

M r . D e e p a k S . P a r e k h i s t h e C h a i r m a n o f t h e C o m p a n y. H e i s a l s o t h e Chairman and Director of Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited in a senior

management position in 1978. He was inducted as a whole -time director of HDFC Limited in 1985 and was appointed as its Chairman in 1993. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales). Mr. Keki M. Mistry joined the Board of Directors of the Company in December, 2000. He is currently the Vice Chairman an d Chief

Executive Officer of HDFC Limited. He joined HDFC Limited in 1981 and became an Executive Director in 1993. He was appointed as its Managing Director in 2000. Mr. Mistry is a Fellow of the Institute of Chartered Accountants of India and a member of the Michigan

Association of Certified Public Accountants. Ms. Renu S. Karnad is the Managing Director of HDFC Limited. She is a graduate in Law and holds a Master's degree in Economics from D e l h i U n i v e r s i t y. S h e h a s b e e n e m p l o ye d w i t h H D F C L i m i t e d s i n c e 1978 and was appointed as the Executive Director in 2000 and Deputy Managing Director in 2007. She is responsible for overseeing all aspects of lending operations of HDFC Limited.

Mr. David Nish joined Standard Life on 1 November 2006 as Group Finance Director and remained in that position until December 2009. He is appointed as the Ex ecutive Europe on 1st J anuary 2010. In 2000
9

he was awarded the Scottish Business Awards Finance Director of the Y e a r a n d f r o m 2 0 0 4 t o 2 0 0 5 h e s e r v e d o n t h e G o v e r n m e n t E m p l o ye r s Pension Task Force. He is a member of the Institute of Chartered Accountants of Scotland. He joined the Board of Directors in February 2010.

Mr. Nathan Parnaby is appointed as the Chief Exec utive, Europe & A s i a o f S t a n d a r d L i f e i n t h e ye a r 2 0 1 0 . N a t h a n j o i n e d S t a n d a r d L i f e i n 1982 as Investment Manager, responsible for all UK net funds. He was appointed a Director of the Standard Life Investments board. He is a Mathematics graduate from Ox ford University and the Member of the Securities Institute. He joined the Board of Directors in December 2009. Mr. Norman K. Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. Prior to this, Mr. Skeoch was working with M/s. James Capel & Co. holding the positions of UK Economist, Chief Economist, Executive Director, Director of Controls and Strategy HSBS Securities and Managing Director Intern ational Equities. He was also responsible for Economic and Investment

Strategy research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005.

Mr. Gautam R. Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India. Mr. Divan was the Former Group Chairman and Managing an Committee Member of of

Midsnell

International,

International

Association

Independent Accounting Firms and has authored several papers of

10

professional interest. Mr. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investmen ts to and from India.

Mr.

Ranjan

Pant

is

global

Management

Consultant

advising

CEO/Boards on Strategy and Change Management. Mr. Pant, until 2002 w a s a P a r t n e r & V i c e - P r e s i d e n t a t B a i n & C o m p a n y, I n c . , B o s t o n , where he led the worldwide Utility Practic e. He was also Director, Corporate Business Development at General Electric headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton School and BE (Honours) from Birla Institute of Technology and Sciences.

Mr. Ravi Narain is the Managing Direc tor & CEO of National Stock Ex change of India Limited. Mr. Ravi Narain was a member of the core team to set -up the Securities & Ex change Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI). Mr. A. K.T. Chari has joined HDFC Standard Life as a Director on March 10, 2010. Mr. Chari has completed his Electrical Engineering from Madras University in 1962. He is associated with Infrastructure D e v e l o p m e n t F i n a n c e C o m p a n y L t d . ( I D F C ) f o r l a s t 1 1 ye a r s . C u r r e n t l y he is handling project finance for infrastructure projects at IDFC. Prior to this he was associated with Infrastructure Development Bank of India (IDBI) from 1975 to 1999.

11

Mr. Gerald E. Grimstone was appointed Chairman of Standard Life in May 2007, having been Deputy Chairman since March 2006. He became a director of the Standard Life Assurance Company in Jul y 2003. He is also Chairman of Candover Investments plc and was appointed as one of the UKs Business Ambassadors by the Prime Minister in January 2009. Gerry held senior positions within the Department of Health and S o c i a l S e c u r i t y a n d H M T r e a s u r y u n t i l 1 9 8 6 . H e t h e n s p e n t 1 3 ye a r s with Schroders in London, Hong Kong and New York, and was Vice Chairman of Schroders worldwide investment b anking activities from 1998 to 1999. He is the Alternate Director to Mr. David Nish.

Mr.

