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ACN COLLEGE OF ENGEERING

& MANAGEMENT STUDIES

SUMMER TRAINING REPORT

Topic: Attrition A MajorChallenge for Insurance

Companies.

UNDER THE ABLE SUPERVISION

OFAruneet M. Thacore

HR ManagerReliance Life Insurance Co. Ltd.

Lucknow


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COMPILED BY: Naila Zia(MBA)

DECLARATION

I hereby declare that the Project entitled ATTRITION-A MAJORCHALLENGE FOR INSURANCE COMPANIES. is an originalwork done by me under the esteemed guidance of

Aruneet.m.thacore,Assistant Human Resource manager,Reliance life Lucknow in the Partial Fulfillment of degree ofMaster of Business Administration of Uttar Pradesh technicaluniversity.


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Date:Place: NailaZia

ACKNOWLEDGEMENT

I am giving my sincere thanks to my project guide Mr. Aruneet MosesThacoreFor my project topic Attrition is a major challenge for insuranceindustry.I am also thankful to Mr. Santanu Basu for guiding me and helping to crossevery difficult mile stones in this project. With the sincere help from myseniors namely Mudit swaroop sir, Arun Rajagopalan sir & Nisha mam I amable to prepare this project. I thank them for their support & inspiration

Last but not least I am grateful to all my colleagues with Reliance lifeInsurance for helping to complete the project Attrition is a major challengefor insurance industry.


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TABLE OF CONTENTAttrition-A Major Challenge for insurance industry.

PART-1INSURANCE:

History of insurance.

Meaning of Insurance.

Principles of Insurance.

Importance of insurance.

Life insurance

PART-2RELIANCE LIFE INSURANCE:

Founder

Chairman

President


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PART-3ATTRITION-HUMAN RESORCE:

Human resource

Human resource management

Functions of human resource management

Attrition

Attrition Rate

Attrition in Insurance sector

EXECUTIVE SUMMARY

Attrition-A Major Challenge for insurance industry

I Am Thankful to Mr. Aruneet.M.Thacore , Asst. Manager (HumanResource), Reliance Life For Giving me Guidance For the project Attrition-

A major challenge for insurance industry.Human resource is the most critical part for any organization & LifeInsurance industry is evaluating and taking faster stride towards Growth .inthis growing time it is becoming critical to maintain highest level of humanresource management for insurance companies.Sustaining talent is always been the most critical part for human resourcedepartment ,the midst of the competition Life insurance companies arebecoming more and more vulnerable for talent retention.

Attrition always happens because of the following reasons Carrier growth of employee.

Competition

Job satisfaction

Location

Family/Personal Reasons, etcIt is becoming very meaningful for every human resource personnel todelicately handle each and every resource.


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The Average rate of Attrition is @18%, so reliance should make betterpolicies to be one of the best employers of the life insurance industry.Once famously said by Mr. Hewlett It is not the system or Machine whomake a company successful, it is human who make it

PROFILE OF THE COMPANY

COMPANY NAME:

Reliance Life Insurance Company Limited

HEAD OFFICES:

Reliance Life Insurance Company LimitedMidas, Sahara Plaza Complex,

Next to Kohinoor Hotel, Andheri,


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Kurla Road, Andheri-East,Mumbai-400 059, Maharashtra.

ZONAL OFFICE(NORTH CENTRAL):

Reliance Life Insurance Company LimitedReliance House, 2nd Floor, 118, TCV,Vibhuti Khand, Behind Wave Multiplex,Gomti Nagar,Lucknow-226 010, U. P.


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INSURANCE

A BRIEF HISTORY OF THE INSURANCESECTOR

The business of life insurance in India in its existing form started in India in

the year 1818 with the establishment of the Oriental Life InsuranceCompany in Calcutta.Some of the important milestones in the life insurance business in Indiaare:


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1912: The Indian Life Assurance Companies Act enacted as the firststatute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable thegovernment to collect statistical information about both life and non-

life insurance businesses.

1938: Earlier legislation consolidated and amended to by theInsurance Act with the objective of protecting the interests of theinsuring public

1956: 245 Indian and foreign insurers and provident societies takenover by the central government and nationalized. LIC formed by an

Act of Parliament, viz. LIC Act, 1956, with a capital contribution ofRs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace itsroots to the Triton Insurance Company Ltd., the first general insurancecompany established in the year 1850 in Calcutta by the British.

MEANING OF INSURANCE

Insurance is a social device providing financial compensation for theeffects of misfortune, the payments being made from the accumulatedcontributions if all parties participating in the scheme. D.H. HanselInsurance is a form of contract under which one party sum of money toanother party (insured) to make good for loss, damage or injury to


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something of value, in which the insured has financial interest,, as a resultof some uncertain event..The above definitions scarify the nature of insurance. Insurance is a deviceby which a loss likely to be caused by an uncertain event is spread over alarge number of persons who r exposed to it and who voluntarily join to

insure themselves against such an event. The agency which helps inentering into this aim arrangement is known as insurer or the insurancecompany. The person who gets his property / life insured is known asinsured. The arrangement or contract, which in writing, is known as apolicy. The consideration in return of which he insurer undertakes to makegood loss or give a certain amount in case of life insurance is known aspremium.Role and Importance of InsuranceInsurance is an important aid to commerce and industry. Every businessenterprise is exposed to a large number of risks and uncertainties to itspremises, plant and machinery, raw materials, finished stock and other

things. Goods may be damaged or lost in the process of transportation, andmay be destroyed due to fire or flood while in storage. As a matter of fact,business means risks and uncertainties. Some of the risks can be avoidedby timely precautions, but some are unavoidable and are beyond thecontrol of a businessman. Despite utmost care, accidents, thefts and firecannot be prevented totally. The next best protection is insurance whichminimizes the severity of the effects of various kinds of risks.Insurance provides the following services to the insured persons inparticular and the society in general:

1. Transfer of risks2. Security3. Diffusion of risks4. Investment5. Growth of trade6. Social benefit


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INSURANCE PRINCIPLES

Main principles of Insurance: Utmost good faith

Indemnity Subrogation Contribution Insurable Interest Proximate Cause

Utmost Good Faith (Uberrimae Fides)

As a client it is your duty to disclose all material facts to the risk being

covered. A material fact is a fact which would influence the mind of aprudent underwriter in deciding whether to accept a risk for insurance andon what terms. The duty to disclose operates at the time of inception, atrenewal and at any point mid term.IndemnityOn the happening of an event insured against, the Insured will be placed inthe same monetary position that he/she occupied immediately before theevent taking place.

In the event of a claim the insured must: Prove that the event occurred

Prove that a monetary loss has occurred Transfer any rights which he/she may have for recovery fromanother source to the Insurer, if he/she has been f5ully indemnified.

Subrogation

The right of an insurer which has paid a claim under a policy to step intothe shoes of the insured so as to exercise in his name all rights he mighthave with regard to the recovery of the loss which was the subject of therelevant claim paid under the policy up to the amount of that paid claim.The insurers subrogation rights may be qualified in the policy.

