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The Life Insurance Corporation of India (LIC)

Paper type: Essay
Pages: 17 (4135 words)
Categories: Corporation, Health Insurance In India, India, Insurance, Life, Life Insurance Corporation Of India
Downloads: 23
Views: 541

The Life Insurance Corporation of India (LIC) is the biggest life insurance business in India and likewise the country’s largest investor. It is fully owned by the Government of India. It also funds near to 24.6% of the Indian Government’s expenses. It was founded in 1956. Headquartered in Mumbai, which is thought about the financial capital of India, the Life Insurance Corporation of India currently has 8 zonal Workplaces and 101 divisional offices located in different parts of India, at least 2048 branches located in different cities and towns of India in addition to satellite Workplaces connected to about some 50 Branches, and has a network of around one million and 200 thousand agents for getting life insurance service from the public.

The corporation is an autonomous and has essential to run on sound principles. The corporation has actually been performing the function appointed to it and validating self-confidence of public by providing adequate security at reasonable expense, reputable service, economic management and favorable returns to the nation at large.

In the year 1956, LIC had 5 zonal offices, 33 divisional offices and 212 branch workplaces, apart from its corporate workplace.

Re-organization of LIC occurred and large number of brand-new branch offices was opened. As an outcome of re-organization, servicing functions were moved to the branches, and branches made accounting units. It worked marvels with the efficiency of the corporation. It may be seen that from about 200 crores of new service in 1957 the corporation crossed 1000 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000 crore mark of new company. But with re-organization happening in the early eighties, by 1985-86 LIC had crossed 7000 crore amount assured on new policies. Today LIC operates with 2048 totally computerized branch workplaces, 100 divisional workplaces, 7 zonal offices and the business workplace. LIC’s large are network covers 100 divisional workplaces and connects all the branches through a City Location Network. LIC has actually tied up with some banks and service companies to provide on-line premium collection center in picked cities.

LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policy holders, LIC has launched SATELLITE SAMPARK OFFICES. The Satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records; LIC of India traversed its long and illustrious journey and now has a vision to emerge as a world class customer centric organization.

Objectives of LIC:

Spread life insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost, is the main objective of LIC. Some other objectives of LIC are as follows: Maximize mobilization of people’s savings by making insurance linked savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the moneys belong to the policy holders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment.

HUMAN RESOURCE MANAGEMENT
Human Resource Planning in LIC

Human resource (or personnel) management, in the sense of getting things done through people. It’s an essential part of every manager’s responsibilities, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. “PEOPLE ARE OUR MOST VALUABLE ASSET” is what the Branch Manager of LIC said to us.

Functions of HRM by LIC

Steps in developing HRM planning in LIC:

Step 1: Get the ‘big picture’

Understand your business strategy.

• Highlight the key driving forces of your business. What are they? E.g. technology, distribution, competition, the markets. • What are the implications of the driving forces for the people side of your business? • What is the fundamental people contribution to bottom line business performance?

Step 2: Develop a Mission Statement or Statement of Intent

That relates to the people side of the business.

Do not be put off by negative reactions to the words or references to idealistic statements – it is the actual process of thinking through the issues in a formal and explicit manner that is important. • What do your people contribute?

Step 3: Conduct a SWOT analysis of the organization

Focus on the internal strengths and weaknesses of the people side of the business.
• Consider the current skill and capability issues.
• What impact will/ might they have on business performance?
• Consider skill shortages?
• The impact of new technology on staffing levels?

From this analysis you then need to review the capability of your personnel department. Complete a SWOT analysis of the department – consider in detail the department’s current areas of operation, the service levels and competences of your personnel staff.

Step 4: Conduct a detailed human resources analysis

Concentrate on the organization’s COPS (culture, organization, people, and HR systems) • consider: Where you are now? Where do you want to be?
• What gaps exists between the reality of where you are now and where you want to be? Exhaust your analysis of the four dimensions.

Step 5: Determine critical people issues

Go back to the business strategy and examine it against your SWOT and COPS Analysis • Identify the critical people issues namely those people issues that you must address. Those which have a key impact on the delivery of your business strategy. • Prioritize the critical people issues. What will happen if you fail to address them? Remember you are trying to identify where you should be focusing your efforts and resources.

Step 6: Develop consequences and solutions

For each critical issue highlight the options for managerial action generate, elaborate and create – don’t go for the obvious. This is an important step as frequently people jump for the known rather than challenge existing assumptions about the way things have been done in the past. Once you have worked through the process it should then be possible to translate the action plan into broad objectives. These will need to be broken down into the specialist HR Systems areas of:

• employee training and development
• management development
• organization development
• performance appraisal
• employee reward
• employee selection and recruitment
• manpower planning
• communication
Develop your action plan around the critical issues. Set targets and dates for the accomplishment of the key objectives.

