CHAPTER I INTRODUCTION

INTRODUCTION
Organizations are made up of people and function through people. Without people organizations cannot exists. The resources of men, money, machinery and materials are collected, coordinated and utilized through people. These resources by themselves cannot fulfill the objectives of an organization. They need to be united into a team. It is through the combine efforts of people that material and monetary resources are effectively utilized for the attainment of common objectives. Without united human efforts no organization can achieve its goals. All the activities of an organization are initiated and completed by the persons who make up the organization. Therefore, People are the most significant resource of any organization. This resource is called human resource and it is most important factor of the production. According to L.F.Urwick, business houses are made or broken in the long run not by markets or capital, patents or equipment but by men. Of all the resources manpower is the only resource, which does not depreciate, with passage of time. Human resource is considered to be the most valuable asset in any organization. It is the sum-total of inherent abilities, acquired knowledge and skills represented by the talents and attitudes of the employees. It may be noted here that human resource should be utilized to the maximum possible extent, in order to achieve individual and organizational goals. It is thus the employees performance, which ultimately decides the attainment of goals. A major concern of every organization should be to contribute positively towards the achievement of its objectives. Organizational effectiveness is often equated with Managerial efficiency. A Manager can ensure organizational effectiveness only by guaranteeing the full utilization of the human resources

available through individual employees under his guidance. Hence, it is always required for a manager to monitor and measure the performance of employees.

Moreover, since the organization exists to achieve the goals, the degree of success that individual employees have in reaching this individual goal is important in determining organizational effectiveness. The assessment of how successful employees have been at meeting their individual goal becomes a critical part of Human Resource Management. Performance Appraisal. A performance appraisal system functions as definition of performance. Performance appraisal is a method of evaluating the behavior of employees in the work spot, including both qualitative and quantitative aspects of job performance indicates how an individual is fulfilling the job demands and it is always in terms of results. Under performance appraisal not only the performance of an employee but also his potential for development is evaluated. Performance appraisal is a systematic description of an employees job relevant strengths and weaknesses. In performance appraisal or merit rating refers to all the formal procedures used in working organizations to evaluate the personalities and contributions and potential group members. In appraisal system the employees merits like initiatives, dependability, personality etc., are compared with others and ranked to rated. Appraisals might be based on the criteria of employees skills, educational qualifications, knowledge, abilities to delegate plans, supervise, assume responsibility, exercise leadership, personal qualities, creativity, decision making and interpersonal skills. This leads to concept of

An appraisal motivates an employee into increased effort aimed at enhancing the outcome of the assessment. It tells an employee what set of activities or what qualities are considered desirable by the organization.

In performance planning and review, the Reporting Manager is expected to set targets or tasks for the appraise in the beginning of the year. In the middle of the year, the appraise fills the self-appraisal form, indicating the extent to which the target or task has been completed, the difficulties faced and the suggestions for improvement. At the end of the year, there is the annual review and targets/tasks set for the next year. Both in the mid-year review and annual review, the self-appraisal is supplemented by a performance review, discussion, the problems are discussed and the appraiser is given feedback on how he is doing.

Human Resource Management is the function with in an organization that focuses on recruitment of management and providing direction for the people who work in the organization. Human Resources Management can also be performed by line managers. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration and training.

Definition: According to Flippo, human resource management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration maintenance and reproduction of human resources to the end those individual, organizational and societal objectives are accomplished.

According to L.F.Urwick, business houses are made or broken in the long run not by markets or capital, patents or equipment but by men. Of all the resources manpower is the only resource, which does not depreciate, with passage of time.

Objectives of Human Resource Management Objective are pre-determined goals to which individual or group activity in an organization is directed. Objectives of personal management are influenced by social objectives, organizational objectives, functional objectives and individual objectives. 1. To create and utilize an able and motivated work force to accomplish the basis organizational goals. 2. To establish and maintain sound organizational structure and desirable working relationships among with those all the members of the organization.. 3. To secure the integration of the individual and groups within the organization by co-ordination of the individual and groups goals with those of the organization.

4. To create facilitate and opportunities for individual or group development so as to much it with the growth of the organization. 5. To attain an effective utilization of human resources in the achievement of organizational. 6. To identify and satisfy individual and group needs by providing adequate and equitable wages, incentives, employee benefits and social security and measures for challenging work, prestige recognition, security, status etc.

OBJECTIVES OF THE STUDY

It provides organized if mission for making hr decisions like placement, pay, transfers, and promotions.

It improves and evaluates Performance of employee It improves communication.

It decides pay rises when regular payment system does not respond. It tests the Performance of hr activities like recruitment selection and training. It provides coaching, counseling and motivation to sub-ordinates.

Broadly, Performance appraisal has four objectives they are: Developmental uses Administrative decisions Organizational objectives Documentation purpose.

NEED OF THE STUDY

The study on performance appraisal is needed in order to To do a comprehensive study on performance appraisal system To provide the prevent grievance and indeciplinary action. To provide the information this helps to council the sub-ordinates. To provide the information about the performance ranks which decision regarding basing on

salary fixation, conformation, promotion,

transfer, and demotions are taken. To provide feedback information about the level of achievement and behavior of sub- ordinate. To determine the Training and Development. To study the design of performance appraisal system existing on the organization. To create and maintain satisfactory level of performance. To facilitate fair and equitable compensation. To ensure organizational effectiveness. It guarantees useful information about employees and the nature of their duties.