In the context of insurance subrogation is a feature of the principle ofindemnity and therefore only applies to contracts of indemnity so that itdoes not apply to life assurance or personal accident policies. It is intendedto prevent an insured recovering more than the indemnity he receivesunder his insurance (where that represents the full amount of his loss) andenables his insurer to recover or reduce its loss.


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Contribution

The right of an insurer to call on other insurers similarly, but not necessarilyequally, liable to the same insured to share the loss of an indemnitypayment i.e. a travel policy may have overlapping cover with the contentssection of a household policy. The principle of contribution allows theinsured to make a claim against one insurer who then has the right to callon any other insurers liable for the loss to share the claim payment.

Insurable Interest

If an insured wishes to enforce a contract of insurance before the Courts hemust have an insurable interest in the subject matter of the insurance,which is to say that he stands to benefit from its preservation and will sufferfrom its loss.In non-marine insurances, the insured must have insurable interest whenthe policy is taken out and also at the date of loss giving rise to a claimunder the policy.

Proximate Cause

An insurer will only be liable to pay a claim under an insurance contract ifthe loss that gives rise to the claim was proximately caused by an insuredperil. This means that the loss must be directly attributed to an insured perilwithout any break in the chain of causation.


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MAJOR TYPE OF INSURANCE

In India Insurance companies are working in 3 mainbranches

1. Life Insurance.2. General Insurance

INSURANCE

LIFE

INSURANCE

GENERAL

INSURANCE

HEALTH

INSURANCE


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3. Health Insurance.

LIFE INSURANCE

Life Insurance is a kind of agreement made among the owner of the policyand the insurer, which says that the issuer would pay a sealed amount ofmoney after the death of the policyholder. In return, the policy payer wouldhave to pay a specified amount of money, known as premium regularly.The Life Insurance covers both natural death and accidental death.There are many kinds of Life Insurance Policies in the Market. Some ofthem are:

Temporary Life Insurance: Temporary Life InsurancePolicy offers Life Insurance coverage for a limited period of time.Temporary Life Insurance premium buys protection for nothing else butdeath.

Permanent Life Insurance: Permanent Life Insuranceis a kind of insurance that stays valid until the policy gains maturity or the

policy holder fails to pay the premium within due date. The permanent LifeInsurance can be of three types: Whole Life, Universal Life andEndowment.

Accidental Death Life Insurance: AccidentalDeath Life Insurance is a limited policy, which is decorated to cover the LifeInsurance policy holder at the time of his death due to some accidents. Thisalso offers protection to those who loose his or her body parts by anaccident.For todays fast paced life it is essential to have a Life InsuranceImportance of Life Insurance


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IMPORTANCE OF LIFE INSURANCE

Life insurance renders a variety of services to individuals, to groups, tobusiness houses and to society in general. The important contributionsmade by life insurance are follows:

1. Protection against untimely death- the valueof life insurance is very great to an individual. Every man of family,rich or poor, wishes his wife and children to be happy. He planselaborately for them with respect to their education, marriage andgeneral welfare. But if he is snatched away before the expectedtime, his dependants are compelled to put up with unthinkablehardships. If he has taken a whole life policy , there will be aconsiderable relief to the dependants.

2. Provision of old age- life insurance also makes goodprovision for old age. Many persons might be earning quite a goodincome during their youth and enjoying a high standard of living. Butwith the coming of old age, the earning capacity dwindles and theyfind it too difficult to maintain the same standard. Endowmentinsurance affords a comfortable support in old age and the memory

is available just when it is most urgently need.

3. Promotion of thrift-Life insurance is one of the mostimportant agencies for the promotion of savings. It fosters


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compulsory savings as the premium assumes the characteristic of adebt or an obligation to be met. If any premium is not paid on thedue date, the policy may lapse. The fear makes the insured pay thepremium regularly.

4. Sense of security- The policy holder and his dependentshave a sense of security as their future is financially secured. If thepolicy holder survives, he will get the stipulated money from theinsurance company during his old age and if dies, his dependantswill get money from the insurance company.

5. Commercial value- The use of life insurance in the fieldof business and commerce has greatly increased in recent years. Itserves as a basis of credit. When a life policy after remaining in

force for a good time acquires a cash value, it can be furnished as acollateral security to acquire a ready loan in times of stringency.

6. Social Value- If the earning member of a family undertakesa suitable life insurance policy; it will make the family self-reliant incase the earning member dies. The will relieve the society of a greatproblem of supporting such families..

7. Funds for Investment- The life insurance companiesaccumulate vast sums in the form of premium .The fund has rightlybeen called a vast economic reservoir which furnishes a goodmeans of investment for the economic development of the country.


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RELIANCE

LIFE

INSURANCE.

Anil Ambani, Chairman


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Regarded as one of the foremost corporate leaders of contemporary India,Shri

Anil D Ambani, 50, is the chairman of all listed companies of the RelianceADA

Group, namely, Reliance Communications, Reliance Capital, RelianceEnergy,

Reliance Natural Resources and Reliance Power.

He is also Chairman of the Board of Governors of Dhirubhai AmbaniInstitute of

Information and Communication Technology, Gandhi Nagar, Gujarat. Healso

Held the post of Vice Chairman and Managing Director in RelianceIndustries

Limited (RIL), India's largest private sector enterprise. Anil D Ambanijoined

Reliance in 1983 as Co-Chief Executive Officer, and was centrally involvedin

Every aspect of the company's management over the next 22 years.


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Vision & Mission

Vision:

Empowering everyone live their dreams.

&

Mission:

Create unmatched value for everyone through dependable, effective,transparent

and profitable life insurance and pension plans.

Goals:

Reliance Life Insurance would strive hard to achieve the 3 goals mentionedbelow:

Emerge as transnational Life Insurer of global scale and standard

Create best value for Customers, Shareholders and all Stakeholders

Achieve impeccable reputation and credentials through bestbusiness practices


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Founder

Few men in history have made as dramatic a contribution to their countryseconomic fortunes as did the founder of Reliance, Shri. Dhirubhai H

Ambani.Fewer still have left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describingthe

true genius of Dhirubhai: The corporate visionary, the unmatched strategist,theproud patriot, the leader of men, the architect of Indias capital markets, thechampion of shareholder interest.

But the role Dhirubhai cherished most was perhaps that of Indias greatestwealth creator. In one lifetime, he built, starting from the proverbial scratch,Indias largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seedcapital of barely US$ 300 (around Rs 14,000). Over the next three and ahalf decades, he converted this fledgling enterprise into a Rs 60,000 crorecolossusan achievement which earned Reliance a place on the globalFortune 500 list, the first ever Indian private company to do so.Dhirubhai is widely regarded as the father of Indias capital markets. In1977, when Reliance Textile Industries Limited first went public, the Indian


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stock market was a place patronized by a small club of elite investors whichdabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-timeretail investors to participate in the unfolding Reliance story and put their

hard-earned money in the Reliance Textile IPO, promising them, inexchange for their trust, substantial return on their investments. It was to bethe start of one of great stories of mutual respect and reciprocal gain in theIndian markets.Under Dhirubhais extraordinary vision and leadership, Reliance scriptedone of the greatest growth stories in corporate history anywhere in theworld, and went on to become Indias largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of

the ordinary shareholder uppermost in mind, in the process makingmillionaires out of many of the initial investors in the Reliance stock, andcreating one of the worlds largest shareholder families.


