1

CHAPTER 1

INTRODUCTION

CHAPTER 1
1.1 INTRODUCTION
After understanding the company strategies and Recruitment policy, the HR manager has to search for the candidates who can contribute for the achievement of the companys strategies. He has to search for the candidates in various sources. Method of recruitment depends on the sources of recruitment. A criterion for adopting a particular method of recruitment depends on many factors. Most important of them are: Cost, Effectiveness. The method adopted must be such that, it is capable of attracting maximum number of potential candidates. In addition it must involve optimum cost. Some popular methods of methods of recruitment are listed in subsequent paragraphs, under the following broad classification: Internal Sources search, External sources search. Internal sources search: Method of internal search involves the following: Posted on bulletin/Notice Boards of the organization, through memos circulated among the shop supervisors, Advertised in the in-house employee magazine/bulletins/handouts, other methods like word-of-mouth and/or who-you-know system, Perusal of Records/P.C.Data bank (unpublished). External sources search: The external source search consists of a number of methods. Dunn and Stephen have broadly classified them under the following broad categories. Direct methods Indirect methods Third party methods These are discussed briefly in the following paragraphs, Scouting, Campusrecruitment, Casual callers/unsolicited applicants. Scouting: This is one of the oldest methods. In this method the personnel department sends their representatives to potential places of recruitment and establishes contact with potential candidates seeking employment. Preliminary screening/interviews are arranged are selected places wherein the candidate presents themselves. In these effort local/consultants agents/institutions/colleges play the liaison work. Organizing conventions, indoctrination seminars, fairs, etc. are other means in this method.

3 Campus recruitment: Campus recruitment is a popular method especially for recruiting professional like Engineers and MBAs. In this method Firm Representatives call on potential colleges/institutes/schools to establish direct contact. In such cases, placement cells established in such educational institutions do the liaison work and coordination for arranging the preliminary screening and interviews. Sometime the firms directly contact the Director/Faculty/Professors for recommending students with outstanding performance for employment. Casual callers/unsolicited applicants: Casual callers and job seekers at the factory and unsolicited applicants are other sources of direct recruitment. Indirect methods/ Internal Sources: Following are the indirect methods of recruitment from external sources: Advertisement, Employers trade associations/clubs, Professional associations, reputed other firms. These are briefly discussed here. Advertisement: Advertisement is a very popular method. Various media are used for advertisements such as Newspapers, journals, radio, T.V, etc. Senior posts are largely filled up through advertisement when suitably experienced and qualified persons are not available for promotion. In addition, advertisement is very useful in locating suitable candidates in scientific, professional and technical vacancies. Proper design of advertisement material will have the following advantages: Encourages right persons to apply Discourage unsuitable persons from applying

Employers trade Associations/clubs: Meetings, conferences, seminars, and other social functions of Employees trade Associations/clubs are yet another means of locating suitable hands. Professional Associations: Meetings, conferences, seminars, and other social functions social professional associations/bodies of major professionals like doctors, Engineers, Auditors, chartered Accounts, and managers also provide ample opportunity to locate potential candidates for technical, scientific and managerial cadre vacancies.

Reputed other firms: Recruiting personnel from reputed firms is popular practices. Certain companies and firms have built-up good reputation on efficiency, productivity

4 and industrial peace. Many firms attempt to locate suitable candidates from such firms for filling up vacancies. Although recruiting may bring to mind employment agencies and classified ads, current employees are often your largest source of recruits. Some surveys even indicated that up to 90% of all management positions are filled internally. Filling open positions with inside candidates has several advantages. Employees see that competence is rewarded and morale and performance may thus be enhanced. Having already been with your firm for some time, inside candidates may be more committed to company goals and less likely to leave. Promotion from within can boost employee commitment and provide managers a longer-term perspective when making business decisions. It may also be safer to promote employees from within, since you're likely to have a more accurate assessment of the person's skills than you would otherwise. Inside candidates may also require less orientation and training than outsiders. Yet promotion from within can also backfire. Employees who apply for jobs and don't get them may become discontented; informing unsuccessful applicants as to why they were rejected and what remedial actions they might take to be more successful in the future is thus essential. Similarly, many employers require managers to post job openings and interview all inside candidates. Yet the manager often knows ahead of time exactly whom he or she wants to hire, and requiring the person to interview a stream of unsuspecting inside candidates is therefore a waste of time for all concerned. Groups may also not be as satisfied when their new boss is appointed from within their own ranks as when he or she is a newcomer; sometimes, for instance, it is difficult for the newly chosen leader to shake off the reputation of being "one of the gang. Perhaps the biggest drawback, however, is inbreeding. When an entire management team has been brought up through the ranks, there may be a tendency to make decisions by the book. And to maintain the status quo, when an innovative and new direction is needed. Balancing the benefit of morale and loyalty with the drawback of inbreeding is thus a challenge. Promotions and Transfers: This is a method of filling vacancies from within through transfers and promotions. A transfer is a lateral movement within the same grade, from one job to another. It may lead to changes in duties and responsibilities, working conditions, etc., but not necessarily salary. Promotion, on the other hand, involves

5 movement of employee from a lower level position to a higher-level position accompanied by (usually) changes in duties, responsibilities, status and value. Organizations generally prepare badly lists or a central pool of persons from which vacancies can be filled for manual jobs. Such persons are usually passed on to various departments, depending on internal requirements. If a person remains on such rolls for 240 days or more, he gets the status of a permanent employee as per the Industrial Disputes Act and is therefore entitled to all relevant benefits, including provident fund, gratuity, retrenchment compensation. Job Posting: Job posting is another way of hiring people from within. In this method, the organization publicizes job openings on bulletin boards, electronic media and similar outlets. One of the important advantages of this method is that it offers a chance to highly qualified applicants working within the company to look for growth opportunities within the company without looking for greener pastures outside. Employee Referrals: Employee referral means using personal contacts to locate job opportunities. It is a recommendation from a current employee regarding a job applicant. The logic behind employee referral is that "it takes one to know one". Employees working in the organization, in this case, are encouraged to recommend the names of their friends working in other organizations for a possible vacancy in the near future. In fact, this has become a popular way of recruiting people in the highly competitive Information Technology industry nowadays. Companies offer rich rewards also to employees whose recommendations are accepted - after the routine screening and examining process is over - and job offers extended to the suggested candidates. As a goodwill gesture, companies also consider the names recommended by unions from time to time. Third party methods: Following are the important third party methods in recruitment: Public employment agencies. Private employment agencies. Temporary help services. Management consultants. Employee referrals/recommendations.

6 Professional bodies/associations. Computer data blank. Voluntary organizations. Trade unions.

These are briefly explained here: Public employment agencies: In India these are called Employment Exchanges under the control of state/central government. It was designed to help job seekers to find suitable employment. In United States, similar agencies were set-up as early as in 1918. These are popularly known as In India, due to large-scale unemployment USES viz. United States Employment Services. In USA compensations are paid to persons eligible for such compensations, these persons have to be registered with USES. Considering large-scale unemployment for youths in India, similar unemployed compensations are not feasible. However, registration with Employment Exchanges will provide certain privileges to such persons like priority in employment or receipt of unemployment doles by government. Effectiveness of public agencies in discharge of their functions depends on many factors. Similarly the problems faced by these agencies also vary in different countries. Some of the characteristics of these agencies are given below: By and large unskilled/semi-skilled workers are being attracted to these agencies including retired hands. Many firms view government agencies are having limited scope and confined on semi-skilled and unskilled job. Hence, seldom do they refer vacancies of higher skill to such agencies. The number of persons registered in such agencies is quite high to the order of miming. Their waiting time is also very long to the order of number of years. Government agencies do not charge any fees form potential candidates or the organization notifying vacancies. In developed nations like USA where unemployment rate is not very high, candidates are reluctant to move out from their preferred locations. In such cases they opt for remaining unemployed and accept unemployed compensations rather than take up job away from their hometown. Government agencies, department, corporations and public sectors in general indicate their requirement of appropriate skills to public agencies. Private Employment Agencies: Private Employment agencies do charge fees either from potential employees, or from employers or from both for their services. The