SCOPE OF THE STUDY

The study is confined to performance appraisal function of the activities of organization and does not cover any other aspect of Human Resource Management. Further the study is restricted to the respondents of kesoram cement and not other organizations. The focus of the study was to understand the existing performance appraisal system with an eye on the lacunae. which might have crewed into the system also the drawbacks of the system. In the present study an attempt has been made to know the actual implementation of performance appraisal techniques in general and some other aspects such as awareness of the workers, effectiveness of the performance appraisal system in particular. Human resource projections are valid on appraisals. By improving job skills, the employees have lot of scope for development and prepare themselves for higher responsibilities. A through analysis of the performance appraisal system will help the management to know the shortcomings, if any. It also help the company in knowing whether the performance appraisal techniques are used to the full extent or not, there by the researcher can understand the effective implementation of the performance appraisal

METHODOLOGY
The research methodology is a systematic way to solve the problem and it is an important component of the study without which researcher may not be able to obtain the facts and figures from the employees.

SOURCE OF DATA:
The study is based on primary as well as secondary data collected from different sources:

a) Primary Data:
The primary data is collected with the help of questionnaires. The questionnaires are chosen because of its simplicity and liability. Researcher can expect straight answers to the questions. Administration a well-designed questionnaire to the employees and their opinions collect primary and suggestions were sorted with the help of the questionnaire.

b) Secondary Data:
Secondary data is collected through the documents provided by the personnel department. The documents include personnel manuals, reports, books, journals, various magazines and additional information from personal Department of Kesoram Cement Industry.etc.

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LIMITATIONS
The rater most of the employees on the higher side of their performance. The main limitation of this method is that it takes a lot of time and effort to construct several evaluating statements. The population of the study is limited and hence the findings may not to be representative of the entire system existing in India. Due to security reason, enter into many of the technical complexes was difficult which provide as a hindrance for gathering qualitative data.

The time duration for the study has been a limitation for the in depth study of the existing system. The shift existing in certain departments created problems for the return of filled questionnaire.

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CHAPTER II INDUSTRY PROFILE

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INDUSTRY PROFILE
Insurance Industry of India Insurance is divided in two categories: 1) Life insurance 2) General insurance Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to an individual. The risk, which can be insured against include fire, the peril of sea, death, incident and burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party at the happening of a certain Event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events like death or accidents. With the help of insurance, large number of people exposed to a similar risk makes contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good.

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Brief History of the Insurance Sector in India: The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360degree turn witnessed over a period of almost 190 years. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are 1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

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Some of the important milestones in the general insurance business in India are: 1907 - The Indian Mercantile Insurance Ltd. set up the first company to transact all classes of general insurance business. 1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company Regulatory Body: The insurance should be changed 1) an insurance regulatory body should be set up 2) Controller of insurance (currently a part from the finance ministry) should be made independent. 3) IRDA is the insurance regulatory and development authority. Each and every life insurance company has to comply with the rules and regulations of this act.

15

Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 Crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.

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S.No.

Registration Number 101 104 105

Date of Reg. 23.10.2000 15.11.2000 24.11.2000

Name of the Company

1 2 3

HDFC Standard Life Insurance Co. Max New York Life Insurance Co. ICICI Prudential Life Insurance Co.

107

10.01.2001

Kotak Mahindra Life Insurance Co.

5 6 7 8 9 10 11

109 110 111 114 116 117 125

31.01.2001 12.02.2001 30.03.2005 02.08.2008 03.08.2010 06.08.2011 08.11.2012

Birla Sunlife Life Insurance Co. Tata AIG Life Insurance Co. SBI Life Insurance ING Vysya Life Insurance Co. Bajaj Allianz Life Insurance Co. MetLife Life Insurance Co. Mahendra life insurance co.

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Investments Mandatory investments of LIC life fund in government securities to be reduced from 75% to 50%. Gic and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time) Market Players in Vizag: LIC SBI LIFE ICICI PRUDENTIAL BIRALA SUNLIFE BAJAZ ALLIANZ AVIVAA MET LIFE TATA AIG

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Competitors with Market Share: The competition is very tough in the insurance sector. There is neck-toneck competition among all the players. But the majority of share is covered by LIC. All the companies give almost the same policy but there is a little

variation in the charges that the companies are charging.

S. No. 01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. 14.

Name of the competitor Bajaj Allianz ING Vysya AMP Sanmar SBI Life Insurance Tata AIG HDFC Standard Life Insurance Co. ICICI Prudential Birla Sunlife Aviva Life Insurance Kotak Mahindra Max Newyork Life Insurance MetLife Sahara Life Insurance LIC Others Total

Market Share (%) 4.18 0.54 0.46 1.47 1.75 3.05 7.12 1.72 1.11 0.71 1.33 0.37 0.03 72.23 3.93 100.00

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CHAPTER III COMPANY PROFILE

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Company Profile
With over 140 years of experience, the MetLife companies serve millions of customers in the America and Asia with one goal in mind to build financial freedom for everyone. The MetLife companies are a leader in group benefits that serve 88 of the top one hundred FORTUNE 500* companies, and provide benefits to 37 million employees and family members through its plans sponsors in the U.S. The MetLife companies are also ranked #1 in group life and #1 in commercial dental in the U.S . The MetLife companies are the number one life insurer in the U.S. With approximately US $2.8 trillion of life Insurance in force. In India, MetLife was in corporated in 2001, and aims to differentiate itself through customized need based selling, simple and innovative products, and technology-backed service experience, to tread its path to build financial freedom for everyone. Mission / Vision / Values: Build financial freedom for all through leadership in providing financial advice and building long-term relationships through innovative protection, accumulation and retirement products, robust underwriting processes and creating world-class customer service experience for our customers and to provide customers in India with world-class solAXISons for financial security, and in the process add significant value to our shareholders, associates and society.

