INTRODUCTION
Human resource in the sense of getting things done through people is an essential part of every manager?s responsibility, 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 a word, which no member of any senior management team would disagree with. Yet, the reality for organizations is that their people remain undervalued, undertrained and underutilized. Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.
TARGET BASED PERFORMANCE APPRAISAL
Target based performance appraisal is to improve the performance of the financial advisors in a MetLife India Insurance. Every advisor is having their targets to achieve goals. According to their targets there will be appraised. Appraisals can be made through various systems. Even though any type of targets the appraisals are followed equally in the organizations. In every organization there will be a target based performances that is followed for every employees. Each employee set their own targets or the company targets. If an employee„s are achieved their target they get appraisals like gifts, promotions etc. for every organizations the target performance appraisal system is important.
Insurance is a subject listed in the union list in the seventh schedule to the constitution of India where only centre can legislate. The insurance sector has gone through a number of phases by allowing private companies to solicit insurance and also allowing FDI of up to 49%, the insurance sector has been a booming market. However, the largest life-insurance company in India is still owned by the government. In insurance sector the target based performance appraisals are differ from other sectors. In this sector both the employees and advisor are having their own targets. The target is achieved then there is appraisals like incentives, performance based pay, gifts etc. The rating system is used in appraising the employees and the advisors in the insurance sectors. Not only are the insurance sectors, in other sectors the appraisal systems are used to evaluate the employee?s performances. All the sectors in the business world and all the organizations are using the targets and according to their targets the performances of the employees are evaluated. From this study it helps to find the effectiveness of the performance appraisals and the factors that influences on the performance of the financial advisors in Metlife India insurance.
1.2 NEED OF THE STUDY
? Through this study the real talent of financial advisors will be judged. So, this performance appraisal is needed. ? Today every organization needs an effective employee. So, those employees will be utilized at the fullest level. ? If financial advisors do not perform well, he will perish; it results in an organization which perishes in the market. So, the study was taken to improve the performance of the financial advisors, according to their targets.
1.3 OBJECTIVE OF THE STUDY
? To know the reasons and factors influences the financial advisors in their performances. ? To study present appraisal system followed for financial advisors. ? To investigate the effects of target based performances of financial advisors performance. ? To make suggestions about the performance of financial advisors.
1.4 SCOPE OF THE STUDY
? This study was taken only to MetLife India insurance co.ltd, Vellore branch. ? This study finds the way to financial advisors, to increase their commitment level for their target performance jobs. ? This study finds the way to motivate the financial advisors to perform well and engaged themselves in their job. ? This study provides the training for the financial advisors to develop themselves and the organization.
1.5 LIMITATIONS OF THE STUDY
? Number of sample size is less due to the time constraint. ? Many respondents did not give response during the data collection. ? Communication is one of the factors which are hard during this study.
1.6 PROFILE OF COMPANY
INDUSTRIAL PROFILE
THE HISTORY OF INDIAN INSURANCE INDUSTRY The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years.
LIFE INSURANCE
In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher
echelons of society. “Unethical practices adopted by some of the players against the interests of the consumers” then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that “nationalization has lent the industry fairness, solidity, growth and reach.” Insurance may be described as a social device to ensure protection of economic value of life and other assets. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. 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. The term "risk" is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss. Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an individual are distributed over a group of individuals.
CHARACTERISTICS OF INSURANCE
? Sharing of risks ? Cooperative device ? Evaluation of risk ? Payment on happening of a special event
? The amount of payment depends on the nature of losses incurred. ? . The success of insurance business depends on the large number of people insured against similar risk. ? Insurance is a plan, which spreads the risk and losses of few people among a large number of people. ? The insurance is a plan in which the insured transfers his risk on the insurer. ? Insurance is a legal contract which is based upon certain principles of insurance which includes, utmost good faith, insurable interest, contribution, indemnity, causes proximal, subrogation, etc. ? The scope of insurance is much wider and extensive.
FUNCTIONS OF INSURANCE:
PRIMARY FUNCTIONS
1. Provide protection: - Insurance cannot check the happening of the risk, but can provide for the losses of risk.
2. Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others. 3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk.
4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.
SECONDARY FUNCTIONS 1. Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions.
2. Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty.
3. Contributes towards development of larger industries.
OTHER FUNCTION
Means of savings and investment
Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their costs, which include payments to cover the losses of policyholders, as well as sales and administrative expenses, taxes and dividends. Insurance companies have two sources of income for covering these costs: premiums and investment income. The premiums are collected on a regular basis and invested in Government Bonds, Gilt, stocks, mutual funds, real estates and other conservative avenues. However, investment income depends on market conditions, interest rates, economy etc. and varies from year to year. Because of the uncertainty associated with the investment income, insurance companies must generate enough income from premiums to cover the bulk of their expenses.
The important milestones in the life insurance business in India are
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life 'Insurance Company started 'its business.
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 pubic.
1956: 245 Indian and foreign insurance and provident societies are 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 crores from the Government of India.
LIBERALIZATION OF INDIAN INSURANCE
1994: Insurance sector invited private participation to induce a spirit of competition amongst the various insurers and. to provide a choice to the consumers.
1997: Insurance regulator IRDA was set up as there felt the Feed:
To set up an independent regulatory body, that provides greater autonomy to insurance companies in order to improve their performance, In the first year of insurance market liberalization (2001) as much as 16 private sector companies including joint ventures with leading foreign insurance companies have entered the Indian insurance sector. Of this, 10 were under the life insurance category and six under general insurance. Thus in all there are 25 players (12-life insurance and l3- general insurance) in the Indian insurance industry till date.
PLAYERS IN INDIAN INSURANCE INDUSTRY
LIFE INSURERS
Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers: · Life Insurance Corporation of India (LIC)
GENERAL INSURERS:
General Insurance Corporation of India (GIC) (with effect from Dec'2000, a National Reinsure) GIC had four subsidiary companies, namely (with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies).
1. The Oriental Insurance Company Limited 2. The New India Assurance Company Limited, 3. National Insurance Company Limited 4. United India Insurance Company Limited.
Yr: 2000-2007: Insurance Industry in the year 2000-2001 had 15 new Entrants, namely:
LIFE INSURERS
S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Name of the Company Max New York Life Insurance Co. Ltd. HDFC Standard Life Insurance Company Ltd. ICICI Prudential Life Insurance Company Ltd. Om Kodak Mahindra Life Insurance Co. Ltd. Birla Sun Life Insurance Company Ltd. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. Reliance Life Insurance Company Ltd. Shriram Life Insurance Company Ltd. Sahara India Life Insurance Company Ltd. Bharti AXA Life Insurance Company Ltd. Aviva Life Insurance Company Ltd.
GENERAL INSURERS
S.No. Name of the Company
1 2 3 4 5 6
Royal Sundaram Alliance Insurance Company Limited Reliance General Insurance Company Limited. IFFCO Tokio General Insurance Co. Ltd TATA AIG General Insurance Company Ltd. Bajaj Allianz General Insurance Company Limited ICICI Lombard General Insurance Company Limited.
Various types of life insurance policies:? Endowment policies: This type of policy covers risk for a specified period, and at the end of the maturity sum assured is paid back to policyholder with the bonuses during the term of the policy. ? Money back policies: This type of policy is for periodic payments of Partial survival benefits during the term of the policy as long as the policy Holder is alive. ? Group insurance: This type of insurance offers life insurance protection under group policies to various groups such as employers-employees, Professionals, cooperatives etc it also provides insurance coverage for People in certain approved occupations at the lowest possible premium cost.
? Term life insurance policies: This type of insurance covers risk only during the selected term period. If the policy holder survives the term, risk Cover comes to an end. These types of policies are for those people who are unable to pay larger premium required for endowment and whole life Policies. No surrender, loan or paid up values are in such policies. ? Whole life insurance policies: This type of policy runs as long as the Policyholder is alive and is covered for the entire life of the policyholder. In This policy the insured amount and the bonus is payable only to nominee on the death of policy holder. ? Joint life insurance policies: These policies are similar to endowment Policies in maturity benefits and risk cover, but joint life policies cover two Lives simultaneously such as married couples. Sum assured is payable on the first death and again on the death of survival during the term of the policy. ? Pension plan: a pension plan or annuity is an investment over certain Number of years but does not provide any life insurance cover. It offers a guaranteed income either for a life or certain period. \ ? Unit linked insurance plan: ULIP is a kind of insurance plan which Provides life cover as well as return on premium paid over a certain period of time. The investment is denoted as units and represented by the value Called as net asset value (NAV).
COMPANY PROFILE
MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife has more than 50,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States (based on life insurance enforce), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500® companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions.
MetLife Inc.:-
Celebrating 140 years, MetLife, Inc. is a leading provider of insurance and Financial services with operations throughout the United States and the Latin America, Europe, and Asia Pacific regions. Through its domestic and international subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force).
The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions.
INTERNATIONAL PRESENCE
Outside of the U.S., MetLife operates in Latin America, Europe, Asia?s Pacific region, and the Middle East, with leading market positions in Mexico, Japan, South Korea and Chile. On March 8, 2010, Met Life announced its intent to purchase the international leader life-insurance business, American Life Insurance Company (Alico), from American International Group (AIG). MetLife [MET], which completed the deal on November 1, 2010, paid approximately $7.2 billion in cash and $9.0 billion in MetLife equity and other securities. The securities portion of the deal consisted of 78.2 million shares of MetLife common stock, 6.9 million shares of contingent convertible preferred stock and 40 million equity units. The values of the common and preferred stock were based on the closing price of MetLife?s common stock on October 29. Upon completion of the purchase, MetLife became a leading competitor in Japan, the world?s secondlargest life insurance market, and moved into a top five market position in many high growth emerging markets in Central and Eastern Europe, the Middle East and Latin America. The deal added 20 million customers to MetLife?s 70 million and according to Barron?s Magazine more than doubled the percentage of operating profits that MetLife gets abroad to 40%. MetLife India Insurance Company Limited (MetLife) operates in India since 2001 and is an affiliate of MetLife, Inc. MetLife headquartered in Bangalore and Gurgaon, is one of the fastest growing life insurance companies in the country (http://www.metlife.co.in/). Punjab National Bank, the largest Public Sector Bank in India with over 5500 branches and with total business figure of Rs.600, 000/- crores as at 31.12.2011(http://www.pnbindia.com), has entered in to strategic alliance with Metlife.
The New entity PnbMetlfe has commenced providing the services through the branches of PUNJAB NATIONAL BANK.
VISION AND MISSION
? Build financial freedom for all through leadership in providing financial advice and building long-term relationships through innovative protection,
accumulation and retirement products, robust underwriting processes and creating world-class customer service experience for our customers. ? They provide customers in India with world-class solutions for financial Security, and in the process add significant value to our shareholders, associates and society.
