SUMMER TRAINING REPORT
EMPLOYEE TURNOVER AND THEIR RETENTION Undertaken at Royal Sundaram Alliance Insurance Company Limited
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Acknowledgment I want to place on record my gratitude to the organization and its people whose generous help and support enabled me to complete this project within the stipulated time period. My special thanks to Mr XYZ, Royal Sundaram Alliance Insurance Company Limited, Gurgaon for his active help, guidance and support in gaining the practical knowledge in HR. I am greatly indebted to all those people who have helped me in some way or other in the completion of the project. I am also grateful to the staff members of Royal Sundaram Alliance insurance company limited for their support and co-operation during the course of my summer training. The Faculty guide Dr. XYZ deserves the praise for their role in shaping this summer training project. In the end, I take the responsibility for all my shortcomings.
Dr. XYZ
XYZ
Professor
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PREFACE In spite of the theoretical knowledge gained through classroom study, a person is incomplete if not subject to practical exposure of real corporate world and may have to face hurdles, which will be difficult to overcome without any first hand experience of business. In this context a project made on any chosen topic has been inculcated within course to make the individual aware of happening of the real business world .The report, entitled “Employee turnover and their Retention “ has been done by me at Royal Sundaram Alliance Insurance Company Limited. As employees are the bases for company so retention of employees is a major focus for HR department. The management should identify the important factors that affect retention and should take necessary measures to improve these. Also, the management should take appropriate measure to identify the reasons of employee voluntarily leave. It is only the employees that implement and give tangibility to the corporate mission. In other words if it is the highest rung in the corporate hierarchy that has ideas, it is the employees’ rung that has the chisel to bring the vision to life. In the best of worlds, employees would love their jobs. Like their co-workers, work hard for their employers, get paid well for their work, have ample chances of advancement and flexible schedules so they could attend to personal 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, hate their co-workers, want a change, or because their spouse gets a dream job in another state. Hence managing human resources, particularly retaining them, is an art that calls for special skills and strategies. Employee survey and exit interviews can be used for assessing the reasons of employee voluntarily leave. HR interventions such as improving selection process, effective orientation and training, better employee relation, better career development programs and planning etc should be used to improve employee retention. The top organizations are on the top because they value their employees and they know how to keep them glued to the organization.. Thus I also wanted to endeavor my knowledge upon “EMPLOYEE RETENTION” and grabbed the opportunity to make a thorough study on it.
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TABLE OF CONTENTS Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.
Topic History of insurance sector Indian Insurance Industry Insurance companies Market Share of life and non-life insurers About Royal Sundaram Group of Companies Vision and Mission Size in terms of manpower and turnover Geographical Areas of operation Product Range Organizational Structure Financial Performance for 2008-09 SWOT analysis Introduction about the study Objectives of the study Research Methodology Data Analysis and interpretation Findings Conclusion Suggestions Learnings Limitations of the study Annexure Bibliography
Page No. 6 7 8 9 12 14 15 16 17 20 21 25 31 33 48 49 68 69 70 71 72 73 80 81
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CHAPTER: I PROFILE OF THE INDUSTRY
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ABOUT THE INDUSTRY The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. A brief history of the Insurance sector The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: •
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.
•
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
•
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.
•
1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:
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•
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.
•
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.
•
1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.
•
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.
•
107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
Indian Insurance Industry: Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event.Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. With the help of Insurance, large number of people exposed to a similar risk makes contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good.
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Insurance companies: IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only reinsurance business. LIFE INSURERS
Websites Public Sector
Life Insurance Corporation of India
www.licindia.com
Private Sector Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in Birla Sun-Life Insurance Company Limited www.birlasunlife.com HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com ING Vysya Life Insurance Company Limited www.ingvysayalife.com Max New York Life Insurance Co. Limited www.maxnewyorklife.com MetLife Insurance Company Limited www.metlife.com Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com SBI Life Insurance Company Limited www.sbilife.co.in TATA AIG Life Insurance Company Limited www.tata-aig.com AMP Sanmar Assurance Company Limited www.ampsanmar.com Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com GENERAL INSURERS Public Sector National Insurance Company Limited www.nationalinsuranceindia.com New India Assurance Company Limited www.niacl.com Oriental Insurance Company Limited www.orientalinsurance.nic.in United India Insurance Company Limited www.uiic.co.in Private Sector Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in
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ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokyo General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. REINSURER
www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com
General Insurance Corporation of India
www.gicindia.com
Table 1: Various players in Insurance Industry The following table shows the market share of life and non-life insurers MARKET SHARE (%) LIFE INSURERS NON – LIFE INSURERS 1. LIC 76.07 1. New India 2. ICICI Prudential 6.91 2. National 3. Bajaj Allianz 4.75 3. United India 4. HDFC Standard 2.98 4. Oriental 5. Brila Sunlife 1.72 5. ICICI- Lombard 6. Tata AIG 1.66 6. Bajaj Allianz 7. SBI Life 1.46 7. IFFCO-Tokio 8. Max New York 1.28 8. Tata-AIG 9. Aviva 1.08 9. ECGC 10. Kotak Mahindra Old Mutual 0.71 10. Royal Sundaram 11. ING Vysya 0.54 11. Cholamandalam 12. AMP Sanmar 0.46 12. HDFC-Chubb 13. Met Life 0.37 13. Reliance General 14. Sahara Life 0.03 14. Agriculture Insurance Co. Private total 23.93 Private total Public total 76.07 Public total Grand total 100.00 Grand total Source : www.irdaindia.org Table 2: Market share of Life and Non-Life Insurers
21.41 17.11 17.11 17.02 8.04 6.15 4.00 2.89 2.50 2.17 1.22 0.89 0.75 -27.35 72.65 100.00
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In the above table shows, the private players in the life insurance business have increased their market share to 23.93 per cent. Among them ICICI prudential is ranked first in capturing the market followed by Bajaj Allianz and HDFC Standard. In the General Insurance sector the private players have captured 27.35 per cent. Among them ICICILombard is ranked first, followed by Bajaj Allianz and IFFCO-Tokio. The healthy competition in the sector enabled the State owned insurers of our mother country to reduce its market share to 76.07 per cent and 72.65 percent in life and non-life business respectively. Moreover, private insurers have planned to increase their market share in the next five years. The public insurers have to enrich its approach to withhold its share.
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CHAPTER: II PROFILE OF THE COMPANY
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ABOUT THE COMPANY (ROYAL SUNDARAM ALLIANCE INSURANCE COMPANY LTD.)