7 question arises then is, how these private agencies must do something different from public agencies to attract both-employers and job seekers. The major differences are the image. Such good image is built up due to the following: Private agencies provide employment opportunities for all categories of employment including managers, top executives, professionals, and engineers in addition to skilled and unskilled labor. Private agencies provide comprehensive services like advertisement, counseling, conducting interviews, preliminary screening, short-listing candidates, etc. Some such agencies provide guaranteed performance by the candidate recommended by them for period ranging 6 months to an year. Some of the agencies become specialized in certain categories of employment like the following: Security guards/personnel, Accountants, Clerical/office/computer operators, Managers/executives, Engineers,

Salesmen etc. Recruitment through Private agencies has become an important method in most countries including developing nations like India. Placement cells in schools and colleges: Recruitment from schools and colleges has become an important method. This is mutually beneficial to the employers and educational institutions. In order to obtain maximum benefit, may educational institutions have opened up placement cells in their institutions? Placement cell acts as single window for employment coordination between organization seeking recruitment and institutions. Such cells collect data regarding potential vacancies and call for students who are interested in such positions. Thereafter placement cells do preliminary screening and recommend those candidates who have done well in their studies. Placement cells also approach potential employers and inform them the availability of potential candidates who are likely to complete their courses shortly and invite them to their institutions to conduct recruitment. There are no charges/fees for such services in majority of institutions. Temporary Help Services: Agencies who provide hands for jobs of temporary shortterm period are very common in developed nations like USA. Their services are extensively used by organizations to tide over fluctuations personnel needs. Key Temporary services is one such agency, which is very popular in USA. Many such agencies are existing. In the past such services are used for hiring office employees. At present, this service is extended to hiring computer programmers, librarians, secretarial

8 staff including nurses. In India such services are now confined to unskilled/semi-skilled jobs like masons, construction workers, gardeners, plumbers and electricians. Mostly these are confined to civil work on building bridges, roads and loading/unloading workers. Management Consultant: Specialist executive/managers selection service is provided to companies by a number of management consultants. Headhunting preferred method of recruitment: HEADHUNTING has emerged as the top method that Singapore companies are using to recruit new staff, and it's not just senior executives that they are on the lookout for. A new survey has showed that 72 per cent of companies here say headhunting is their preferred choice when looking for talent. Nearly a third of them turn to this technique to recruit junior officers, highlighting the intense competition for talent between employers, according to the latest employment trends survey by recruitment network Vedior Asia Pacific. The annual survey polled a total of 1,044 respondents representing 23 industry sectors in three countries - Singapore, Australia and New Zealand. Vedior, however, could not provide the breakdown for Singapore by press time. The survey found that headhunting was the No 1 approach to recruiting staff in Singapore, and was more popular here than in the other two markets, where online job boards and print advertising still remain the recruitment method of choice. Overall, 57 per cent of firms here complained that attracting talent remains a big struggle for them, with 32 per cent saying that this would represent their biggest human capital challenge for the next 18 months. One in two Singapore companies plan to increase their headcount in the current year, said the survey, which suggests that the war for talent is set to intensify. Vedior's chief executive officer Debbie Loveridge said the results reflected the chronic talent shortage in the region. 'The results reflect the overall climate of the continued shortage in skilled labor and the need to consider strategies to penetrate a relatively dense 'passive' candidate market,' she said. And with the power firmly in the candidate's hands as to which company he or she wanted to join, the onus is now on companies to clearly define what it is that makes a career with them unique, Ms Loveridge added. Labour shortages, meanwhile, only meant that employer branding is likely to wind up on the agenda of 'every boardroom table in the country', she said.

9 In Singapore, most companies (76 per cent) believe their employer brand was successful in attracting and retaining employees. A slightly higher number, 79 per cent, felt that they ought to do more work to improve their employer branding strategy. One area that companies could focus more attention on to hire the right worker was the online and digital media, said Ms Loveridge. The Vedior survey found that just 7 per cent of companies here are making use of online social networks such as Face book and My Space. 'Employers might want to consider incorporating online networking into their long-term recruitment strategy. Online is a great opportunity to target different demographics and diverse talent pools. In the midst of such a shortage, it is a much under-utilized tool in Singapore,' she said.

1.2 REVIEW OF LITERATURE 1) College research departments use students as participants in trials and often
receive course credit or other incentives, but sometimes challenges are found in recruiting participants without compensation. This commentary describes methods of recruitment for one study at Palmer Center for Chiropractic Research and comments from two other schools about how they recruit volunteers. College research departments have often recruited students at their schools to participate in research trials. Commonly, students are perfect candidates for these trials because many are young and asymptomatic. In research trials, student volunteers may be rewarded with course credit or other incentives. A major ethical concern is whether a student is either coerced to be involved in a study or perceives that there will be repercussions for nonparticipation. Some might feel obligated to take part if they believe their grade might otherwise suffer. To guarantee that ethical procedures are followed methods of recruitment and the process of informed consent for any study carried out on a college campus must be approved by the school's institutional review board (IRB). Differences have been observed in the motivation between paid and nonpaid research participants. Males have been shown to be more interested in financial compensation, whereas females generally volunteer for the benefit of the cause.1 Disputes have arisen about the appropriateness of financial incentives for study recruits.2 Most commonly noted is that financial reimbursement could be coercive or serve as an unnecessary stimulus to encourage participation.3 Conversely, there are those who report

10 that there is justification for reimbursing participants for time and expenses.3 Surprisingly, however, there is little standardization for financial reimbursement.3 Recently, Russell et al stated,4 Ethicists and regulatory bodies have raised ethical concerns related to paying subjects to caution against, and even restrict, its widespread use. Financial incentives offer a conflict of interest, according to many researchers, because they can alter the motives of participants and, therefore, the results of a study. A review of literature in 2002 showed, financial rewards to be an important motivator among normal healthy volunteers in their decision to participate in clinical trials.5 A study published in the Journal of Medical Ethics evaluated the attitudes of research volunteers toward the monetary payment or disbursement of other incentives in exchange for their participation in a study. A majority of those surveyed were against financial reimbursement of volunteers for research investigations.4 Volunteer recruitment, incentives, and participation in research studies are important factors when conducting trials, as most studies attempt to assure unbiased results from experiments. However, it is frequently difficult to recruit participants who are not offered an incentive to participate. In one study on paraspinal muscle spindle sensitivity at Palmer Center for Chiropractic Research,6 unforeseen difficulties arose in acquiring the 48 student volunteers needed to complete the project. After recruiting, scheduling, and conducting the investigation, questions arose as to how other chiropractic colleges recruit student volunteers, and what incentives, if any, are given for their efforts. Also of concern was the level of interest in chiropractic research present in the student bodies of other chiropractic schools. A literature search utilizing Pubmed found several examples of studies using volunteer subjects. When using the search string research volunteer recruitment methods, 64 results were obtained, with 8 relevant to this discussion. When using the search string chiropractic college students, however, 17 of the 64 results involved student volunteer subjects, some of which were symptomatic and others asymptomatic. Fifteen articles were found using student volunteers AND chiropractic while chiropractic college students yielded 3 relevant articles. None of the articles actually discussed the recruitment process or methods of garnering participants. The most relevant discussion was found in Dr. J.Q. Zhang's work at Sherman College of Straight Chiropractic reported in 1996. Dr. Zhang surveyed 70 chiropractic students and found that the majority were

11 interested in research and participating in trials. Reasons for not participating included family responsibilities, school work load, and lack of interest and/or experience. Zhang stated, The overwhelming concern to the students in terms of participating in research was the additional time requirement.7 2) The objectives of the project are to review the current appointments process for Consultant Recruitment in Scotland and consider the findings in relation to best practice selection and recruitment practices. There are two linked activities to the project. First, a literature review on best practice selection with implications for consultant recruitment in Scotland. This was supplemented with a review of existing relevant documentation and reports. Second, consultation interviews were conducted to establish the views and experiences of key stakeholders (N=38). The key findings are as follows: 1.1 The evidence from the stakeholder consultation suggests that the current appointments process for consultant recruitment in Scotland is not working efficiently. The report provides evidence of the need for improvement in many areas of the process to ensure effectiveness. 1.2Evidence for improvement to the process does not mean that there are grounds to say that the current process has appointed the wrong people in the past. Clearly, this is not the case. Rather, there are significant lost opportunities in the current process for all stakeholders involved. 1.3 The time taken to fill a consultant post (from a vacancy arising to a new consultant starting their job) was extensive and had consequences for many stakeholders. Improvements to every stage of the recruitment process have been identified particularly in clarifying stakeholder roles in the process. 1.4 There is sound academic and practical evidence from other organisational contexts of how best practice selection and recruitment methods can deliver benefits for both individuals and organisations. This evidence can help to inform improvements to the current recruitment and selection for consultant recruitment in Scotland.