THEIR CORE VALUES
? They lead through Innovation to offer world class and competitive products to their customers ? They build Long Term Relationships with their customers by creating a world class service experience through operational excellence and the innovative use of technology ? They create a Customer Centered and Result Focused Vision that inspires each one of their Associates and has their buy-in ? They committed in creating a High Performance Organization by creating an environment that allows each one of their Associates to perform at their peak. As a result they will also be recognized as an Employer of Choice
? They committed to Partnering with their internal and external Customers for mutual success ? They work with Integrity, Fairness and Financial Prudence in all their dealings keeping the interests of our Shareholders, Customers and Associates paramount
AWARDS
? MetLife was named the “Best Managed Insurance Company for 2008” by Forbes magazine. ? For three consecutive years (2008–2010) the company has also appeared on FORTUNE?s list of the most-admired companies. ? MetLife was recognized by Diversity MBA magazine as one of its “Top 50 Companies for Diverse Managers” in 2007, 2008, 2009 and 2010. ? The magazine highlighted MetLife?s Enterprise Diversity Council and noted how the council helps “set direction, communicate strategy and ensure consistency of the diversity message across MetLife.” ? For eleven consecutive years (1999–2009) MetLife has been named by Working Mother magazine as one of the “100 Best Companies for Working Mothers,” specifically for offering flexible schedules, remote working capabilities and various child care options. ? MetLife has also been awarded a perfect score for seven consecutive years (2004– 2010) by the Human Rights Campaign Foundation for its “Corporate Equality Index-Best Companies “.
PARTNERS
CORPORATE AGENTS ? Geojit Investment Services Ltd ? The Jammu And Kashmir Bank Ltd. ? Karnataka Bank Ltd ? Barclays Plc ? Sri Bhramaramba Pattina
INACTIVE CORPORATE AGENTS ? Abl Consultancy Services Pvt. ? Alliance Consultancy ? Ampe Insurance Advisors ? Analytical Insurance ? Apna Bazaar ? Apna Insurance ? Ardee Life ? Arian Medicals ? Ashram Composite Insurance Age ? Canon Insurance Services Pvt ? Muthoottu Mini Financiers Pvt
Soudhara Sahakari Niyamita ? Odisha Housing Development And Finance Co-Op Ltd ? M.P Rajya Sahakari Bank Mydt ? J&K Grameen Bank ? Birdres Technologies Pvt. Ltd ? Punjab National Bank ? American Express Banking Corp.
METLIFE INSURANCE - PRODUCTS MetLife Plans are innovative and cater to individual and group customers and are categorized into the following:
MetLife Term Plans ? Met Suraksha ? Met Suraksha Plus ? Met Suraksha TROP ? Met Protect ? Met Mortgage Protector Plus
MetLife ULIP Plans ? Met Smart Platinum ? Met Smart one ? Met Easy Super
MetLife Child Plans ? Met Bhavishya ? Met Junior Endowment ? Met Junior Money Back ? Met Smart Child
MetLife Pension Plans ? Met Deferred Monthly Income Plan
MetLife Monthly Income Plans ? Met Monthly Income Plan ? Met Monthly Income Plan - 7 pay ? Met Monthly Income Plan – 15 pay
MetLife Traditional Plans ? Met Sukh ? Met Suvidha ? Met Saral ? Met 100
MetLife Health Plans ? Met Health Care ? Met Health cash
MetLife Rural Plans ? Met Vishwas ? Met Suvidha Saral ? Met Grameen Ashray
RESPONSIBILITIES AND DUTIES OF FINANCIAL ADVISOR
WHO IS A FINANCIAL ADVISOR A financial advisor can be addressed as a professional who provides financial services to individuals, businesses, and governments. These financial services may include pension planning or/and advice related to life insurance and similar insurances like income protection insurance, critical illness insurance, and also advise on mortgages. Perfectly, a financial advisor assists the client in maintaining the expected balance of investment income, capital gains, and acceptable level of risk through the use of proper allocation. Financial advisors use bonds, stock, mutual funds, RETIs (real estate investment trusts, futures, options, notes, and insurance products to congregate the needs of the clients.
DUTIES AND RESPONSIBILITIES OF A FINANCIAL ADVISOR
The duties and responsibilities of a financial advisor are as follows: 1. The first and foremost responsibility of a financial advisor is to guide the clients on the basis of short term and long term financial objectives. 2. It is essential to first consider the financial requirements of the customers for advising on the basis of his/her financial conditions. 3. The advisor should guide the clients about the fund specific projects they would be interested in. 4. The advisor can undertake the retirement planning for clients.
5. It is also required on the financial advisor?s part to guide the clients about the bets real estate investment opportunities present in a particular market. 6. The financial advisor is liable for pooling the wealth of the shareholder when employed in a mutual fund. 7. The financial advisor needs to ensure the clients? willingness towards a particular investment decision as well. 8. The financial advisor performs the duty of helping the client in acquiring assets in a balanced way. 9. The financial advisor should keep in mind the requirement of liquid cash to congregate the day to day expenses.
SKILLS AND SPECIFICATIONS
The basic skills and specifications required essentially in a financial advisor include: 1. The person should possess good communication skills. 2. He/she should have the required financial knowledge in insurance, tax services, retirement accounts, and financing accounts. 3. He/she should be registered with the respective authorities. 4. He/she should be trustworthy and objective in doing the job.
ORGANIZATIONAL STRUCTURE
2.1 FIELD OF THE STUDY The study was restricted to the financial advisors of METLIFE INDIA INSURANCE CO LTD in Vellore.
2.2 RESEARCH DESIGN Research design `deals with a logical problem and not a logistical problem'. Before a builder or architect can develop a work plan or order materials they must establish the type of building required, its uses and the needs of the occupants. Similarly, in social research the issues of sampling, method of data collection.
TYPES OF RESEARCH DESIGN
1. 2.
Descriptive Research methodology Explanatory Research methodology
Descriptive Research Methodology:? In this study descriptive research design was adopted Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when and how...
2.3 SAMPLING DESIGN A sample is a finite part of a statistical population whose properties are studied to gain information about the whole. When dealing with people, it can be defined as a set of respondents (people) selected from a larger population for the purpose of a survey.
TYPES OF SAMPLING DESIGN 1. Probability sampling design 2. Non probability sampling design Meaning of Probability Sampling A probability sampling method is any method of sampling that utilizes some form of random selection. In order to have a random selection method, you must set up some process or procedure that assures that the different units in your population have equal probabilities of being chosen. Humans have long practiced various forms of random selection, such as picking a name out of a hat, or choosing the short straw. These days, we tend to use computers as the mechanism for generating random numbers as the basis for random selection. NON PROBABILITY SAMPLING The difference between non probability and probability sampling is that non probability sampling does not involve random selection and probability sampling does. Does that mean that non probability samples aren't representative of the population? Not necessarily. But it does mean that non probability samples cannot depend upon the rationale of probability theory. At least with a probabilistic sample, we know the odds or probability that we have represented the population well. Non probability sampling method was adopted in this study. They are able to estimate confidence intervals for the statistic. With non probability samples, they may or may not represent the population well, and it will often be hard for us to know how well we've done so. In general, researchers prefer probabilistic or random sampling methods over non probabilistic ones, and consider them to be more accurate and rigorous. However, in applied social research there may be
circumstances where it is not feasible, practical or theoretically sensible to do random sampling. Here, we consider a wide range of non probabilistic alternatives. It can divide non probability sampling methods into two broad
types: accidental or purposive. Most sampling methods are purposive in nature because they usually approach the sampling problem with a specific plan in mind. The most important distinctions among these types of sampling methods are the ones between the different types of purposive sampling approaches. SAMPLE SIZE: The size of the sample is 130. Tool of data collection: Questionnaire 2.4 SOURCE OF DATA COLLECTION PRIMARY SOURCE Primary source is a term used in a number of disciplines to describe source material that is closest to the person, information, period, or idea being studied. In the study of history as an academic discipline, a primary source (also called original source or evidence) is an artifact, a document, a recording, or other source of information that was created at the time under study. SECONDARY DATA Secondary data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research. ? In this study both data method was adopted.
2.5 TOOL OF DATA COLLECTION
Purpose of Questionnaires The questionnaire (also called survey) is a set of questions given to a sample of people. The purpose is to gather information about the people?s attitudes, thoughts, behaviors, and so forth. The researchers compile the answers of the people in the sample in order to know how the group as a whole thinks or behaves. Closed Ended Questions:Respondents? answers are limited to a fixed set of responses. Most scales are closed ended. Other types of closed ended questions include:
? ? ?
Yes/no questions - The respondent answers with a “yes” or a “no”. Multiple choices - The respondent has several options from which to choose. Scaled questions - Responses are graded on a continuum.
Open Ended Questions:No options or predefined categories are suggested. The respondent supplies their own answer without being constrained by a fixed set of possible responses. Examples of types of open ended questions include
2.6 ANALYSIS OF DATA 1. Correlation 2. Chi-square
CORRELATION ? A reciprocal relation between two or more things ? Correlation coefficient: a statistic representing how closely two variables co-vary; it can vary from -1 (perfect negative correlation) through 0 (no correlation) to +1 (perfect positive correlation); "what is the correlation between those two variables?" ? A statistical relation between two or more variables such that systematic changes in the value of one variable are accompanied by systematic changes in the other.
Definition & Formula to Correlation N?xy-(?x) (?y) R= ? {N?x2-(?x)2}{N?y2-(?y)2}
N ?xy ?x ?y ?x
= number of pairs of scores =sum of the products of paired scores = sum of x scores =sum of squared x scores = sum of squared y scores
Correlation is a statistical measurement of the relationship between two variables. Possible correlations range from +1 to –1. A zero correlation indicates that there is no
relationship between the variables. A correlation of –1 indicates a perfect negative correlation, meaning that as one variable goes up, the other goes down. A correlation of +1 indicates a perfect positive correlation, meaning that both variables move in the same direction together.
DEFINITIONS & FORMULA OF CHI-SQUARE
In probability theory and statistics, the chi-square distribution with k degrees of freedom is the distribution of a sum of the squares of k independent standard normal random variables. Pearson's chi-square test, also known as the chi-square goodness-of-fit test or chisquare test for independence, when mentioned without any modifiers or without other precluding context, this test is usually understood (for an exact test used in place of ?2, see Fisher's exact test). The analysis for this study was made with the help of SPSS tool.
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Human Resource (or personnel) management, in the sense of getting things done through people, is an essential part of every manager?s responsibility, 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 a line, which no member of any senior management team would disagree with. Yet, the realities for many organizations are that their people remain undervalued, under trained and underutilized. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop „cultural awareness?, product / process / organization knowledge and experience for new staff members.
FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization: 1. Recruitment 2. Selection 3. Induction 4. Performance Appraisal 5. Training & Development
Recruitment The process of recruitment begins after manpower requirements are determined in terms of quality through job analysis and quantity through forecasting and planning.
Selection The selection is the process of ascertaining whether or not candidates possess the requisite qualifications, training and experience required.
Induction Induction is the technique by which a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of the organization. WHAT IS “PERFORMANCE APPRAISAL”?
Performance Appraisal is defined as the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in working organizations and potential of employees. According to Flippo, “Performance Appraisal is the systematic, periodic and an important rating of an employee?s excellence in matters pertaining to his present job and his potential for a better job.”
CHARACTERISTICS OF PERFORMANCE APPRAISAL
1. Performance Appraisal is a process. 2. It is the systematic examination of the strengths and weakness of an employee in terms of his job. 3. It is scientific and objective study. Formal procedures are used in the study.