CORPORATE OFFICE ADDRESS Royal Sundaram Alliance Insurance co, Sundaram Towers 45 & 46, Whites Road, Chennai 600 014 Tel: 91-44-28517387 / 91-44-42227373 Fax: 91-44-28517376 Email: customer.services@royalsundaram.in Sundaram Towers 45 & 46, Whites Road, Chennai 600 014 Royal Sundaram Alliance Insurance Company Limited is a joint venture between Sundaram Finance and Royal & Sun Alliance Insurance Group plc, UK, where the former holds 74% and the latter holds 26% of the equity of the venture. Royal Sundaram, the first Non-Life Insurer to be awarded a license by the IRDA in October 2000. Royal Sundaram Alliance Insurance Company Limited has been at the forefront of providing innovative insurance solutions for you, your family and business. The Company became the first private insurer in the country to be licensed post privatization in 2001. Since then The Company have been innovating constantly for our customers. Like being the first to offer cashless hospitalization, the first to offer segment specific business solutions, first to offer cobranded credit cards, first to introduce industryspecific proposition.
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Our product range is designed to provide extra cover to a varied range of customers starting from the common man to corporate conglomerates. You can reach us directly and also through our partners, agents, and brokers. The Company does business in over 180 cities through a combination of our own branches and those of our partners. Royal Sundaram brings to you the golden heritage and reliability of Sundaram Finance (AAA), one of the most respected non-banking financial institution in India, and RSA (Royal &SunAlliance), one of the oldest and the second largest general insurer in the UK. The coming together of these two financial giants allows us to offer you the best global practices in insurance industry, innovation in terms of products and services, and unmatched, personalized customer service.
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GROUP OF COMPANIES: About RSA (Royal &SunAlliance)
With a 300 year heritage, RSA is one of the world’s leading multinational quoted insurance groups, listed on the London Stock Exchange. It has the capability to write business in over 130 countries and with major operations in the UK, Scandinavia, Canada, Ireland, Asia and the Middle East, Latin America and Central and Eastern Europe. Focusing on general insurance, it has around 21,000 employees and, in 2009, its net written premiums were £6.7bn.
About Sundaram Finance Sundaram Finance, a Triple A rated Non-Banking Finance Company, is one of the most respected financial services companies in India, established in 1954. The Sundaram Finance group’s operations span Vehicle finance, Home mortgages, Asset management, General Insurance, Business process outsourcing, IT solutions and distribution of financial products. Sundaram Finance has a network of over 320 branches across India with over 2,500 employees.
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VISION AND MISSION VISION To be the preferred company for general insurance in India. MISSION To create unmatched value for our customers, employees, business partners and shareholders by delivering remarkable service that is consistent, fair and transparent. To understand the needs of its customers and provide solutions to cater to those needs. To capitalize further on our customer-centric approach. To leverage local knowledge, infrastructure and customer base. To achieve a leadership position in India through a multi-distribution, multi-product platform.
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SIZE IN TERMS OF MANPOWER AND TURNOVER The company has posted a top-line growth of 13.62% with a Gross Written Premium (GWP) of Rs9.15bn, during the Financial year 2009-10, as compared to the GWP of Rs8.05bn, in the previous year. This makes Royal Sundaram the 3rd fastest growing private General Insurance Company, among established players, in India. The company has also recorded a healthy Profit Before Tax (after pool loss) of Rs340.1mn while the Profit After Tax (PAT) stood at Rs309.7mn. The company s balance sheet and cash flows remain strong, with the solvency margin at 1.64, well above the stipulated norms. Royal Sundaram, with its strong distribution and affinity partners, has expanded its business during the year 2009-10 to over 180 cities/ towns, across the country. The company serviced over 37 Lakh customers across these cities/ towns during the year. Your Company has 1159 employees as on 31st March 2009, an addition of 296 people from the 863 employees at the end of the previous year.
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GEOGRAPHICAL AREAS OF OPERATION Registered Office 21, Patullos Road Chennai 600 002 Regional Offices Mumbai – Powai – Western Regional Office Royal Sundaram Alliance Insurance Co.Ltd "DELPHI" "C" Wing, 2nd Floor, 201-204 Hiranandani Business Park, Powai, Mumbai - 400 076. Tel: 91-022-40055005 / 67041212 Fax: 022-40055016 Email: customer.services@royalsundaram.in Gurgaon – Northern Regional Office Royal Sundaram Alliance Insurance Co.Ltd Rider House, Ground and First Floor, Plot Number : 136, Sector - 44, Gurgaon - 122002 Tel: 91-124-2383828 - 33 - 34/ 2581712-4 Fax: 91-124-2383829 Email: customer.services@royalsundaram.in Kolkata- Eastern Regional Office Royal Sundaram Alliance Insurance Co.Ltd Millenium City Information Technology Park, Unit No T-2-2A,Tower 2, Plot No : DN-62,Sector -V, Salt Lake
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Kolkata - 700 091. Tel: 91- 033-23675520/21/22/26 Fax: 91- 033-23675523 Email: customer.services@royalsundaram.in Chennai - Royapettah - Southern Regional Office Royal Sundaram Alliance Insurance Co.Ltd No:45 & 46, Whites Road,Sundaram Towers, Chennai - 600 014. Tel: 91-44-28517387 and 91-44-42227373 Fax: 91-44-28585912 Email: customer.services@royalsundaram.in
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Fig.1: Map showing location of Royal Sundaram Alliance Insurance Co. Offices 19
PRODUCT RANGE Royal Sundaram Alliance Insurance Company Ltd. offers a range of services to its customers which include: •
Health Insurance
•
Car Insurance
•
Travel Insurance
•
Home Insurance
•
Hospital Cash Insurance
•
Accident Insurance
•
Business Insurance Royal Sundaram has range of innovative general Insurance products for individual
customers, distributed through Agents, Distribution Partners, Affinities and Brokers. For Commercial clients, Royal Sundaram offers a wide range of specialised insurance covers in Fire, Marine, Engineering, Liability and Business Interruption risks apart from specially designed products for Small and Medium enterprises. The Company has focused on developing the multi-channel distribution model for marketing and distribution of its products. Royal Sundaram has distribution relationships with American Express, Citibank, Standard Chartered Bank, Repco Bank, SBI-GE, General Motors, ING Vysya, Lakshmi Vilas Bank. In 2004, Royal Sundaram entered into a strategic partnership with Maruti Udyog Ltd. for the distribution of Motor Insurance to the customers.
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ORGANISATIONAL STRUCTURE
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Fig.2: Organizational Structure of Royal Sundaram Alliance Insurance Co.