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Core Values It lead through Innovation to offer world class and competitive products to our customers It build Long Term Relationships with our customers by creating a world class service experience through operational excellence and the innovative use of technology It create a Customer Centered and Result Focused Vision that inspires each one of our Associates and has their buy-in They are committed to creating a High Performance Organization by creating an environment that allows each one of our Associates to perform at their peak. As a result we will also be recognized as an Employer of Choice They are committed to Partnering with our internal and external Customers for mutual success They work with Integrity, Fairness and Financial Prudence in all our dealings keeping the interests of our Shareholders, Customers and Associates paramount MetLife, the Indian affiliate of the largest life insurer in the U.S.*, is going through changes that are unprecedented in size and scope. And that means an unprecedented array of career opportunities and growth potential. It provides customers in India with world-class solAXISons for financial security, and in the process add significant value to their shareholders, associates and society. Corporate Partners As the vital channel for MetLifes products, it has chosen some

exemplary banks and financial institAXISons. These will serve as the interface between our customers and us to aid us understand the unique needs and aspirations of every Indian. And update its products with features that form the cornerstones of financial freedom.
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Jammu & Kashmir Bank The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a network of more than 500 branches/offices spread across the country offering world class banking products/services to its customers. Today, the Bank has a status of value driven organization and is always working towards building trust with Shareholders, Employees, Customers, Borrowers, Regulators and other diverse Stakeholders, for which it has adopted a strategy directed to developing a sound foundation of relationship and trust aimed at achieving excellence, which of course, comes from the womb of good Corporate Governance. trusteeship, transparency, fairness and control, leading to stakeholders delight, enhanced shareholder value and ethical corporate citizenship. It also ensures that bank is managed by an independent and highly qualified Karnataka Bank The Karnataka Bank Ltd., a premier private sector bank of the country, was incorporated on February 18th, 1924 at Mangalore, a coastal town in South Kanara, a district of Karnataka state, which has attained renown as the Cradle of Indian Banking. Today it is one of the leading private sector banks in the country, known for its steady and disciplined growth and cordial customer service. The Bank has a strong national presence through a widespread network of 358 branches. The bank has 230 branches wholly/partially computerized, as of now. Plans are underway to put in place additional products to enhance customer satisfaction and to increase income stream with the help of upgraded technology. The bank has already put in place an elaborate risk monitoring and asset liability management system.

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D h a n a l a ks h m i B a n k Dhanalakshmi Bank charts a 79-year course commencing from its incorporation in the year 1927 by a group of enterprising entrepreneurs of Thrissur, the cultural capital of Kerala. The Bank has foreseen transition and made the right moves towards sustained development. Dhanalakshmi Bank has today attained national stature with 181 branches and 26 Extension Counters spread over the States of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Delhi and West Bengal. The high growth trajectory is powered by strong fundamentals. As at the end of March 2011, the Capital Adequacy Ratio of the Bank was above the mandatory requirement of 9%. The highlights of our performance during the year 2005-11are as follows: Operating profits increased by 53% Non-interest income increased by 83.8% Cost of deposits declined to 5.19% and yield on advances improved to 9.44% Micro credit recorded a growth of 92.2% Net NPA brought down to 2.44% Bank posted a net profit of Rs. 20.51 crores. 85% of Banks business brought under centralized banking solAXISon (CBS) The Bank has ventured into both life and non-life insurance. It is selling life insurance products of M/s. MetLife India, a renowned global player in this segment and non-life insurance products of M/s. IFFCO-TOKIO as their corporate agent. The Bank is also a depository participant of NSDL (National Security Depository Limited) offering Demat services through selected branches.
24

In essence, the Bank is paying focused attention on its core competence like ever expanding client-base, constantly upgraded customer service, professional management, skilled manpower, wide network of branches and excellent customer support. The Bank is managed by a professional and forward looking Board of Directors drawn from various walks of life with Mr. A.D. Navaneethan as the Chairman, Mr. P.S Prasad as the MD & CEO and Mr. V S R Murthy as ExecAXISve Director.

AXIS Bank AXIS Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. AXIS Bank is one of the fastest growing private sector banks in the country. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence AXIS Bank is one of the few banks in India that have built up a fully integrated centralized banking architecture to offer banking services anywhere, anytime. Currently the Bank has a network of 509 Branches & Extension counters and 2224 ATMs spread across 299 cities, towns and villages, offering a complete range of retail and corporate services, including retail loans, corporate credit, forex services, investment banking, depository services, and investment advisory services to our customer base of over 5.2 million. AXIS Bank is uniquely positioned to harness the high growth opportunity in India. At AXIS Bank, it has been our constant endeavour to bring a sharper focus to the requirements of our customers and we strive to leverage cuttingedge technology to provide the highest levels of service to them. The Bank has customised offerings for various segments:
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Priority Banking: For High Net Worth Customers Senior Privilege: For Senior Citizens Smart Privilege: For Women Salary Power: For Payroll accounts Power Salute: For Defence personnel Trusts and NGO NRI Accounts Other Partners Karvy In 1982, a group of Hyderabad-based practising Chartered Accountants started Karvy Consultants Limited with a capital of Rs.1,50,000 offering auditing and taxation services initially. Later, it forayed into the Registrar and Share Transfer activities and subsequently into financial services. All along, Karvy's strong work ethic and professional background leveraged with Information Technology enabled it to deliver quality to the individual. Geojit Securities Geojit Securities was founded by Mr.C.J George in 1987 as a Proprietorship for doing Broking business in Cochin Stock Exchange. In 1994, the business was taken over by Geojit Securities Ltd, a Joint Venture between Mr.C.J George and the Kerala State Industrial Development Corporation Ltd. In the following year, the company came up with an IPO and the shares were listed in various Stock Exchanges in India in 1995.