4. It is an ongoing and continuous process wherein the evaluations are arranged periodically according to a definite plan. 5. The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee.
PROCESS OF PERFORMANCE APPRAISAL
The process of performance appraisal:
1. Establishing performance standards 2. Communicating the Standards 3. Measuring Performance 4. Comparing the actual with the standards 5. Discussing the appraisal 6. Taking Corrective Action
LIMITATIONS OF PERFORMANCE APPRAISAL
1. Errors in Rating 2. Lack of reliability 3. Negative approach 4. Multiple objectives 5. Lack of knowledge
BENEFITS OF PERFORMANCE APPRAISALS ? Measures an employee?s performance. ? Helps in clarifying, defining, redefining priorities and objectives. ? Motivates the employee through achievement and feedback.
? Facilitates assessment and agreement of training needs. ? Helps in identification of personal strengths and weaknesses. ? Plays an important role in Personal career and succession planning. ? Clarifies team roles and facilitates team building. ? Plays major role in organizational training needs assessment and analysis. ? Improves understanding and relationship between the employee and the reporting manager and also helps in resolving confusions and misunderstandings. ? Plays an important tool for communicating the organization?s philosophies, values, aims, strategies, priorities, etc among its employees. ? Helps in counseling and feedback.
BASIS OF THE STUDY Performance Appraisal is the important aspect in the organization to evaluate the employee?s performance. It helps in understanding the employees work culture, involvement, and satisfaction. It helps the organization in deciding employee?s promotion, transfer, incentives, and pay increase.
MODERN APPRAISAL Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual etc), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations, appraisals are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performance of advisors who should get the majority of available bonuses, promotions and merits. By the same time, appraisals are used to identify the poor performers, who may require training, decreases in bonus and other forms.
FEATURES OF PERFORMANCE APPRAISAL
Systematic process Periodic process Evaluating process Performance appraisal
Determines employees potentialities Futureoriented
Employee development
TARGET BASED PERFORMANCE APPRASAL
Goals lay down targets to be achieved infuture.they influence the behavior of employees and also their motivation. When the employees participate in goal setting, they see how their efforts will lead to performance, rewards and personal satisfaction. Thus, goals provide a sense of direction to the employees. Moreover, attainment of goals is rewarding as it helps to satisfy the needs of the employees and stimulates them to set higher goals for the future. TYPES OF GOALS 1) On the basis of level of organizations: Strategic goals: Broad statements of where the organization wants to be in the future; pertain to the organization as a whole rather than to specific divisions or departments. Tactical goals: Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals. Operational goals: Specific measurable results expected from departments, work groups, and individuals within the organization.
2) On the basis of individual course of action: Achievement goals: These describe the results that one will have when finished the goal. Action goals: These describe specific actions that one will take to accomplish achievement goals. Limit goals: These goals set boundaries and help to manage priorities.
Rate goals: These specify actions repeatedly done over time. Many personal growth activities can be performed as rate goals. Exclusion goals: These states things that one will not do. These help people to decide in advance which activities they will avoid. Layered goals: These specify the same goal with different levels of priority and difficulty. They use layered goals to stretch the performance beyond minimum achievements.
Incredible goals: These goals are highly optimistic, farfetched, or uncommonly aggressive. ELEMENTS OF TARGET SETTING These elements are studied by EDWIN LOCKE 1) Goal acceptance: The employees should understand the implications of goals for them and also accept them. If difficult goals are assigned to individuals, they may not feel attached to the goals.thats why it is desired that the managers should follow a participative approach in setting the goals for the subordinates. 2) Goal specificity: A specific goal identifies the target in quantitiave or measurable terms. This would enable the worker to evaluate his performance and judge as to how he is doing in relation to the goal. Meeting a goal provides the worker with a sense of achievement, pride and personal satisfaction. This results in improved performance. 3) Goal challenge: Difficult but feasible goals provide more challenge than easy goals. Reaching an easy target is not competitive and hence hardly exciting. This is particularly true for high need achievers. However, even the challenging goals must be achievable, given the capability and experience of the individuals and the resources available.
4) Performance feedback: The employees, who have set challenging goals for themselves, need feedback about how well they are doing and how successful they are. Proper feedback can motivate them further. Performance feedback tends to encourage better job performance and self generated feedback is an especially powerful motivational tool. TARGET SETTING AND TARGET ACHIEVEMENT: It is the relation between goal-setting and subsequent success and failure in goal achievement. It is concluded by Kolb et al. 1) Conscious goal-setting facilitates goal achievement. Individuals tend to change more in those areas, which are related to their consciously set goals. 2) These changes are independent of the difficulty of the goal; and are not a result of an initial choice of easy to achieve goals. 3) Awareness of forces related to the goal, high expectations of success, high psychological safety, a concern for measuring progress, and an emphasis on selfcontrolled evaluation are all precursors of successful goal achievement.
PERFORMANCE APPRAISAL METHODS
1. Critical incident method This format of performance appraisal is a method which is involved identifying and describing specific incidents where employees did something really well or that needs improving during their performance period. 2. Weighted checklist method In this style, performance appraisal is made under a method where the jobs being evaluated based on descriptive statements about effective and ineffective behavior on jobs. 3. Paired comparison analysis This form of performance appraisal is a good way to make full use of the methods of options. There will be a list of relevant options. Each option is in comparison with the others in the list. The results will be calculated and then such option with highest score will be mostly chosen. 4. Graphic rating scales This format is considered the oldest and most popular method to assess the employee?s performance. In this style of performance appraisal, the management just simply does checks on the performance levels of their staff.
5. Essay Evaluation method In this style of performance appraisal, managers/ supervisors are required to figure out the strong and weak points of staff?s behaviors. Essay evaluation method is a nonquantitative technique. It is often mixed with the method the graphic rating scale. 6. Behaviorally anchored rating scales This formatted performance appraisal is based on making rates on behaviors or sets of indicators to determine the effectiveness or ineffectiveness of working performance. The form is a mix of the rating scale and critical incident techniques to assess performance of the staff. 7. Performance ranking method The performance appraisal of ranking is used to assess the working performance of employees from the highest to lowest levels. Managers will make comparisons of an employee with the others, instead of making comparison of each employee with some certain standards. 8. Management by Objectives (MBO) method MBO is a method of performance appraisal in which managers or employers set a list of objectives and make assessments on their performance on a regular basis, and finally make rewards based on the results achieved. This method mostly cares about the results achieved (goals) but not to the way how employees can fulfill them.
9. 360 degree performance appraisal The style of 360 degree performance appraisal is a method that employees will give confidential and anonymous assessments on their colleagues. This post also information that can be used as references for such methods of performance assessments of 720, 540, 180… 10. Forced ranking (forced distribution) In this style of performance appraisal, employees are ranked in terms of forced allocations. For instance, it is vital that the proportions be shared in the way that 10 or 20 % will be the highest levels of performances, while 70 or 80% will be in the middle level and the rest will be in the lowest one.
PROBLEMS IN PERFORMANCE APPRAISAL
Rating Errors in Performance Appraisals Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as 'rating errors'. These errors can seriously affect assessment results. Some of the most common rating errors are: Leniency or severity: - Leniency or severity on the part of the rater makes the assessment subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are lenient for the following reasons: a) The rater may feel that anyone under his or her jurisdiction who is
rated unfavorably will reflect poorly on his or her own worthiness.
b)
Hershel may feel that a derogatory rating will be revealed to the rate to
detriment the relations between the rater and the rate. c) He/ She may rate leniently in order to win promotions for the
subordinates and therefore, indirectly increase his/her hold over him. Central tendency: - This occurs when employees are incorrectly rated near the average or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from certain doubts and anxieties, which the raters have been assessing the rates. Halo error: - A halo error takes place when one aspect of an individual's performance influences the evaluation of the entire performance of the individual. The halo error occurs when an employee who works late constantly might be rated high on productivity and quality of output as well as on motivation. Similarly, an attractive or popular personality might be given a high overall rating. Rating employees separately on each of the performance measures and encouraging raters to guard against the halo effect are the two ways to reduce the halo effect. Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score are given only to certain individuals or groups based on the rater's attitude towards them and not on actual outcomes or behaviors; sex, age, race and friendship biases are examples of this type of error. Primacy and Regency effects: - The rater's rating is heavily influenced either by behavior exhibited by the ratee during his early stage of the review period (primacy) or by the outcomes, or behavior exhibited by the ratee near the end of the review period (regency). For example, if a salesperson captures an important contract/sale just before the completion of the appraisal, the timing of the incident may inflate his or her standing, even though the overall performance of the sales person may not have been encouraging. One way of guarding against such an error is to ask the rater to consider the composite performance of the rate and not to be influenced by one incident or an achievement.
Performance dimension order: - Two or more dimensions on a performance instrument follow each other and both describe or rotate to a similar quality. The rater rates the first dimensions accurately and then rates the second dimension to the first because of the proximity. If the dimensions had been arranged in a significantly different order, the ratings might have been different. Spillover effect: - This refers lo allowing past performance appraisal rating lo unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating for current period although the demonstrated behavior docs not deserve the rating, good or bad.
The history of performance appraisal is quite brief. It?s in the early 20th century can be traced to Taylor?s pioneering time and motion studies. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of second world war- not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art.
There is, says DULEWICZ (1989), a basic human tendency to make judgments about those one is working with, as well as about oneself.” Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the work place. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the bonus or commission of an advisor was justified. The process was firmly linked to material outcomes. If a performance of an advisor found to be poor, there will be no bonus or fewer bonuses given are followed. On the other hand, if their performance was better there will be a bonus given according to their performance.
In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. Shirmeyer, Roslyn, (1999) in his article “current trends in performance appraisal” explained performance appraisal continues to be a subject of interest and
importance to human resource specialists. For decades, performance appraisal has received considerable attention in the literature, from both researchers and practitioners alike. Many others (Bernardin & KLatt, 1985; Hall, posner, &hardener, 1989; Maroney& Buckley, 1992; Thomas & Bretz, 1994) maintain that there is a considerable gap between theory and practice, and that human resource specialists are not making full use of the psychometric tools available. To support their claim, these authors cite surveys of practitioners concerning current performance appraisal methods and use. Taylor and Zawacki (1976) in his article “performance appraisal” explained that documented trends in performance appraisal usage among U.S. organizations. When comparing the results of two surveys taken five years apart, the authors noted a remarkable shift away from what they called collaborative approaches(e.g., MBO,BARS) and toward the more traditional performance appraisal techniques (graphic rating scales). Taylor and Zawacki (1984) hypothesized that managers, responding to the legal constraints prevalent in the 1980s, preferred techniques that were defensible in court. Accordingly, managers tended to be more satisfied with the objective traditional approaches, whereas their subordinates seemed to prefer the developmental collaborative methods. Bernardin and KLatt (1985) in his articles “performance appraisal practice” explained that small firms tended to rely heavily on trait-based approaches, while larger firms relied on a combination of trait, behavioral, and results-based techniques. They noted that one in five organizations did not give employees the opportunity to review the performance appraisal results. In another study, Locher and Teel (1988) identified graphic rating scales (57.1%), the open-ended essay (21.3%), and management- by- objectives (18.1%) as the most popular performance appraisal techniques. Unlike Taylor and Zawacki (1984) before them, Locher and Teel identified a trend toward the use of MBO as a popular technique.