Michael

Connarty

is

responsible

for

Standard

Life's

investments in life assurance Joint Ventures in India and China. He holds a degree in Law and MBA. He has worke d with Standard Life for 3 3 ye a r s i n m a n a g e r i a l p o s i t i o n s c o v e r i n g a n u m b e r o f f i e l d s s u c h a s Pensions law, International Marketing, Operational Management,

S t r a t e g y, R i s k , C o m p l i a n c e , C o m p a n y S e c r e t a r i a l a n d B a n k i n g . H e h a s acted as Project Manager for th e start-up project of the Company in 2000. He is the Alternate Director to Mr. Norman K. Skeoch.

Mr. Amitabh Chaudhry is the MD and CEO of HDFC Standard Life. Before joining HDFC Standard Life, he was the MD and CEO of I n f o s ys B P O a n d w a s a l s o h e a d i n g a n I n d e p e n d e n t V a l i d a t i o n S e r v i c e s u n i t i n I n f o s ys T e c h n o l o g i e s . H e s t a r t e d h i s c a r e e r w i t h B a n k o f America delivering diverse roles ranging from Head of Technology Investment Banking for Asia, Regional Finance Head for Wholesale Banking and Global Markets an d Chief Finance Officer of Bank of America (India)

12

INSURANCE COMPANIES IN INDIA (COMPETITORS) Before insurance sector was opened to the private sector Life Insurance Corporation (LIC) was the only insurance company in India. After the opening up of In surance sector in India there has been a glut of insurance companies in India. These companies have come up with i n n o v a t i v e a n d f l e x i b l e i n s u r a n c e p o l i c i e s t o c a t e r t o v a r yi n g n e e d s o f the individual. Opening up of the In surance sector has also forced the LIC to tighten up its belt and deliver better service. All in all it has been a bonanza for the con sumer. Major Life insurance Companies in India are

Aviva Life Insurance SBI Life Insurance Birla S un Life Insu rance HDFC Standard Life Insurance IC IC I Prudential Life Insurance l I N G V ys y a L i f e I n s u r a n c e Kotak Mahindra Life Insurance LIC Max New York Life Insurance Met life India Insurance Reliance Life Insurance Shriram Life Insurance Tata AIG Li fe Insurance Bajaj Allianz Life Insurance

13

INTRODUCTION OF PERFORMANCE APPRAISAL In an informal sense, performance appraisal is as old as mankind itself. In a formal sense, performance appraisal of an individual began in the w e d yn a s t y ( A . D 2 6 1 2 6 5 ) i n C h i n a . W h e r e a n i m p e r i a l r a t e r appraised the performance members of the official f amily. In 1883 the New York City Civil Services in the USA introduced a formal appraisal program shortly before World War I. The US Army adopted t he Man to Man rating s ys t e m for evaluating Military Personnel. This early appraisal was called Merit rating. In early 50s, attention shifted to the performance Personnel. Since then, the Philosophy of pe rformance Appraisal has undergone tremendous changes. Different expert have used different terms to describe this concept. The common terms used, include Merit rating, b e h a v i o r a l a s s e s s m e n t , e m p l o ye e e v a l u a t i o n p e r s o n n e l r e v i e w , s t a f f assessment, progress report and performance appraisal. PERFORMANCE APPRAISAL Performance Appraisal is one tool available to successfully manage performance management process. Performance appraisal may be defined as The process by which an e m p l o ye e s c o n t r i b u t i o n t o t h e o r g a n i z a t i o n d u r i n g a s p e c i f i e d p e r i o d is assessed. Performance appraisal is an important strategic management tool. Performance Appraisal = Performance + Appraisal appraisal of technical professional and Managerial

14

Performance defined as : Altitudes and traits Achievement of goals and outcomes Behaviors

Appraisal defined as : Measurement of facts, figures and Means. A n a l ys i s o f v e r i f i a b l e c o m p o n e n t s o f a g i v e n j o b .

15

PURPOSE OF PERFORMANCE APPRAISAL PURPOSE OF PERFORMANCE APPRAISAL

Evaluation 1) Evaluation :Accurately measures performance

Development

Establishes performance standards that are clearly related to the organizations mission and objectives.

D e v e l o p s e m p l o ye e w h e r e n e c e s s a r y o r t a k e c o r r e c t i v e a c t i o n where appropriate.

Provide

continuous

feedback

to

e m p l o ye e

about

their

performance.

2)

Development :Assist the training and continued personal development of an e m p l o ye e . Employee are more motivated committed and competent to achieve their work roles and organizational goal.

16

METHODS OF PERFORMANCE APPRAISAL

TRADITIONAL METHOD

MODERN METHOD

1.Stright Ranking Method 2.Man To Man Comparison Method 3.Grading 4.Graphic Rating Method 5.Forced Choice Description Method. 6.Forced Distribution Method. 7.Check List. 8.Free From Essay Method. 9.Critical Incident. 10.Group Appraisal. 11.Field Review Method.