Step 7: Implementation and evaluation of the action plans

The ultimate purpose of developing a human resource strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans. There is very little value or benefit in training people only to then frustrate them through a failure to provide ample career and development opportunities.

The functions of HRM followed by LIC are as follows:

Function 1: Manpower planning

The penalties for not being correctly staffed are costly.

• Understaffing loses the business economies of scale and specialization, orders, customers and profits. • Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislation in respect of redundancy payments, consultation, minimum periods of notice, etc. Very importantly, overstaffing reduces the competitive efficiency of the business. Planning staff levels requires that an assessment of present and future needs of the organization be compared with present resources and future predicted resources. Appropriate steps then be planned to bring demand and supply into balance. What future demands will be is only influenced in part by the forecast of the personnel manager, whose main task may well be to scrutinize and modify the crude predictions of other managers. Future staffing needs will derive from:

• Sales and production forecasts
• The effects of technological change on task needs.
• Variations in the efficiency, productivity, flexibility of labor as a result of training, work study, organizational change, new motivations, etc. • Changes in employment practices (e.g. use of subcontractors or agency staffs, hiving-off tasks, buying in, substitution, etc.) • Variations, which respond to new legislation, e.g. payroll taxes or their abolition, new health and safety requirements. • Changes in Government policies (investment incentives, regional or trade grants, etc.).

That, in turn, will involve the further planning of such recruitment, training, retraining, labor reductions (early retirement/redundancy) or changes in workforce utilization as will bring supply and demand into equilibrium, not just as a one–off but as a continuing workforce planning exercise the inputs to which will need constant varying to reflect ‘actual’ as against predicted experience on the supply side and changes in production actually achieved as against forecast on the demand side.

Function 2: Recruitment and selection of employees

Recruitment of staff should be preceded by:

An analysis of the job to be done (i.e. an analytical study of the tasks to be performed to determine their essential factors) written into a job description so that the selectors know what physical and mental characteristics applicants must possess, what qualities and attitudes are desirable and what characteristics are a decided disadvantage;

• In the case of replacement staff a critical questioning of the need to recruit at all (replacement should rarely be an automatic process). • Effectively, selection is ‘buying’ an employee hence bad buys can be very expensive. For that reason some firms (and some firms for particular jobs) use external expert consultants for recruitment and selection. • Equally some small organizations exist to ‘head hunt’, i.e. to attract staff with high reputations from existing employers to the recruiting employer. However, the ‘cost’ of poor selection is such that, even for the mundane day-to-day jobs, those who recruit and select should be well trained to judge the suitability of applicants.

The main sources of recruitment are:

• Internal promotion and internal introductions (at times desirable for morale purposes)
• Careers officers (and careers masters at schools)
• University appointment boards
• Agencies for the unemployed
• Advertising (often via agents for specialist posts) or the use of other local media (e.g. commercial radio)

Interviewing can be carried out by individuals, by panels of interviewers or in the form of sequential interviews by different experts and can vary from a five minute ‘chat’ to a process of several days. Ultimately personal skills in judgment are probably the most important, but techniques to aid judgment include selection testing for: • Aptitudes (particularly useful for school leavers).

• Attainments
• General intelligence.

Function 3: Employee motivation

To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise. Basic financial rewards and conditions of service (e.g. working hours per week) are determined externally (by national bargaining or government minimum wage legislation) in many occupations but as much as 50 per cent of the gross pay of manual workers is often the result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of service are often more important than the basics. Hence there is scope for financial and other motivations to be used at local levels.

As staffing needs will vary with the productivity of the workforce (and the industrial peace achieved) so good personnel policies are desirable. The latter can depend upon other factors (like environment, welfare, employee benefits, etc.) but unless the wage packet is accepted as ‘fair and just’ there will be no motivation.

The former demand better-educated, mobile and multi-skilled employees much more likely to be influenced by things like job satisfaction, involvement, participation, etc. than the economically dependent employees of yesteryear.

Hence human resource management acts as a source of information about and a source of inspiration for the application of the findings of behavioral science. It may be a matter of drawing the attention of senior managers to what is being achieved elsewhere and the gradual education of middle managers to new points of view on job design, work organization and worker autonomy.

Function 4: Employee evaluation

An organization needs constantly to take stock of its workforce and to assess its performance in existing jobs for three reasons:

• To improve organizational performance via improving the performance of individual contributors (should be an automatic process in the case of good managers, but (about annually) two key questions should be posed: o What has been done to improve the performance of a person last year? o And what can be done to improve his or her performance in the year to come?