Thomas and Bretz(1994) in his articles “performance information” explained report that performance information is most likely to be used for employee development or to administer performance, communicating expectations, determining employee potential and aiding employee counseling .other common administrative uses included promotions, lay-offs, transfers, terminations, and validations of hiring decisions. In addition, Hall, Posner, and Hardener (1989) identified common objectives of performance appraisal as reviewing past performance, rewarding past performance, goal setting for future performance, and employee development. Cleveland, Murphy, and Williams (1989) warned that organizations should exercise caution when using the same performance appraisal methods for multiple applications (e.g., counseling vs. evaluation), since different performance appraisal methods may yield different types of data (e.g., qualitative vs. quantitative). McAfee and Green (1977) in his articles “performance appraisal method” explained these included employee development, administrative, personnel research, economic, and validity criteria. Human resource specialists must weigh these to determine which format represents the best match with their needs. For example, formats that meet the administrative requirements of the company (e.g., salary and promotion) may be beyond the economic means of the firm (e.g., BARS). Relative to these factors, the narrative essay format rates well against economic criteria and may be suitable for employee development. However, it is not amenable to administrative decisions, personnel research, or validity studies. Bretz, Milkovich, & Read (1992), in his articles “performance improvement is desired” explained if performance improvement is desired, perhaps emphasis on job redesign is necessary. For example, production workers whose job has been redesigned to include feedback concerning their own quality are more likely to see improvement than those who receive feedback from external sources such as quality control officers.
Organizations should rethink how they use performance appraisal and tailor the process to the kinds of outcomes they desire.
Controversy Few issues in management stir up more controversy than performance appraisal. There are many reputable sourcesresearchers, management commentators, and
psychometricians-who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be 8impossible to perfect it. At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially”…. The most crucial aspect of organizational life” LAWRIE(1990)
Link to Rewards
Research (BANNISTOR & BALKIN, 1990) has reported that appraises seem to have greater acceptance of the appraisal process , and feel more satisfied with it, when the process is directly linked to rewards, such findings are a serious challenge to those who feel that appraisal results and reward outcomes must be strictly isolated from each other.
4.1GENDER
Table 1 Gender of the respondents
S.No 1 2
Options Male Female Total
Frequency 84 46 130
Percent 64.6 35.4 100.0
The above table shows that 64.6% of the respondents were male and remaining of them was female.
4.2. AGE GROUP OF THE RESPONDENTS
Table 2 Age group of the respondents S.No 1 2 3 Age Up to 20 yrs 20-30 yrs 30-40 yrs Total Frequency 15 54 61 130 Percent 11.5 41.5 46.9 100.0
The above table shows that 46.9% of the respondents belong to the age group 30-40years and around 41.5% of respondents belong to 20-30years and remaining respondents are from age group of up to 20years.
FIGURE 1
AGE GROUP OF THE RESPONDENTS
RESPONDENTS
60 40 20 0 Up to 20 11.5
41.5
46.9
Percent 20-30 AGE GROUP
30-40
4.3. MARITAL STATUS
Table 3 Marital status of the respondents
S.No 1 2
Marital status Married Unmarried Total
Frequency 89 41 130
Percent 68.5 31.5 100.0
The above table shows that 68.5% of the respondents were single and remaining of them was married.
4.4. EDUCATIONAL QUALIFICATION
Table 4 Educational qualifications of the respondents
S.No 1 2 3
Educational qualification Schooling Degree PG Degree Total
Frequency 20 78 32 130
Percent 15.4 60.0 24.6 100.0
The above table shows that 60% of the respondents belong to Degree qualified and 24.6% of the respondents belong to PG degree qualified and 15.4% of respondents belong to schooling.
4.5. STATUS
Table 5 Status of the respondents
S.No 1 2 3
Status Employee Student Others Total
Frequency 86 22 22 130
Percent 66.2 16.9 16.9 100.0
The above table shows that 66.2% of respondents are stated as employees and oth er respondents are stated as a student and other occupations.
FIGURE 2
STATUS OF THE RESPONDENTS
70 60 50 40 30 20 10 0 66.2
RESPONDENTS
16.9
16.9
Percent
Employee
Student STATUS
Others
4.6. YEAR OF SERVICE
Table 6 Year of service
S.No 1 2 3
Options up to 3yrs 3-6yrs above 6yrs Total
Frequency 64 29 37 130
Percent 49.2 22.3 28.5 100.0
The above table shows that 49.2% of the respondents belong to up to 3 years of experience and only 22.3% of the respondents belong to 3-6 years of experience. 28.5% of respondents are having experience of above 6 years.
FIGURE 3 YEAR OF SERVICE
60 50 40 30 20 10 0 RESPONDENTS 49.2 28.5
22.3
up to 3yrs
3-6yrs YEARS
above 6yrs
4.7. NATURE OF JOB Table 7 Nature of job
S.No 1 2 3
Options Easy Moderate Tough Total
Frequency 39 44 47 130
Percent 30.0 33.8 36.2 100.0
above
The
table shows that 36.2% of the respondents said that their job as financial advisor was tough and 33.8% of respondents said their job was moderate and 30.0% of the respondents feel that their job was easy.
4.8. TARGET SET BY COMPANY
Table 8 Target set by company
S.No 1
Options optimum utilization of resources
Frequency 10
Percent 7.7
2 3
To perform well To know the knowledge of the financial advisors
14 15
10.8 11.5
4
To develop themselves and the company
40
30.8
5
All the above Total
51 130
39.2 100.0
The above table shows that majority (39.2%) of respondents feels that the target is set by company for financial advisors need all the above reasons and least number of respondents (7.7%) said that the reason to set target by company is to use the optimum utilization of resources.
CORRELATION
The researcher was interested to know the correlation between education qualification and target set by the company for financial advisors. The hypothesis for the test was framed as follows: The null hypothesis There is no relationship between education qualification and target set by company. The alternative hypothesis There is relationship between education qualification and target set by company. The table shows the result of the correlation. Table 9 Correlation
Variable
Pearson’s Correlation
P Value
Inference
Education Qualification .068 Target set by company .440 Positive Correlation
The Pearson Correlation obtained was .068 for relation between the Education Qualification and target set by company. Thus there is a positive correlation between the two variables. The P value was .440 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted.
CONCLUSION
Hence there is no relationship between education qualification and target set by company.
From this it is inferred that, the target set by the company for financial advisors is not based on the educational qualification and it may be based on the skills possessed by financial advisors which is analyzed while in interview.
4.9. IMPORTANCE OF FINANCIAL ADVISOR
Table 10 Importance of financial advisor
S.No 1 2 3 4 5
Options To maintain customer relationship Source generator Linking the employee and customer Receive feedback from customer All the above Total
Frequency 39 18 19 7 47 130
Percent 30.0 13.8 14.6 5.4 36.2 100.0
The above table shows that 36.2% of respondents feel that importance of financial advisor for the company is all the above in the given options and 5.4% of respondents feels that receiving feedback from customer is importance of financial advisor.
4.10. TARGET ACHIEVEMENT PERIOD
Table 11 Target achievement period
S.NO 1 2 3
Options Weekly Monthly Yearly Total
Frequency 56 48 26 130
Percent 43.1 36.9 20.0 100.0
The above table shows that majority (43.1%) of the respondents opinions that the target is achieved in weekly, 36.9% of respondents say that the target is achieved in monthly and 20% of respondents opinions are the target is achieved through the year. It is concluded that the target period is differ because this target period is fixed according to the size of the target. And it is inferred through the interviews from financial advisors.
4.11. KIND OF BENEFITS
Table 12 Kind of benefits
S.No 1 2 3 4
Options Promotion Bonus Gifts Any other Total
Frequency 48 59 16 7 130
Percent 36.9 45.4 12.3 5.4 100.0
The above table shows that 36.9% of respondents said that the benefits given by company is promotion and 45.4% of respondents opinions are bonus is given , and 12.3% of respondents are gifts is given and 5.4% of respondents are feels that any other benefits like tour packages, rewards, appreciations etc… are given by company.
CORRELATION
The researcher was interested to know the correlation between year of service and kind of benefits given by the company. The hypothesis for the test was framed as follows:
The null hypothesis There is no relationship between year of service and kind of benefits. The alternative hypothesis There is relationship between year of service and kind of benefits.
The table below shows the result of the correlation. Table 13 Correlation
Variable Year of service Kind of benefits
Pearson’s Correlation -.040
P Value .648
Inference Negative Correlation
The Pearson correlation obtained was -.040 for relation between the year of service and kind of benefits. Thus there is a negative correlation between the two variables. The p value is .648 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted.
CONCLUSION
Hence there is no relationship between year of service and kind of benefits.
From this analyze it is inferred that the benefits given is not based on their experience, and it is based on the performance of financial advisors.
4.12. ACHIEVABLE TARGET
Table 14 Achievable target
S.No 1 2
Opinions Yes No Total
Frequency 116 14 130
Percent 89.2 10.8 100.0
The above table shows that 89.2% of the respondents stated that the target given is achievable and 10.8% of the respondents feel that the target given is not achievable.
4.13. BONUS/COMMISSION GIVEN IMMEDIATELY
Table 15 Immediate bonus/commission S.No 1 2 3 Opinions Yes No Sometimes Total Frequency 100 11 19 130 Percent 76.9 8.5 14.6 100.0
The above table shows that 76.9% of respondents stated that the bonus/commission according to their performance is given immediately and 8.5% of the respondents said that the bonus/ commission are not given immediately.
FIGURE 4
IMMEDIATE BONUS/COMMISSION
100 RESPONDENTS 80 60 40 20 0 Yes No OPINIONS Sometimes 8.5 14.6 Percent 76.9
4.14. PREFRENCE OF BENEFITS Table 16 Preference of benefits
S.No 1 2 3
Options Annual benefits Monthly benefits Spot benefits Total
Frequency 28 65 37 130
Percent 21.5 50.0 28.5 100.0
The above table shows that 50.0% of respondents stated that monthly benefits are preferred by them and 21.5% of respondent?s states that annual benefits are preferred.
CONCLUSION
It is concluded that financial advisors psychology is to get on monthly basis as salary, the same thing is being expected for the extra benefits as monthly basis.
FIGURE 5
PREFERENCE OF BENEFITS
Spot benefits 28% Annual benefits 22%
Monthly benefits 50%
Table 17 GENDER & PREFERENCE OF BENEFITS PREFERENCE OF BENEFITS PARTICULARS Annual benefits 16 Male (12.3%) GENDER 12 Female (9.2%) TOTAL 28 (18.5%) 65 (7.7%) 37 130 24 10 46 (31.5%) (20.8%) Monthly benefits 41 Spot benefits 27 84 TOTAL
The above table shows that 31.5% of male respondents are preferred the monthly benefits and least 7.7% of female respondents are preferred the spot benefits.
4.15. SATISFACTION OF BONUS/COMMISSION
Table 18 Satisfaction of bonus/commission S. No 1 2 3 Opinions Highly satisfied Satisfied Dissatisfied Total Frequency 44 73 13 130 Percent 33.8 56.2 10.0 100.0
The above table shows that 56.2% of respondents are satisfied by bonus/commission given by the company and 10% of respondents are dissatisfied by bonus/commission given by the company.