12 1.5 There is growing evidence of the application of best practice selection methods within medicine, notably within entry to undergraduate and postgraduate medical training. However there is no documented evidence available in the research literature specifically exploring best practice methods of selection in consultant recruitment. 1.6 Given the relatively low selection ratios (applicants to posts) recruitment to consultant level in Scotland has recently focused on attracting and appointing competent candidates to posts. However, given the introduction of MMC and specialty training, there is likely to be a large number of trainees exiting training at a similar time. This implies there may be an increase of applications in Scotland to this senior level. As a result, the recruitment and selection process for the future must be designed to manage potentially increased numbers. 1.7 Key themes that emerged from the stakeholder consultation included the following:

Recruitment and selection process: The process by which appointments are made is viewed as bureaucratic and in need of change. Improvements are required to enhance the experience for applicants, interviewers, HR and employers.

Professional standards and quality assurance in recruitment: While the CCT is an important indicator of minimum clinical competence, alone it does not confirm whether a doctor has the experience to safely practice within a particular job context. Further assessment is required. All stakeholders welcomed a clarification of the role and boundaries of the National Panellists remit, in addition to more structured training for the role.

Selection criteria: Clinical competence is clearly specified in the selection criteria. However, all stakeholders believed that improvements could be made to the identification and assessment of other selection criteria that are important for the consultant role (e.g. team working, communication skills, leadership etc). These criteria are not currently documented in the Person Specification.

Selection methods: All stakeholders supported the use of interviews as a method for recruitment at this level. However, many would like to see

13 improvements in the interview process without increasing workload. Use of interview data for development activities for appointed candidates, and feedback to unsuccessful ones was also identified as an important area for improvement. There was significant interest in piloting the use of other selection methods (e.g. presentations, work-based exercises, personality measures). Piloting is essential before any changes are recommended to generate evidence of the validity, reliability and utility before being applied in this context.

Fairness and diversity: Attracting an eligible pool of candidates from which to select was a key issue. Stakeholders recognise a tension existing between advertising widely versus ensuring that local talent is retained. Organisations and departments have developed strategies to meet their own recruitment needs and improvements are needed to ensure posts are attractive to a diverse applicant pool. Training in equal opportunities, fairness, and interviewing is essential.

Future perspectives: All stakeholders believe that improvement is required to the current appointments process. Stakeholders differed in the extent of improvements required, and there were some concerns about what was possible given the problems encountered in the context of changes to specialty selection. Most felt that significant opportunities exist to improve the selection process and build upon existing approaches, by piloting new selection methods, building on current practice.

Scotland has a unique opportunity to be the first to establish best practice recruitment and selection methods at this consultant level. Clearly, stakeholder input is required to pilot and review improvements in order to gain benefits for all. All stakeholders interviewed could identify areas for improvement. Given that consultant recruitment is high stakes, it is essential to engage and consult with these stakeholders regarding any proposed improvements to the process. 3) This literature review provides a summary and critical evaluation of the research on the topic of teacher recruitment and retention. It focuses on empirical studies

14 that were published between 1980 and the end of 2003. As a means of organizing the large body of research relating to this broad topic, we grouped the studies into the following categories: (1) studies that examined the characteristics of individuals who enter teaching, (2) studies that focused on the characteristics of individuals who remain in teaching, (3) studies that investigated the external characteristics of districts and schools that affect recruitment and retention, (4) studies of compensation policies that affected recruitment and retention, (5) studies of pre-service policies that affected recruitment and retention, and (6) studies of in-service policies that affected recruitment and retention. The reviewed research offered several consistent findings. The strongest set of results were those relating to the influence of various factors on attrition due to the widespread availability of longitudinal datasets that track the employment of teachers. Below, we summarize the findings that emerged in the research literature. (1) The results that arose fairly consistently in research regarding the characteristics of individuals who enter the teaching profession were as follows: Females formed greater proportions of new teachers than males. Whites formed greater proportions of new teachers than minorities. College graduates with higher measured ability were less likely to enter teaching than other college graduates. It is possible, however, that these differences may be driven by the measured ability of elementary school teachers, who represent the majority of teachers. Reentrants to teaching formed a significant proportion of newly hired teachers in the 1980s. Science and math teachers were less likely to return than other teachers, whereas elementary teachers and teachers with more prior experience were more likely to return. A more tentative finding based on a small number of weaker studies is that an altruistic desire to serve society is one of the primary motivations for pursuing teaching. (2) There were several findings that emerged with a strong degree of consistency in research regarding the characteristics of individuals who leave the teaching profession. They were as follows: The highest attrition rates seen for teachers occurred in their first years of teaching and after many years of teaching when they were near retirement, thus producing a U-shaped pattern of attrition with respect to age or experience. Minority teachers tended to have lower attrition rates than white teachers.

15 Teachers in the fields of science and mathematics were more likely to leave teaching than teachers in other fields. The highest attrition rates seen for teachers occurred in their first years of teaching and after many years of teaching when they were near retirement, thus producing a U-shaped pattern of attrition with respect to age or experience. Minority teachers tended to have lower attrition rates than white teachers. Teachers in the fields of science and mathematics were more likely to leave teaching than teachers in other fields. And teacher recruitment and retention: Nontraditional and alternative teacher education programs appeared to attract more diverse student populations, and their graduates appeared to have higher rates of entry into and retention in teaching than graduates of traditional programs. Minority representation in teaching appeared to be adversely affected by teacher-testing requirements. (6) Findings from the research on in-service policies that affect teacher retention were as follows: Schools that provided mentoring and induction programs, particularly those related to collegial support, had lower rates of turnover among beginning teachers. Schools that provided teachers with more autonomy and administrative support had lower levels of teacher attrition and migration. Schools with fewer disciplinary problems or those that gave teachers discretion over setting disciplinary policies had lower levels of teacher attrition and dissatisfaction. In at least two states (Texas and New York), larger class sizes were associated with higher teacher attrition rates. The entry, mobility, and attrition patterns summarized above indicate that teachers exhibit preferences for higher salaries, better working conditions, and greater intrinsic rewards and will tend to move to other teaching positions or jobs or activities outside of teaching that offer these characteristics recruitment and retention rates, the research provided the following fairly consistent findings: when possible. In particular, the finding that higher compensation is associated with increased retention is well established. It is evident that urban schools and schools with high percentages of minority students are difficult to staff, and that teachers tend to leave these schools when more attractive opportunities present themselves. It is also evident,

16 however, that factors that can be altered through policy can have an impact on the decisions of individuals to enter teaching and on teachers decisions to migrate to other schools or quit teaching. The research findings support the notion that individual schools and districts can affect their attractiveness to current and prospective teachers relative to other opportunities available to these individuals. The research also offers information on the effectiveness of a number of different options in the areas of compensation, preservice policies, and in-service policies, although rigorous research evaluating the latter two types of policies is relatively scarce. Although reliable ongoing information on the labor market for teachers is vital to monitoring trends and averting movements toward a shortage in a productive and preemptive manner, our literature review highlights the absence of recent data on key indicators and the need for increased and improved data collection efforts. In particular, there is a noticeable lack of rigorous policy evaluation research. In addition to updated and more complete national and state data on the movements of teachers, more reliable data tied to specific policy interventions are needed. While the education literature abounds with articles and reports describing or advocating particular policies, very few of them contain empirical data and analysis, and even fewer contain analysis conducted in accordance with rigorous research quality standards. We believe that policy goals at every institutional levelschool, district, state, and federal governmentwould be well served by committing the resources needed to ensure rigorous evaluations whenever new policies are put in place. In the end, this will be a cost-effective means of answering many questions currently unanswered in the research literature. Researchers have, for the most part, been fairly thorough in investigating issues relating to recruitment and retention when data are available. Answering the pressing questions regarding the recruitment and retention of effective teachers will require new quantitative and qualitative research based on improved data collection efforts, the further application of theoretical and methodological rigor to the study of teacher labor markets, the further subjection of theory to empirical testing at the state and local labor-market level, and a commitment on the part of policymakers at all levels to provide support for useful evaluation research when new policies are implemented.