1.Assessment Center 2.Appraisal By Result or method by Objective. 3.Human Asset Accounting Method. 4.BehaviourlyAnchored Rating Scales.

17

USE OF PERFORMANCE APPRAISAL

Performance Improvement

Compensation Informational Adjustment Inaccuracies

Use of Performance Appraisal

Staffing Process

Career Planning

Placement Decisions

Deficiencies and Development

1.

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

2.

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

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3.

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

4.

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

5.

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

6.

Staffing Process Deficiencies :-

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

19

ADVANTAGES OF PERFORMANCE APPRAISAL

ADVANTAGE

Individual Level

Team Level

Organization Level

Individual Level : Team Level : Organization : Development of human resources. Achievement of key objective. Best and focused utilization of human resources. Alignment of effort with objective. Motivation of team members Recognition of past effort Development requirement can be uncovered

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FACTORS AFFECTING PERFORMANCE APPRAISAL

Motivating

Reinforcement

Factors Affecting Performance Appraisal

Organization Behavior Modification

Motivation :Motivation are the forces that energize direct and sustain a person efforts. Motivated people with adequate ability and understanding of the job, will be more productive. Reinforcement :Behavior followed by positive nature probably will be repeated. Reinforce led to positive consequences that motivate behavior. Organization Behavior Modification :Reinforcement in organizational setting can be used by peoples behavior and improves performance by systematically managing work

21

BENEFITS OF PERFORMANCE APPRAISAL

Benefits to Benefits of Performance Appraisal Benefits to Employees Organization

Benefits to Organization : Documentation of performance appraisal and feedback may be needed for legal defense. Appraisal provides a rational basic for constructing a bonus or merit system. Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations. Benefits to employee : Performance appraisal is as important for good performers as for weak employee. Performance feedback is needed and desired for brining about improvement in performance. Assessment and recognition of performance levels can motivate employee to improve their performance

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PERFORMANCE APPRAISAL RULES IN HDFC LIFE DELHI

1. TITLE:

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

2.

OBJECTIVES: The objectives of the Performance Appraisal System are: 2.1 To set Norms and Targets of Work Performance, as well as, to monitor the Work Progress of Employees. 2.2 To facilitate placement of Employees in accordance with their suitability for different types of Assignments, 2.3 To provide an Objective basis for determination of Merit, Efficiency and Suitability for the purpose of promotion. 2.4 To identify areas requiring exposure for Training/Development.

23

3.

EVALUATION: The Performance Appraisal System seeks to evaluate: 3.1 The Work Performance of an Employee on the present job in relation to the expected levels of performance, both qualitative and quantitative. 3.2 The extent of development achieved by the employee during the period under review. 3.3 3.4 Evaluation of behavioral Attributes Attitudes and Abilities. Evaluation of potentials for assuming higher responsibility.

24

4.

COVERAGE: 4.1 i) ii) The appraisal shall cover: Performance during the period from 1s1 April to 31st March of every year. All regular employees of the company. There shall, however, be 5 different Formats for: a. Class III and IV b. E-0 c. E-1 to E-3 d. E-4 to E-6

DEFINITIONS: 5.1 Executive: An executive is a person employed under the authority of HDFC

LIFE in any of the Executive grades but shall not include a Trainee (Technical or Non-Technical). This would not include Directors or any of the other person appointed by the President of India, for any of the offices in HDFC LIFE or its subsidiaries and associated offices. 5.2 Appraisal Year: The appraisal period is 12 months of financial year between 1st April of a year to 31st March of succeeding year. 5.3 a) Appraisee: An appraise is an executive who has worked under the direct control and supervision of another executive for a minimum period of 4 months within the time span of 1s1 April - 31s1 March (12 months) in an Appraisal year; b) Seconded Appraise is an executive who belongs to a Professional Group but works under the direct control of different group.

25

5.4

Appraisers: i.) There are two levels of appraisers. The First Appraiser, also called Reporting Authority, means an executive under whose direct control and supervision the Appraise operates. In case of seconded appraise, immediate functional senior executive (who may be equal in status to the 18t Appraiser) could be the Joint Appraiser with the Reporting Authority, and he would only record, whether or not agrees with the observations of the first Appraiser. ii.) The second Appraiser also called Reviewing Authority means a senior executive who oversees the activities of the Appraise and who offers professional advice to, or controls, the first Appraiser. Normally, the assessment of performance of an Appraise is considered in detail by these two Appraisers and they should briefly explain the rationale for the grade Specific observation must be recorded for very high or low grading in comments column.

6.