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Achievements

RLIC closed the last financial year with a New Business Premiumof Rs 3513 Crores.

For 3 successive years, since inception, the Company has beenamongst the fastest growing Companies in the Life InsuranceIndustry achieving a growth rate of 28% in the last financial yearagainst a market growth of -6%. In the Individual Business segment,the company achieved a growth rate of 59% in terms of WRPagainst the private industry growth of 1%.

Reliance Life has been one of the fastest gainers in market sharegrowing from 1.9% amongst private players in Mar'06 to 10.3% as ofMar'09. This has resulted in the Company growing to becoming the 4th largest private player in just two years starting at position of

11.

The Company has been the fastest company to reach the 3 millionpolicy mark and was the 3rd largest private insurerin terms ofPolicy count in 2008-09


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Reliance Life has accomplished a large distribution ramp-up in theIndustry in a short span of time by opening 1145 branches in justover 2 year.

RLIC continues to be amongst the foremost Life Insurancecompanies in India to be certified ISO9001:2000 for all theprocesses.

Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007-

Certificate of Merit in the Financial Services category byCouncil for Fair Business Practices (CFBP).

The Company has also won the DL Shah Quality Council of

India Commendation Award in the services category in feb 2008

for its work on promoting 'self help channels for service'


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Reliance Life is anchored by a team of experienced and

committed visionaries who are dedicated towards scaling the

company to greater heights through innovation and

excellence; thereby creating value for all our stakeholders

Chairman's Profile

Regarded as one of the foremost corporate leaders of contemporary India,Anil Dhirubhai Ambani is the Chairman of all listed Group companies,namely: Reliance Communications, Reliance Capital, Reliance Energy andReliance Natural Resources Limited.


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Till recently, he also held the post of Vice Chairman and Managing Directorin Reliance Industries Limited (RIL), India's largest private sectorenterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and

was centrally involved in every aspect of the company's management overthe next 22 years.

He is credited with having pioneered a number of path-breaking financialinnovations in the Indian capital markets. He spearheaded the country'sfirst forays into the overseas capital markets with international publicofferings of global depositary receipts, convertibles and bonds. Starting in1991, he directed Reliance Industries in its efforts to raise over US$ 2billion. He also steered the 100-year Yankee bond issue for the company inJanuary 1997.

He is a member of:

Wharton Board of Overseers, The Wharton School, USA

Central Advisory Committee, Central Electricity Regulatory

Commission Board of Governors, Indian Institute of Management,

Ahmedabad Board of Governors Indian Institute of Technology, Kanpur


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In June 2004, he was elected for a six-year term as an independentmember of the Rajya Sabha, Upper House of India's Parliament a positionhe chose to resign voluntarily on March 25, 2006.

Awards and Achievements:

Conferred the 'CEO of the Year 2004' in the Platt Global EnergyAwards

Rated as one of 'India's Most Admired CEOs' for the sixthconsecutive year in the Business Barons - TNS Mode opinion poll,2004

Conferred 'The Entrepreneur of the Decade Award' by the Bombay

Management Association, October 2002 Awarded the First Wharton Indian Alumni Award by the WhartonIndia Economic Forum (WIEF) in recognition of his contribution tothe establishment of Reliance as a global leader in many of itsbusiness areas, December 2001

Selected by Asia week magazine for its list of 'Leaders of theMillennium in Business and Finance' and was introduced as the only'new hero' in Business and Finance from India, June 1999

His Inspiration:The strongest influence in Anil's life is his father, Shri Dhirubhai Ambani.Here are a few quotes from the legend himself.


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"Give the youth a proper environment. Motivate them. Extend them thesupport they need. Each of them have infinite source of energy. They willdeliver."

"Growth has no limit at Reliance. I keep revising my vision. Only when you

dream it you can do it."

Malay Ghosh (President, Reliance Life Insurance)


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Malay is the Executive Director and President of Reliance Life Insurance

Company

Malay leads all activities at Reliance Life Insurance Company Limited andhis key focus is on rapid expansion of all channels and accelerating the

Companys growth trajectory. Malay has over 24 years of work experiencein the insurance industry. He has worked for 17 years with LIC across

various functions and for 7 years with Bajaj Allianz Life Insurance where hewas last designated Head of Sales.

Malay holds a Masters degree in statistics from Indian Statistical Institute,Kolkata

ARTICLES

Reliance Life Insurance crosses sixmillion policies


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Achieves 6 million policies landmark in less than five yearsAims 10 per cent overall market share in 3 years, to be the largest private

sector insurerTargets overall annual business premium of Rs 20,000 crore and AUM of

Rs 30,000 crore in next two yearsPlans to tap growing health insurance segments

Shimla, Himachal Pradesh, July 9, 2010

Reliance Life Insurance Company Limited (RLIC), a part of Reliance AnilDhirubhai Ambani Group, today announced that it has crossed the 6 millionpolicies milestone in less than five years, making it one of the fastestprivate life insurers to record this milestone in such a short span of time. This was announced by Mr. Malay Ghosh, President and ExecutiveDirector, Reliance Life Insurance here today.

The 6 million policies landmark in less than five years of operations is atestimony to the trust and confidence our customers have bestowed in thecompany and its offerings said Mr. Ghosh.

The company also said that it issued over 2.3 million policies in 2009-10,which is the largest new business addition by the company in any fiscalyear.

We clocked over 2.3 million policies in a single year, the highest by thecompany in any one year. Our rural presence added significantly to thismilestone. We plan to strengthen our product portfolio and distributionreach in the coming years to increase this number substantially said Mr.Ghosh

Elaborating on the business plan for the company in next few years, Mr.Ghosh said the company is targeting a 10 per cent overall market share inthe next three years to become one of the largest private sector insurers.

We hope to achieve an overall premium of Rs 20,000 crore and more thandouble our assets under management to cross over Rs 30,000 crore in the

next two fiscal, said Mr. Ghosh

Apart from a healthy mix of unit linked and traditional products, RLIC plansto also focus on evolving health insurance segments in the country.

''Health insurance sector offers sizeable growth opportunity. We are


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strengthening our health insurance portfolio with innovative products thatinclude total reimbursable health expenses, individual and family floater onboth group and individual product platforms, long-term care among others.We aims to be amongst the top three health insurers by 2012,'' said Mr.Ghosh.

At present Reliance Life Insurance have an AUM of Rs 13677 crore and amarket share of 10.2 per cent amongst private life insurers (as on March31, 2010). The company operates through strong distribution network of1,247 branches with over 1,95,000 agents.


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Work at Reliance

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd.

of the Reliance - Anil Dhirubhai Ambani Group. Reliance Life Insurance isanother step forward for Reliance Capital Limited to offer need based LifeInsurance solutions to individuals and Corporates.

Reliance Capital Ltd. is one of Indias leading and fastest growing privatesector financial services companies, and ranks among the top 3 privatesector financial services and banking companies, in terms of net worth.