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1.3 NEED OF THE STUDY

Recruitment function helps the organization to develop a pool of prospective human resources. To attract people with multi-dimensional skills and experiences that suits the present and future organizational strategies. Recruitment method and practices vary from one organization to another. Some organizations like commercial banks resort to centralized recruitment while some organizations like the Indian Railways resort to decentralized recruitment practices. Personnel department at the central office performs all the functions of recruitment in case of centralized recruitment and personnel departments at unit level/zonal level perform all the functions of recruitment concerning to the jobs of the respective unit or zone. This study would help the Unit Managers and Recruiting Officers who recruiting Financial Advisors for the company to know the best suitable recruitment method which will reduce the cost as well as increase the sales.

1.4 OBJECTIVES OF THE STUDY

This study is being made to know the various recruitment methods used for recruiting Financial Advisors To study the various sector of Advisors and to find out the effective sector who do better sales. To study the training process given for Financial Advisors who cleared IRDA exams. To find out the impact of training process in the sales of the company.

1.5 SCOPE OF THE STUDY

The project work has been undertaken in ICICI Prudential Life Insurance Company, Chennai- Nungambakam branch. The entire project is based on the recruitment method followed by Unit Managers and Recruitment Officers of ICICI Prudential Life Insurance Company, Chennai- Nungambakam branch. The study was conducted in the time period of 2nd January 30th April 2008.

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1.6 RESEARCH METHODOLOGY

1.6.1 RESEARCH DESIGN Descriptive research design has been used for this study. Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group. 1.6.2 NATURE OF DATA All types of data, both primary and secondary were used in this study. 1.6.3 SOURCES OF DATA The reliable datas of this study in the form of primary and secondary data are as follows. PRIMARY DATA: This is the data, which is collected by the researcher for the first time. The tool used to collect this data is Questionnaire. Here, for this project the researcher has collected data and other relevant information through ICICI Prudential Life Insurance employees who availed training from the company using questionnaires. SECONDARY DATA: The data, which are already collected, are called secondary data. This data may be available within the company, government records, trade publications etc., The secondary data and other relevant information for this study have been collected from the secondary sources such as manuals, books, journals, websites, and paper publications. 1.6.4 SAMPLING DESIGN For the purpose of sampling, Judgement sampling method was adopted. Unit Managers has given the number of samples and their names. 1.6.5 SAMPLE FRAME The survey was conducted on Unit Managers and Recruiting Officers at ICICI Prudential Life Insurance Company, Chennai- Nungambakam branch.

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1.6.6 POPULATION Totally there are 80 Unit Managers and 15 Recruiting Officers in that branch. 1.6.7 SAMPLE SIZE The sample size of the study is 60. 1.6.8 SAMPLE UNIT Out of 80 Unit Managers 55 were taken for the study and out of 15 Recruiting Officers 5 were taken for the study. 1.6.9 STATISTICAL TOOLS USED 1) Percentage Analysis To calculate the percent by using percentage analysis by the following formula No. of Respondents Percentage Analysis = ------------------------------- x 100 Sample size 2) Weighted Average Method

1.7 LIMITATIONS OF THE STUDY

Data collected was not gathered from the senior management, restricted to the junior management, so the higher degree of refined answers was not justified with the collected information. Access to the files and records of the employees was restricted and is not at all possible to know about the personal traits of the employees under study with details. The respondents were hesitating to co-operate and most of the time they feel that giving information for a report is just a waste of time. Recruiting Officers is a new concept in ICICI Prudential. Those persons were lack in knowledge about the recruitment method followed

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CHAPTER 2

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COMPANY PROFILE

CHAPTER 2
2.1 COMPANY PROFILE
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank one of India's foremost financial services companies-and prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital

22 infusion stands at Rs. 37.72 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over 952 branches in addition to 1,004 micro-offices, over 291,000 advisors; and 21 banc assurance partners. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India.

VISION & VALUES:

Vision: To be the dominant Life, Health and Pensions player built on trust by world-class people and service. This we hope to achieve by:

Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings The success of the company will be founded in its unflinching commitment to 5

core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity,

23 where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth. Values: Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

PROMOTERS:
ICICI Bank ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of $121 billion as of March 31, 2008. ICICI Banks subsidiaries include Indias leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Banks presence currently spans 19 countries, including India. Prudential Plc Established in London in 1848, Prudential plc, through its businesses in the UK, Europe, US, Asia and the Middle East, provides retail financial services products and services to more than 20 million customers, policyholder and unit holders and manages over 267 billion of funds worldwide (as of December 31, 2007). In Asia, Prudential is the leading European life insurance company with life operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest retail fund managers for Asian sourced assets ex-Japan. Its fund management business has expanded into ten markets, comprising of China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates. The Company:

24 ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the year ended March 31, 2008, the company garnered Retail New Business Weighted premium of Rs. 6,684 crores, registering a growth of 68% over the last year and has underwritten nearly 3 million retail policies during the period. The company has assets held over Rs. 28,500 crore. ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life. Distribution: ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 952 branches in addition to 1,004 micro-offices and an advisor base of 291,000. The company has 21 banc assurance partners having tie-ups with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon Peoples Co-op Bank, Ernakulam District Co-op Bank, Idukki District Co-op Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani Gramya Bank, Ratnagiri District Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative Bank, Baramati Co-operative Bank,

25 Ballia Kshetriya Co-Operative Bank, The Haryana State Co-Operative Bank and Imphal Urban Cooperative Bank Ltd. Products: Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Savings & Wealth Creation Solutions

Save'n'Protect is a traditional endowment savings plan that offers life protection along with adequate returns. CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years.

LifeTime Gold & LifeTime Plus are unit-linked plans that offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 6 fund options - Preserver, Protector, Balancer, Maximiser, Flexi Growth and Flexi Balanced.

LifeLink Super is a single premium unit linked insurance plan which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold is a limited premium paying plan specially structured for long term wealth creation. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation.

InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options.

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LifeStage RP is a unique and powerful wealth creation insurance solution, which combines the benefits of automatic asset allocation and quarterly rebalancing along with increased protection.

Protection Solutions

LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium.

HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.

Education insurance plans

Education insurance under the SmartKid brand provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. SmartKid plans are also available in unit-linked form - both single premium and regular premium.

Retirement Solutions

ForeverLife is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. LifeTime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement.

LifeLink Super Pension is a single premium unit linked pension plan. Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options.

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PremierLife Pension is a unique and convenient retirement solution with a limited premium paying term of three or five years, to suit professionals and businessmen, especially those who require more flexibility and customization while planning their finances.

Health Solutions

Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover.

Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care and also provides an additional benefit of free periodical cancer screenings. Diabetes Care: Diabetes Care is a unique critical illness product specially developed for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover.

Diabetes Care Plus: is a unique insurance policy that provides an additional benefit of life cover for Type 2 diabetics and pre-diabetics Hospital Care: is a fixed benefit plan covering various stages of treatment hospitalisation, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years.

Crisis Cover: is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death.

Group Insurance Solutions: ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.

28 Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. Group Superannuation Plan: ICICI Prudential Life offers both defined contribution (DC) and defined benefit (DB) superannuation schemes to optimise returns for the members of the trust and rationalise the cost. Members have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. Group Immediate Annuities: In addition to the annuities offered to existing superannuation customers, we offer immediate annuities to superannuation funds not managed by us. Group Term Plan: ICICI Prudential Life's flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. Flexible Rider Options ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.

1. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while travelling in an authorized

29 mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. 2. Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death. 3. Waiver of Premium: In case of total and permanent disability due to an accident, the future premiums continue to be paid by the company till the time of maturity. This rider is available with SmartKid, LifeTime Plus, LifeTime Super and LifeTime Super Pension. 4. Income benefit rider: In case of death of the life assured during the term of the policy, 10% of the sum assured is paid annually to the nominee on each policy anniversary till the maturity of the rider. About the Promoters: ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of $121 billion as of March 31, 2008. ICICI Banks subsidiaries include Indias leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Banks presence currently spans 19 countries, including India. Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, US, Asia and the Middle East, provides retail financial services products and services to more than 20 million customers, policyholder and unit holders and manages over 267 billion of funds worldwide (as of December 31, 2007). In Asia, Prudential is the leading European life insurance company with life operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest retail fund managers for Asian sourced assets ex-Japan. Its fund management business has expanded into a total of ten markets: China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates. Its fund management business has expanded into a total of ten markets: China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates.

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Board of directors: The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamnath, Chairman Mr. Mark Norbom Mrs. Lalita D. Gupta Mrs. Kalpana Morparia Mrs. Chanda Kocchar Mr. Kevin Holmgren Mr. M.P. Modi Mr. R. Narayanan Ms. Shika Sharma, Managing Director & CEO Management team: The ICICI Prudential Life Insurance Company Limited Management team comprises reputed people from the finance industry both from India and abroad. Ms. Shika Sharma, Managing Director Mr. Sandeep Batra, CFO & Company Secretary Mr. Shubhro J. Mitra, CHR Mr. Puneet Nanda, Head Investments Mr. Anitha Pai, Chief Customer Service and Operations Mr. V. Rajagopalan, Appointed Actuary Mr. Dipan Bhattacharya Chief information technology HISTORY OF INSURANCE INDUSTRY The origin of insurance is very old. The time when we were not even born; has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance.The insurance came to India from UK; with the establishment of the oriental life insurance corporation in 1818. The Indian life insurance company act 1912 was the

31 first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building wide network across the length and breadth of the country. After the liberalization the entrance of foreign players has added to the competition in the market. 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. In 1957 general insurance council, a wing of the insurance association of India, framed a code of conduct for ensuring fair conduct and sound business practices. In 1972 the general insurance business nationalization act, nationalized the general insurance business in India with effect from 1st January 1973. it was after this that 107 insurers amalgamated and grouped in to four companies viz., the national Insurance Company Ltd, The New India Assurance Company Ltd, The Oriental Insurance Company, and the United India Insurance Company. Industry Profile Insurance is a colossal sector in India that is growing at a speedy rate of 15- 20%. The insurance sector is approximately 450 billion yet 80% of population in India is not insured. This gives you a peek in to the huge growth opportunity that exists for this segment. the insurance business in India mainly consists of two main players, the Life Insurance Corporation (LIC) and General Insurance Corporation (GIC). Almost 100 divisional offices and 2000 branch offices are functional for LIC. As LIC caters to life insurance, health insurance, property and accident insurance it needs an increasing number of employees. The other player GIC undertakes motor, marine, personal accident and fire insurance. Moreover it has four subsidiaries 1. Oriental Insurance 2. United India Insurance 3. New India assurance and 4. National Insurance

32 Insurance companies in India have a deep rooted history. It all began in 1818 when Oriental Life Insurance in Calcutta was established. From then on insurance was scattered across the country. It was an unorganized sector. Then in 1950, the entire insurance sector was nationalized. After achieving freedom, the insurance sector gained momentum. In 1956, the government of India consolidated 240 private life insurers and provident societies and this was how LIC came to life. The justification to the nationalization of the life insurers was that the government would reap the necessary funds that were required for industrialization. The general insurance industry still remained in the hands of the private sector till 1972 and was then nationalized. LIC adds about 7% to the countrys GDP. With IRDAs regulation not less than 15% of funds from the insurance companies are said to fill the coffers of infrastructure and social sectors. Thus providing vital funds to the countrys growth. Infrastructure of the country bears risks that are of a long term character. They include political instability, geological hindrances, gestation period and illiteracy. The long term funds provided by life insurance of India not only cover these risks but also help securing a brighter future for the country. Besides infrastructure, the insurance companies in India are vital for ones saving purpose. In the beginning insurance was looked at as a tax benefit investment. Slowly, however the mindset of common man is changing. Players in the Market The untapped potential in terms of potential insurable population in the country has attracted many players to the market. According to IRDA sources, there are 12 private players in the life insurance sector vying for their pie. Home grown business barons like Tata, Birla, Bajaj, and ICICI have jumped into the foray joining hands with foreign players as joint ventures. The indigenous knowledge about the Indian consumer behavior coupled with the expertise of the foreign partners in the insurance business has enabled the new entrants making an inroad into the market with roaring success. In addition to the market share, the private insurers are also able to grab the mind share of the upwardly mobile Indian. The list of players in life and non life insurance is given in the following table.

33 List of players in life and non life insurance a) Life insurers Table 1 S.no 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. player Life insurance Corporation Of India ICICI Prudential Life Insurance Company ltd., Birla Sun Life Insurance Company Ltd., HDFC Standard Life Insurance Company Ltd., Max New York Life Insurance Company Ltd., Tata AIG Life Insurance Company Ltd., SBI Life Insurance Company Ltd., ING Vysya Life Insurance Company Ltd., Bajaj Allianz Life Insurance Company Ltd., Metlife India Life Insurance Company Ltd., AMP Sanmar Life Insurance Company Ltd., Aviva Life Insurance Company Ltd., Om Kotak Mahindra Life Insurance Company Ltd.,

b) General Insurers Table 2 S.no Player 1. Royal Sundaram Alliance Insurance Company Ltd., 2. Reliance General Insurance Company Ltd., 3. IIFCO Tokio General Insurance Company Ltd., 4. Tata AIG General Insurance Company Ltd., 5. Bajaj Allianz General Insurance Company Ltd., 6. ICICI Lombard General Insurance Company Ltd., 7. Cholamandalam General Insurance Company Ltd., 8. Export Credit Guarantee Corporation Ltd., 9. HDFC Chubb General Insurance Company Ltd., The FDI limit in insurance sector has been capped at 26% with the remaining 74% in the hands of Indian players. The proposal by the government of India to increase the FDI limit to 49% has met with lukewarm response, as the players are comfortable with the existing norms. Strategies Adopted By The Players In The Market Gone were the days when the customers were forced to take up the kind of products whatever coming from LICs and GICs stables. But now, the customer is portrayed as the king and to his delight, the products are redesigned and customized suiting his needs taking into account his paying capacity and multiple benefits. Too much of his chagrin,

34 he has also got an option of withdrawing his offer within a period of 15 days (free look period) if he is not satisfied with the policy features. Shift In The Product Portfolio Earlier the entire industry was revolving around investment and savings oriented plans. As the interest rates are moving southwards, all the players are deliberately focusing on selling pure risk covers in an effort to capture the new customers. The premium on such products is low as it covers only the risk aspect and does not factor in investments or savings. Even the market leader LIC has withdrawn some of the products, which are positioned, on the assured returns platform. Though the share of the term plans in the product portfolio is quite negligible, the shift towards the term products is already visible. Typically a term plan does not provide anything by way of maturity, unlike moneyback and endowment policies. Globally, close to a third of the policies fall into this category must be encouraging news to the players. Unit linked products are also gaining momentum in this country. Om Kotak and Birla Sun Life have launched unit linked schemes focusing on equity, debt, and gilt edged stocks. These schemes are expected to yield better returns when compared to normal insurance schemes. As the awareness level about these unique products is much lower, the companies resort to educate the customers about the salient features of the products. Value For Money (VFM) The sea change since the sector opened up has been on the way the basic products have been packaged innovatively, often tailor made to provide a bundle of benefits to the customers. This is possible through the introduction of riders, which have added value to the risk cover at minimal cost. Riders are nothing but add-ons coming along with the base policies for a slightly additional premium. Riders have become the major instruments for the organizations to lure the customers away from the competitors. The removal of 30% cap on the premium of the base policy for the health riders alone has come has a shot in the arm for many players since this is used as an Unique Selling Proposition by many private players vis a vis the LIC. Later, LIC has also started announcing riders along with the main policies dancing to the tune of the market forces. This could see many nonlife

35 players going out of the business as life insurers offer a plethora of personal line products as add-ons. Tapping The Niche Markets Private insurers are concentrating much on designing attractive products by investing heavily on research, studying life expectancy and health statistics across age groups, income levels, professionals and regions on their own instead of relying on data with state insurers. The products are designed with a technical team of actuaries and a product development team working closely together to target the niche market. The innovations for the niche markets are abounded and to name a few. Metlife India Insurance Company has recently launched a charitable trust policy in Kolkata, which has evoked a lot of interest especially among the Marwaris business community who want to set up a temple in their name after their death. Similarly a buy and sell agreement cover from the same company permits a business enterprise to take out a life plan on each of its partners, to ensure that the company continues. The other segments which have attracted almost all the players are the women and the children segments. Though the state insurer has had a chunk of products sufficiently for a longer time, it faces stiff competition from the private players in these segments. Tata AIG has offered a specialized life insurance package where the insured and the employers of the insured have a say in it. Termed as worksite marketing, AIG, which has adopted this practice in different places across the world, is spreading the concept in India too. Worksite marketing is a distribution method used to offer voluntary insurance products (employee benefits) to employees at their place of work with the sponsorship or backing of their employer, traditionally done on a deduction from the payroll. The policyholder carries the policy with himself throughout his life, even if it happens to change the organizations.