Board of Directors •
P M Venkatasubramanian Chairman 22
•
S Viji Director
•
T T Srinivasaraghavan Director
•
A.Rangaswami Director
•
R Haresh Director
•
A V Rajwade Director
•
Srinivas Acharya Director
•
Paul Whittaker Director
•
Scott John Pickering Director
•
Gregory James Otterson Director
•
Gareth Morgan Roberts Director
•
Ajay Bimbhet Managing Director
Audit Committee •
P M Venkatasubramanian Chairman
•
Srinivas Acharya Director
•
Gregory James Otterson Director
•
Ajay Bimbhet Managing Director
Chief Financial Officer •
Ramkumar Krishnamachari
Company Secretary •
S R Balachandher
Statutory Auditors •
M/s N C Rajagopal & Co. Chartered Accountants, Chennai
•
M/s Brahmayya & Co, Chartered Accountants, Vijayawada
Systems Auditors •
M/s Tejas Brainware Systems (P) Ltd, Chennai
Internal Auditors •
M/s Sundaram & Srinivasan, Chartered Accountants, Chennai 23
BUSINESS REGIONS: WRO – Western Region NRO – Northern Region SRO – Southern Region ERO – Eastern Region DEPARTMENTS OF ROYAL SUNDARAM:
HUMAN RESOURCES/ PERSONNEL DEPARTMENT
OPERATIONS DEPARTMENTS
CLAIMS AND UNDERWRITERS
CUSTOMER SERVICES DEPARTMENTS
INTERNET MARKETING
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CHAPTER: III FINANCIAL PERFORMANCE FOR 2008-09
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FINANCIAL PERFORMANCE FOR 2008-09 The highlights of the Financial Results of the Company are: (Rupees in lakhs) 2008-09
2007-08 Gross Written Premium 80336 69441 Net Written Premium 66831 53306 Net Earned Premium 59806 44583 Net Incurred Claims 41235 29815 Net Commission – Outgo/(Income) 3206 1624 Expenses of Management 21955 17435 Underwriting Profit /(Loss) (6590) (4291) Investment Income – Policyholders 5648 3509 General Insurance Results Profit /(Loss) (942) (782) Investment Income – Shareholders 1908 1311 Other Income/(Outgo) 7 (52) Profit Before Tax 973 477 Provision for taxation (407) (6) Profit After Tax 566 471 Table 3: Highlights of financial results for the Year 2007-08 and 2008-09 The Company achieved a Gross Written Premium of Rs. 803.36 cr. for 2008-2009 (previous year Rs.694.41 cr.), registering a growth of 16%. In 2008-09, the non-life Insurance Market in India grew by about 9% and the market share of the private companies increased marginally from 40% to 41%. Your Company’s market share too went up marginally from 2.4% to 2.6% of the overall non-life business during the year.
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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2009 Form B - PL Royal Sundaram Alliance Insurance Company Limited Registration No. and Date of Registration with the IRDA : 102/23.10.2000 (Rs ‘000) Particulars
31-3-2009
31-3-2008
1 OPERATING PROFIT/(LOSS) (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance
53,315
63,815
(18,132)
4,420
(128,842)
(146,488)
170,771
125,515
2 INCOME FROM INVESTMENTS (a) Interest, Dividend and Rent [Net of amortisation] [Gross Interest and Dividend Rs.172,102 thousand (Previous Year -- Rs. 131,733 thousand)] (b) Profit on sale of investments
20,734
Less : Loss on sale of investments
(668)
5,015 20,066
-
5,015
3 OTHER INCOME (Interest on Income Tax refund and Interest on Staff Loan) Total (A)
3,216
607
100,394
52,884
4 PROVISION (Other than taxation) a) For diminution in the value of investments
-
b) For doubtful debts
-
c) Others
-
5 OTHER EXPENSES a) Expenses other than those related to Insurance business -Filing fees etc
. 2,827
b) Bad debts written off c) Exchange loss Total (B) Profit Before Tax (A - B)
3,127 -
262
2,060
3,089
5,187
97,305
47,697
Provision for Taxation
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- Current [including Wealth Tax Rs.28 thousand (Previous Year -- Rs.58 thousand)]
(51,528)
(76,058)
21,234
83,035
(10,380)
(7,533)
56,631
47,141
(a) Interim dividends paid during the year
-
-
(b) Proposed final dividend
-
-
(c) Dividend distribution tax
-
-
(d) Transfer to any Reserves or Other Accounts
-
-
71,538
24,397
- Deferred - Fringe Benefit Tax (Current year FBT includes Rs. 50 thousands relating to Prior year) Profit after tax Appropriations
Balance of Profit/(Loss) brought forward from last year
Balance carried forward to Balance Sheet 128,169 Table 4: Profit and loss account for the year ended 31st March 2009
71,538
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BALANCE SHEET AS AT 31ST MARCH 2009 Form B - BS Royal Sundaram Alliance Insurance Company Limited Registration No. and Date of Registration with the IRDA : 102/23.10.2000 (Rs ‘000) Particulars SOURCES OF FUNDS
31-3-2009
SHARE CAPITAL
31-3-2008
2,100,000
1,700,000
SESERVES AND SURPLUS
128,169
71,538
FAIR VALUE CHANGE ACCOUNT
(28,598)
(9,589)
-
-
2,199,571
1,761,949
7,775,394
5,590,331
-
-
Deferred Tax Assets - Net
175,084
191,424
CURRENT ASSETS
104,269
83,035
BORROWINGS TOTAL APPLICATION OF FUNDS INVESTMENTS LOANS FIXED ASSETS
Cash and Bank Balances
382,378
922,937
Advance and Other Assets
1,608,291
1,028,826
Sub- Total (A)
1,990,669
1,951,763
CURRENT LIABILITIES 4,085,583
3,063,668
PROVISIONS
3,760,262
2,990,936
Sub - Total (B)
7,845,845
6,054,604
NET CURRENT ASSETS (C)=(A-B)
(5,855,176)
(4,102,841)
-
-
-
-
MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT TOTAL
2,199,571 Table 5: Balance Sheet as on 31st March 2009.