PROCEDURE: 6.1 PAR/ACR in respect of an employee is required to be assessed/written by levels indicated below:a. b. 6.2 By the Reporting Officer under whom employee is working, By the Reviewing Officer Class III/IV& E-0 employees: The reporting officer for writing PAR of an employee of Class III/IV and E-0 level category will be the executive under whose control the employee is working. The Reviewing officer will be of one grade above the grade of Reporting Officer. The PARs in respect of Class III and IV employees duly reviewed/accepted is maintained at Region/Institutes/Headquarters Group-wise in the concerned establishment section/ PAR Sections.

26

6.3

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

6.4

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

a.

The Performance Appraisal Reports of Executives of E-6 level i.e. Deputy General Manager and above will be submitted to concerned Functional Director for final review and acceptance.

b.

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

c.

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

7. i.

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

27

8.

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

9. APPRAISAL YEAR FOR PROBATIONARY PERIOD: The Appraisal year will apply in cases of all Regular executives of HDFC LIFE Special Forms and relevant instructions already exist for assessment of performance during the probationary period mentioned above, and these would continue to be operative in the future. It is essential that the process of assessing-performance for completion of the probation period commences immediately after the end of the prescribed time, and decision of the appropriate authority is communicated to the concerned executive within six weeks. This will ensure that further appraisal of the executive as Regular employee is not delayed. 10. APPRAISAL FOR PART-PERIOD: i) The minimum period of 4 months of linkage between the Appraise and Appraisers (Reporting Authority, Reviewing Authority and Accepting Authority) may be disturbed due to transfers etc., in some cases. The guiding principle for ensuring fair assessment in the event of loss of linkage (minimum 4 months) in such cases would be as under: A minimum of 4 months interaction period must subsist between the Appraise and the first Appraiser, In case this is not so, the second Appraiser would make his comments on the performance of the Appraise. In case he had the opportunity of overseeing activities of the executive for a minimum of 4 months during the Appraisal period in consultation with the existing new Reporting Authority, i.e., first Appraiser.
28

In case there is less than 4 months interaction between the Appraise and the second Appraiser, the necessity of having second Appraiser would be waived, and the final assessment will be made by the Accepting Authority on the basis of the report (formal or informal) of either first or second level Appraiser or both,

ii)

In case of an Appraisers transfer when he has worked for less than 4 months period with the Reporting Authority, the erstwhile Reporting Authority will forward Part-Period report about the Appraisers performance to the appropriate Authority (in this case the new Reporting Authority). This report will be attached to the PAR formal when the appraisal procedure is initiated for the executive for current year. The new Reporting Authority/ Reviewing Authority may consider the Part-report for assessing the Appraisers performance for the total year, and refer to this in his assessment.

iii)

The Reviewing Authority would also be subjected to the limitation of 4 Months

period of inter-action between the Appraise and him (Appraiser). In case this condition is not satisfied the concerned Accepting Authority will finally record his assessment in consultation with the first and or second Appraiser who have known the Appraise while assigning final grade to the appraise. 11. APPRAISAL IN SPECIAL CASES: i) In case an executive who has worked in a number of positions of short Duration during 12 month period, the assessment will be made by the Reviewing Authority/Accepting Authority currently associated with the Appraise. In case none of the above mentioned employees has the benefit of assessing the performance for the prescribed minimum period of 4 months, this may be duly recorded, and the Accepting Authority should complete the PAR ii) Employee on Study Leave: The Reporting Officer/PAR officer is to initiate action to secure a Report from the Head of Institute where the appraise has been placed for advanced learning / training without waiting for the appraise to fill the personal details etc. The Appraiser would prepare summary report about his performance on the basis of the report received from the Institutional Head.
29

In the event of the non-compliance on the part of the Institution to send a report, appraise be advised to send a report of his studies to the appraiser through the Institutional Head. iii) Employee on Long Leave: In case an appraise is on medical leave (for 4 months or more), the Reporting Officer in this case would record the nature of medical problem/ reasons for long medical leave. The medical report, if available, be attached with the PAR. iv) Employees on Suspension for alleged misconduct: The Reporting Officer will initiate action without waiting for the Appraise to fill in personal data etc. He will record his observations about the Appraise which may not deal with his performance as an employee but make reference of his conduct, during the period of suspension, if so desired. v) Erring Appraise: In case where an Appraise deliberately does not fill in the personal data or record job parameters / achievements within the prescribed time limit, this deliberate delinquency, may be recorded by the Reporting Officer. The Appraiser would initiate action on other aspects of performance appraisal as per Rules.

12.