Reliance Capital Ltd. has interests in asset management, life and generalinsurance, private equity and proprietary investments, stock broking and

other financial services.

Our Belief

We believe that you are the force behind the company. And with yourgrowth will come the drive that can take this company to higher and

stronger levels. Creating a huge wave of satisfaction, not only for ourcustomers and us, but for your career as well.

Why Reliance?

Whatever your career goal, Reliance Life Insurance is a company bigenough for your dreams. We, along with the other businesses of RelianceCapital, enjoy a strong position in the financial services category. And this

may be the place where you can have the career you always wanted.

We endeavor to be unique in creating an environment that makes pittingyour skills against the world a challenging, stimulating and energizingexperience.


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Here, we believe that bigger the challenges that we set for ourselves, thehigher they will take us. And finding resonance with this credo is our ever-increasing workforce

With us you will experience and be a part of

Opportunities for lateral growth within the company

Performance management system based on the balanced scorecardmodel

Exposure to extensive learning and developmental initiatives (thatincludes a state of the art e-learning platform and strategic partnershipswith international leaders for special


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ATTRITION-

HUMAN

RESOURCE


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HUMAN RESOURCE

Human resources are a term used to describe the individuals whocomprise the workforce of an organization, although it is also applied inlabor economics to, for example, business sectors or even whole nations.Human resources is also the name of the function within an organizationcharged with the overall responsibility for implementing strategies and

policies relating to the management of individuals (i.e. the humanresources). This function title is often abbreviated to the initials 'HR'.

Human resources is a relatively modern management term, coined in the1960s.The origins of the function arose in organizations that introduced'welfare management' practices and also in those that adopted theprinciples of 'scientific management'. From these terms emerged a largelyadministrative management activity, co-coordinating a range of workerrelated processes and becoming known, in time as the 'personnel function'.Human resources progressively became the more usual name for thisfunction, in the first instance in the United States as well as multinational

corporations, reflecting the adoption of a more quantitative as well asstrategic approach to workforce management, demanded by corporatemanagement and the greater competitiveness for limited and highly skilledworkers.
http://en.wikipedia.org/wiki/Human_resource_managementhttp://en.wikipedia.org/wiki/Human_resource_management


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BACKGROUND

The use of the term 'human resources' by organizations to describe theworkforce capacity available to devote to the achievement of its strategieshas drawn upon concepts developed in Industrial/OrganizationalPsychology and System Theory. Human resources has at least two relatedinterpretations depending on context. The original usage derives frompolitical economy and economics, where it was traditionally called labor,one of fourfactors of production although this perspective has shifted asa consequence of further ongoing research into more strategic approaches.[1] This first usage is used more in terms of 'human resourcesdevelopment' of the individuals within an organization, although theapproach can also be applied beyond the level of the organization to that ofindustry sectors and nations

The early development of the function can be traced back to at least twodistinct movements. One element has its origins in the late 19th century,where organizations such as Cadburys at its Bourneville factory recognizedthe importance of looking after the welfare of the workforce, and theirfamilies. The employment of women in factories in the United Kingdomduring the First World War lead to the introduction of "Welfare Officers".Meanwhile, in the United States the concept of human resourcesdeveloped as a reaction to the efficiency focus of Taylorism or "scientificmanagement" in the early 1900s, which developed in response to thedemand for ever more efficient working practices within highly mechanizedfactories, such as in the Ford Motor Company. By 1920, psychologists andemployment experts in the United States started the human relationsmovement, which viewed workers in terms of their psychology and fit withcompanies, rather than as interchangeable parts.During the middle of the last century, larger corporations, typically those inthe United States that emerged after the Second World War, recruitedpersonnel from the US Military and were able to apply new selection,training, leadership, and management development techniques, originallydeveloped by the Armed Services, working with, for example, university-based occupational psychologists. Similarly, some leading Europeanmultinationals, such as Shell and Phillips developed new approaches topersonnel development and drew on similar approaches already used inCivil Service training. Gradually, this spread more sophisticated policies
http://en.wikipedia.org/wiki/System_Theoryhttp://en.wikipedia.org/wiki/Political_economyhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Labour_economicshttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Human_resources#cite_note-0%23cite_note-0http://en.wikipedia.org/wiki/Cadburyshttp://en.wikipedia.org/wiki/Bournvillehttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/First_World_Warhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Taylorismhttp://en.wikipedia.org/wiki/Taylorismhttp://en.wikipedia.org/wiki/Ford_Motor_Companyhttp://en.wikipedia.org/wiki/Human_relationshttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Second_World_Warhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Phillipshttp://en.wikipedia.org/wiki/Civil_Servicehttp://en.wikipedia.org/wiki/System_Theoryhttp://en.wikipedia.org/wiki/Political_economyhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Labour_economicshttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Human_resources#cite_note-0%23cite_note-0http://en.wikipedia.org/wiki/Cadburyshttp://en.wikipedia.org/wiki/Bournvillehttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/First_World_Warhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Taylorismhttp://en.wikipedia.org/wiki/Ford_Motor_Companyhttp://en.wikipedia.org/wiki/Human_relationshttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Second_World_Warhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Phillipshttp://en.wikipedia.org/wiki/Civil_Service


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and processes that required more central management via a personneldepartment composed of specialists and generalist teams.The role of what became known as Human Resources grew throughout themiddle of the 20th century. Tensions remained between academics whoemphasized either 'soft' or 'hard' HR. Those professing so-called 'soft HR'

stressed areas like leadership, cohesion, and loyalty that play importantroles in organizational success. Those promoting 'hard HR' championedmore quantitatively rigorous management techniques in the 1960s.In the later part of the last century, both the title and traditional role of thepersonnel function was progressively superseded by the emergence, atleast in larger organizations, of strategic human resources managementand sophisticated human resources departments. Initially, this may haveinvolved little more than renaming the function, but where transformationoccurred, it became distinguished by the human resources having a moresignificant influence on the organizations strategic direction and gainingboard-level representation.
http://en.wikipedia.org/wiki/Leadershiphttp://en.wikipedia.org/wiki/Leadership


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KEY ROLES OF HUMAN RESOURCEMANAGEMENT


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FUNCTIONS OF HUMAN RESOURCE

Industrialrelations

Industrialrelations

Employeeeducation,

training anddevelopment

Employeeeducation,

training anddevelopment

Manpowerplanning

Manpowerplanning

Employeemotivation

Employeemotivation

Recruitmentand selectionof employees

Recruitmentand selectionof employees

Employee

evaluation

Employee

evaluation

FUNCTIONS

OFHUMAN

RESOURCE

FUNCTIONS

OFHUMAN

RESOURCE


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Human Resources may set strategies and develop policies, standards,systems, and processes that implement these strategies in a whole rangeof areas. The following are typical of a wide range of organizations:

Recruitment, selection, and on boarding (resourcing)

Organizational design and development Business transformation and change management Performance, conduct and behavior management Industrial and employee relations Human resources (workforce) analysis and workforce personnel

data management Compensation, rewards, and benefits management Training and development (learning management)

Implementation of such policies, processes or standards may be directlymanaged by the HR function itself, or the function may indirectly supervise

the implementation of such activities by managers, other businessfunctions or via third-party external partner organizations.