1,761,949
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009 29
(Rs. ‘000) Particulars Cash flows from operating activities
31-3-2009
31-3-2008
Premium received from policyholders, including advance receipts
8,144,013
6,927,896
3,849
1,054
(774,670)
(923,278)
(8,556)
39,842
(4,099,424)
(3,075,131)
(591,057)
(568,357)
(1,962,907)
(1,603,373)
(6,047)
83,478
Income taxes paid (Net)
15,770
(102,468)
Service tax paid
(1,263)
7,679
Other payments
3,145
Other receipts Payments to the re-insurers, net of commissions and claims Payments to co-insurers, net of claims recovery Payments of claims Payments of commission and brokerage Payments of other operating expenses Preliminary and pre-operative expenses Deposits, advances and staff loans
Cash flows before extraordinary items Cash flow from extraordinary operations Net cash flow from operating activities
722,853
787,342
(90,028)
(114,178)
1,226
1,126
(6,704,111)
(3,594,199)
-
-
4,542,262
2,571,059
635,498
409,598
(46,864)
(41,449)
(1,133)
(2,164)
Cash flows from investing activities Purchase of fixed assets Proceeds from sale of fixed assets Purchases of investments Loans disbursed Sales of investments Repayments received Rents/Interests/Dividends received Investments in money market instruments and in liquid mutual funds (Net) Expenses related to investments
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Net cash flow from investing activities
(1,663,150)
(770,207)
400,000
300,000
400,000
300,000
(262)
(4)
(540,559)
317,131
922,937
605,806
Cash flows from financing activities Proceeds from issuance of share capital Proceeds from borrowing Repayments of borrowing Interest/dividends paid Net cash flow from financing activities Effect of Foreign exchange rates on Cash and Cash Equivalents, net Net increase in cash and cash equivalents: Cash and Cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
382,378 Table 6: Cash Flow Statement for the Year ended 31 March 2009.
922,937
st
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SWOT ANALYSIS Major Strengths: 1. Premium rates are increasing and so are commissions. 2. The variety of products is increasing. 3. Motivated and dedicated work force. Major Weaknesses 1. The company is slow to respond to changing needs. 2. There is an increasing trend of financial weakness among the company. Opportunities 1. The ability to cross sell financial services is barely being tapped. 2. Technology is improving to the point that paperless transactions are available 3. .The client's increasing need for an "insurance consultant" can open new ways to service the client and generate income. Threats 1. The increasing cost and need for insurance might hit a point where a backlash will occur. 2.
Government regulations on issues like health care, mold and terrorism can quickly change the direction of insurance.
3. Increasing expenses and lower profit margins will hit hard on the smaller agencies and insurance companies. 4. There are more competitors entering in the industry to compete with.
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CHAPTER: IV INTRODUCTION ABOUT THE STUDY
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INTRODUCTION TO “RETENTION” “High performers are like frogs in a wheelbarrowThey can jump out at any time” -Mc Kinsey & Company Study. “Genius begins and labor finishes” is an old saying that would be profoundly significant if interpreted in the context of corporate and large employers. Concepts, visions and decisions do take shape within the four walls of corporate boardrooms. However, it is only the employees that implement and give tangibility to the corporate’s mission. In other words if it is the highest rung in the corporate hierarchy that has ideas, it is the employees’ rung that has the chisel to bring the vision to life. In the best of worlds, employees would love their jobs. Like their co-workers, work hard for their employers; get paid well for their work, ample chances of advancement and flexible schedules so they could attend to personal 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, hate their co-workers, want a change, or because their spouse gets a dream job in another state. Unlike inanimate products and systems that subject themselves to fine tuning without any reaction, employees would not subject themselves to any measure taken without reaction and analysis. Hence managing human resources, particularly retaining them, is an art that calls for special skills and strategies.
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EMPLOYEE RETENTION Employee Retention involves taking measures to encourage employees to remain in the organization for the maximum period of time. Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. There is no dearth of opportunities for a talented person. There are many organizations which are looking for such employees. If a person is not satisfied by the job he’s doing, he may switch over to some other more suitable job. In today’s environment it becomes very important for organizations to retain their employees. The top organizations are on the top because they value their employees and they know how to keep them glued to the organization. Employees stay and leave organizations for some reasons. Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. The picture states the latest statement that corporate believes in “Love them or lose them”
The reason may be personal or professional. These reasons should be understood by the employer and should be taken care of. The organizations are becoming aware of these reasons and adopting many strategies for employee retention.
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Employees today are different. They are not the ones who don’t have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they don’t, they would be left with no good employees. A good employer should know how to attract and retain its employees. Retention involves five major things:
1) COMPENSATION
4) RELATIONSHIP
2) ENVIRONMENT
3) GROWTH
5) SUPPORT
Employee retention would require a lot of efforts, energy, and resources but the results are worth it.
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IMPORTANCE OF EMPLOYEE RETENTION Why is retention so important? Is it just to reduce the turnover costs? Well, the answer is a definite no. It’s not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached. The process of employee retention will benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee thousands of money to a company's expenses. While it is difficult to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate. 2. Loss of Company Knowledge: When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized. 3. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss. 4. Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff. 5. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization. 6. Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee.
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WHAT MAKES EMPLOYEE LEAVE? Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be: Job is not what the employee expected to be: Sometimes the job responsibilities don’t come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction. 1. Job and person mismatch: A candidate may be fit to do a certain type of job which matches his personality. If he is given a job which mismatches his personality, then he won’t be able to perform it well and will try to find out reasons to leave the job. 2. No growth opportunities: No or less learning and growth opportunities in the current job will make candidate’s job and career stagnant. 3. Lack of appreciation: If the work is not appreciated by the supervisor, the employee feels de-motivated and loses interest in job. 4. Lack of trust and support in co-workers, seniors and management: Trust is the most important factor that is required for an individual to stay in the job. Nonsupportive co-workers, seniors and management can make office environment unfriendly and difficult to work in. 5. Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately many times lead to employee leaving the organization. 6. Compensation: Better compensation packages being offered by other companies may attract employees towards themselves. 7. New job offer: An attractive job offer which an employee thinks is good for him with respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization.
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EMPLOYEE RETENTION STRATEGIES The basic practices which should be kept in mind in the employee retention strategies are: 1. Hire the right people in the first place. 2. Empower the employees: Give the employees the authority to get things done. 3. Make employees realize that they are the most valuable asset of the organization. 4. Have faith in them, trust them and respect them. 5. Provide them information and knowledge. 6. Keep providing them feedback on their performance. 7. Recognize and appreciate their achievements. 8. Keep their morale high. 9. Create an environment where the employees want to work and have fun. 10. Management has several policy options viz. changing (or improving existing) policies towards recruitment, selection, induction, training, job design and wage payment.
Fig.3: Employee Retention Strategies adopted at different levels. 39
RETENTION DETERMINANTS It has been recognized by both employers and employees that some common areas affect employee retention. If certain organizational components are being provided, than other factors may affect retention. Surveys of employees consistently show that better compensation package and better career opportunity are the two most important determinates of retention. Finally, job design and fair and supportive employee relationship with others inside the organization contribute to retention. Following are the components that affect employee retention: Career opportunities 1. Training Continuity. 2. Development & Mentoring. Career planning.
Rewards 1. Competitive pay & benefits. 2. Performance reward differentiation. 3. Recognition. 4. Special benefit & perks. Job design & work
Organizational Components
Values and Culture. Strategies & Opportunities. Well managed & resultsoriented. Job continuity & security.