26

Way2wealth Way2Wealth is a premier Investment Consultancy Firm that has been launched with the aim of making investing simpler, more understandable and profitable for the investors. Way2Wealth brings a wide range of product offerings from Fixed Income Securities, Life Insurance and Mutual Funds to Equity and Derivatives (on the National Stock Exchange) for the convenience and benefit of it customers. Way2Wealth has over 40 easily accessible Investment Outlets spread across 20 major towns and cities in the country. Mini Muthoothu Established in 1921, Mini Muthoothu with an illustrious history of banking behind them today operates from 75 branches in Kerala and 5 in Bangalore. All business concerns of Mini Muthoothu function under the strict guidelines set by the Department of Company Law Affairs and Reserve Bank of India. They also have a certificate of compliance with the requirements regarding prudential norms from the Reserve Bank of India. Mini Muthoothu, under the able leadership of its Chairman, Mr. Roy M Mathew, offers both the resources and capabilities like any national player coupled with individualized attention to its customers. Metlife to Double Consultants MetLife Insurance will be doubling the number of financial planning consultants it has from 11,480 people to around 20,000 during the next calendar year between January and December, 2007. "The idea is to grow into a bigger player in the market by expanding the distribAXISon system. We want to increase our market share and the way we have decided to do this is by strengthening our multi distribAXISon system
27

which consists of agency sales, third party sales and institAXISonal sales," Rajesh Relan, MD, MetLife India Insurance Company said. Apart from hiring more financial planning consultants, the company had recently entered into a banc assurance tie-up with the AXIS Bank. This is MetLifes fourth bancassurance tie-up after J&K Bank, Karnataka Bank and Dhanalaxmi Bank The tie-up will give MetLife a national footprint as AXIS Bank is currently the third largest private bank in India. Also, the tie up is a referral model under which MetLife would be deploying its own staff in the banks branches and the staff would work on the leads generated by AXIS Bank. MetLife is also looking at raising capital from its existing investors. The capital base of the company is currently Rs 355 crore. J&K bank holds 25 per cent of the equity, M Pallonji holds 20 per cent, 26 per cent is held by MetLife while the rest is with other investors. "We are building our plans. We will raise capital but we have not finalized details," Mr. Relan said.

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Management Team Gaurav Suri Managing Director Rajesh Relan Director(Marketing)

Rajesh Relan Managing Director Chander Chellani - Officer, Agency Sales Miro Farrugia Chief Financial Officer B Ashwin - Chief Administrative Officer K P Sarma Appointed Actuary Phanesh M S V S - Chief Actuary KR Anil Kumar - Chief Planning, Legal and Compliance Officer and Financial Controller Smitashree Menon Director, Human Resources Sanyog Jain Director, Training and Development Center of Excellence Gaurav Suri Director, Marketing Neerav Kaushik Director, Individual Service Delivery

29

Organizational Structure Organization Chart: Organization structure is a basic framework which the managers decision making behavior takes place. Structure basically deals with relationships. Organization structure is the pattern of relationships among various components or parts of the organizations. This prescribes the relationship of various activities and positions. Organization chart is the vital tool for providing information about organization relations. The organization structure plays a vital role in the smooth functioning of the MetLife Insurance India Pvt. Ltd. Visakhapatnam. The organization chart for the firm depends on the customer coverage. The personnel department is under the main company i.e., MetLife Insurance India Private Limited, Visakhapatnam. It is a insurance Branch Office, there are only three departments i.e., accounts, and marketing and human resource.

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ORGANIZATION CHART OF METLIFE INDIA INSURANCE CO. PVT.LTD-VISHAKAPATNAM

BRANCH MANAGER Mr.V.ANIL KUMAR

HR Department Mr.Shastri MsVaralakshmi

Front End Office Ms.Srilakshmi

Agency Manager Mr.Aamir Khan

Agency Manager Mr.Rajasekhar

Agency Manager Mr.Leeladar

Backend Operator

Banc assurance

10 Sales Managers Mr.M.Srinivas

10 Sales Managers Ms.Krishna Koppaka

4 Executives

Financial Advisors 5 INC interns

Financial Advisors 5 INC interns

PRODUCTS Accumulation Whole Life Policy Endowment Policy MET Suvidha Money Back Policy Met Sukh Money Back Non Participating Met Bhavishya Multi Purpose Met Ultimate Met Smart Plus Met Smart Premier Met Smart Plus - Single Pay Met Smart Premier - Single Pay Protection Met Suraksha - TROP Met Suraksha - TA Met-Mortgage Protector SP/Limited pay(MRTA) Retirement MET pension MET Advantage Plus

 Add Ons Accidental Death Benefit (ADB) Term Rider Waiver Of Premium Critical Illness Additional Benefits Rider benefits Tax benefit Insurance Is For Saving Tax The primary function of life insurance is to cover you against sudden losses arising out of sudden death or liability. Unlike other investment options like the Public Provident Fund that offers 20% tax rebate under Section 88 of the Income Tax Act, 1961or other small savings schemes like post office deposits and national savings certificates, Insurance isnt a tax saving investment vehicle. Insurance, primarily offers you complete security arising out of risk coverage against the uncertainties of life. And secondarily serves you as a good investment option and tax saving tool. Hence, as an instrument, life insurance offers you the ideal blend of risk cover, returns and tax benefits.

CHAPTER IV THEORITICAL FRAME WORK

PERFORMANCE APPRAISAL
Performance appraisal is one of the It is a time based survey which gives a Performance. It helps to achieve the organizational objectives by evaluating the Performance of employees over a specified period of time for better utilization of employees skills. The Performance of employees helps for the growth of organization. Performance appraisal is a scientific approach .it is a systematic examination of employee strengths and weakens. It consists of sequentially organized steps. Performance appraisal range from confidential reporting to 360-degree appraisal. methods of evaluating the technological based edge. It behavior of employees in both quantitative and qualitative job performance. integrates a full sit of tools & techniques for bringing out employees

In industry the performance appraisal is a systematic evaluation of personnel by supervisors or others familiar with their performance because employers are interested in knowing about employee performance. Employees also wish to know their position in the organization. Performance appraisal can be defined as the process of evaluating an employees performance of a job in terms of its requirement.