FIGURE 6
SATISFACTION OF BONUS/COMMISSION
60 50 40 30 20 10 0 56.2 33.8 RESPONDENTS
10
Percent
Highly satisfied
Satisfied OPINIONS
Dissatisfied
CHI-SQUARE
A chi-square test was conducted to find out the association between year of service and satisfaction of bonus/commission given by the company. The hypothesis for the test was framed as follows The null hypothesis There is no association between year of service and satisfaction of bonus/commission given by the company. The alternative hypothesis There is association between year of service and satisfaction of bonus/commission given by the company.
Chi-Square Test Table 19 Value
a Pearson Chi-Square 2.070
df
4
P value
.723
a. 2 cells (22.2%) have expected count less than 5. The minimum expected count is 2.90.
Pearson chi-square value was obtained 2.070.since p value of 0.723 is greater than 0.05 the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance. CONCLUSION Hence there is no association between year of service and satisfaction of bonus/commission given by the company. From the above table it is interpreted that satisfaction of bonus/commission given by company may be due to performance made by financial advisors not merely by their experiences.
4.16. BONUS RELATED PERFORMANCE
Table 20 Performance bonus
S.NO 1 2
Opinions Yes No Total
Frequency 122 8 130
Percent 93.8 6.2 100.0
The above table shows that 93.8% of respondents stated that the bonus is given according to their performance and 6.2% of respondents are not given the bonus according to their performance.
FIGURE 7
BONUS RELATED PERFORMANCE
RESPONDENTS 93.8 100 50 6.2 0 Yes No OPINIONS Percent
4.17. TRAINING FOR FINANCIAL ADVISORS
Table 21 Training
S.No 1 2
Opinions Yes No Total
Frequency 107 23 130
Percent 82.3 17.7 100.0
The above table shows that 82.3% of respondents states that there is training provided for financial advisors and 17.7% of respondents does not state any training given by the company for financial advisors.
4.18. TARGET NOT ACHIEVED
Table 22 Target not achieved S.No 1 2 3 4 Options Training Changing the post No commission Less commission Total Frequency 25 16 72 17 130 Percent 19.2 12.3 55.4 13.1 100.0
The above table shows that 55.4% of respondents stated that if target is not achieved the company will give no commission and 19.2% of respondents feels that the company is giving
training , and 13.1% of respondents feels that the company gives less commission, 12.3% of respondents stated that the company is changing the post of the financial advisors.
4.19. QUALITIES OF FINANCIAL ADVISORS
Table 23 Qualities of financial advisors S.No 1 2 3 4 5 Options Confidence Presentation about schemes Express words in positive Influencing capability All the above Total Frequency 28 24 14 8 56 130 Percent 21.5 18.5 10.8 6.2 43.1 100.0
The above table shows that majority of the respondents (43.1%) states that all the above skills and abilities of financial advisors are needed, and 6.2% of respondents stated that influencing capability is the quality to be possessed by the financial advisors.
4.20. SKILLS OF FINANCIAL ADVISORS
Table 24 Skills to handle the clients S.No 1 2 3 4 5 Options Communication Scheme knowledge Listening skills Managing the customers All the above Frequency 15 12 10 43 50 Percent 11.5 9.2 7.7 33.1 38.5
Total
130
100.0
The above table shows that 38.5% of respondents feels that the financial advisors need all the skills to handle their clients, and 7.7% of respondents feels that they need listening skills to manage their customers.
4.21. CUSTOMER SATISFACTION
Table 25 Customer satisfaction
S.No 1 2
Opinions Yes No Total
Frequency 104 26 130
Percent 80.0 20.0 100.0
The above table shows that 80% of the respondents are satisfied their customers and 20% of respondents are not satisfying their customers.
4.22. COMPANY SATISFACTION
Table 26 Company satisfaction
S.No 1 2
Opinions Yes No Total
Frequency 96 34 130
Percent 73.8 26.2 100.0
The above table shows that 73.8% of respondents are satisfied their company due to their financial advisor performance and 26.2% of respondents are not satisfying their company.
4.23. AREAS OF IMPROVEMENT
Table 27 Areas of improvement
S.No 1 2 3 4
Options Communication Innovative Handling stress All the above Total
Frequency 22 20 38 50 130
Percent 16.9 15.4 29.2 38.5 100.0
The above table shows that 38.5% of respondents are need to improve all the areas mentioned and 29.2% of respondents are need to improve their handling stress and 16.9% of respondents are to improve their communication , 15.4% of respondents are to improve their innovative skills to be a qualified financial advisor.
4.24. COMMUNICATION WITH SUPERIORS
Table 28 Communication with superiors
S.No 1 2
Opinions Yes No Total
Frequency 114 16 130
Percent 87.7 12.3 100.0
The above table shows that the majority of respondents (87.7%) are having good communication with their superiors and 12.3% of respondents are not having their good communication with their superiors.
4.25. INFORMATION ABOUT APPRAISAL SYSTEM
Table 29 Information about appraisal system
S.No 1 2 3
Opinions Aware Sometimes Do not aware Total
Frequency Percent 78 39 13 130 60.0 30.0 10.0 100.0
The above table shows that 60% of the respondents are aware of the appraisal system and 30% of the respondents are known sometimes about the appraisal system and 10% of respondents are do not aware about the appraisal system.
FIGURE 8
INFORMATION ABOUT APPRAISAL SYSTEM
Do not aware 10%
Sometimes 30%
Aware 60%
Table 30 YEAR OF SERVICE & INFORMATION ABOUT APPRAISAL SYSTEM PARTICULARS INFORMATION ABOUT APPRAISAL TOTAL
SYSTEM Do Aware Sometimes aware
38 Up to 3yrs (29.2%0
not
19 (14.6%) 12 (9.2%) 8 (6.2%) 39
7 64 (5.4%) 2 29 (1.5%) 4 37 (3.1%) 13 130
15 YEAR OF 3-6yrs (11.5%) SERVICE 25 Above 6yrs (19.2%) TOTAL 78
The above table shows that 29.2% of respondents who are experienced up to 3yrs are aware of the appraisal system and least 1.5% of respondents , experienced about 3-6yrs are do not aware about the appraisal system.
CONCLUSION
From this it can be concluded that in the initial period the advisors will have more curiosity to know their progress and if they become experienced, they gain knowledge about the appraisal system, how it be and there will be less curiosity in knowing about their progress.
4.26. METHOD OF APPRAISAL SYSTEM
Table 31 Methods of appraisal system
S.No 1 2
Options Ranking/Grading system Do not aware Total
Frequency 117 13 130
Percent 90.0 10.0 100.0
The above table shows that 90% of respondents stated that the company is following the ranking/grading system and 10% of respondents are do not aware about the appraisal system followed by the company.
4.27. SATISFACTION OF APPRAISAL SYSTEM
Table 32 Satisfaction of appraisal system
S.No 1 2 3
Opinions Highly satisfied Neutral Not satisfied Total
Frequency 41 82 7 130
Percent 31.5 63.1 5.4 100.0
The above table shows that 63.1% of respondents are either highly satisfied or not satisfied by the appraisal system, 31.5% of respondents are highly satisfied in the appraisal system and only 5.4% of respondents are not satisfied with this appraisal system.
FIGURE 9
SATISFACTION OF APPRAISAL SYSTEM
RESPONDENTS
80 60 40 20 0
63.1 31.5 5.4 Highly satisfied Neutral OPINIONS Not satisfied Percent
CHI-SQUARE
A chi-square test was conducted to find out the association between year of service and satisfaction of appraisal system conducted by the company. The hypothesis for the test was framed as follows The null hypothesis
There is no association between year of service and satisfaction of appraisal system conducted by the company. The alternative hypothesis There is association between year of service and satisfaction of appraisal system conducted by the company.
Chi-Square Test
Table 33
Value Pearson Chi-Square 2.634a
df 4
P value .621
a. 3 cells (33.3%) have expected count less than 5. The minimum expected count is 1.56.
Pearson chi-square test value obtained 2.634. Since p value (.621) is greater than 0.05 the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance. CONCLUSION Hence there is no association between year of service and satisfaction of appraisal system conducted by the company. From the above table it is interpreted that satisfaction of appraisal system followed by company may occur due to some other factors such as attitude of appraiser, may be the impact of post appraisals etc…
4.28. MOTIVATION TO ACHIEVE TARGET
Table 34
Motivation to achieve target S.No 1 2 3 Opinions Motivated Neutral Not-Motivated Total Frequency Percent 99 24 7 130 76.2 18.5 5.4 100.0
The above table shows that 76.2% of respondents stated that there is a motivation to achieve the target and least 5.4% of respondents are stated that there is no motivation to achieve target.
4.29. PERIOD OF PERFORMANCE APPRAISAL
Table 35
Period of performance appraisal
S.No 1 2 3 4
Options Monthly Quarterly Half-yearly Annually Total
Frequency 27 47 40 16 130
Percent 20.8 36.2 30.8 12.3 100.0
The above table shows that majority (36.2%) of respondents are stated that the performance review and evaluation is conducted in the quarterly period, and least no of respondents (12.3%) stated as the appraisal is conducted annually. Because this performance appraisal period is depends upon the nature of the target.
4.30. RECEIVED PERFORMANCE APPRAISAL REPORT
Table 36
Received performance appraisal report S.No 1 2 3 Opinions Yes Sometimes No Total Frequency 78 48 4 130 Percent 60.0 36.9 3.1 100.0
The above table shows that 60% of the respondents accepts that they receives the appraisal report after evaluation, 36.9% of respondents stated that sometimes they receive the appraisal report and 3.1% of respondents stated that they do not receive the appraisal report.
4.31. BENEFITS RECEIVED
Table 37
Benefits received S.No 1 2 Options Monetary benefits Non-monetary benefits Total Frequency 101 29 130 Percent 77.7 22.3 100.0
The above table shows that 77.7% of the respondents receive the monetary benefits and 22.3% of the respondents receive the non-monetary benefits.
4.32. BENEFITS SATISFIED Table 38 Satisfaction of benefits
S.No 1 2 3
Opinions Highly satisfied Neutral Not satisfied Total
Frequency 33 80 17 130
Percent 25.4 61.5 13.1 100.0
The above table shows that 61.5% of respondents are stated that the benefits given is either highly satisfied or not satisfied, and 13.1% of respondents are not satisfied with the benefits given.
FIGURE 10
SATISFACTION OF BENEFITS
RESPONDENTS
80 60 40 20 0
61.5 25.4 13.1 Percent Highly satisfied Neutral OPINIONS Not satisfied
4.33. OVERALL PERFORMANCE APPRAISAL SYSTEM
Table 39 Overall appraisal system
S.No 1 2 3 4
Options Excellent Very good Good Average Total
Frequency 21 59 36 14 130
Percent 16.2 45.4 27.7 10.8 100.0
The above table shows that 45.4% of the respondents stated that the performance system followed by the company is very good, and 10.8% of respondents feel that this appraisal system is in average.