KEY ROLES


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Function 1: Manpower planning.

Planning staff levels requires that an assessment of present and futureneeds of the organization be compared with present resources and futurepredicted resources. Appropriate steps then be planned to bring demandand supply into balance.

Function 2: Recruitment and selection ofemployees.

An analysis of the job to be done (i.e. an analytical study of the tasks to beperformed to determine their essential factors) written into a job descriptionso that the selectors know what physical and mental characteristics

applicants must possess, what qualities and attitudes are desirable andwhat characteristics are a decided disadvantage;

Function 3: Employee motivation.

To retain good staff and to encourage them to give of their best while atwork requires attention to the financial and psychological and even

physiological rewards offered by the organization as a continuous exercise .

Function 4: Employee evaluation.

Basically an evaluation / appraisal scheme is a formalization of what isdone in a more casual manner anyway (e.g. if there is a vacancy,discussion about internal moves and internal attempts to put square pegsinto 'squarer holes' are both the results of casual evaluation). Mostmanagers approve merit payment and that too calls for evaluation. Made astandard routine task, it aids the development of talent, warns the inefficient

or uncaring and can be an effective form of motivation.


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Function 5: Employee education, trainingand development.

In general, education is 'mind preparation' and is carried out remote from

the actual work area, training is the systematic development of the attitude,knowledge, skill pattern required by a person to perform a given task or jobadequately and development is 'the growth of the individual in terms of

ability, understanding and awareness'.

Function 6: Industrial relations.

Good industrial relations, while a recognizable and legitimate objective for

an organization, are difficult to define since a good system of industrialrelations involves complex relationships between:

(a) Workers (and their informal and formal groups, i. e. trade union,organizations and their representatives);

(b) Employers (and their managers and formal organizations like trade andprofessional associations);

(c) The government and legislation and government agencies l and'independent' agencies like the Advisory Conciliation and ArbitrationService.


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ATTRITION OF HUMAN RESOURCE

In the best of worlds, employees would love their jobs, like their coworkers,work hard for their employers, get paid well for their work, have amplechances for advancement, and flexible schedules so they could attend topersonal or family needs when necessary. And never leave.

But then there's the real world. And in the real world, employees, do leave,either because they want more money, hate the working conditions, hatetheir coworkers, want a change, or because their spouse gets a dream jobin another state. So, what does all that turnover cost? And what employeesare likely to have the highest turnover? Who is likely to stay the longest?

Staff attrition (or turnover) and absenteeism represent significant costs tomost organizations. It is odd, therefore, that many organizations neithermeasure such costs nor have targets or plans to reduce them. Manyorganizations appear to accept them as part of the cost of doing business -a sign of increasing job mobility and decreasing staff loyalty perhaps, amatter to be regretted but just 'one of those things.' They add a sum in theirbudgets for 'temp staff' and 'recruitment' and forget about it.

However, it seems to be one of the areas in which HR can make adifference - and one that can be measured in quantifiable, financial termsagainst targets.

An attrition rate in call (or contact) centres has become legendary. Indeed,the attrition rates in some Indian call centers now reach 80%. This is anextreme figure but the average attrition rates in Indian call centers are uparound 30-40%.


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However, it is interesting to note that the attrition rates in India - and thecosts associated - are so high that they can override the benefits of lowerwage costs. While wages in call centres in Indian are less than one-eighthof those in Northern Europe, it has been reported that Hewlett-Packardhave found the cost per 'ticket' (the cost of processing a query) has

doubled "due to the inability of the staff to resolve customer queriesefficiently because of language barriers and inexperience." It is said thatthis increased cost has made HP's move from Ireland to India "completelypointless," and that it can never recover the (substantial) costs of the move.It is further reported that GE Capital has moved a call centre back to

Australia "after staff attrition rates of 70% wiped away any potential costsavings."

The issue is not with the quality or education of the staff - and still less withthe investment in technology. It is simply attrition - people do not stay longenough to be taught or to learn the job. The staff may be cheaper but if

they cannot do the job, what's the point? Managing attrition is not just a'nice thing to do' in Indian call centres. It is the route to their survival.

Far from accepting attrition rates as part of the cost of doing business, it issurely something that all organizations should address, and equally surelyit is an area in which HR can take a lead - measure attrition, seek itscauses, set out solutions and target performance.


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WHAT IS ATTRITION.

"A reduction in the number of employees through retirement, resignation ordeath".

ATTRITION RATE.

The rate of shrinkage in size or number Attrition is beginning tosignificantly affect offshore ROI. Just as businesses faced a scarcity oftalented IT resources during the dotcom era, organizations in offshorecountries such as India are experiencing similar pains. Skilled employeesare hopping from job to job and taking with them the customer knowledgeand technical expertise that any company needs. Their salaries are

increasing, along with their perks, benefits, and bonuses.

CALCULATING EMPLOYEE ATTRITION.

The high attrition rate in the industry has always been the greatest concern,and a subject of much analysis and debate. Organizations use differentmethodologies for calculating their turnover rate. It is a known fact thatturnover calculation is a grey area which does not always depict the truepicture. While a few techniques are common, there are no proven theories.Furthermore, the approach to this calculation might vary from organizationto organization. Disclosure of the figure not only has a direct impact on thebusiness, but also affects employee morale and productivity. Significantly, itmight also trigger off a chain reaction-a high attrition rate will lead to more


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people leaving the organisation, while a lower rate will act as a retentionstrategy. It is not surprising that most industry observers are skeptical whenorganizations disclose their employee turnover.

A high attrition reflects poorly on an organizations ability to hold on to itspeople. Unfortunately, attrition is viewed as a management flaw, when in

fact; it could well be a recruitment error. In some cases it can be simplyseen as an organizations competitor appreciating its quality of hires andthe output, post-training-almost a backhanded compliment!Ideally, attrition should be calculated on a monthly basis for companies thathave over 50 employees for the first five years of its business.Subsequently, a quarterly index should be applied till a company's 10thanniversary. Post this, annual attrition figures should be measured andaccounted for. This is optimal within the services industry as companiestend to have different challenges at different stages of their business life-cycle, and also maturity achieves stability around a company's 10thanniversary.

Formula for Attrition:

While different organizations follow different formulae for calculatingattrition depending on their size and nature of services, some of thecommonly used formulae to calculate attrition are as follows:

1.) Attrition Rate = (No of employees resigned/Average manpower)*100where, Average Manpower = (Opening Manpower + Closing manpower)/2

(opening/closing manpower could be either the calendar year beginning orfinancial year beginning whichever followed)

2.) Attrition = employees left * 100 / (opening balance in a month + number ofemployees joined in a month + number of employees left + no of employeesat the end of the month

REASONS OF ATTRITION

It is not easy to find out as to who contributes and who has the control onthe attrition of employees. Various studies/survey conducted indicates thatevery one is contributing to the prevailing attrition. Attrition does not happenfor one or two reasons. The way the industry is projected and speed atwhich the companies are expanding has a major part in attrition.