• To identify potential, i.e. to recognize existing talent and to use that to fill vacancies higher in the organization or to transfer individuals into jobs where better use can be made of their abilities or developing skills.

• To provide an equitable method of linking payment to performance where there are no numerical criteria (often this salary performance review takes place about three months later and is kept quite separate from 1. and 2. but is based on the same assessment). On-the-spot managers and supervisors, not HR staffs, carry out evaluations. The personnel role is usually that of:

• Advising top management of the principles and objectives of an evaluation system and designing it for particular organizations and environments.

• Developing systems appropriately in consultation with managers, supervisors and staff representatives. Securing the involvement and cooperation of appraisers and those to be appraised.

• Assistance in the setting of objective standards of evaluation / assessment, for example:
o Defining targets for achievement;
o Explaining how to quantify and agree objectives;
o Introducing self-assessment;
o Eliminating complexity and duplication.

• Publicizing the purposes of the exercise and explaining to staff how the system will be used.

• Organizing and establishing the necessary training of managers and supervisors who will carry out the actual evaluations/ appraisals. Not only training in principles and procedures but also in the human relations skills necessary. (Lack of confidence in their own ability to handle situations of poor performance is the main weakness of assessors.)

• Monitoring the scheme – ensuring it does not fall into disuse, following up on training/job exchange etc. recommendations, reminding managers of their responsibilities.

Basically an evaluation / appraisal scheme is a formalization of what is done in a more casual manner anyway. Most managers approve merit payment and that too calls for evaluation. Made a standard routine task, it aids the development of talent, warns the inefficient or uncaring and can be an effective form of motivation.

Function 5: Industrial relations

Good industrial relations, while a recognizable and legitimate objective for an organization, are difficult to define since a good system of industrial relations 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 and professional associations); (c) The government and legislation and government agencies l and ‘independent’ agencies like the Advisory Conciliation and Arbitration Service.

Oversimplified, work is a matter of managers giving instructions and workers following them – but (and even under slavery we recognize that different ‘managing’ produces very different results) the variety of ‘forms’ which have evolved to regulate the conduct of parties (i.e. laws, custom and practice, observances, agreements) makes the giving and receipt of instructions far from simple.

Function 6: Provision of employee services

Attention to the mental and physical well-being of employees is normal in many organizations as a means of keeping good staff and attracting others. The forms this welfare can take are many and varied, from loans to the needy to counseling in respect of personal problems. Among the activities regarded as normal are:

• Schemes for occupational sick pay, extended sick leave and access to the firm’s medical adviser;
• Schemes for bereavement or other special leave;

• The rehabilitation of injured/unfit/ disabled employees and temporary or permanent move to lighter work; • Provision of financial and other support for sports, social, hobbies, and activities of many kinds which are work related; • Provision of canteens and other catering facilities;

• possibly assistance with financial and other aid to employees in difficulty (supervision, maybe, of an employee managed benevolent fund or scheme); • Provision of information handbooks,
• Running of pre-retirement courses and similar fringe activities;
• Care for the welfare aspects of health and safety legislation and provision of first-aid training.

Attention to the mental and physical well-being of employees is normal in many organizations as a means of keeping good staff and attracting others. The forms this welfare can take are many and varied, from loans to the needy to counseling in respect of personal problems. Among the activities regarded
as normal are:

• Schemes for occupational sick pay, extended sick leave and access to the firm’s medical adviser;
• Schemes for bereavement or other special leave;
• The rehabilitation of injured/unfit/ disabled employees and temporary or permanent move to lighter work;
• Provision of financial and other support for sports, social, hobbies, activities of many kinds which are work related;
• Provision of canteens and other catering facilities;

• Possibly assistance with financial and other aid to employees in difficulty (supervision, maybe, of an employee managed benevolent fund or scheme); • Provision of information handbooks,
• Running of pre-retirement courses and similar fringe activities;
• Care for the welfare aspects of health and safety legislation and provision of first-aid training.

Function 7: Employee education, training and 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 job adequately and development is ‘the growth of the individual in terms of ability, understanding and awareness’.

Within an organization all three are necessary in order to:

• Develop workers to undertake higher-grade tasks;
• Provide the conventional training of new and young workers (e.g. as apprentices, clerks, etc.);
• Raise efficiency and standards of performance;
• Meet legislative requirements (e.g. health and safety);
• Inform people (induction training, pre-retirement courses, etc.);

From time to time meet special needs arising from technical, legislative, and knowledge need changes. Meeting these needs is achieved via the ‘training loop’. (Schematic available in PDF version.) Designing training is far more than devising courses; it can include activities such as:

• Learning from observation of trained workers;
• Receiving coaching from seniors;
• Discovery as the result of working party, project team membership or attendance at meetings;
• Job swaps within and without the organization;
• Undertaking planned reading, or follow from the use of self–teaching texts and video tapes;
• Learning via involvement in research, report writing and visiting other works or organizations.