1. Job responsibility & autonomy. 2. Work flexibility. 3. Working conditions. 4. Work/Life balancing. Employee Relationship
1. Fair/nondiscriminatory treatment. 2. Supervisory/management support. Co-Workers relations.
Fig.4: Retention Determinants These were the determinants of retention. An affective leadership assumed by the top management would be a very important feature that keeps the work force intact and loyal. In fact, the approach to the task of formulation of strategies for employee retention
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should be comprehensive and the honest intention of the employer to implement every stipulation in the package of appointment should be evident. However, there would, in each employing corporate, be a section of so-called ‘good employees’, whom it would be unwise to loose. Special strategies and special kind of efforts are required in the task of retaining them. Probably it would be the hardest task for the employer to retain them as persons and rivals would be making relentless bids to woo this section of employees. To counter these onslaughts from peers, special efforts are called for.
The Three Rs of Employee Retention To keep employees and keep satisfaction high, you need to implement each of the three Rs of employee retention: respect, recognition, and rewards. Fig.5: Three R’s of Employee Retention. Respect
Respect is esteem, special regard, or particular consideration given to people. As the pyramid shows, respect is the foundation of keeping your employees. Recognition and rewards will have little effect if you don’t respect employees. Recognition Recognition is defined as “special notice or attention” and “the act of perceiving clearly.” Many problems with retention and morale occur because management is not paying attention to people’s needs and reactions.
Rewards
Rewards are the extra perks you offer beyond the basics of respect and recognition that make it worth people’s while to work hard, to care, to go beyond the call of duty. While rewards represent the smallest portion of the retention equation, they are still an important one.
RETENTION MYTHS The process of retention is not as easy at it seems. There are so many tactics and strategies used in retention of employees by the organizations. The basic purpose of these strategies should be to increase employee satisfaction, boost employee morale hence achieve retention. But some times these strategies are not used properly or even worse, wrong strategies are used. Because of which these strategies fail to achieve the desired results. There are many myths related to the employee retention process. Let us have a look on some of these myths:
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1. Employees leave an organization for more pay: Money may be the motivating factor and can make an employee stay in an organization but not for long. The factors more important than money are job satisfaction, job responsibilities, and individual’s skill development.. When employees leave, management tries to retain them by offering more money. Issues that are mainly the cause of dissatisfaction are organization’s policies and procedures, working conditions, relationship with the supervisor and salary, etc. For such employees, achievement, growth, respect, recognition, is the main concern. 2. Incentives can increase productivity: Incentives can surely increase productivity but not for long term. Cash incentives, volume work targets and speed awards are old management beliefs. They can generate work speedily and in volumes but can’t boost employee commitment. Rather speed can hamper the quality of work produced. What really glues employees to their work and organization is quality work, meaningful responsibilities, recognition, respect, growth opportunities and friendly supervisors. 3. Employees run away from responsibilities: It is a myth that employees run from responsibilities. In-fact employees feel more responsible if they are given extra responsibilities apart from their regular job. Employees look for variety, greater control on the processes and authority to take decisions in their present job. They want opportunities to learn and grow. Management can assign extra responsibilities to their employees and appreciate them on the completion of these tasks. This will induce a sense of pride in the employee and will improve the relationship between the management and the employee. 4. Loyalty is a thing of the past: Employees can be loyal but what they need is an employer for whom they can be loyal. There is no reason for the employee to hop jobs if he’s satisfied with the employer. 5. Taking measures to increase employee satisfaction will be expensive for the organizations: The things actually required improving employee satisfaction like respect, career growth and development, appreciation, etc. can’t be bought. They are free of cost. An employer or management that reacts well to the employee’s ideas and suggestions is enough for the employees to be retained.
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RETENTION SUCCESS MANTRAS 1) Transparent Work Culture In today’s fast paced business environments where employees are constantly striving to achieve business goals under time restrictions; open minded and transparent work culture plays a vital role in employee retention. A transparent work environment can serve as one of the primary triggers to facilitate accountability, trust, communication, responsibility, pride and so on. It is believed that in a transparent work culture employees rigorously communicate with their peers and exchange ideas and thoughts before they are finally matured in to full-blown concepts. It induces responsibility among employees and accountability towards other peers, which gradually builds up trust and pride. 2) Quality of Work The success of any organization depends on how it attracts recruits, motivates, and retains its workforce. Organizations need to be more flexible so that they develop their talented workforce and gain their commitment. Thus, organizations are required to retain employees by addressing their work life issues. The elements that are relevant to an individual’s quality of work life include the task, the physical work environment, social environment within the organization, administrative system and relationship between life on and off the job. The basic objectives of a QWL program are improved working conditions for the employee and increase organizational effectiveness. Providing quality work life involves taking care of the following aspects: 1. Occupational health care: The safe work environment provides the basis for the person to enjoy working. The work should not pose a health hazard for the person.
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The employer and employee, aware of their risks and rights, could achieve a lot in their mutually beneficial dialogue. 2. Suitable working time: Organizations are offering flexible work options to their employees wherein employees enjoy flexi-timings for dedicating their efforts at work. 3. Appropriate salary: The appropriate as well as attractive salary has always been an important factor in retaining employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick with the company for long. Providing quality at work not only reduces attrition but also helps in reduced absenteeism and improved job satisfaction. Not only does QWL contribute to a company's ability to recruit quality people, but also it enhances a company's competitiveness. Common beliefs support the contention that QWL will positively nurture amore flexible, loyal, and motivated workforce. 3) Supporting Employees Organizations these days want to protect their biggest and most valuable asset and they want to do this in a way that best suits their organizational culture. Retaining employees is a difficult task. Providing support to the employees acts as a mantra for retraining them. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. The management can support employees directly or indirectly. Directly, they provide support in terms of personal crises, managing stress and personal development. Management can support employees, indirectly, in a number of ways as follows: 1. Manage employee turnover: Employee turnover affects the whole organization in terms of productivity. Managing the turnover, hence, becomes an important task. A proactive approach can be adopted to reduce attrition. Strategies should be framed in advance and implemented when the times arrives. Turnover costs should also be taken into consideration while framing these strategies.
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2. Become employer of choice: What makes a company an employer of choice? Is the benefit it offers or the compensation packages it gives away to its employees? Or is it measured in terms of how they value their employees or in terms of customer satisfaction? Becoming an employer of choice involves following a road map which tells where to go as a brand. 3. Engage the new recruits: The newly hired employees are said to be least engaged in the organization. Keeping them engaged is an important task. The fresh talent should be utilized to maximum before they start feeling bored in the organization. 4. Optimize employee engagement: An organization’s productivity is measured not in terms of employee satisfaction but by employee engagement. Employees are said to be engaged when they show a positive attitude toward the organization and express a commitment to remain with the organization. Employee satisfaction also comes with high engagement levels. So, organizations should aim to maximize the engagement among employees. 5. Coaching and mentoring: Employees whose work performance suffers due to poor interpersonal relationships or because of lack of interpersonal skills should be provided proper coaching by their superiors. Planed coaching sessions help an individual to work through issues, maximize his potential and return to peak performance.