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The specific reasons for attrition are varied in nature and it is interesting toknow why the people change jobs so quickly. Even today, the main reasonfor changing jobs is for higher salary and better benefits. While attritioncannot be attributed to employees alone, let us look at some of the possible

reasons:

Organizational matters

The employees always assess the management values, work culture, workpractices and credibility of the organization. The Indian companies do havedifficulties in getting the businesses and retain it for a long time. There arealways ups and downs in the business. When there is no focus and in theabsence of business plans, non-availability of the campaigns makes peopleto quickly move out of the organization.

Working environment

Working environment is the most important cause of attrition. Todays GenNext employees expect a professional approach and an international styleworking environment. They expect a friendly and learning environment.Employees look for freedom, good treatment from the superiors, goodencouragement, friendly approach from one and all, and good motivation.

Job matters

No doubt the jobs today bring lots of pressure and stress is high. Theemployees often switch jobs if there is too much pressure on performanceor any work related pressure. It is quite common that employees are movedfrom one process to another. They take time to get adjusted with the newprocesses while few employees find it difficult to adjust and consequentlyleave. Monotony sets in very quickly and this is one of the main reasons forattrition. Job hopping is very common among youngsters who look at jobsas being temporary. Another commonly looked option is to move to suchother process where there is little or no pressure of sales and meetingservice level agreements (SLA). The employees move out if there arestrained relations with the superiors or with the subordinates or any

slightest discontent.

Salary and other benefits


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Moving from one job to another for higher salary, better positions and betterbenefits are the most important reasons for attrition. The salaries andbenefits offered by MNCs are generally higher than their Indiancounterparts. The employees expect salary revision once in 4-6 months

and if not they move to other organizations.

Personal reasons

The personal reasons are many and only few are visible to us. They varywidely from getting married to relocating for health/family reasons. The nextimportant personal reason is going for higher education. Health is anotheraspect, which contributes for attrition.

Poaching

The demand for trained and competent manpower is very high. Poachinghas become very common. The rise in the number of placement agencieshas led to a boom in poaching. Most of the organizations have employeereferral schemes and this makes people to spread message and referknown candidates from the previous companies and earn too.

Employees advocate

One of the main reasons why employees leave companies is because ofproblems with their managers. An HR professional can be termed anemployees advocate and a bridge between top management andemployees at all levels. There is often a huge gap between HRprofessionals and employees in terms of understanding challenges anddelivering requirements. HR sometimes does not really understand theproblems associated with employees careers and jobs. The companysoverall plans and strategies also depend on HR professionals as they voiceemployees problems and requirements. The HR department should havegenuine interest in the employees welfare; it is responsible for making surethat their expectations are met. By doing this it is easier to meet the

companys business targets.


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ASSOCIATED COST OF ATTRITION

Talent cost: It includes the cost of lost knowledge, skills and

contacts that the person who is leaving is taking with them out ofyour door.

TALENT= KNOWLEDGE+SKILLLOSS OF TALENT= KNOWLEDGE+SKILL+TIME+PROJECT

COST


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Recruitment cost:

-The cost of advertisements; agency costs; employee referral costs;internet posting costs.-Calculate the cost of the manager who has to understand what workremains, and how to cover that work until a replacement is found.-Cost of the various candidate pre-employment tests to help assesscandidates' skills, abilities, aptitude, attitude, values and behaviors.

Training cost:-It includes the cost of orientation in terms of the new person's salaryand the cost of the person who conducts the orientation.-It also consists of the training.-Calculate the cost of various training materials needed including

company product manuals, computer or other technology equipmentused in the delivery of the training.

Motivational cost: It refers to the cost arises because ofmotivating the other employees to retain them in the organization interms of increasing their salary and time.

Lost Productivity Costs: As the new employee is learningthe new job, the company policies and practices, etc. they are notfully productive.

ATTRITION IN INSURANCE INDUSTRY


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While job attrition rates ranging between 15 per cent and 20 per cent is

commonplace in the software sector, these pale in comparison to the kindof turnover that the insurance industry witnesses with its agency force.Conservative estimates put the attrition rates at 35-40 per cent.The opening up of the sector five years ago provided insurance agents withnew opportunities and an image makeover as "life insurance advisors".But little has changed in the basic nature of the business - insurance stillneeds to be sold to a reluctant populace. Most agents or advisors who joinin enthusiastically, spurred by dreams of "working at one's own hours,getting full reward for the hard work" and other such motivational spiel,meet reality soon enough. Once the initial list of potential customers suchas close relatives, friends and neighbors is exhausted, the climb for an

agent is uphill.When the rejections start and the doors start getting banged in the face,new agents confront failure. The dropouts begin. Most people think thatthey can make a lot of money in a short span of time. Besides, one has toacknowledge that it is a high-pressure job. Sustenance requires constantnetworking and acquiring new relationships for your business. This requires


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a lot of discipline.Insurance companies believe that adequate training will help to contain theproblem in some measure. In a business such as insurance one has toaccept the fact that 20 per cent of the work force will bring in 80 per cent oftheir business.

Hiring from each other is a common practice amongst insurancecompanies. Employees, especially in middle and junior levels of the salesfunction, tend to move amongst insurance companies. Availability of qualitytalent is still scarce. Given the huge demand for talent, and since not all ofthis requirement can be met by fresher, companies tend to poach fromcompetitors.

Attrition rate in insurance industry is standing at 18%. But real attrition ismore at bottom level rather than the top level. As per the report fromGartner the top level and middle management attrition is at 4% while thelower level attrition is at 40%. Secondly due to nature of insurance product,this is a push product so the sales attrition rate is higher than any other

department. Retaining the talent is much more important as the insuranceindustry is having less talented sales force.

The costs which are associated with attrition are too high to bear for acompany. Some of the costs are mentioned in detail.

Costs Due to a Person Leaving

1. Calculate the cost of the person(s) who fills in while the position isvacant. Calculate the cost of lost productivity at a minimum of 50%of the person's compensation and benefits cost for each week theposition is vacant, even if there are people performing the work.Calculate the lost productivity at 100% if the position is completelyvacant for any period of time.

2. Calculate the cost of conducting an exit interview to include the timeof the person conducting the interview, the time of the personleaving; the administrative costs of stopping payroll benefitdeductions, benefit enrollments.

3. Calculate the cost of the manager who has to understand what workremains, and how to cover that work until a replacement is found.

4. Calculate the cost of training your company has invested in thisemployee who is leaving.

5. Calculate the impact on departmental productivity because theperson is leaving. Who will pick up the work, whose work will suffer,what departmental deadlines will not be met or delivered late.

6. Calculate the cost of lost knowledge, skills and contacts that theperson who is leaving is taking with them out of your door. Use a


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formula of 50% of the person's annual salary for one year of service,increasing each year of service by 10%.

7. Subtract the cost of the person who is leaving for the amount of timethe position is vacant.

Recruitment Costs

1. The cost of advertisements; agency costs; employee referral costs;internet posting costs.

2. The cost of the internal recruiter's time to understand the positionrequirements, develop and implement a sourcing strategy, reviewcandidates backgrounds, prepare for interviews, conduct interviews,prepare candidate assessments, conduct reference checks, makethe employment offer and notify unsuccessful candidates. This canrange from a minimum of 30 hours to over 100 hours per position.