Definition of Performance Appraisal: Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. Communicating the Standards Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. Features The main characteristics of performance appraisal may be listed thus. The appraised is a systematic process involving three steps Setting work standards: Assessing employees actual performance relative to the se standards. Offering feedback to the employee so that he can eliminate deficiencies and improve performance in course of time.

What Is To Be Appraised behaviors which measure o observable physical actins , movements objectives which measure job related results like amounts of deposits mobilized, and Traits which are measured in terms of personal characteristics observable in employees job activities.

Who Will Appraise Supervisors, Peers, Sub ordinates self -appraisal, users of services, consultant The Performance Appraisal Process Performance appraisal is planned, developed and implemented through a series of steps

Establish performance standards Communicate the standards. Measure the actual performance `compare actual performance with standards and discuss the appraisal Taking corrective action, if necessary

Who Appraises: The appraiser may be person who has through knowledge of job content attributes and understand for appraisal. The appraiser should be able to determine which attributes are important in performing a particular job. He should prepare reports without any bias and leniency. Typical praises are supervisors, peers and sub-ordinates, employees themselves (self-appraisal).Appraisal by all ie.360=degree appraisal.

The Attributes That Are Appraised: Technical Intelligence Integrity Initiative Honesty Sincerity Judgment skills Creativity Ability to accustom to new things area of interest Quality of work Quantity of work Knowledge of the job knowledge of the work punctuality good housekeeping Attendance

PROCESS OF EVALUATION

Methods: A number of Performance appraisal methods are available to measure and appraise Performance. Each organization follows its own method of appraisal but each method with its strengths and weakness may be suitable for one organization and non- suitable for another. As such there is no single method which is accepted and used by all the organizations. All the appraisal methods are classified differentially by different authors. But the most used classification is divided into two categories. 1. Traditional method 2. Modern method Traditional methods lay emphasis on rating the individuals personality traits, whereas Modern methods are more objectives and lays emphasis on evaluating the work result. A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates, and customers, while also performing a self assessment. This is known as a 360-degree appraisal and forms good communication patterns.

The most popular methods used in the performance appraisal process include the following:

Management by objectives 360-degree appraisal Behavioral observation scale Behaviorally anchored rating scales Trait-based systems, which rely on factors such as integrity and

conscientiousness, are also commonly used by businesses. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are two-fold: Because trait-based systems are by definition based on personality traits, they make it difficult for a manager to provide feedback that can cause positive change in employee performance. This is caused by the fact that personality dimensions are for the most part static, and while an employee can change a specific behavior they cannot change their personality. For example, a person who lacks integrity may stop lying to a manager because they have been caught, but they still have low integrity and are likely to lie again when the threat of being caught is gone.

Trait-based systems, because they are vague, are more easily influenced by office politics, causing them to be less reliable as a source of information on an employee's true performance. The vagueness of these instruments allows managers to fill them out based on who they want to/feel should get a raise, rather than basing scores on specific behaviors employees should/should not be engaging in. These systems are also more likely to leave a company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioral information.

Traditional Methods: Ranking Method Grading Method Paired Comparison Method Force Choice Method Forced Distribution Method Checklist Method Critical Incidents Method Graphic Rating Scale method

Ranking Method:

In this method of Performance Appraisal>it is systematic in nature. In this method each Individual employee is compared with all others and is placed in simple rank order of worth. The employees are ranked from the highest to the lowest or from the best to worst. The main limitations of this method are:

1. It does not specify how much one individual is better than the other. 2. This method is difficult when there are large number of employees.

Grading Method:

In this method certain Well-defined grades are established in advance. Certain Categories of worth are first established and carefully defined as grades like A-Outstanding. B - Satisfactory. C- Unsatisfactory. Employee Performance is compared with defined grades and each employee is allotted a grade that best describes his /her performance.

Forced-choice Method:

J.P. Guilford developed this method. This method contains a series of statements and rates how effectively a statement describes each individual being evaluated. The main limitation of this method is that it takes a lot of time and effort to construct several evaluating statements.

Paired comparison method: In this method each individual employee is compared with other employee on one-on-one basis. i.e. usually based on one trait only. The rater is given a bunch of slips each containing a pair of names, the rater ticks against the employee whom he considers the better of the two. The number of times this employee is compared as better, determines his/her final ranking. Forced Distribution Method: The appraiser is forced to rate the performance of the employees through their factors categorized into different types of either a five point scale or a three- point scale. For example the appraisal may distribute his employee's performance as outstanding, above average below average.

Critical Incident Method: In this Method, the rater lays emphasis on those key behaviors that make the difference between performing a job in net worth manner. In this method the employee's performance is appraised in three basic steps: 1. Preparing a list of one worthy on-the job behavior of specific incidents. 2. Group of experts assign weight age to these incidents, depending on their degree of desirability to perform a job.

3. Finally constructing a Checklist indicating incidents describing workers

as Good' or 'Bad'. The, he checklist is given to the rater to evaluate the workers.

Check list Method: The rater does not evaluate employee performance. The appraiser supplies reports about the performance of appraisers and the personnel department does the final rating. A series of questions are presented concerning an employee to his behavior. The rater then checks to indicate if the answer to a question about an employee is positive or negative. The value of each question may be weighed equally or certain question may be weighed more heavily than others. Free Essay Method: The supervisor makes a free from, open-ended appraisal of an employee in his words and puts down his impressions about the employee. The description is all ways as factual and concrete as possible. No attempt is made to evaluate in a quantitative manner. Field review method: A trainer employee from the personnel department interview line supervisors to evaluate their respective subordinates. The appraiser takes detailed notes of the collected information and proceeds to evaluation process. The above listed traditional method are easy and simple to adopt but their effectiveness is listed because a majority of the methods are based on rating the personality traits of the appraises rather than the task related traits.