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4) Feedback Feedback acts as a channel of communication between the employee and his manager. The amount of information employees receive about how well or how poorly they have performed is what we call feedback. It suggests where the employee performance is effective and where performance has to improve. Thus, feedback is necessary because: 1. It builds trust and enhances communication between manager and employee. 2. It gives managers and employees a way to identify and discuss skills and strengths. 3. Positive feedback leads to employee retention and motivation. 4. It helps in identifying performance areas that need improvement and specific ways to improve them. 5. It acts as an opportunity to enhance performance by identifying resources for skill development. 6. It is an opportunity for managers and employees to assess and identify career and advancement opportunities. 7. It helps employees to understand the effectiveness of their performance and contributes to their overall knowledge about the work Managers have tendency to ignore good performances of their employees. Providing no feedback may de-motivate employees and may lead to employee absenteeism 5) Communication between Employee and Employer Communication is the solution to almost everything in this world. Employees look for organizations where communication and process are transparent. Nothing is hidden and shared with the employees. Communication is also the way to win the employees trust in the organization. This trust leads to employee loyalty and finally retention. Employers also feel that the immediate supervisors are the most authenticated and trusted source of information for them. Communication mediums
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1. Open door policy: Organizations should support open door policies so that the employees feel comfortable and are able to express their doubts and feeling to their employers. 2. Frequent meetings and Social gatherings 3. Emails, Newsletters, Intranet and many more. So there should be effective communication across the organization & this communication should be two-way. Communication alone can lead to unimaginable heights of employee retention.
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CHAPTER: V RESEARCH PROBLEM AND PURPOSE
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OBJECTIVES OF THE STUDY
1.
To study the common reasons of employee voluntarily leaving or staying in
organization. 2.
To suggest the strategies and steps for reducing turnover and improving retention.
3.
To study efforts made by organization to retain employee.
4.
To study various career development programs offered by the organization.
5.
To study the impact of induction & training programs on retention of employees.
6.
To determine the organizational climate.
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RESEARCH METHODOLOGY Research in common parlance refers to a search for knowledge. The advanced learner’s dictionary of current English lays down the meaning of research as “a careful investigation of enquiry especially through search for new facts in any branch of knowledge.” The systematic approach concerning generalization and the formulation of a theory is also research. The purpose of research is to discover answers to questions through the application of scientific procedures. RESEARCH DESIGN “A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure.”
- JOHN.W.BEST
The exploratory research design is adopted for this project. RESEARCH APPROACH Research worker contacted the respondents personally with well-prepared sequentially arranged questions. The questionnaire is prepared on the basis of objectives of the study. Direct contact is used for survey, i.e., contacting employees directly in order to collect data.
SAMPLE SIZE The study sample constitutes 50 respondents in the research area. SAMPLE PROCEDURE In this study, convenient sampling method was adopted.
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COLLECTION OF DATA The study was based on questionnaire method. The study was about Employee turnover and retention measures. There are two types of data collection :
Primary Data
Secondary Data
Primary Data The primary data are those, which are collected a fresh and for the first time happen to be original in character. It has been collected through a questionnaire. Secondary Data Secondary data are those which have already been collected by someone else and which have already been passed through the stratified process. It has collected through the books, journals, company literature and Internet. RESEARCH INSTRUMENT The researcher has used a structured questionnaire as a research instrument tool which consists of open ended questions, multiple choice and dichotomous questions in order to get data. All the questions in the questionnaire are organized in such a way that elicits all the relevant information that is needed for the study. PERIOD OF STUDY The study was conducted for period of 60 days. STATISTICAL TOOLS The statistical tools used for analyzing the data collected are bar diagrams and pie diagrams.
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ANALYSIS OF DATA The data are collected through survey and books, reports, newspapers and internet etc. The data collected by the researcher are tabulated and analyzed in such a way to make interpretations. Various steps, which are required to fulfill the purpose, i.e., editing, coding, and tabulating. The collected data are analyzed and interpreted using statistical tools and techniques.
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DATA ANALYSIS & INTERPRETATION
Span of Service in the Organization Options Below 3 months Between 3 to 6 months Above 6 months Total
Responses 10 22 18 50
Responses 25
22 18
20 15 10
Responses
10
5 0 Below 3 months
Between 3 to 6 months
Above 6 months
Fig.6: Bar diagram showing the span of service of the employees in the organization
Inference: The response shows that most of the employees are working in this organization since past 3-6 months.
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Satisfaction Level of the Employees Options Yes No Not Really Total
Responses 32 2 16 50
Responses
Not Really 32%
No 4%
Yes 64%
Fig.7: Pie Chart showing the satisfaction level of employees
Inference: The response shows that almost 65% of the employees are satisfied with their current job. Only 4 % employees are not satisfied with their current job.
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Reasons behind Dissatisfaction of Employees Options Low salary No personal life No growth opportunities Policies and procedure not conductive Uneasy relationship with peers or managers Others Total
Responses 6% 0%
Responses 1 0 0 3 4 10 16
Low salary
No personal life
0% 17%
55% 22%
No growth opportunities Policies and procedure not conductive Uneasy relationship with peers or managers Others
Fig.8: Pie chart showing the reasons behind dissatisfaction of employees.
Inference: The response shows that the reason of dissatisfaction of employees is some other than above-mentioned reasons. But they also don’t want to disclose the reason for the same.
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Changes required in the Job Options Yes No Can’t say Total
Responses 8 28 14 50
Responses
Can't say
14
No
28
Yes
Responses
8
0
10
20
30
Fig.9: Bar diagram showing responses of employees regarding changes required in job.
Inference: The response shows that more than 50% of employees are not planning for any change. It shows that they are satisfied with their job.
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Reasons of Resigning from the Job Options Low salary Bad employment practices Bad experience with peers Lucrative opportunities from other companies Lack of social life Others Total
Responses
0% 24%
14% 0%
Responses 0 7 0 27 4 12 50
Low salary
Bad employment practices Bad experience with peers Lucrative opportunities from other companies
8%
54%
Lack of social life
Others
Fig.10: Pie chart showing the reasons of resigning from the job.
Inference: The response shows that the main reason behind leaving the job is lucrative opportunities from other companies. And the minor reason is lack of social life. And rest employees don’t want to reveal the reasons for resigning the job.