So far as group training is concerned in addition to formal courses there are:

• Lectures and talks by senior or specialist managers;
• Discussion group (conference and meeting) activities;
• Briefing by senior staffs;
• Role-playing exercises and simulation of actual conditions;
• Video and computer teaching activities;
• Case studies (and discussion) tests, quizzes, panel ‘games’, group forums, observation exercises and inspection and reporting techniques.
• Evaluation of the effectiveness of training is done to ensure that it is cost effective, to identify needs to modify or extend what is being provided.

RECRUITMENT AND SELECTION PROCESS OF LIC
LIC

There is basically 3 types of employees in LIC. First are the ones working on payroll basis? There are permanent employees of LIC and receive their monthly incomes. Second are the ones who are on temporary basis basically working for a year or 2 years approximately. They also receive their incomes on monthly basis. Third are the ones who are agents who are purely working on Commission basis. Their Commission is decided on the number of policy holders they track. Recruitment at LIC: recruitment at LIC is done on all India bases. Class 1 officers are assistant administrative officers. Class 2 officers are development officers.

Class 3 officers are assistant officers.

Class 4 officers are the sub staff usually Job rotation is practiced in LIC means employees have to work in different departments. This is usually done to import different types of sails in their employees. Recruitment at LIC is done by central office at Mumbai. The recruitments process for above mentioned officers at LIC begins with placing at advertisements in popular national and regional newspapers across the country. Candidates applying for above mentioned posts should be between 21 and 28 years at age. They should be graduate/post graduate degree with minimum 50 % marks candidates from certain background(SC,ST,OBC) are given some commissions with regard to age and marks. Short listed candidates are asked to appear for an entrance examination.

The entrance examination has 2 papers – one is objective type and other is an essay type. The objective type paper test is intelligence, aptitude, mathematical knowledge, logical reasoning, general awareness and awareness of political and cultural events. After written test, candidates have to appear for interviews which are conducted by LIC officers across the country. Based on overall performance candidates reselected. There are basically 3 types of employees in LIC. First are the ones working on payroll basis? There are permanent employees of LIC and receive their monthly incomes. Second are the ones who are on temporary basis basically working for a year or 2 years approximately. They also receive their incomes on monthly basis. Third are the ones who are agents who are purely working on Commission basis. Their Commission is decided on the number of policy holders they track.

Recruitment at LIC: recruitment at LIC is done on all India bases.
Class 1 officers are assistant administrative officers.
Class 2 officers are development officers.
Class 3 officers are assistant officers.
Class 4 officers are the sub staff usually Job rotation is practiced in LIC means employees have to work in different departments. This is usually done to import different types of sails in their employees.

Recruitment at LIC is done by central office at Mumbai. The recruitments process for above mentioned officers at LIC begins with placing at advertisements in popular national and regional newspapers across the country. Candidates applying for above mentioned posts should be between 21 and 28 years at age. They should be graduate/post graduate degree with minimum 50 % marks candidates from certain background(SC,ST,OBC) are given some commissions with regard to age and marks.

Short listed candidates are asked to appear for an entrance examination. The entrance examination has 2 papers – one is objective type and other is an essay type. The objective type paper test is intelligence, aptitude, mathematical knowledge, logical reasoning, general awareness and awareness of political and cultural events. After written test, candidates have to appear for interviews which are conducted by LIC officers across the country. Based on overall performance candidates are selected.

The different motivating programs like competitions are use. These are parameters to value them at different targets. The performance apparatus for employees is usually once in 1 year. 6 months after information. For class 1 officers it’s on financial year basis.

For other employees it’s every calendar year. For class 1 officer’s double appraisal system is used. It is named as DOPA. Usually there is very much transparency in the organization. There is mutual agreement, planning agreement between employees and employees.

Recruitment of other employees of the organization.

Applications are invited from eligible candidates for selection and appointment for the desired profile in the various Offices of LIC of India. The selection and appointment is subject to the reservation of SC/ST/OBC as per rules. The total number of vacancies including vacancies for the reserved category may increase or decrease, depending upon the actual vacancies at the time of final selection and availability of successful candidates after the interview.

Cite this essay

The Life Insurance Corporation of India (LIC). (2016, Dec 21). Retrieved from https://studymoose.com/the-life-insurance-corporation-of-india-lic-essay

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