Group Appraisal Method: Appraises are rated by an appraisal group consisting of their supervisor and there or four other supervisors who have some knowledge of their performance.

Modern Methods of Performance Appraisal: Some of the modern methods of performance appraisal are described below. Management by Objective psychological appraisal Human asset accounting method 360-degree appraisal Behaviorally anchored rating scales(BARS)method Assessment center method

Management by Objective (MBO) OR appraisal by result method: Management by objective methods was developed by Peter F. Drucker in 1954.According to him MBO is " A process whereby the superior and sub-ordinates of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unite and assuming the contribution of its members".

This method provides responsibility and accountability and recognizes that employee has need for achievement and self full fiment. The philosophy of by MBO stresses on goals rather than methods and is results -oriented.

360-degree Appraisal Method: The 360-degree appraisal method was first developed and used by Fenral Electronic Company of USA in 1992.an employee is appraised by his supervisors, sub -ordinates, peers and customers with whom he interacts in the course of his job performance. All these appraisers provide feedback on the employee by completing a survey questionnaire designed for this purpose. All the information so gathered is then compiled through the computerized system to prepare individualized reports. These reports are then to the employees who were rated.

Assessment Centers: It Is simulation method developed initially for military situations. The important feature of this method is 'job-related stimulation's which involves characteristics that managers that managers feel are important to the job success. The evaluators observe and evaluate participants as they perform activities commonly found in these higher-level jobs.

Psychological appraisal: Large organizations employee fulltime industrial psychologists. When psychologists are used for evaluations. they assess an individual's future and past performance . The appraisal normally consists of in-depth interviews, psychologists and discussion with the superior.

Behaviorally anchored rating scale (BARS) Method: In this method developed during 1960's, the procedure for Behaviorally Anchored Rating scale is usually five stepped. The first step is generation of critical incidents by appraisers. The next step is to developed performance dimensions, which are clusters of the critical incidents. He third step is to reallocate incidents. Scaling of the incident usually in a 7-point or in a 9point scale to represent effective and ineffective performance is the fourth step. The last step in this procedure is to develop a final instrument in which a subset of incidents is used as "Behavior anchors" for the performance dimensions. This system is time consuming and expensive.

Human Asset Accounting Method: It refers to activity devoted to attaching money estimates to the value of a form's internal human organization and its external customer goodwill. the human asset is considered to be enhance if a worthy employee joins in the organization. If distrust and conflict prevails in organization then human asset are considered to be devalued. the current value of an organization' s human assets can be appraised by developed procedures by undertaking periodic measures of key casual and intervening enterprise variables.

Need For Performance Appraisal:

Performance appraisal is needed in order to:

The study on performances appraisal is needed in order to 1. Provide information about the performances ranks basing on which decision regarding salary fixations; confirmation, promotion, transfer and demotion are taken. 2. Provide feedback information about the level of achievement and behavior of subordinate. The information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary. 3. Provide information to diagnose deficiency in employee regarding skill, knowledge, determine training and developmental needs and to prescribe the means of employee growth, provides information for correcting placement. 4. Provide information which helps to counsel the subordinate. 5. To prevent grievances and in disciplinary action.

Purpose: Performance appraisal aims at attaining the different purpose They are: 1. To create and maintain a satisfactory level of performance. 2. To contribute to the employee growth and development through training, self and management development programmes. 3. To help the superiors to have a proper understanding about their subordinates 4. To guide job changes with the help to continuous ranking. 5. To facilitate fair and equitable compensation based on performances. 6. To facilitate for testing and validating selection tests, interview techniques through comparing their sources with performance appraisal ranks. 7. To provide information for making decisions regarding layoff, retrenchment extra.

CHAPTER - 5 DATA ANALYSIS & INTERPRETATION

Data Analysis and Interpretation

A reach has been conducted among 60 employees of Performance appraisal in MetLife by providing them with questionnaires. The feed back obtained was useful in analyzing the level of satisfaction among the employees and management in the organization. The data has been collected, selecting criteria such as age , sex ,designation, nature of job, family back ground ,educational qualification etc.,

For the purpose of survey, a sample of 60 employees has been taken into consideration with a view to assess the Performance Appraisal System in MetLife India insurance Ltd.

1. Age group Age 25-35 35-45 45-55 55 above Total No of employees 29 15 8 2 54 Percentage No of employees 54 28 15 4 100

Age
54% 60 50

PERCENTAG E

40 30 20

28% 15% 4%

10 0 25-35 35-45 45-55 No of employees 55 above

Interpretation: From the survey It was found that 53% .of the respondent belong to the age group of 25-35, 28% of the respondents belongs to the group of 3545, 15 % of the respondents belongs to the group of 45-55, and 4% of respondents belongs to the group 55 an above.

2. Sex:

Sex Male Female Total

No. of employees 50 10 60

Percentage 50 10 60

Sex
80%

80 70 60 50 40 30 20 10 0 Male No. of employees Female

The male respondents were 80% and female employees occupied 20%

PERCENTAGE

20%

3. Educational Qualification

Qualification Post Graduate Graduate Under graduate Technical total

No. of employees 27 19 5 3 54

Percentage 50 35 9 6 100

No of employees
50% 50 45 40 35%

PERCENTAGE

35 30 25 20 15 10 5 0 Post Graduate Graduate Under graduate Percentage Technical 9% 6%

Interpretation: The educational attainments of the respondents showed that 50% people were Post graduate 35% were graduate, 8% were undergraduate reaming 6% have completed technical or other course etc.