FIGURE 11
OVERALL APPRAISAL SYSTEM
Average 11% Good 28% Excellent 16%
Very good 45%
5.1 FINDINGS
The following were the major findings from the study. 1. It was found that majority of the respondents (64.6%) belonged to the female. 2. It was found that majority of the respondents (46.9%) belonged to the age group of 30-40 years. 3. It was found that majority of the respondents (89%) were married. 4. It was found that majority of the respondents (60%) belong to degree qualification. 5. It was found that majority of the respondents (66.2%) are employed. 6. It was found that majority of the respondents (49.2%) were experienced up to 3yrs. 7. It was found that majority of the respondents (33.8%) opinion is that their nature of job is moderate. 8. It was found that majority of the respondents (39.2%) feels that the target set by company for financial advisors is to utilize the resource, to perform well, to know knowledge of the financial advisors, to develop themselves and the company. 9. Correlation test was applied the p value was found to be .440 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted. Hence there is no relationship between educational qualification and target set by company. 10. It was found that majority of the respondents (36.2%) feels that the importance of financial advisors for the company needs all the skills like to maintain customer relationship, source generator, linking the employee and customer, receive feedback from customer etc.. 11. It was found that majority of the respondents stated that the target is achieved in weekly.
12. It was found that majority of the respondents (45.4%) stated that the benefits given by company is bonus for their performance.
13. Correlation test was applied the p value was found to be .648 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted. Hence there is no relationship between year of service and kind of benefits given by the company.
14. It was found that majority of the respondents (89.2%) feels that the target given by company is achievable.
15. It was found that majority of the respondents (76.9%) stated that the bonus/commission is given immediately according to their performance.
16. It was found that majority of the respondents (50%) prefer the monthly benefits.
17. The comparative study was made it was found that majority of the respondents(31.5%) who prefer the monthly benefits are male and least (7.7%) of respondents who prefer spot benefits are female.
18. It was found that majority of the respondents (56.2%) are stated that they are satisfied by the bonus/commission given by the company.
19. Chi-square test was applied Pearson chi-square value obtained is 2.070, and p value was found to be .723 which is greater than 0.05, therefore the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance.
Hence there is association between the year of service and satisfaction of bonus/commission given by the company.
20. It was found that majority of the respondents (93.8%) feels that the bonus is given according to their performance.
21. It was found that majority of the respondents (82.3%) states that the training is given because if they are lacking of skills for financial advisors by the company.
22. It was found that majority of the respondents (55.4%) opinions are if the target is not achieved, then there is no commission given.
23. It was found that majority of the respondents(43.1%) states that the financial advisors needs the qualities like confidence, presentation about schemes, express words in positive, influencing capability etc..
24. It was found that majority of the respondents (38.5%) stated that the communication, scheme knowledge, listening, managing the customers are the skills needed for financial advisors.
25. It was found that the majority of the respondents (80%) feels that they are satisfied their customers through their performance as a financial advisor.
26. It was found that majority of the respondents (73.8%) stated that they satisfy their company through their performance.
27. It was found that majority of the respondents (38.5%) feels that they need the communication, innovative, handling stress are their areas of improvement for financial advisors.
28. It was found that majority of the respondents (87.7%) are having the good communication with their superiors.
29. It was found that the majority of the respondents (60%) are aware of the appraisal system followed by the company.
30. The comparative study was made it was found that majority of the respondents (29.2%) who are experienced up to 3 years are aware of the appraisal system and least (1.5%) of respondents are experienced about 3-6 years are do not aware about the appraisal system followed by the company.
31. It was found that majority of the respondents (90%) are stated that the company is following the ranking/grading method of appraisal system.
32. It was found that the majority of the respondents (63.1%) are stated that the appraisal system followed by company is neither satisfied nor not satisfied.
33. Chi-square test was applied Pearson chi-square value obtained is 2.634 and p value is found to be .621 which is greater than 0.05, therefore the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance. Hence, there is no association between year of service and satisfaction of appraisal system conducted by the company.
34. It was found that the majority of the respondents (76.2%) feel that there is a motivation to achieve target in the company.
35. It was found that majority of the respondents (36.2%) of respondents are stated that the performance review and evaluation is conducted in the quarterly period.
36. It was found that the majority of the respondents (60%) are stated that the financial advisor receives the appraisal report after it is evaluated.
37. It was found that majority of the respondents (77.7%) are feels that the benefits received after the performance is monetary benefits.
38. It was found that the majority of the respondents (61.5%) are stated that the given benefits are neither highly satisfied nor not satisfied.
39. It was found that majority of the respondents (45.4%) feels that the appraisal system followed by the company is very good.
5.2 SUGGESTIONS
From this research work, with the help analysis and finding the following suggestion can be implemented in Metlife
1) From the correlation analysis it was found that the benefits given is not based on
their experience, it is based on performance only. So it may be suggested the benefits can be given to financial advisors by considering their experience as a part of their performances.
2) From the table 22, it was inferred that no commission paid, if target was not achieved
it may be suggest that at least minimum percentage of communication can be given, which help to motivate to continue their task effectively.
3) From the table 30, it is inferred that during initial period only the financial advisor
have curiosity at appraisal system, afterwards it was lacking. So it may suggest that the company can provide information about appraisal system, at frequent interval, which helps to identify how much skills are changed over a period.
4) As the open suggestion, every individual will have unique talent, so instead of fixing
a standard target, the company may fix the target based on the individual skills of financial advisors, so that it helps to motivate the financial advisor to achieve their target.
5.3 CONCLUSION
The study was conducted to identify the reasons for the financial advisors whose performances are based upon their targets, and how the targets and the appraisals influence in the performance of the financial advisors. From this study it helps to know the financial advisor duties and responsibilities, roles and how their performance affects company progress. This study helps to know how the performance of advisors is measured and steps taken by company to improve the progress of advisors. Through this research, the analysis helps to find some valuable suggestion if the company implements some of these suggestions, which helps to increase performance of financial advisors, which in turn increase the productivity of the company.
A STUDY ON TARGET BASED PERFORMANCE AND APPRAISAL OF FINANCIAL ADVISORS AT METLIFE INDIA INSURANCE, VELLORE
QUESTIONNAIRE: NAME (optional): GENDER: Male / Female AGE: a) Up to 20yrs b) 20-30yrs c) 30-40yrs
MARITAL STATUS: Married / Unmarried EDUCATIONAL QUALIFICATION: a) Schooling 1) What is your status in the society? a) Employee b) Student c) Others b) Degree c) PG Degree
2) What is your year of service as a Financial Advisor? a) Up to 3yrs b) 3-6yrs c) above 6yrs
3) What kind of job you have? a) Easy b) Moderate c) Tough
4) Why the target is set by the company? a) b) c) d) e) optimum utilization of resources to perform well to know the knowledge of the financial advisors to develop themselves and the company all the above
Why financial advisor are important for the company? a) To maintain customer relationship b) Source generator c) Linking the employee & customer d) Receive feedback from customer e) All the above 5) How the target is achieved? a) Weekly b) monthly c) yearly
7) If the target is achieved what kind of benefits are given? a) Promotion b) bonus c) gifts d) any other
8) Whether the target is achievable? a) Yes b) No
9) Whether the performance bonus/ commission are given immediately? a) Yes b) No c) Sometimes
10) What type of benefits do you prefer? a) Annual benefits b) monthly benefits 11) The bonus/commission given is a) Highly satisfied b) satisfied c) neutral c) Spot benefits
12) Whether the bonus/commission is given according to your performance? a) Yes b) No
13) Whether your company trains the financial advisor? a) Yes b) No
14) If the target is not achieved, the company will give a) Training b) changing the post c) no commission d) less commission
15) What would you need to be a financial advisor? a) Confidence b) presentation about schemes c) express words in positive d) influencing capability e) all the above 16) What knowledge should have the financial advisor to handle their clients? a) Communication b) scheme knowledge c) listening skills d) Managing the customers e) all the above 17) Whether the customers are satisfied by your advice? a) Yes b) No
18) Whether the company is satisfied by your advice? a) Yes b) No
19) What do you think are your areas of improvement? a) Communication b) innovative c) handling stress d) all the above 20) Do you have communication with your superiors? a) Yes b) No
21) Did the company give information about the appraisal system? A) Aware b) sometimes c) do not aware
22) Which method do they follow for appraisal system? a) Ranking/ Grading system b) Do not aware 23) Are you satisfied with this appraisal system, adopted by company? a) Highly satisfied b) Neutral c) not satisfied
24) Whether there is a motivation for achieving the target?
a) Motivated
b) neutral
c) non-motivated
25) How the performances are reviewed and evaluated? a) Monthly b) quarterly c) half-yearly d) annually
26) Do you receive your performance appraisal report after it is evaluated? a) Yes b) sometimes c) No
27) After appraisal do you receive? a) Monetary benefits b) Non-Monetary benefits
28) Are you satisfied with Monetary/Non-Monetary benefits through appraisal system? a) Highly satisfied b) Neutral c) Not satisfied
29) How do you feel overall performance appraisal system followed by the organization? a) Excellent b) very good c) good d) average
If you have any suggestions about the appraisal system: ………………………………………………………………………………………… ………………………………………………………………………………………… …………………………………………………………………
BIBLIOGRAPHY
WEBSITE
? http://www.securities.com/Public/companyprofile/IN/Metlife_India_Insurance_Company_Limited_en_2426227.html ? http://en.wikipedia.org/wiki/MetLife ? https://www.metlife.com/about/corporate-profile/metlife-history/index.html ? www.metlifeindia.com ? www.metlife.co.in ? http://en.wikipedia.org/wiki/Financial_adviser ? http://www.studyvalue.com/_management_sciences/_hrm/definition_of_persormance_apprai sal_32.html ? http://www.readyratios.com/reference/education/financial_advisor.html ? http://www.humanresources.hrvinet.com/problems-in-performance-appraisal/ ? http://mycii.in/KmResourceApplication/E000000073.2466.Indian%20insurance%20report%20fin al.pdf ? http://ztest.net/thread-26498.html ? http://scdlmbaprojects.blogspot.com/2011/07/scdl-mba-project-study-of-performance.html
? http://www.scribd.com/doc/22450531/Performance-Appraisal-project-report
BOOKS
? Management & Organizational Behavior - Rudani - Google Books ? Performance Management: International Edition - Herman Aguinis - Google Books ? Human resources management- J.Jayashankar, Margham Publications.
doc_820295189.docx
Human resource in the sense of getting things done through people is an essential part of every manager?s responsibility, 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 a word, which no member of any senior management team would disagree with. Yet, the reality for organizations is that their people remain undervalued, undertrained and underutilized. Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.
TARGET BASED PERFORMANCE APPRAISAL
Target based performance appraisal is to improve the performance of the financial advisors in a MetLife India Insurance. Every advisor is having their targets to achieve goals. According to their targets there will be appraised. Appraisals can be made through various systems. Even though any type of targets the appraisals are followed equally in the organizations. In every organization there will be a target based performances that is followed for every employees. Each employee set their own targets or the company targets. If an employee„s are achieved their target they get appraisals like gifts, promotions etc. for every organizations the target performance appraisal system is important.