THE GRADING SYSTEM: The Block numerical values have been assigned to assist the 1st Appraiser in making an overall assessment. The overall total score for determining a grade is merely a guide and the final grade may be at variance with the total score. The second Appraiser i.e. the Reviewing Authority and the Accepting Authority, have to take an overall view, both of the performance and the personality of the appraise, while determining the 'FINAL GRADING'. The Accepting Authority will arrive at the Final Grading by judiciously weighing the assessment of Reviewing Authority, who may belong to functional discipline of the Appraise along with the detailed assessment of the Reporting Authority.
30

The overall rating in grades in respect of appraisals would be as under: A+ - Exceptional {rare occasions) A - Top Performer B - Very Good C - Adequate D - In Adequate The final grade given by the Accepting Authority after detailed and cfue consideration to the rating by the 1st and 2nd Appraisers, will be the DECISIVE GRADE of the Appraise executive. In case this final rating is different from those of the 1sl and 2nd appraiser, adequate justification MUST be mentioned by the Accepting Authority. There must be adequate explanation by the 1st and 2nd appraisers and the Accepting Authority for any grade assigned to the appraise. In the absence of adequate explanation the report will be considered incomplete and returned back to the appraisers for conforming to the directives contained in the instructions. 22. THE GRADES i. The performance categories are defined as follows:

EXCEPTIONAL (A+) This is a person whose job performance and personality attributes are clearly remarkable. This person meets or exceeds Company's highest standards and achieves extraordinary results in extraordinary circumstances. A rare individual who achieves this once in a while. TOP PERFORMER (A) This is some one whose job performance is noteworthy and he makes valuable contribution to the organization. He does not have any negative personality attributes. He is one of the top performers.

31

VERY GOOD (B) This is an individual whose performance consistently meets company's expectations. This is a person who is unquestionably above average. ADEQUATE (C) This is a person whose overall performance meets basic requirements of the job and the basic targets. IN-ADEQUATE (D) This is an individual who needs to improve his or her performance and has not achieved results in spite of guidance and counseling by appraisers. This aspect must be specially stated in the comments/remarks column of the PAR format by the appraisers.

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CHAPTER-2 RESEARCH METHODOLOGY

33

RESEARCH METHODOLOGY In order to carry out the proposed study data are to calculated and analysis is accordingly. There are two main sources of data collection i.e. primary data and secondary data. Primary data :it mean collection of the information for the first time. In order

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

34

To offer suggestions and recommendation regarding the existing performance appraisal system in the company.

RESEARCH DESIGN Research design in the conceptual structure with in which research is conducted, it constitute the blue print for the collection measurement and analysis of data for the preparation of effective research. Sample size :Number of person on which the actual survey is conducted. The simple size of 50 employee working in the service sector

Sample procedure:-

Simple random sampling is used as a means to collect data from the target population.

Data collection instrument :-

The study is based upon the analysis and interpretation

of questionnaire and schedule prepared to gather information relevant to the awareness. The survey instrument included 16 open ended question in the beginning of the questionnaire the demographic data and information about the number of years employee are working in HDFC LIFE is collected. Mode of analysis: The methods used to analyze the data are as follows:

1) To study the importance of performance appraisal in the organization. 2) To find out whether the employees are satisfied with the present performance appraisal system or not. 3) Interpret and analysis of the data and present it in a proper manner. 4) Uses of Microsoft excel for preparation of graph

35

Research Method : Literature survey Retrieving in house information (data collection ) Feed back from various department . Interaction with personal associate. Interpretation

36

CHAPTER 3 FINDINGS & ANALYSIS

37

DATA ANALYSIS AND INTERPRETATION

Analysis and Interpretation, as explained earlier, is done for each question Separately. This is followed by Analysis and Interpretation, parameter wise i.e. according to parameters that are specified in the structure of questionnaire. Note : The recommendations/ Suggestions for improvement have been made against those questions /measuring attributes that are less than 60%

38

Q1.

THE OBJECTIVES OF PRESENT APPRAISAL SYSTEM ARE CLEAR TO ME.( EMPLOYEES):

No. of Responses :

Agree Disagree

= =

70% 30%

30% Agree Not Agree 70%

Findings: Almost 70% of the respondents agree that the objectives of the present Appraisal System are clear to them.

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Q2.

THE PRESENT PERFORMANCE APPRAISAL SYSTEM IS HELPFUL FOR INDIVIDUAL DEVELOPMENT.

No. of Responses: Agree Disagree Findings: Only 56% of the respondents agree that the present Performance System helps to identify the area of individual development. Where as almost 44% do not agree with this statement. = = 56% 44%

44% 56%

Agree Not Agree

Recommendations: Since almost 41% of the employees are dissatisfied with the present Appraisal System in terms of helping the individual to identify the area of individual development, this implies that the scheme is unable to serve the purpose of identification of the areas of individual development.

40

Q3.