4. I am aware of the present Performance Appraisal System in my Organization. Number of Response Yes To some extent No Total Respondents 36 17 1 54 Percentage of Response 66.67 31.48 1.85 100.00

Percentage of Response

70 60 50 percentage 40 30 20 10 0 Yes To some extent response Percentage of Response No

Interpretation: The above diagram clearly represents that a large percentage of employees are aware of the Performance Appraisal System existing in the organization. At the same time, significant percentage of employees said that they know about Performance Appraisal up to some extent only. Only 2% of the employees said that they were not aware of Performance Appraisal. So, theres a need to educate these 33% employees about the importance of the Performance Appraisal. So, it can be said that the purpose of conducting Performance Appraisal is fulfilled as 67% employees answered Yes while asked about their awareness.

5. Period of Performance Appraisal system. Number of Response 3 Months 6 Months 1 Year No Specified Time Total Respondents 0 21 33 0 54 Percentage of Response 0.00 38.89 61.11 0.00 100.00

70 60

percentage

50 40 30 20 10 0 3 Months 6 Months 1 Year No Specified Time

Time period Percentage of Response

Interpretation: Maximum Number of Employees i.e. 61% said that Performance Appraisal is done to them once in a year. 39% of the employees said that Performance Appraisal is done for every 6 months. Employees strongly believe that Performance Appraisal is done for their benefit only.

6. Performance Appraisal is done by Response Immediate Superior HR Personnel Outer Consultant Others Total Number of Respondents 29 2 23 0 54 Percentage of Response 53.70 3.70 42.59 0.00 100.00

60 50

percentages

40 30 20 10 0 Immediate Superior HR Personnel Outer Consultant Others

Respondents Percentage of Response

Interpretation: A large number of employees said that their immediate superior appraises them. Up to 96% of employees say that their superior appraises them. At the same time, 4% of employees said that HR Personnel appraises them.No question of outer consultant and other source of appraisal, the role and responsibility of both superior and subordinate are very significant in making the Performance Appraisal more efficient for their future development.

7. Performance Appraisal is used as a basis for Response Training & Development Job Rotation Promotion Incentives Salary Hike Wage Fixation All the above Total 6 5 3 0 30 0 10 54 11.11 9.26 5.56 0.00 55.56 0.00 18.52 100.00 Number of Respondents Percentage of Response

60 50 40 30 20 10 0 Training & Job Rotation Development Promotion Incentives Salary Hike Wage Fixation All the above

Percentage

Response
Percentage of Response

Interpretation: 56% of the employees agreed that the Performance Appraisal is used as a basis for salary hike. Next to that, majority employees (18%) opined that Performance Appraisal is used as a basis for Training & Development, Job Rotation, Promotion, Salary Hike, Incentives and Wage fixation. No incentives are given on the basis of Performance Appraisal.

8. Satisfaction of Performance Appraisal System.

Response Highly Satisfied Satisfied Can't Say Dissatisfied Highly Dissatisfied Total

Number of Respondents 4 42 7 1 0 54

Percentage of Response 7.41 77.78 12.96 1.85 0.00 100.00

80 70 60

Percentages

50 40 30 20 10 0 Highly Satisfied Satisfied Can't Say Dissatisfied Highly Dissatisfied

respondents
Percentage of Response

Interpretation: Maximum numbers of employees i.e. 78% are satisfied with the Performance Appraisal system in the organization. 7% of employees were highly satisfied with it. A minor proportion of employees are not satisfied and 13% employees said that they cant say exactly their decision. Employees are satisfied with the existing one. Employees will be highly satisfied, if the management appraises employees regularly and guide them, lead them in all aspects.

9. The timely completion of performance appraisal system in Metlife insurance company Table -9

Time rate With in time Beyond the Schedule Cant say Total

No. of employees 37 18 5 54

Percentage 57 33 9 100

57% 60 50 33% 40 30 20 10 0 With in time Beyond the Schedule Percentage Cant say 9%

PERCENTAGE

Interpretation: From the survey 57% Of Employees with in the time rate of the completion of performance appraisal system, 33 % Of Employees beyond the schedule of the completion of performance appraisal system, 9 Of Employees cant say the completion of performance appraisal system was held in metlife company.

10. Development of the performance appraisal system Result Yes No Total No. of employees 39 15 54 Percentage 72 28 100

72% 80 70 60 50 40 30 20 10 0 Yes No. of employees No 28%

Percentages

Interpretation: For the survey 72% of employees are satisfied with work performance appraisal system helps you for the development of for the development of career in career, 28% of company. employees are satisfied with work performance appraisal system helps you metlife

11. Opinion Regarding the awards or rewards for better performance

Rewards taken Yes No Total

No. of employees 49 5 54

Percentage 90 10 100

90

90 80 70

Percentages

60 50 40 30 20 10 0 Yes Result Percentage No 10

For the survey 90% of employees are satisfied to get the awards or rewards for better performance, 10 % of employees are satisfied to get the awards or rewards for better performance, in MetLife Company.

12. Types of benefits that you will get after Performance appraisal

Benefits Monetary Non Monitory Total

No. of employees 42 12 54

Percentage 78 22 100

78 %

80 70 60

Percentages

50 40 30 20 10 0 Monetary Percentage

22 %

Non Monetory

For the survey78% of employees are satisfied to get the monetary benefits for the better performance, 22 % of employees are satisfied to get the non monetary benefits for the better performance, in MetLife Company.

13. Do you get any supporting work environment in achieving highest performance

Result Yes No Total

No. of employees 33 21 54

Percentage 61 39 100

61 %

70 60 39 %

Percentages

50 40 30 20 10 0 Yes Result Percentage No

For the survey 61% of employees are to get the supporting work environment in achieving highest performance, 39% of employees are to get the supporting work environment in achieving highest performance, in metlife company.