Insurance is a subject listed in the union list in the seventh schedule to the constitution of India where only centre can legislate. The insurance sector has gone through a number of phases by allowing private companies to solicit insurance and also allowing FDI of up to 49%, the insurance sector has been a booming market. However, the largest life-insurance company in India is still owned by the government. In insurance sector the target based performance appraisals are differ from other sectors. In this sector both the employees and advisor are having their own targets. The target is achieved then there is appraisals like incentives, performance based pay, gifts etc. The rating system is used in appraising the employees and the advisors in the insurance sectors. Not only are the insurance sectors, in other sectors the appraisal systems are used to evaluate the employee?s performances. All the sectors in the business world and all the organizations are using the targets and according to their targets the performances of the employees are evaluated. From this study it helps to find the effectiveness of the performance appraisals and the factors that influences on the performance of the financial advisors in Metlife India insurance.
1.2 NEED OF THE STUDY
? Through this study the real talent of financial advisors will be judged. So, this performance appraisal is needed. ? Today every organization needs an effective employee. So, those employees will be utilized at the fullest level. ? If financial advisors do not perform well, he will perish; it results in an organization which perishes in the market. So, the study was taken to improve the performance of the financial advisors, according to their targets.
1.3 OBJECTIVE OF THE STUDY
? To know the reasons and factors influences the financial advisors in their performances. ? To study present appraisal system followed for financial advisors. ? To investigate the effects of target based performances of financial advisors performance. ? To make suggestions about the performance of financial advisors.
1.4 SCOPE OF THE STUDY
? This study was taken only to MetLife India insurance co.ltd, Vellore branch. ? This study finds the way to financial advisors, to increase their commitment level for their target performance jobs. ? This study finds the way to motivate the financial advisors to perform well and engaged themselves in their job. ? This study provides the training for the financial advisors to develop themselves and the organization.
1.5 LIMITATIONS OF THE STUDY
? Number of sample size is less due to the time constraint. ? Many respondents did not give response during the data collection. ? Communication is one of the factors which are hard during this study.
1.6 PROFILE OF COMPANY
INDUSTRIAL PROFILE
THE HISTORY OF INDIAN INSURANCE INDUSTRY The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years.
LIFE INSURANCE
In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher
echelons of society. “Unethical practices adopted by some of the players against the interests of the consumers” then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that “nationalization has lent the industry fairness, solidity, growth and reach.” Insurance may be described as a social device to ensure protection of economic value of life and other assets. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. 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. The term "risk" is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss. Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an individual are distributed over a group of individuals.
CHARACTERISTICS OF INSURANCE
? Sharing of risks ? Cooperative device ? Evaluation of risk ? Payment on happening of a special event
? The amount of payment depends on the nature of losses incurred. ? . The success of insurance business depends on the large number of people insured against similar risk. ? Insurance is a plan, which spreads the risk and losses of few people among a large number of people. ? The insurance is a plan in which the insured transfers his risk on the insurer. ? Insurance is a legal contract which is based upon certain principles of insurance which includes, utmost good faith, insurable interest, contribution, indemnity, causes proximal, subrogation, etc. ? The scope of insurance is much wider and extensive.
FUNCTIONS OF INSURANCE:
PRIMARY FUNCTIONS
1. Provide protection: - Insurance cannot check the happening of the risk, but can provide for the losses of risk.
2. Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others. 3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk.
4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.
SECONDARY FUNCTIONS 1. Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions.
2. Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty.
3. Contributes towards development of larger industries.
OTHER FUNCTION
Means of savings and investment
Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their costs, which include payments to cover the losses of policyholders, as well as sales and administrative expenses, taxes and dividends. Insurance companies have two sources of income for covering these costs: premiums and investment income. The premiums are collected on a regular basis and invested in Government Bonds, Gilt, stocks, mutual funds, real estates and other conservative avenues. However, investment income depends on market conditions, interest rates, economy etc. and varies from year to year. Because of the uncertainty associated with the investment income, insurance companies must generate enough income from premiums to cover the bulk of their expenses.
The important milestones in the life insurance business in India are
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life 'Insurance Company started 'its business.
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 pubic.
1956: 245 Indian and foreign insurance and provident societies are 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 crores from the Government of India.
LIBERALIZATION OF INDIAN INSURANCE
1994: Insurance sector invited private participation to induce a spirit of competition amongst the various insurers and. to provide a choice to the consumers.
1997: Insurance regulator IRDA was set up as there felt the Feed:
To set up an independent regulatory body, that provides greater autonomy to insurance companies in order to improve their performance, In the first year of insurance market liberalization (2001) as much as 16 private sector companies including joint ventures with leading foreign insurance companies have entered the Indian insurance sector. Of this, 10 were under the life insurance category and six under general insurance. Thus in all there are 25 players (12-life insurance and l3- general insurance) in the Indian insurance industry till date.
PLAYERS IN INDIAN INSURANCE INDUSTRY
LIFE INSURERS
Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers: · Life Insurance Corporation of India (LIC)
GENERAL INSURERS:
General Insurance Corporation of India (GIC) (with effect from Dec'2000, a National Reinsure) GIC had four subsidiary companies, namely (with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies).
1. The Oriental Insurance Company Limited 2. The New India Assurance Company Limited, 3. National Insurance Company Limited 4. United India Insurance Company Limited.
Yr: 2000-2007: Insurance Industry in the year 2000-2001 had 15 new Entrants, namely:
LIFE INSURERS
S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Name of the Company Max New York Life Insurance Co. Ltd. HDFC Standard Life Insurance Company Ltd. ICICI Prudential Life Insurance Company Ltd. Om Kodak Mahindra Life Insurance Co. Ltd. Birla Sun Life Insurance Company Ltd. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. Reliance Life Insurance Company Ltd. Shriram Life Insurance Company Ltd. Sahara India Life Insurance Company Ltd. Bharti AXA Life Insurance Company Ltd. Aviva Life Insurance Company Ltd.
GENERAL INSURERS
S.No. Name of the Company
1 2 3 4 5 6
Royal Sundaram Alliance Insurance Company Limited Reliance General Insurance Company Limited. IFFCO Tokio General Insurance Co. Ltd TATA AIG General Insurance Company Ltd. Bajaj Allianz General Insurance Company Limited ICICI Lombard General Insurance Company Limited.
Various types of life insurance policies:? Endowment policies: This type of policy covers risk for a specified period, and at the end of the maturity sum assured is paid back to policyholder with the bonuses during the term of the policy. ? Money back policies: This type of policy is for periodic payments of Partial survival benefits during the term of the policy as long as the policy Holder is alive. ? Group insurance: This type of insurance offers life insurance protection under group policies to various groups such as employers-employees, Professionals, cooperatives etc it also provides insurance coverage for People in certain approved occupations at the lowest possible premium cost.
? Term life insurance policies: This type of insurance covers risk only during the selected term period. If the policy holder survives the term, risk Cover comes to an end. These types of policies are for those people who are unable to pay larger premium required for endowment and whole life Policies. No surrender, loan or paid up values are in such policies. ? Whole life insurance policies: This type of policy runs as long as the Policyholder is alive and is covered for the entire life of the policyholder. In This policy the insured amount and the bonus is payable only to nominee on the death of policy holder. ? Joint life insurance policies: These policies are similar to endowment Policies in maturity benefits and risk cover, but joint life policies cover two Lives simultaneously such as married couples. Sum assured is payable on the first death and again on the death of survival during the term of the policy. ? Pension plan: a pension plan or annuity is an investment over certain Number of years but does not provide any life insurance cover. It offers a guaranteed income either for a life or certain period. \ ? Unit linked insurance plan: ULIP is a kind of insurance plan which Provides life cover as well as return on premium paid over a certain period of time. The investment is denoted as units and represented by the value Called as net asset value (NAV).
COMPANY PROFILE
MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife has more than 50,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States (based on life insurance enforce), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500® companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions.
MetLife Inc.:-
Celebrating 140 years, MetLife, Inc. is a leading provider of insurance and Financial services with operations throughout the United States and the Latin America, Europe, and Asia Pacific regions. Through its domestic and international subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force).
The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions.
INTERNATIONAL PRESENCE
Outside of the U.S., MetLife operates in Latin America, Europe, Asia?s Pacific region, and the Middle East, with leading market positions in Mexico, Japan, South Korea and Chile. On March 8, 2010, Met Life announced its intent to purchase the international leader life-insurance business, American Life Insurance Company (Alico), from American International Group (AIG). MetLife [MET], which completed the deal on November 1, 2010, paid approximately $7.2 billion in cash and $9.0 billion in MetLife equity and other securities. The securities portion of the deal consisted of 78.2 million shares of MetLife common stock, 6.9 million shares of contingent convertible preferred stock and 40 million equity units. The values of the common and preferred stock were based on the closing price of MetLife?s common stock on October 29. Upon completion of the purchase, MetLife became a leading competitor in Japan, the world?s secondlargest life insurance market, and moved into a top five market position in many high growth emerging markets in Central and Eastern Europe, the Middle East and Latin America. The deal added 20 million customers to MetLife?s 70 million and according to Barron?s Magazine more than doubled the percentage of operating profits that MetLife gets abroad to 40%. MetLife India Insurance Company Limited (MetLife) operates in India since 2001 and is an affiliate of MetLife, Inc. MetLife headquartered in Bangalore and Gurgaon, is one of the fastest growing life insurance companies in the country (http://www.metlife.co.in/). Punjab National Bank, the largest Public Sector Bank in India with over 5500 branches and with total business figure of Rs.600, 000/- crores as at 31.12.2011(http://www.pnbindia.com), has entered in to strategic alliance with Metlife.
The New entity PnbMetlfe has commenced providing the services through the branches of PUNJAB NATIONAL BANK.
VISION AND MISSION
? Build financial freedom for all through leadership in providing financial advice and building long-term relationships through innovative protection,
accumulation and retirement products, robust underwriting processes and creating world-class customer service experience for our customers. ? They provide customers in India with world-class solutions for financial Security, and in the process add significant value to our shareholders, associates and society.
THEIR CORE VALUES
? They lead through Innovation to offer world class and competitive products to their customers ? They build Long Term Relationships with their customers by creating a world class service experience through operational excellence and the innovative use of technology ? They create a Customer Centered and Result Focused Vision that inspires each one of their Associates and has their buy-in ? They committed in creating a High Performance Organization by creating an environment that allows each one of their Associates to perform at their peak. As a result they will also be recognized as an Employer of Choice
? They committed to Partnering with their internal and external Customers for mutual success ? They work with Integrity, Fairness and Financial Prudence in all their dealings keeping the interests of our Shareholders, Customers and Associates paramount
AWARDS
? MetLife was named the “Best Managed Insurance Company for 2008” by Forbes magazine. ? For three consecutive years (2008–2010) the company has also appeared on FORTUNE?s list of the most-admired companies. ? MetLife was recognized by Diversity MBA magazine as one of its “Top 50 Companies for Diverse Managers” in 2007, 2008, 2009 and 2010. ? The magazine highlighted MetLife?s Enterprise Diversity Council and noted how the council helps “set direction, communicate strategy and ensure consistency of the diversity message across MetLife.” ? For eleven consecutive years (1999–2009) MetLife has been named by Working Mother magazine as one of the “100 Best Companies for Working Mothers,” specifically for offering flexible schedules, remote working capabilities and various child care options. ? MetLife has also been awarded a perfect score for seven consecutive years (2004– 2010) by the Human Rights Campaign Foundation for its “Corporate Equality Index-Best Companies “.