THE PRESENT APPRAISAL SYSTEM IS ABLE TO MOTIVATE THE EMPLOYEES. No. of Responses: Agree Disagree = = 42% 58%

Findings: Only 42% of the respondents agree that the present Appraisal System is able to motivate the employees and 58% disagree with this statement.

42% 58%

Agree Not Agree

Recommendations: For promoting an individual some extra motivational policies should be introduced. Weightage should be given to PAR rating.

41

Q4.

THE PARAMETERS OF PRESENT APPRAISAL SYSTEMS ARE SUFFICIENT FOR APPRAISING THE EMPLOYEE. No. of responses: Agree Disagree Findings: Only 44% of respondents agree that the parameters of present Appraisal System are sufficient for appraising the employee. = = 44% 56%

44% 56%

Agree Not Agree

Recommendations: As high percentage (almost 56%) of employees are dissatisfied with the given job parameters for appraising an employee, so some more tangible parameters may be required to be incorporated in the performance appraisal system to make it more objective.

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Q5.

COUNSELING IS HELPFUL IN IMPROVING THE PERFORMANCE.

No. of responses:

Agree Disagree

= =

90% 10%

10%

Agree Not Agree

90%

Findings: Almost 90% of the respondents agree that counseling is helpful in improving the performance.

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Q6.

THE PRESENT APPRAISAL SYSTEM IS ABLE TO IDENTIFY THE STRENGTH AND WEAKNESS OF AN INDIVIDUAL.

No. of responses; Agree Disagree = = 54% 46%

Findings: Only 54% of the respondents agree that the present Appraisal System helps in knowing the strength and weakness of an individual, and 46% of the respondents disagree with this statement.

46% 54%

Agree Not Agree

Recommendations: Some space should be provided in the appraisal form where the employee can express his strength and weakness in separate columns, or some discussion can be held between the superior and subordinates. This will help the superior to recommend suitable training/ exposure to over come the weakness of his subordinate.

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Q7.

YOUR ORGANISATION GIVES YOU NON-MONETORY INCENTIVES ALSO TO MOTIVATE YOU.

No. of responses : Strongly agree Agree Slightly agree = Disagree Strongly disagree = = = = 02 13 35

4%

Agree Not Agree

96%

Findings: Only 96% of respondents agree that the company gives them non-monetary incentives to motivate them, and 4% disagree on this aspect.

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Q8.

THE CONFLICTS RELATED TO PERFORMANCE APPRAISAL SYSTEM IS RESOLVED PROMPTLY AND FAIRLY. No. of responses: Strongly agree Agree Slightly agree = Disagree Strongly disagree Findings: Only 30% of respondents agree that the conflicts related to Performance Appraisal System are resolved promptly and fairly and on the contrary 70% of the respondents feels that the conflicts related to Performance Appraisal System are not resolved promptly and fairly. = = 30 = = 03 02 15

30% Agree Not Agree 70%

Recommendations: Certain procedure must be designed to remove the conflicts related to Performance Appraisal. Appellate Authority should take the action regarding conflicts carefully, after in depth study of the related matter

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Q9.

THE PRESENT APPRAISAL SYSTEM OF HDFC LIFE IS SATISFACTORY AS A WHOLE. No. of responses: Strongly agree = Agree Slightly agree = Disagree Strongly disagree = 35 = = 05 10

Findings: Only 20% of the respondents agree that the overall present Appraisal System of HDFC LIFE is satisfactory. On the contrary 80% of the respondents feels that the overall present appraisal system of HDFC LIFE is not satisfactory.

20% Agree Not Agree 80%

Recommendations: A large number of employees are dissatisfied with the present Appraisal System of HDFC LIFE, which is quite a serious problem, and it has to be meticulously tackled. A complete review of the system is required. Measures, should be taken to remove the loopholes of the system.

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Q10. APPRAISAL SYSTEM IS THE BEST WAY TO INCREASE JOB SATISFACTION AND JOB PERFORMANCE. No . of responses : Strongly agree Agree Slightly agree Disagree Strongly disagree Findings: Only 48% of respondents agree that Appraisal System is the best way to increase job satisfaction and job performance and 52% of the respondents are disagree with this statement. = = = = = 08 16 15 8 3

52%

48%

Agree Not Agree

Recommendations: Job parameters should be made slightly challenging so that the individual derives professional satisfaction out of it. Further the individual such as job rotation/job enrichment/job training identifies the areas of development, etc are fulfilled

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Q11. WORKING ENVIRONMENT OF HDFC LIFE IS HELPFUL TO INDIVIDUAL DEVELOPMENT. No. of responses : Strongly agree Agree Slightly agree = Disagree Strongly disagree = = 20 = = 10 05 15

Findings : Only 40% of the respondents agree that the working environment of HDFC LIFE is helpful to individual development and 60% of the respondents are disagree.