14. The correct feed back of your strengths or weaknesses in performance appraisal system

Feed back Reslt Yes No Total

No. of employees 36 18 54

Percentage 67 33 100

67 70 60

Percentages

50 40 30 20 10 0 Yes Percentage No

33

For the survey 67% of employees are to the correct feed back of our strengths or weaknesses in performance appraisal system, 33% of employees are to the correct feed back of our strengths or weaknesses in performance appraisal system, in metlife company.

15. Is there any scope to meet the higher authority, if performance appraisal is not done in fair.

Scope Yes No No idea Total

No. of employees 33 16 5 54

Percentage 61 30 9 100

Scope

61.11% 70 60

Percentages

50 40 30 20 10 0 Yes Result No

30 %

9%

No idea Percentage

From the survey 61% Of Employees share their feelings to meet the higher authority. 30% Of Employees not share their feelings to meet higher authority .9 % Of Employees are no idea about the performance appraisal system.

16. Performance appraisal system helps you in achieving organization goals Table- 16 Feed back Result Yes No No idea Total No. of employees 22 22 10 54 Percentage 41 41 18 100

41 %
45 40 35

41%

Percentages

30 25 20 15 10 5 0 Yes Result No

18 %

No idea

Percentage

From the survey 41% Of Employees are respond to help in achieving organization goals. 41% Of Employees not respond to help in achieving organization goals.9 % Of Employees are dilemma to achieving the organization goal.

17. The suggestion and modifications in the present performance appraisal system for effective implementation.

Feed back Reslt Yes No No idea Total

No. of employees 34 11 9 54

Percentage 62.962963 20.3703704 16.6666667 100

63 %
70 60 50

Percentages

40

21 %
30 20 10 0 Yes Result Percentage No

17 %

No idea

From the survey 63% Of Employees are respond to suggest any modifications in the present performance appraisal system for effective implementation and 24 % Of Employees are not respond to suggest any modifications in the present performance appraisal system for effective implementation.9 % Of Employees are no idea about the present performance appraisal system

CHAPTER - 6 FINDINGS AND SUGGESTIONS

FINDINGS
The employees in the organization are aware of Performance Appraisal System of the organization. Performance Appraisal to employees is once in a year The employees say that they were highly satisfied with the Performance Appraisal done by Superior. So the employees say that the role of performance appraisal in achieving the organizational effectiveness is high. The respondents say that the performance management is effectively formulated and implemented in the organization. Respondents says that in performance management key performance areas are taken into consideration while evaluation of measuring performance. Respondents say that performance management will improve directly or indirectly productivity. Respondents say that needs minor changes in power grid performance management system. Respondents say that the performance is improved by the behavioral training.

SUGGESTIONS
The organization can give special training on soft skills to the employees. Whoever lacked in the Communication skills in the organization Open system of Performance appraisal can also be followed. Senior management should continually review the appraisal conducted, which shall be seen as positive support to the system by the appraiser as well as appraises, and their interest will be maintained. The management should identify the significant improvements in the employee's performance appraisal. The management can also encourage the efforts and suggestions from employees. The management should also give importance to senior employees for promotions, increments. Taking proper care of dissatisfied employees is fish spoils the whole sea. The management should allow the employees to set their own targets so that they can improve their performance. An effective performance appraisal system must be implemented so it will have an impact on the employee's performance. essential as one bad

CONCLUSION
After my thorough observation and analysis, I would like to conclude that the organization is good in the overall implementation of the performance appraisal process. One of the conclusions based on appraisers views is that the major purpose of performance appraisal is to promoting the employee and helping for their career development. The major factors considered by them in evaluating the performance are their job knowledge and performance and dedication to the organization. The employees were very friendly and helped in doing my project and answered to my questions very spontaneously and accurately. My project guide is also very co-operative and has guided me in every step in completing my project.

BIBIOLOGRAPHY

Text Books: 1. Aswathappa K. Human Resources and Personnel Management. Tata McGraw-Hill Publishing Company limited, New Delhi. 2. Edwin B.Flippo, Principles of Personal Management, McGraw-Hill, New York. 3. L.M.Prasad, Principles and Practices of Management Sultan Chand &Sons Educational Publishers, New Delhi. 4. Personnel and Human Resource Management Himalya Publishing house, New Delhi. Dr. P.SUBBA RAO Websites: www.insuranceindia.com www.metlife.com www.irda.com www.wikipedia.com www.hrsolutions.inc

QUESTIONNAIRE ON PERFORMANCE APPRAISAL

1. Are you aware of the performance appraisal system exists in your company? (a) Yes [ ] (b) No (b) Peers (d) Group appraisers [ ] 2. By whom you are appraised? (a) Superiors (c) Self appraisal (a) Promotion (c) Transfers (a) 2 months (c) 6 months system in MetLife insurance company (a) With in time (c) cant say 6. Will the performance appraisal system helps you for the development of your career? (a) Yes (a) Yes (c) cant say 8. If yes, what types of benefits will you get? (a) Monetary (b) Non Monetary (b) No (b) No 7. Do you get any awards or rewards for better performance? (b) beyond the schedule (b) Increments (d) all the above (b) 3 months (d) 1 year

3. In your opinion what is the objective3 or purpose of performance

4. What is the periodicity of the performance appraisal system?

5. How does you rate the timely completion of performance appraisal

9. Is there any bias in assessing the performance? (a) Yes performance? (a) Yes performance appraisal system? (a) Yes 12. Is there any scope to meet appraisal is not done in fair? (a) Yes (c) No idea 13. Will the performance appraisal system help in achieving organization goals? (a) Yes (c) No idea 14. Do you suggest any modifications in the present performance appraisal system for effective implementation? (a) Yes (c) No idea (b) No (b) No (b) No (b) No the higher authority, if performance (b) No 11. Do you get the correct feed back of your strengths or weaknesses in (b) No 10. Do you get any supporting work environment in achieving highest