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Initiative taken by the Organization in Retaining Employees Options Yes No Can’t say Total
Response 27 0 23 50
Response
Can’t say 46%
Yes 54% No 0%
Fig.11: Pie chart showing the responses of employees regarding the initiatives taken by the organization in retaining employees.
Inference: The response shows that 54% of employees are in the favor of organization that they takes initiative to retain employees and rest 46% can’t say anything about retaining employees.
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Efforts made by the Company to retain its Employees Options Response Offer salary hike 17 Offer T & D programme 9 Offer promotions 6 Provides flexible work hours 10 Opportunities for international level 2 Provides assistance for personal problems 5 Others 1 Total 50
Response
10%
Offer salary hike
Offer T & D programme
2%
4%
34%
20%
Offer promotions
Provides flexible work hours 12%
18%
Opportunities for international level Provides assistance for personal problems
Others Fig.12: Pie chart showing the efforts made by the organization to retain its employees
Inference: The analysis shows that organization provides salary hike and flexible work hours to retain its employees.
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Frequency of Rewards given to the Employees Options Once in a month Once in 2-3 months More than 3 months Never/Rare On achieving the targets Total
Response 6 2 0 24 18 50
Response On achieving the targets
18
Never/Rare More than 3 months
24 0
Once in 2-3 months
Response 2
Once in a month
6 0
10
20
30
Fig.13: Bar diagram showing the frequency of rewards given to the employees.
Inference: The response shows that almost 50% of employees say that that they are either never or rare awarded/ praised by their boss and 36% of the employees say that they are been awarded / praised on achieving the targets.
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Training Programs Provided by the Organization Options Yes No Can’t say Total
Response 33 17 0 50
Response 35
33
30 25 20
17
Response
15 10 5
0
0 Yes
No
Can’t say
Fig.14: Bar diagram showing responses of employees regarding training programs provided by the organization.
Inference: More than 65% employees say that they are provided with the training programs and around 35% say no that they are not provided with any training.
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Opportunity for Direct Communication with Management Options Yes No Total
Response 45 5 50
Response
No 10%
Yes 90%
Fig.15: Bar diagram showing responses of employees regarding the opportunities for direct communication with the management.
Inference: About 90% of employee’s finds opportunity for direct communication with management and rest don’t find it.
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Career Development Programs provided by the Organization Options Yes No Can’t say Total
Response 32 6 12 50
Response 35
32
30 25 20
Response
15
12
10
6
5 0 Yes
No
Can’t say
Fig.16: Bar diagram showing responses of employees regarding career development programs provided by the organization.
Inference: About 64% response was in the favor of organization that they provide career development programs to them. And 12% of response was against the organization and rest 24% can’t say anything about it.
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Importance given to Physical Fitness of an Employee
Options Yes No Can’t say Total
Response 30 15 5 50
Response
10%
Yes 30%
No 60%
Can’t say
Fig.17: Bar diagram showing responses of employees regarding the importance of their physical fitness.
Inference: The response shows that 60% of employees say that organization give importance to physical fitness of employees.
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Importance given to Work Standards and Satisfaction of Employees Options Work standards Satisfaction of employee Total
Response 34 16 50
Response 40 35
34
30 25 20
16
Response
15 10 5 0 Work standards
Satisfaction of employee
Fig.18: Bar diagram showing the importance given by the organization on work standards and satisfaction of employees.
Inference: More than 65 % of the employees feel that work standards are given more importance in the organization while only 16 employees feel satisfaction of employees are given much priority. The response shows that much importance is given to work standards rather than satisfaction of employees.
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Comfort Level of the Employees in the Organization Options Yes No Total
Response 44 6 50
Response
No 12%
Yes 88%
Fig.19: Pie chart showing the comfort level of the employees in the organization.
Inference: The response shows that most of the employees find themselves comfortable with the organizational culture. 88% employees are in favour of Yes and only 12 % opted for No in this question.
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Attributes of Organizational Climate of the Company Options Openness Confrontation Trust Autonomy Proactive Authentication Collaboration Experimentation Total
Response 7 3 17 3 8 2 3 7 50
Response
14% 6%
14%
Openness 6%
4%
Confrontation Trust Autonomy Proactive Authentication
16% 34% 6%
Collaboration Experimentation
Fig.20: Pie chart showing the attributes of the organizational climate of the company.
Inference: The response shows that the most common attribute found in the organizational climate is trust.
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CHAPTER: VI DISCUSSIONS AND FINDINGS ABOUT THE STUDY
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FINDINGS 1. The employees who are not satisfied from their present job is due to uneasy relationships with peers or managers and they found that policies and procedures are not conductive. 2. According to analysis the main reasons for voluntarily leaving the job are: •
Lucrative opportunities from other companies
•
Bad employment practices
•
Lack of social life
3. Steps and strategies that should be taken to reduce attrition rate •
Provide lucrative opportunities within organization
•
Implement good employment practices
•
Try to create a healthy environment
•
Provide attractive salary to its employees.
4. The main cause for reduction in number of employees is resignation. 5. Efforts made by organization to retain its employees are: •
Offer salary hike.
•
Offer training &development programs to employees.
•
Offer recreational facilities.
•
Provides assistance in case of personal problems.
•
Offer a promotion.
6. Provides career development programs to retain as well as to motivate employees to work efficiently in the organization.
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CONCLUSION Therefore, if the above strategies are taken into account the business would be able to survive in a dynamic environment by treating their employees as one of their assets which needs a lot of attention. Employees are the backbone of any business success and therefore, they need to be motivated and maintained in organization at all cost to aid the organization to be globally competitive in terms of providing quality products and services to the society. And in the long-run the returns on investments on the employees would be achieved. Management should encourage job redesign-task autonomy, task significance and task identity, open book management, empowerment of employees, recruitment and selection must be done scientifically with the objective of retaining employees. Managers should examine the sources of employee turnover and recommend the best approach to fill the gap of the source, so that they can be in a position to retain employees in their organization to enhance their competitiveness in the this world of globalization. Managers must understand that employees in their organizations must be treated as the most liquid assets of the organization which would make the organization to withstand the waves of globalization. This asset needs to be monitored with due care, otherwise their organizations would cease to exist. Employees should be given challenging work and all managers should be hired on the basis of know how by following laid down procedures of the organization and this would make organization to have competent managers at all levels of management and hence good supervision. Griffeth et al. (2000) noted pay and pay-related variables have a great effect on employee turnover. Management must compensate employees adequately. They should pay employees based on their performance and in addition they should given employees incentives like individual bonus, lump sum bonus, sharing of profits and other benefits. Hence, if these are put in place they would minimize employee turnover.