3. Calculate the cost of the various candidate pre-employment tests to

help assess a candidate' skills, abilities, aptitude, attitude, valuesand behaviors.

Training Costs

1. Calculate the cost of orientation in terms of the new person's salaryand the cost of the person who conducts the orientation. Alsoinclude the cost of orientation materials.

2. Calculate the cost of departmental training as the actualdevelopment and delivery cost plus the cost of the salary of the newemployee. Note that the cost will be significantly higher for some

positions such as sales representatives and call center agents whorequire 4 - 6 weeks or more of classroom training.

3. Calculate the cost of the person(s) who conduct the training.4. Calculate the cost of various training materials needed including

company or product manuals, computer or other technologyequipment used in the delivery of training.

Lost Productivity Costs

As the new employee is learning the new job, the company policies andpractices, etc. they are not fully productive. Use the following guidelines to

calculate the cost of this lost productivity:

1. Upon completion of whatever training is provided, the employee iscontributing at a 25% productivity level for the first 2 - 4 weeks. Thecost therefore is 75% of the new employees full salary during thattimeperiod.


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2. During weeks 5 - 12, the employee is contributing at a 50%productivity level. The cost is therefore 50% of full salary during thattimeperiod.

3. During weeks 13 - 20, the employee is contributing at a 75%productivity level. The cost is therefore 25% of full salary during that

timeperiod.4. Calculate the cost of mistakes the new employee makes during thiselongated indoctrination period.

New Hire Costs

1. Calculate the cost of bring the new person on board including thecost to put the person on the payroll, establish computer andsecurity passwords and identification cards, telephone hookups, costof establishing email accounts, or leasing other equipment such ascell phones, automobiles.

2. Calculate the cost of a manager's time spent developing trust andbuilding confidence in the new employee's work.

Lost Sales Costs

1. Calculate the revenue per employee by dividing total companyrevenue by the average number of employees in a given year.Whether an employee contributes directly or indirectly to thegeneration of revenue, their purpose is to provide some defined setof responsibilities that are necessary to the generation of revenue.Calculate the lost revenue by multiplying the number of weeks the

position is vacant by the average weekly revenue per employee.

As a company reliance has some how manage to retain its topmanagement nd middle management. But the real problem is its salesforce. Its still at staggering 45%.In this report my studies are about the reason of attrition. There are certainreasons which I have found during my research process which amazed mea lot. There are certain hidden facts that I had never thought of but duringthe course of time I get know about some very interesting fact. During myproject y objective was to investigate the reason of high rate of attrition.. To investigate the impact of attrition of one employee on other

employees. To understand the different way to retain the employees.The assumed sample size of my survey was 5. And the research wascompletely based on the primary data as well secondary data. And after theanalysis of both the data the conclusion is drawn at last.The type of research that I had taken was exploratory type as well as


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descriptive type. Like in case of identifying the company policy regardingretaining employee was descriptive and investigating the employeesopinion the research type was definitely be exploratory type.Calculation of attrition rate of the company{(No. Of attritions x 100) / (Actual Employees + New Joined)} /100.

Above is the formula given which I have used to find out the attrition rate ofthe company? In the end pages of the report you get to know attrition rateof this company.

Reasons for attrition in RLIC:

It is not easy to find out as to who contributes and who has the control onthe attrition of employees. Survey conducted indicates that every one iscontributing to the prevailing attrition. Attrition does not happen for one or

two reasons. The way the industry is projected and speed at which thecompany is expanding has a major part in attrition.

Organizational matters:

The employees always assess the management values, work culture, workpractices and credibility of the organization. The Indian companies do havedifficulties in getting the businesses and retain it for a long time. There arealways ups and downs in the business. When there is no focus and in theabsence of business plans, non-availability of the campaigns makes people

to quickly move out of the organization.

Working environment:

Working environment is the most important cause of attrition. Employeesexpect very professional approach and international working environment.They expect very friendly and learning environment. It means bossism;rigid rules and stick approach will not suit the call center. Employees lookfor freedom, good treatment from the superiors, good encouragement,friendly approach from one and all, and good motivation.

Job matters:

No doubt the jobs today bring lots of pressure and stress is high. Theemployees leave the job if there is too much pressure on performance orany work related pressure. It is quite common that employees are moved


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from one process to another. They take time to get adjusted with the newcampaigns and few employees find it difficult to get adjusted and they leaveimmediately. Monotony sets in very quickly and this is one of the mainreasons for attrition. Youngsters look jobs as being temporary and theyquickly change the job once they get in to their own field. The other option

is to move to such other process work where there is no pressure of salesand meeting service level agreements (SLA). The employees move out ifthere are strained relations with the superiors or with the subordinates orany slightest discontent.

Salary and other benefits:

Moving from one job to another for higher salary, better positions and better

benefits are the most important reasons for attrition. The salary and offeredfrom MNC companies in Bangalore, Delhi and Mumbai have gone up veryhigh (Rs 15000 to Rs 18000 per month) and it is highly impossible forIndian companies to meet the expectation of the employees. Theemployees expect salary revision once in 4-6 months and if not they moveto other organizations.

Personal reasons:

The personal reasons are many and only few are visible to us. Theforemost personal reasons are getting married or falling in love or changeof place. The next important personal reason is going for higher education.

Health is another aspect, which contributes for attrition. Employees do getaffected with health problems.

Poaching:

The demand for trained and competent manpower is very high. Poachinghas become very common. The other insurance companies target RLIC

employees. The placement agencies have good days for doing morebusiness.

The employees with 4-6 months experience have very good confidenceand dare to walk out and get a better job in a week's time. Most of theorganizations have employee referral schemes and this makes people to


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spread message and refer the know candidates from the previouscompanies and earn too.

Employees advocate:

One of the main reasons why employees leave RLIC is because ofproblems with their managers. An HR professional can be termed anemployees advocate and a bridge between top management andemployees at all levels. There is a huge gap between HR professionals andemployees in terms of understanding challenges and deliveringrequirements. HR has not really understood the problems associated withemployees careers and jobs. The companys overall plans and strategiesalso depend on HR professionals as they voice employees problems andrequirements. The HR department should have genuine interest in theemployees welfareit is responsible for making sure that theirexpectations are met. By doing this it is easier to meet the companys

business targets.

SUGGESTIONS:To Attract, Retain &Motivate Employees

Anti-poaching agreements Better perks Higher compensation levels Well-laid career plans essential for retaining employees

Better recruiting methods to filter the right people for right places Balance between performance expectations and growth aspirations. Offerperformance feedback and praise good efforts and results. Pay employees fairly and well - then get them to forget about money. Treat each and every employee with respect. Show them that you careabout them as persons, not just as workers. Praise accomplishments and attemptsBoth large and small , at least 4times more than you "criticize", publicly and in private, verbally and inwriting, promptly (as soon as observed) Clearly communicate goals, responsibilities and expectations. NEVERcriticize in public redirect in private.