40% 60%

Agree Not Agree

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Q12. PERFORMANCE APPRAISAL PROCEDURE ALLOWS APPRAISER TO EXPRESS HIS DEVELOPMENTAL NEEDS No. of responses : Strongly agree Agree Slightly agree Disagree Strongly disagree = = = = = 06 24 12 08 -

40% 60%

Agree Not Agree

Findings: Only 60% of the respondents agree by present Performance System allows Appraise to express his developmental needs, so soon space should be provided to the Appraise in the appraisal form so that they can express his developmental needs.

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Q13. PERFORMANCE POLICY SHOULD BE CLEAR AND TRANSPARENT. No. of responses: Strongly agree Agree Slightly agree Disagree Strongly disagree = = = = = 28 10 12 -

24% Agree Not Agree 76%

Findings: About 76% employees are agreeing to that the Performance Appraisal System should be clear and transparent.

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Q14. PERFORMANCE APPRAISAL POLICY SHOULD BE EVALUATED AFTER A FIXED DURATION. No. of responses : Strongly agree Agree Slightly agree Disagree Strongly disagree = = = = = 30 10 10 -

20% Agree Not Agree 80%

Findings: About 80% of the respondents agree that the Performance Appraisal policy should be evaluated after a fixed duration.

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Q15.

EMPLOYEES SHOULD HAVE THE RIGHT TO KNOW ABOUT HIS PERFORMANCE APPRAISAL REPORT AND DECISION OVER THEIR PERFORMANCE WITH DETAILED REASONS.

No. of responses: Strongly agree Agree Slightly agree Disagree Strongly disagree = = = = = 25 15 08 02 -

20% Agree Not Agree 80%

Findings: About 80% respondents agreed with the fact that employees should have the right about his PAR Report.

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Q16. TRANSPARENCY IN PERFORMANCE APPRAISAL CAN DEVELOP THE LOYALTY IN EMPLOYEES. No. of responses: Strongly agree Agree Slightly agree Disagree Strongly disagree = = = = = 12 20 10 , 8 -

36% Agree Not Agree 64%

Findings: About 64% of the respondents agree that PAR system can create loyalty in employees.

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CHAPTER-4 CONCLUSION

55

CONCLUSION

The basic lacuna in the scheme observed by us is due to the fact that job parameters are not explicitly laid sown in the beginning of the year or through mutual consent between the appraiser and the appraise, which has been the central consideration in the existing scheme. Also the present scheme is not at all transparent, which is unable to motivate the employee, as he is unaware of his ACR grading. For this, a mechanism should be introduced in the system to make the individual aware of his ACR grading of the precious year, to provide him an opportunity for the future improvement and development. Also counseling should be made effective by involving the individual to suggest measures for solving his problems and developmental needs. Counseling should be held regularly at fix intervals for the employees having been awarded adequate and inadequate grading. The performance appraisal system at HDFC LIFE has certain loopholes which need to be eliminated for the efficient and effective working of the employees and also for the better overall growth of the organization on the whole

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CHAPTER- 5 SUGGESTION

57

SUGGESTIONS

Major suggestions given by the executives are expressed during the course of interaction with study team are:

1.

The parameters are to be defined by the superiors at the beginning of the year and should define the future course of action.

2.

PAR should be clear to the employees, how to work for an individual and HDFC LIFES benefits.

3.

Target should be set at the start of the year in consultation of controlling offices.

4. 5. 6.

Target should be measured at the end of the year. Employees should have the right to know the feedback. The executives of the organization desire that there is a need for more transparency in the PAR process, in the existing system by intimating about his final grading for the year, in order to make the opportunity for future improvement.

7.

The Present Appraisal System is felt lacking in the potential evaluation of the employees. Hence, the Reporting Officer/ Senior Officer should give the suggestion for potential development of the individual.

The system of identifying the individual for meritorious awards may be solely based on his performance in the past.

9.

It is felt by the employees of the organization that the rules and the regulations of the performance Appraisal System are to be followed strictly and honestly.

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10.

The employees feel that the reporting officer must be fully aware, of the Appraisal System, its process, rules and regulations. For that awareness the ACR department from time to time must organize programs.

11.

Some employees have suggested that some Weight age should be incorporated in the ACR rating for participating in other related activities.

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CHAPTER-6 LIMITATION OF THE STUDY

60

LIMITATIONS OF PERFORMANCE APPRAISAL SYSTEM OF HDFC LIFE

1. 2.

No feedback to the employees. Target for next year are not set in the Appraisal System on which performance can be measured.

3. 4. 5.