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Tata AIG General Insurance, for the first time in the country, has launched a specialized product for Accountants (after tasting the success with specialized products such as Directors and Officers policy in India) in its bid to segment the market for professional indemnity policies. The policy has been designed with the assistance from Bombay chartered accountants society. This policy covers claims pertaining to professional negligence; wrongful acts committed in the performance duties. It also provides for coverage of all legal expenses incurred in defending such claims. Any other way to promote non-smoking? Or to reward those who give up smoking? Om Kotak Mahindra has taken an initiative by offering a term insurance plan a pure protection product to non-smokers at much cheaper price. As against an annual premium of Rs.2400 on a Rs.10 lacs policy for a 10 year term for a 30 year old under the preferred term plan, the regular term premium works out to Rs.3400 for a similar cover. Though there are apprehensions in the industry circle about the success of the policy, the intention of the company is quite appreciated. Even the unborn childs future can be safeguarded now. The offspring can be insured against unfortunate congenital defects. State owned general insurers have started aggressively marketing these kinds of products. Thrust To The Rural Markets Norms stipulated by the regulator IRDA are very flexible; all the players have turned their eyes towards the rural market towards ensuring equitable distribution of insurance policies in every nook and cranny of the country. IRDA stipulates the rural obligations to be met by the players over the years. The rural obligation on part of the new private insurance companies is incremental in nature. It goes from 5% to 15% over the period of 5 years for life insurance and from 2% to 5% in case of general insurance. IRDA has also defined what it meant by rural.

37 The place should have a population of less than 5000. Secondly, the density of the population should be less than 400 persons per square kilometer. 75% of the male population should be engaged in agricultural pursuit. Of the 11 private sector insurers, 10 companies substantially performed in the rural sector with the percentage of policies issued in the rural sector standing higher than 5% level mentioned. Most of the non-life insurers achieved the base level of 2% gross premium from rural sector. Since the penalty for not adhering to the obligation includes Rs.5 lacs penal fee and up to 3 years of imprisonment of the chief of the organization, all the companies are swarming the rural market. The challenge lies in reaching the critical mass with the redesigned products. And the organizations have been fairly successful in their efforts. For instance, Om Kotak Life Insurance is successful in selling the single premium policy in rural market. Reaching the doorstep of the villagers through non-conventional channels like Regional Rural Banks (RRBs), Co-operative Banks, Self-Help Groups (SHGs), ITCs E-Choupal is also being tried by the players. Tapping Unconventional Distributional Channels Nevertheless all the players depend heavily on their agents force to reach out (LIC has reached a figure of 8,50,000 agents and planned to increase it to 1 million by this year), they are trying out other distribution channels also like banks and corporate agencies in addition to the channels mentioned above. The following table shows the strategic alliances the insurers have entered into to distribute their products. Table-3: List of Strategic Alliances INSURER Bajaj Alliance (General Insurance) United India Insurance Company Ltd. New India Assurance Company Ltd. BANKS/CORPORATE AGENCIES Jammu & Kashmir Bank, Karur Vysya Bank, Punjab & Sind Bank Andhra Bank, Indian Bank, South Indian Bank, Federal Bank. Punjab National Bank (General Insurance), Vijaya Bank(Life insurance)

38 SBI Life ICICI Prudential SBI Branches and Branches of its Subsidiaries Allahabad Bank, Bank of India, Citi Bank, Federal Bank, Lord Krishna Bank, Punjab and Maharashtra Co-operative Banks. Corporation Bank, Oriental LIC of India Metlife AMP Sanmar Birla SunLife HDFC Standard Life Insurance Dabur CGU Life Bank Of

Commerce. Karnataka Bank, Dhanalakshmi Bank, Jammu & Kashmir Bank. Kerala Based Co-operative Banks,

Peruntalmanna Bank, and Manjeri Bank. Citi Bank, Deutsche Bank, IDBI Bank, Catholic Syrian Bank, Bank of Rajasthan, and Bank Of Muscat. Indian Bank, Union Bank. Lakshmi Vilas Bank, Canara Bank, Amex, ABN Amro Bank.

LIC is also exploring ways to rope in Regional Rural Banks (RRBs) across the country. Cross-selling could be another key strategy in selling insurance provided the restrictions on the functioning of corporate agencies are lifted. Once the curbs are removed, the market may see a wave of cross selling. Royal Sundaram Alliance may offer household insurance with Sundaram Housing Finance and sell customers of Sundaram Finance Mutual Fund a whole range of insurance products. ICICI Prudential and HDFC Standard Life Insurance will tie up with their parent companies to use their network. Once the much awaited Insurance Brokers Regulations comes into force, the industry is poised to change the way the insurance products are sold with the entry of brokers. While an insurance agent represents an insurance company and offers only the product of that company, an insurance broker is independent and represents a number of insurers. He can also compare the benefits of different policies and premiums to find the best coverage for the customer. Cause Related Marketing (CRM) Cause Related Marketing has become the order of the day in Insurance industry. By creating goodwill about the organizations, the insurers are making an attempt to change

39 the negative attitude of the people towards insurance products. For instance, towards serving the society in a better way, LIC has adopted a novel way through its Bima grams policy. Accordingly, LIC pays 25% of the premium collected from the villagers or Rs.25000 whichever is lesser for undertaking developmental work in the villages provided. The population of the village is between 1000 and 5000. Life Insurance coverage for at least one person in 75% of the households. Acquisition of 100 new policies in a single year IFFCO-Tokio General Insurance co is planning to launch a novel insurance policy Sankat Karan for farmers in which for every purchase of 50 kg bag of fertilizers, insurance worth Rs. 4000 would be provided to the farmers. The policy will remain in force for a period if 12 months from the date of purchase. Birla SunLife insurance has adopted 332 villages around Renukoot and actively involved in improving the lives of the residents. De-Tariffing In General Insurance Though the issue of de-tariffing in general insurance has been debated upon at length, the response from the industry is quite mixed. By fixing a tariff for a product, Tariff Advisory Committee (TAC) maintains discipline in the market and makes sure that the insurance companies do not resort to under pricing to gain market share. IRDA is now working on de-tariffing the general insurance sector beginning with commercial vehicle business since it constitutes more than two fifth of the non-life business volume. Both IRDA and TAC are working out the modus operandi of the de-regulations of motor premium. Sensing the indifferent attitude of the private general insurers towards motor insurance, the government is contemplating on coming out with obligations to be met by the private insurers in this segment (like rural business). Once the motor insurance premium is de-tariffed, the end user is likely to see another cola war like. Life Insurance Meaning Life insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event