Recognize performance appropriately and consistently: Rewardoutstanding performance (e.g., with promotions and opportunities) Do nottolerate sustained poor performance coach and train or remove! Involve employees in plans and decisions, especially those that affectthem. Solicit their ideas and opinions. Encourage initiative. Create opportunities for employees to learn and grow. Link the goals of


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the organization with the goals of each individual in it. Actively listen to employees concerns both work-related and personal. Share information promptly, openly and clearly. Tell the truth withcompassion Celebrate successes and milestones reached organizational and

personal. Create an organizational culture that is open, trusting and fun! Select the right people in the first place through behavior-based testingand competency screening. The right person, in the right seat, on the rightbus is the starting point. Offer an attractive, competitive, benefits package with components suchas life insurance, disability insurance and flexible hours. Provide opportunities for people to share their knowledge via trainingsessions, presentations, mentoring others and team assignments. Demonstrate respect for employees at all times. Enable employees to balance work and life. Allow flexible starting times,core business hours and flexible ending times. (Yes, his son's soccer game

is important.) Involve employees in decisions that affect their jobs and the overalldirection of the company whenever possible. Recognize excellent performance, and especially, link pay toperformance. Provide opportunities within the company for cross-training and careerprogression. People like to know that they have room for career movement.

Communicate goals, roles and responsibilities so people know what isexpected and feel like part of the in-crowd. Encourage employees to have good, even best, friends, at work.

Humor - be Happy and Be Healthy Availability of effective leadership


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QUESTIONAIRE


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ATTRITION: MAJORCHALLENGE FOR

INSURANCE

QUESTIONNAIRE:

ATTRITION: A MAJOR CHALLENGE FOR

INSURANCE COMPANIES

A. How many employees are currently working in yourorganization (zone/Region)?

a) Below 100

b) 100-200

c) 200-300


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d) Above 300

B. What is your major source of recruitment?

a) Campus Hiring.

b) Walk-inc) Consultancies.

d) References

C. How many employees are recruited in a month?

a) Below 10

b) 10-20

c) 20-30

d) Above 30

D. How many people resign on an average in a month?a) Below 10

b) 10-20

c) 20-30

d) Above 30

E. What is the major cause employee resignation in your company?

a) Unsatisfactory salary

b) Transfers

c) Better Opportunity

d) Company Culture.

e) Other Cause (please specify) -----------------.

F. What is the major type of exit?

a) Termination/Performance.b) abandonment/Absconding.

c) Resignation.

d) Lay off.

e) Others (please specify) ---------------------.


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G. Attrition is frequent in which age group?

a) 20-30 years

b) 30-35 years

c) 35-45 yearsd) 45 above

H. Which department has highest employee turnover?

a) Sales

b) Operations

c) Human Resource

d) Finance

I. Which quarter has highest attrition rate?

a) 1st quarterb) 2nd quarter

c) 3rd quarter

d) 4th quarter

J. What is the average tenure of employment?

a) 0-3 months

b) 3-9 months

c) 9-12 months

d) Above 12 months

K. What is your main criterion for Recruitment and Selection?

-----------------------------------------------------------------------------.

L. What are the steps taken to over come attrition?

-------------------------------------------------------------------------------------------.


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As per the survey done with 5 major insurance companies this appendixhas been prepared. Which show how the insurance companies in India areperforming, what are their strength in terms of there employees, what arethe attrition rate, their causes etc.

QUES:1


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NO. OF EMPLOYEES 0-100 100-200 200-300 Above300

PERCENTAGE 0 20 20 60

QUES:2

SOURCES OF

RECRUITMENT CAMPUS

WALK-

IN CNSLTNCY REFRNC


0

10

20

30

40

50

60

0-100 100-200

200-300

Above300

EMPLOYEES STRENGHT

0-100

100-200

200-300

Above 300


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RECRUITMENT SOURCES

Campus

Walk-in

ConsultncyRefrences

Campus Walk-in Consultncy Refrences

QUES:3


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RECRUITMENT

RATE 0-10 10-20 20-30 Above30


0

5

10

15

20

25

30

35

40

0-10 10-20 20-30 Above 30

RATE OF RECRUITMENT 0-10

10-20

20-30

Above 30

QUES:4


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RATE OF

RESIGNATION 0-10 10-20 20-30 Above 30


RESIGNATION RATE

0-10 10-20 20-30 Above 30


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QUES:5

CAUSE OF

RESIGNATION SALARY TRANSFER BETTERMENT OTHERS


CAUSES OF RESIGNATION

2 4

80

0

14

SALARY

TRANSFER

BETTERMENT

CULTURE

OTHERS


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QUES:6

TYPE OFEXIT TERMINATION/PERFORMANCE ABANDONMENT/ABSCONDING RESIGNATION LAYOFF

PERCEN

TAGE 2 4 80 14

30

10

50

10

0

5

10

15

20

25

30

35

40

45

50

EXIT TYPE

TERMINATION/PERFOR

MANCE

ABANDONMENT/ABSC

ONDING

RESIGNATION

LAYOFF


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QUES:7

ATTRITION AGE-GROUP 20-30 30-35 35-45 Above 45

PERCENTAGE 95 3 2 0

ATTRITION(AGE GROUP)

0

10

20

30

40

50

60

70

80

90

100

20-30 30-35 35-45 Above 45


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QUES:8

DEPARTMENTAL

TURNOVER SALES OPERATIONS HR FINANCE


80

105 5

0

20

40

60

80

SALES OPERATIONS HR FINANCE

DEPT. TURNOVER

SALES OPERATIONS HR FINANCE


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QUES:9

ATTRITION

QUARTER 1st 2nd 3rd 4th



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ATTRITION QTR.

6020

200

1st

2nd

3rd

4th

QUES:10

EMPLOYMENTTENURE 0-3 Months 3-9 Months 9-12 Months

Above 12Months



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EMPLOYEMENT TENURE

10%

30%

10%

50%

0-3 Months

3-9 Months

9-12 Months

Above 12 Months

Conclusion:


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Human beings are complex personalities. They differ from person toperson. This difference is the result of their attitudes, perceptions, values,norms etc. that they inculcate in the process of socialization with family,society, peer group etc. Hence it is very difficult to predict a common

behavior for surety. This indicates the significance for understandingemployees well. Hence it is very necessary that the employers and themanagers do understand the employees well.The making up and ruining of an individual and that of an organization, alldepends upon the task master- the manager. If every manager realizes this, there is no doubt that the organizationwould break off all its boundaries and emerge successful. In this context itis important that the managers take the following into consideration:1. leading people2. Developing them3. Empowering them

4. Maintaining them Therefore we can say that Attrition is a serious problem that theorganizations face today. This can be reduced if both the management andthe managers realize this. The managers should take in a lead role here.They should be committed to tune and mould people in such a way thatthey best fit the organization. In fact it becomes the duty of every individualmanager to understand his subordinates well. Managers should understandthat their duty is not only restricted to bossing over employees but inunderstanding employees, leading them, developing them, empoweringthem and maintaining them. If this realization bestows on every manager,the organization is sure to succeed. This will help in reducing the attrition

level to a certain extend.

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