Grading System is not clearly defined. Lack of communication between the Appraise and the Appraiser. Experience holders are not given relaxation in the area of qualification if they are not possessing induction level qualification.

6.

Well-defined and clear parameters are not clearly set at the beginning of the year of the Performance Appraisal System.

7.

The Appraisal System has become a routine form to be filled and it has no relevance with the improvement of the ability of the work.

8. 9.

Personal relations are a serious limitation of the present Performance System. Appraisal interview and counseling are absent in the present Performance Appraisal System.

10.

There is no separate column for expressing the special achievements performed by the executives.

11.

There is a lack of interaction between the Appraiser and the Appraise for the evaluation purposes. .

12.

The system does not cover the job satisfaction and it does not motivate the employees.

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13.

It does not give any scope in suggesting ways for the Appraise to improve his performance.

14.

The Appraisal System and its grading criteria are not clear to most of the executive themselves.

15.

System is not at all transparent.

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BIBLIOGRAPHY

For the Project Report Study of Efficiency of Performance Appraisal program in HDFC LIFE, I have consulted the following books and website

Books: Arora, Sakshi & Bhatia, Human Resource Management second edition, R . B . S . A P u b l i s h e r , ye a r 2 0 1 0

Dessler Varkkey , Human Resourse Management Dorling Kindersley (India) Pvt.Ltd, ye a r 2 0 1 1 S.P., Fundamentals of ninth edition, publisher

DeCenzo, D. A. and Human Resource

Robbins,

Management

J o h n W i l e y, Y e a r 2 0 0 7 Chhabra, T.N Human Resourse Management concepts Dhanpat Rai & Co.(P) Ltd.

and issues Fifth edition , Year 2010 Website:-

http://www.hdfclife.com/AboutUs/OurVisionAndValues.aspx http://en.wikipedia.org/wiki/HDFC_Life http://www.managementstudyguide.com/performance -appraisal.htm http://www.hdfclife.com/AboutUs/Ou rVisionAndValues.aspx

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ANNEXURE

64

QUESTIONNAIRE PERFORMANCE APPRAISAL SYSTEM Your personal details: NAME: DESIGNAT ION: NO OF WORKING YEARS IN HDFC: SI. Questions No. Strongly Agree Slightly Disagree Strongly agree agree disagree

1.

The objectives of the present appraisal s ys t e m a r e c l e a r t o me. The present a p p r a i s a l s ys t e m i s helpful for individual development. The present a p p r a i s a l s ys t e m i s able to motivate the e m p l o ye e s . The parameters of present appraisal s ys t e m are sufficient for appraising the e m p l o ye e . Counseling is helpful in improving the performance.

2.

3.

4.

5.

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SI. "Questions No. 6. Present appraisal s ys t e m i s a b l e t o identify the strength and weaknesses of an individual. Your organization gives yo u nonmonetary incentives also to motivate you. The conflicts related to performance appraisal arc resolved promptly a n d f a i r l y. The present a p p r a i s a l s ys t e m o f HDFC is satisfactory as a whole.

Strongly Agree Slightly Disagree Strongly agree agree disagree

7.

8.

9.

10. The appraisal s ys t e m i s a l w a ys t h e best way to increase job satisfaction and job performance. 11. Working environment of HDFC is helpful to individual development. 12 Performance Appraisal procedure allows Appraiser to express his developmental

66

needs.

SI. "Questions No.

Strongly Agree Slightly Disagree Strongly agree agree disagree

13. Performance appraisal policy should be clear and transparent.

14. Performance policy should be evaluated after a fixed duration.

1 5 . E m p l o ye e s should have the right to know about his performance appraisal report and decision over them with detail reasons.

16. Transparence in performance a p p r a i s a l s ys t e m c a n d e v e l o p t h e l o ya l t y i n e m p l o ye e s .

67

Your overall feedback: -

1 . W h a t i s t h e l i m i t a t i o n o f p r e s e n t p e r f o r m a n c e a p p r a i s a l s ys t e m o f HDFC LIFE? 2 . W h a t i m p r o v e m e n t a c c o r d i n g t o yo u s h o u l d b e i n c o r p o r a t e d i n t h e s ys t e m ? SCORE SHEET

A . E n t e r yo u r r e s p o n s e s , b e l o w a f t e r r e v e r s i n g ( * ) m a r k e d o n e s .

Original response Reversed responses

0 4

1 3

2 2

3 1

4 0

Item

Response

Item

Response

Item

Response

1. 4. 7. 10. 13.

...... ... ...... ...... ......

2. 5. 8. 11. 14.

...... ... ... ....... .......

3. 6. 9. 12. 15.

. ..... ...... . ..... . ..... .......

Total

..

...

...

Self-disclosure Feedback

Openness to Perceptiveness

68