40 insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the corporation by the assured. Life insurance is universally acknowledged to be an institution, which eliminates risk, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilizations partial solution to the problems caused by the death. Life insurance in short, is concerned with two hazards that stand across the life path of every person; that of dying prematurely leaving a dependent family to fend for itself and that of living to old age without visible means of support. Life Insurance is protection for dependants. Your dependents can include children, parents, spouse, or anyone who is dependent on you financial support. In a sense, creditors are also Dependents in that they are depending on you to repay your debt. So creditors should be added to your list of dependents. Life Insurance is not an investment nor is it a savings plan. The American council of life insurance (ACLI), a trade association in the life insurance industry, said in an issue of their newsletter: Life Insurance is not designated to provide for the possibility of economic gain in return for a risked sum of money. Thats an investment. Nor is it designed to accumulate deposits of money building toward an individual or family financial goal. Thats a savings account. The purpose of life insurance is to provide a guaranteed death benefit to protect your dependents against financial losses General Insurance Corporation Of India The entire general insurance business in India was nationalized by General Insurance Business (Nationalization) act, 1972 (GIBNA). The government of India (GOI), through nationalization took over the shares of 55 insurance companies and the undertakings of 52 insurers carrying on general insurance business. General insurance Corporation of India (GIC) was formed in pursuance of selection 9(1) of GIBNA. It was incorporated on 22 November 1972 under the companies act , 1956 as a private company limited by shares, GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance. As soon as GIC was formed, GOI transferred all the shares it held of the general insurance companies to GIC. Simultaneously, the

41 nationalized undertakings were transferred to Indian insurance companies. After a process of mergers among Indian insurance companies, four companies were left as fully owned subsidiary companies of GIC (1) National Insurance Company ltd, (2) The New India Assurance Company Ltd, (3) The Oriental Insurance Company Ltd, and (4) United India Insurance Company Ltd. The next landmark happened on 19th April 2000, when the IRDA act, 1999 came in to force. This act also included amendment to GIBNA and the Insurance act, 1938. an amendment to GIBNA removed the exclusive privilege of GIC and its subsidiaries carrying on general insurance in India. In November 2000, GIC is renotified as the Indian reinsure and through administrative instruction; its supervisory role over subsidiaries was ended. With the general insurance business (Nationalization) amendment act 2002 (40 of 2002) coming into force from March 21, 2002 GIC ceased to be a holding company of its subsidiaries their ownership were vested with government of India.

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CHAPTER 3

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DATA ANALYSIS AND INTERPRETATION

CHAPTER - 3
3.1 DATA ANALYSIS AND INTERPRETATION
This chapter explains the recruitment method followed by ICICI Prudential Life Insurance Company Limited, Chennai, to recruit Financial Advisors. Primary data is mainly used to collect the opinion about the recruitment methods currently followed by the company, source that use to recruit Financial Advisors, effective sector people of Financial Advisors, influence of educational qualification, clearance of IRDA exams, performance of Financial Advisors, skills required for Financial Advisors to do better sales, and impact of training program in sales and so on. The opinion of the Unit Managers and Recruiting Officers has been described in the following table by using Percentage Analysis and Weighted Average Method. Let us see one by one.

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3.1.1 Recruitment of Financial Advisor

The researcher has made an attempt to know the frequency of recruiting Financial Advisors in the company. From this we know the requirement of Financial Advisors to do better sales.

Table 3.1.1 Recruitment of Financial Advisor:

Sl. No 1 2 3 4 Frequency Monthly Weekly Daily When the need arises TOTAL No. of Respondents 11 17 18 14 60 % of Respondents 18.33 28.33 30 23.34 100

Interpretation:
From the table 3.1.1 it is inferred that 30% of the respondents recruiting Financial Advisors daily, 28.33% of the respondents recruiting Financial Advisors weekly, 23.34%

45 of the respondents recruiting Financial Advisors when the need arises, and 18.33% of the respondents recruiting Financial Advisors monthly.

3.1.2 Current Recruitment Method

The researcher has made an attempt to find the current recruitment method followed by the company to recruit Financial Advisors. They can recruit either by direct method or indirect method. The following table will show the method they followed.

Table 3.1.2 Current Recruitment Method:

Sl. No 1 2 3 4 Alternatives Reference Advertisement Tele Calling Other Activities TOTAL No. of Respondents 15 16 19 10 60 % of Respondents 25 26.67 31.67 16.66 100

Interpretation:
From the table 3.1.2 it is understood that 31.67% of the recruiters recruiting through appointing girls for tele calling, 26.67% of the recruiters recruiting through advertisement, 25% of the recruiters recruiting through the reference and 16.66% of the recruiter recruiting Financial Advisors through activity programs.

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3.1.3 Sources for Recruitment

The researcher had made an attempt to find out the sources which the company used to recruit people either through internal sources or external sources.

Table 3.1.3 Sources for Recruitment:

Sl. No 1 2 3 Sources Internal Sources External Sources Both TOTAL No. of Respondents 18 20 22 60 % of Respondents 30 33.34 36.66 100

Interpretation:
From the table 3.1.3 it is inferred that 36.66% of the respondents use both resources to recruit Financial Advisors, 33.34% of the respondents use external sources to recruit Financial Advisors, and 30% of the respondents use internal sources to recruit Financial Advisors.

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3.1.4 Effective Sector of People

The researcher has made an attempt to find out the effective sector of Financial Advisors recruited by the Unit Managers and Recruiting Officers. Out of all the sector people who do best and good sales of insurance is meant as effective sector.

Table 3.1.4 Effective Sector of People:

Sl. No 1 2 3 4 Alternatives Retired Persons House Wives Students Second income people TOTAL No. of Respondents 22 17 12 9 60 % of Respondents 36.66 28.34 20 15 100

Interpretation:
From the table 3.1.4 it is found that 36.66% of the respondents answered that retired persons are effective people than other sector people, 28.34% of the respondents answered that house wives are effective than others in sales, 20% of the respondents answered that students are effective, and 15% of the respondents answered that second income people are effective in sales.

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3.1.5 Influence of Educational qualification

The researcher has made an attempt to find out whether the educational qualification of the people influence in recruiting Financial Advisors. The minimum qualification of the Financial Advisor will be 12th pass.

Table 3.1.5 Influence of Educational qualification:

Sl. No 1 2 3 4 5 Agreed level Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree TOTAL No. of Respondents 13 8 21 8 10 60 % of Respondents 21.67 13.33 35 13.33 16.67 100

Interpretation:
From the table 3.1.5 it is depicted that 35% of the respondents dont have any opinion about this, 21.67% of the respondents strongly agree with the influence of educational qualification, 16.67% of the respondents strongly disagree with this, and 13.33% of the respondents agree and 13.33% get disagree with the same.

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3.1.6 Percentage of IRDA Exam clearance

The researcher has made an attempt to find out the percentage of clearing IRDA exams. IRDA exam is conducted by the Insurance body of Central Government to select the Financial Advisors. People who cleared the exam will be provided by the license by the Govt., of India. Only those people are appointed as Financial Advisors by the company.

Table 3.1.6 Percentage of IRDA Exam clearance:

Sl. No Agreed level No. of Respondent 1 2 3 4 5 Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree TOTAL s 7 13 12 16 12 60 11.67 21.67 20 26.66 20 100 % of Respondents

Interpretation:
From the table 3.1.6 it is observed that 26.66% of the respondents disagree with this statement, 21.67% of the respondents agreed that all cleared exams, 20% of the respondents disagree with this, 20% of the respondents have no opinion about this, and 11.67% of the respondents strongly agree with this.

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3.1.7 Effectiveness of Job by Financial Advisors

It is their duties to do their job effectively who are selected as Financial Advisors. The researcher has made an attempt to know whether they do so or not by the following table.

Table 3.1.7 Effectiveness of Job by Financial Advisors:

Sl. No 1 2 Response Yes No TOTAL No. of Respondents 34 26 60 % of Respondents 56.67 43.33 100

Interpretation:
From the table 3.1.7 it indicates that 56.67% of the respondents said that who are selected as Financial Advisors are doing their job effectively, and 43.33% of the respondents said that who are selected as Financial Advisors are not doing their job effectively.

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3.1.8 Performance in Sales

Financial Advisors can be any one who has cleared IRDA exams. The following table shows which sector of Financial Advisors are performing their best in sales out of 4 sectors.

Table 3.1.8 Performance in Sales:

Sl. No 1 2 3 4 Alternatives Retired persons House wives Students Second income people Total No. of Respondents 19 18 14 9 60 % of Respondents 31.67 30 23.33 15 100

Interpretation:
From the table 3.1.8 it is found that 31.67% of the recruiters said that retired persons are performing well, 30% of the recruiters said that house wives are performing their best, 23.33% of the recruiters said that students are good in sales, and 15% of the recruiters said that second income people are performing their best in sales.