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SUGGESTI ONS
1. Management should encourage job redesign-task autonomy, task significance and task identity, open book management, empowerment of employees, recruitment and selection must be done scientifically with the objective of retaining employees. 2. Managers should examine the sources of employee turnover and recommend the best approach to fill the gap of the source. 3. Managers must understand that employees in their organizations must be treated as the most liquid assets of the organization. This asset needs to be monitored with due care, otherwise their organizations would cease to exist. 4. Employees should be given challenging work and all managers should be hired on the basis of know how by following laid down procedures of the organization. 5. The Organisation should pay employees based on their performance and in addition they should given employees incentives like individual bonus, lump sum bonus, sharing of profits and other benefits.
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LEARNINGS FROM SUMMER TRAINING
•
I have learnt to perform SWOT analysis.
•
I have learnt to how to prepare questionnaire and analyzing the results thereof.
•
I have learnt the importance of having good industrial relations where there is so much of strong competition and where customers do not think twice before switching over to another competitor.
•
I have got much detailed knowledge of the insurance industry.
•
I have attained more confidence in dealing and behaving with seniors through exposure in the industry.
•
I have learnt how to form questionnaire and analyzing the results.
•
I have learnt how retention techniques help in retaining the employees for longer period.
•
I have gathered knowledge about various employee retention strategies adopted in the organizations.
•
Retention of the employees is very important for a company to survive in the market for the long term.
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LIMITATIONS 1. Time constraint- the duration of training was short, due to which it was difficult to collect data. 2. One constraint has been regarding the cost, as study involves the collection of primary and secondary data. Therefore, the cost incurred was much more. 3. Another constraint has been geographical area, which is confined only to Gurgaon. 4. Normally employees hesitate to disclose the information.
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ANNEX
URE
74
DECLARATION I, Nirmit Rana, student of BBA Vth semester (M) of Tecnia Institute of Advanced Studies have prepared and got filled this questionnaire from the employees of Royal Sundaram Alliance Insurance Company Limited. This full project is only for the demand of my institution and solely for academic purpose. I further state that this project details will be kept confidential and in no way harm Royal Sundaram Alliance Insurance Company Limited nor constitute any legal action or malafide intention.
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QUESTIONNAIRE 1) Since how long are you working in this organization? a) Below 3 months c)
b) Between 3-6 months
Above 6months
2) Are you satisfied with your current job? a) Yes
b) No
c) Can’t say
3) If no, why (please rank) a) Low salary
b) No personal life
c) No growth opportunities
d) Policies & procedures not conductive
e) Uneasy relationship with peers or managers f) Others If others please specify_______________________________________ 4) Are you looking/ planning for any change? a) Yes
b) No
c) Can’t say 5) According to you what are the reasons of resigning from job? a) Low salary
b) Bad employment practices
c) Bad experience with peers
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d) Lucrative opportunities from other companies e) Lack of social life
f) others
If others please specify_______________________________________ 6) Does organization takes initiative in retaining employees? a) Yes
b) No
c) Can’t say
7) If yes what efforts do they make? a) Offer salary hike
b) Offer training and development programs.
c) Offer a promotion
d) provides flexible work hours
e) Opportunities for international travel
f) Provides assistance for personal problems
g) Others If others please specify _______________________________________ 8) How frequently you are been rewarded/ praised by your boss? a) Once in a month
b) Once in 2-3 months
c) More than 3 months
d) Never/Rare
e) On achieving the targets 9) Does the organization provide you with training programs if required? a) Yes
b) No
c) Can’t say
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10) Do you find opportunity for direct communication with management? a) Yes
b) No
11) Does organization provide you career development programs? a) Yes
b) No
c) Can’t say
12) Does the organization give importance to physical fitness of an employee? a) Yes
b) No
13) According to you how much importance does organization gives to following? a) Work Standards
b) Satisfaction of employee
14) Do you find yourself comfortable with the organizational culture? a) Yes
b) No
15) Which of the following attributes does your organizational climate has? a) Openness
b) Confrontation
c) Trust
d) Autonomy
e) Proactive
f) Authentication
g) Collaboration
h) Experimentation
Comments, if any _______________________________________________________________________ _______________________________________________________________________ __
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List of Tables
Table 1:
Various players in Insurance Industry
Table 2:
Market share of Life and Non-Life Insurers
Table 3:
Highlights of financial results for the Year 2007-08 and 2008-09
Table 4:
Profit and loss account for the year ended 31st March 2009
Table 5:
Balance Sheet as on 31st March 2009.
Table 6:
Cash Flow Statement for the Year ended 31st March 2009.
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List of Figures Fig.1:
Map showing location of Royal Sundaram Alliance Insurance Co. Offices
Fig.2:
Organizational Structure of Royal Sundaram Alliance Insurance Co.
Fig.3:
Employee Retention Strategies adopted at different levels.
Fig.4:
Retention Determinants
Fig.5:
Three R’s of Employee Retention.
Fig.6:
Bar diagram showing the span of service of the employees in the organization
Fig.7:
Pie Chart showing the satisfaction level of employees
Fig.8:
Pie chart showing the reasons behind dissatisfaction of employees.
Fig.9: Bar diagram showing responses of employees regarding changes required in job. Fig.10: Pie chart showing the reasons of resigning from the job. Fig.11: Pie chart showing the responses of employees regarding the initiatives taken by the organization in retaining employees. Fig.12: Pie chart showing the efforts made by the organization to retain its employees Fig.13: Bar diagram showing the frequency of rewards given to the employees. Fig.14: Bar diagram showing responses of employees regarding training programs provided by the organization. Fig.15: Bar diagram showing responses of employees regarding the opportunities for direct communication with the management.
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Fig.16: Bar diagram showing responses of employees regarding career development programs provided by the organization. Fig.17: Bar diagram showing responses of employees regarding the importance of their physical fitness. Fig.18: Bar diagram showing the importance given by the organization on work standards and satisfaction of employees. Fig.19: Pie chart showing the comfort level of the employees in the organization. Fig.20: Pie chart showing the attributes of the organizational climate of the company.
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BIBLIOGRAPHY BOOKS •
Gupta Shashi K. & Joshi Rosy, Human Resource Management, Tata McGraw Hill, Fourth Revised & Enlarged Edition, 2007. (Page 20.9-20.14)
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Kothari C.R., Research methodology, New Age Publishing House, Second Edition.
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Griffeth RW, Hom PW, Gaertner S (2000). "A meta-analysis of antecedents and correlates of employee turnover: update, moderator tests, and research implications for the next millennium", J. Manage. 26 (3): 463-88.
WEBSITES •
www.royalsundaram.in
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www.retention.naukarihub.com
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www.insurancejournal.com
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www.thefreelibrary.com
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www.irdaindia.org
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