3.1.9 Skills required for Financial Advisors

52 The researcher has made an attempt to know what are all the skills required by a Financial Advisor to be success in their field. The following table shows the recruiters rank for the alternate skills required by Financial Advisors.

Table 3.1.9 Identification and rectification of problem:

Skills / Rank Communication skill Convincing skill Management skill Building rapport 1st 22 20 10 8 2nd 17 16 13 14 Total 60 60 60 60

3rd 12 15 10 22

4th 9 9 27 16

Weighted Average Method

53 Communication Skill = (22*4 + 17*3 + 12*2 +9*1) / 4+3+2+1 = 17.2 Convincing Skill Management Skill Building Rapport = (20*4 + 16*3 + 15*2 +9*1) / 4+3+2+1 = 16.7 = (10*4 + 13*3 +10*2 +27*1) /4+3+2+1 = 12.6 = (8*4 +14*3 +22*2 +16*1) /4+3+2+1 = 13.4

Interpretation:
From the table 3.1.9 and from the weighted average method it is inferred that Communication Skill holds 1st rank, Convincing Skill holds 2nd rank, Building Rapport holds 3rd rank, and Management Skill holds 4th rank. It shows that every Financial Advisors should hold skills in this order to do sales better.

3.1.10 Training for Financial Advisors

54 The researcher has made an attempt to find out whether they provide training for those who are selected for the Financial Advisors.

Table 3.1.10 Training for Financial Advisors:

Sl. No 1 2 Response Yes No TOTAL No. of Respondents 39 21 60 % of Respondents 65 35 100

Interpretation:
From the table 3.1.10 it shows that 65% of the respondents said that they provide training to the financial Advisors, and 35% of the respondents said that they are not providing training to the Financial Advisors.

3.1.11 Percentage of selected Advisors attending training

55 The selected Financial Advisors should attend the training program provided by the company to get knowledge about the products.

Table 3.1.11 Percentage of selected Advisors attending training:

Sl. No 1 2 Response Yes No TOTAL No. of Respondents 27 33 60 % of Respondents 45 55 100

Interpretation:
From the table 3.1.11 it is observed that 55% of the respondents said that the selected advisors attend training, and 45% of the respondents said that they dont attend training.

3.1.12 Impact of training program on the sales

Training program helps Financial Advisors to get thorough knowledge about products and also the general terms and meaning of Insurance. They also come to know

56 about the money market. The following table shows how these training programs help the Financial Advisor to do sales.

Table 3.1.12 Impact of training program on the sales:

Sl. No 1 2 Yes No TOTAL Response No. of Respondents 33 27 60 % of Respondents 55 45 100

Interpretation:
From the table3.1.12 it is depicted that 55% of the respondents said that they believe training helps in sales, and 45% of the respondents said they dont believe it improve sales.

CHAPTER 4

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FINDINGS AND SUGGESTIONS

CHAPTER - 4
SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

58 4.1 SUMMARY OF FINDINGS 1) 30% of the recruiters recruiting Financial Advisors monthly. 2) 32% of the recruiters using tele calling as a major recruiting method to recruit Financial Advisors. The recruiters appoint tele callers for this purpose. 3) 37% of the recruiters using both sources of recruitment to recruit Financial Advisors. 4) 37% of the recruiters said that retired persons are the effective sector people of Financial Advisors. After that house wives is in the second place according to the recruiters. 5) 35% of the recruiters dont have any opinion about the influence of educational qualification. 22% of the recruiters are strongly agreed that education influence the recruitment process. 6) 27% of the recruiters are not agreed with the clearance of IRDA exams. They told that only the people who have knowledge about the money market and insurance are clearing the exams without fail. 7) 57% of the recruiters agreed that all the Financial Advisors who are all selected are doing their job effectively. That is they are doing sales promptly. 8) 32% of the recruiters said that retired persons are the good sector who do sales better than other sector people. 9) According to the study communication skill holds the 1st place, convincing skill holds 2nd place, building rapport holds the 3rd place and management skill holds the 4th place. 10) 65% of the recruiters said that they provide training for the Financial Advisors who are selected through IRDA exams. 11) 55% of the recruiters said that the selected Financial Advisors are not attending the training classes promptly.

12)

55% of the recruiters believe that the training programs are helping Financial Advisors to improve their sales skills.

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4.2 SUGGESTIONS

60 Effective communication media should be selected to convey the information to all set of people. Advertisement can be given through Internet portals to cover the students who are willing to do part time job. Recruit the people who are already experienced with this field to do better sales. Encourage tele callers by giving incentives to get more appointment and to find the interested people. The commission amount should be credited immediately to the Recruiting Officers after they recruit people. It will encourage them to recruit more persons. Activity programs conducted by the Unit managers can also increased, so that lot of people come to know the opportunity to earn money by part time. Training should be given to the people who are recruited before the IRDA exams. It will increase the percentage of clearing the exams.

4.3 CONCLUSION
Recruitment is an important part of a business' human resource planning. The overall aim of the recruitment and selection process is to obtain the number and quality of

61 employees that are required in order for the business to achieve its objectives. Recruitment is becoming more and more important in business. In particular, this reflects the increasing need for a well-motivated and flexible workforce that requires less management supervision. Successful recruitment requires: efficient planning, innovative strategies to obtain a quality field of applicants, testing of applicants skills and attributes, panels with appropriate expertise and judgment, quality decision-making, commitment to diversity and fairness, and commitment to quality, best practice processes that present a professional image. Recruitment has always been key to organizations retaining their competitive edge. Having the right processes can help you select the best potential candidates. Recruiting a new team member should be underpinned by a clear definition of the requirements of the role. The requirements set out the knowledge skills and Behaviour required and as such provides a set of criteria against which you can assess candidates and avoid attracting inappropriate candidates. However, you may also need to consider and identify: Qualifications or training that candidates should have undertaken, Particular experience/s that you require for example categories of work or organizations, types of achievements and activities previously undertaken, and Special requirements perhaps relating to working conditions (hours, locations, mobility etc). Recruiting Financial Advisors is very important to the company to increase their sales. They are the persons who promote insurance policies in front of the people. They are convincing people to take policies of their company. Therefore recruiting Financial Advisors is necessary and the recruited persons should be interested to do sales.

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BIBLIOGRAPH Y

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BIBLIOGRAPHY
1) Kothari, C.R., Research Methodology, New Delhi, New Age International (P) Limited, Publishers, 2004. 2) Dr. T. K. Mahendra Babu, C. Swarnalatha Raju., Human Resource Management, Chennai, Anuradha Publications, 2007. 3) Dr. P. Subba Rao, Human Resource Management Text & Cases, Anantapur. 4) http://www.answers.com/recruitment-method 5) http://www.google.com

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APPENDIX

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QUESTIONNAIRE
(Please express up your opinion by putting ( ) Marks)

1. Name 2. Designation 3. Experience 4. Gender

: : : : Male / Female When the need arises

5. How often you recruit people for financial advisor? Yearly Monthly Weekly

6. What is the current recruitment method that is followed by unit managers to recruit financial advisors? Tele Other Reference Advertisement Calling Activities 7. Which source do you think is best suited for recruiting financial advisors? Internal Sources External Sources Both

8. Which sector people are effective for financial advisors? Retired Persons House Wives Students Second Income People

9. Do you agree that educational qualification influence the recruitment process? Strongly agree Agree Neither Agree Nor Disagree Disagree Strongly Disagree

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10. Do you agree that all recruited persons cleared the IRDA exams? Strongly agree Agree Neither Agree Nor Disagree Disagree Strongly Disagree

11. Do you think that all the people who are selected as financial advisors are doing their job effectively? Yes No

12. Which sector of people those who are selected as financial advisors are performing their best in sales? Retired Persons House Wives Students Second Income People

13. Rank the skill required from financial advisors? Communication Skill Convincing Skill Management Skill Building Rapport

14. Do you provide training for those who are selected for financial advisors? Yes No

15. Do all the selected advisors attend training? Yes No

16. Do you believe that the training programs are helping financial advisors to improve their sales skills? Yes No

17. Suggest some of the screening method that can be used for effective recruitment ____________________________________________________________________

THANK YOU FOR YOUR CO-OPERATION