PARTNERS
CORPORATE AGENTS ? Geojit Investment Services Ltd ? The Jammu And Kashmir Bank Ltd. ? Karnataka Bank Ltd ? Barclays Plc ? Sri Bhramaramba Pattina
INACTIVE CORPORATE AGENTS ? Abl Consultancy Services Pvt. ? Alliance Consultancy ? Ampe Insurance Advisors ? Analytical Insurance ? Apna Bazaar ? Apna Insurance ? Ardee Life ? Arian Medicals ? Ashram Composite Insurance Age ? Canon Insurance Services Pvt ? Muthoottu Mini Financiers Pvt
Soudhara Sahakari Niyamita ? Odisha Housing Development And Finance Co-Op Ltd ? M.P Rajya Sahakari Bank Mydt ? J&K Grameen Bank ? Birdres Technologies Pvt. Ltd ? Punjab National Bank ? American Express Banking Corp.
METLIFE INSURANCE - PRODUCTS MetLife Plans are innovative and cater to individual and group customers and are categorized into the following:
MetLife Term Plans ? Met Suraksha ? Met Suraksha Plus ? Met Suraksha TROP ? Met Protect ? Met Mortgage Protector Plus
MetLife ULIP Plans ? Met Smart Platinum ? Met Smart one ? Met Easy Super
MetLife Child Plans ? Met Bhavishya ? Met Junior Endowment ? Met Junior Money Back ? Met Smart Child
MetLife Pension Plans ? Met Deferred Monthly Income Plan
MetLife Monthly Income Plans ? Met Monthly Income Plan ? Met Monthly Income Plan - 7 pay ? Met Monthly Income Plan – 15 pay
MetLife Traditional Plans ? Met Sukh ? Met Suvidha ? Met Saral ? Met 100
MetLife Health Plans ? Met Health Care ? Met Health cash
MetLife Rural Plans ? Met Vishwas ? Met Suvidha Saral ? Met Grameen Ashray
RESPONSIBILITIES AND DUTIES OF FINANCIAL ADVISOR
WHO IS A FINANCIAL ADVISOR A financial advisor can be addressed as a professional who provides financial services to individuals, businesses, and governments. These financial services may include pension planning or/and advice related to life insurance and similar insurances like income protection insurance, critical illness insurance, and also advise on mortgages. Perfectly, a financial advisor assists the client in maintaining the expected balance of investment income, capital gains, and acceptable level of risk through the use of proper allocation. Financial advisors use bonds, stock, mutual funds, RETIs (real estate investment trusts, futures, options, notes, and insurance products to congregate the needs of the clients.
DUTIES AND RESPONSIBILITIES OF A FINANCIAL ADVISOR
The duties and responsibilities of a financial advisor are as follows: 1. The first and foremost responsibility of a financial advisor is to guide the clients on the basis of short term and long term financial objectives. 2. It is essential to first consider the financial requirements of the customers for advising on the basis of his/her financial conditions. 3. The advisor should guide the clients about the fund specific projects they would be interested in. 4. The advisor can undertake the retirement planning for clients.
5. It is also required on the financial advisor?s part to guide the clients about the bets real estate investment opportunities present in a particular market. 6. The financial advisor is liable for pooling the wealth of the shareholder when employed in a mutual fund. 7. The financial advisor needs to ensure the clients? willingness towards a particular investment decision as well. 8. The financial advisor performs the duty of helping the client in acquiring assets in a balanced way. 9. The financial advisor should keep in mind the requirement of liquid cash to congregate the day to day expenses.
SKILLS AND SPECIFICATIONS
The basic skills and specifications required essentially in a financial advisor include: 1. The person should possess good communication skills. 2. He/she should have the required financial knowledge in insurance, tax services, retirement accounts, and financing accounts. 3. He/she should be registered with the respective authorities. 4. He/she should be trustworthy and objective in doing the job.
ORGANIZATIONAL STRUCTURE
2.1 FIELD OF THE STUDY The study was restricted to the financial advisors of METLIFE INDIA INSURANCE CO LTD in Vellore.
2.2 RESEARCH DESIGN Research design `deals with a logical problem and not a logistical problem'. Before a builder or architect can develop a work plan or order materials they must establish the type of building required, its uses and the needs of the occupants. Similarly, in social research the issues of sampling, method of data collection.
TYPES OF RESEARCH DESIGN
1. 2.
Descriptive Research methodology Explanatory Research methodology
Descriptive Research Methodology:? In this study descriptive research design was adopted Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when and how...
2.3 SAMPLING DESIGN A sample is a finite part of a statistical population whose properties are studied to gain information about the whole. When dealing with people, it can be defined as a set of respondents (people) selected from a larger population for the purpose of a survey.
TYPES OF SAMPLING DESIGN 1. Probability sampling design 2. Non probability sampling design Meaning of Probability Sampling A probability sampling method is any method of sampling that utilizes some form of random selection. In order to have a random selection method, you must set up some process or procedure that assures that the different units in your population have equal probabilities of being chosen. Humans have long practiced various forms of random selection, such as picking a name out of a hat, or choosing the short straw. These days, we tend to use computers as the mechanism for generating random numbers as the basis for random selection. NON PROBABILITY SAMPLING The difference between non probability and probability sampling is that non probability sampling does not involve random selection and probability sampling does. Does that mean that non probability samples aren't representative of the population? Not necessarily. But it does mean that non probability samples cannot depend upon the rationale of probability theory. At least with a probabilistic sample, we know the odds or probability that we have represented the population well. Non probability sampling method was adopted in this study. They are able to estimate confidence intervals for the statistic. With non probability samples, they may or may not represent the population well, and it will often be hard for us to know how well we've done so. In general, researchers prefer probabilistic or random sampling methods over non probabilistic ones, and consider them to be more accurate and rigorous. However, in applied social research there may be
circumstances where it is not feasible, practical or theoretically sensible to do random sampling. Here, we consider a wide range of non probabilistic alternatives. It can divide non probability sampling methods into two broad
types: accidental or purposive. Most sampling methods are purposive in nature because they usually approach the sampling problem with a specific plan in mind. The most important distinctions among these types of sampling methods are the ones between the different types of purposive sampling approaches. SAMPLE SIZE: The size of the sample is 130. Tool of data collection: Questionnaire 2.4 SOURCE OF DATA COLLECTION PRIMARY SOURCE Primary source is a term used in a number of disciplines to describe source material that is closest to the person, information, period, or idea being studied. In the study of history as an academic discipline, a primary source (also called original source or evidence) is an artifact, a document, a recording, or other source of information that was created at the time under study. SECONDARY DATA Secondary data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research. ? In this study both data method was adopted.
2.5 TOOL OF DATA COLLECTION
Purpose of Questionnaires The questionnaire (also called survey) is a set of questions given to a sample of people. The purpose is to gather information about the people?s attitudes, thoughts, behaviors, and so forth. The researchers compile the answers of the people in the sample in order to know how the group as a whole thinks or behaves. Closed Ended Questions:Respondents? answers are limited to a fixed set of responses. Most scales are closed ended. Other types of closed ended questions include:
? ? ?
Yes/no questions - The respondent answers with a “yes” or a “no”. Multiple choices - The respondent has several options from which to choose. Scaled questions - Responses are graded on a continuum.
Open Ended Questions:No options or predefined categories are suggested. The respondent supplies their own answer without being constrained by a fixed set of possible responses. Examples of types of open ended questions include
2.6 ANALYSIS OF DATA 1. Correlation 2. Chi-square
CORRELATION ? A reciprocal relation between two or more things ? Correlation coefficient: a statistic representing how closely two variables co-vary; it can vary from -1 (perfect negative correlation) through 0 (no correlation) to +1 (perfect positive correlation); "what is the correlation between those two variables?" ? A statistical relation between two or more variables such that systematic changes in the value of one variable are accompanied by systematic changes in the other.
Definition & Formula to Correlation N?xy-(?x) (?y) R= ? {N?x2-(?x)2}{N?y2-(?y)2}
N ?xy ?x ?y ?x
= number of pairs of scores =sum of the products of paired scores = sum of x scores =sum of squared x scores = sum of squared y scores
Correlation is a statistical measurement of the relationship between two variables. Possible correlations range from +1 to –1. A zero correlation indicates that there is no
relationship between the variables. A correlation of –1 indicates a perfect negative correlation, meaning that as one variable goes up, the other goes down. A correlation of +1 indicates a perfect positive correlation, meaning that both variables move in the same direction together.
DEFINITIONS & FORMULA OF CHI-SQUARE
In probability theory and statistics, the chi-square distribution with k degrees of freedom is the distribution of a sum of the squares of k independent standard normal random variables. Pearson's chi-square test, also known as the chi-square goodness-of-fit test or chisquare test for independence, when mentioned without any modifiers or without other precluding context, this test is usually understood (for an exact test used in place of ?2, see Fisher's exact test). The analysis for this study was made with the help of SPSS tool.
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Human Resource (or personnel) management, in the sense of getting things done through people, is an essential part of every manager?s responsibility, 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 a line, which no member of any senior management team would disagree with. Yet, the realities for many organizations are that their people remain undervalued, under trained and underutilized. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop „cultural awareness?, product / process / organization knowledge and experience for new staff members.
FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization: 1. Recruitment 2. Selection 3. Induction 4. Performance Appraisal 5. Training & Development
Recruitment The process of recruitment begins after manpower requirements are determined in terms of quality through job analysis and quantity through forecasting and planning.
Selection The selection is the process of ascertaining whether or not candidates possess the requisite qualifications, training and experience required.
Induction Induction is the technique by which a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of the organization. WHAT IS “PERFORMANCE APPRAISAL”?
Performance Appraisal is defined as the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in working organizations and potential of employees. According to Flippo, “Performance Appraisal is the systematic, periodic and an important rating of an employee?s excellence in matters pertaining to his present job and his potential for a better job.”
CHARACTERISTICS OF PERFORMANCE APPRAISAL
1. Performance Appraisal is a process. 2. It is the systematic examination of the strengths and weakness of an employee in terms of his job. 3. It is scientific and objective study. Formal procedures are used in the study.
4. It is an ongoing and continuous process wherein the evaluations are arranged periodically according to a definite plan. 5. The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee.
PROCESS OF PERFORMANCE APPRAISAL
The process of performance appraisal:
1. Establishing performance standards 2. Communicating the Standards 3. Measuring Performance 4. Comparing the actual with the standards 5. Discussing the appraisal 6. Taking Corrective Action
LIMITATIONS OF PERFORMANCE APPRAISAL
1. Errors in Rating 2. Lack of reliability 3. Negative approach 4. Multiple objectives 5. Lack of knowledge
BENEFITS OF PERFORMANCE APPRAISALS ? Measures an employee?s performance. ? Helps in clarifying, defining, redefining priorities and objectives. ? Motivates the employee through achievement and feedback.
? Facilitates assessment and agreement of training needs. ? Helps in identification of personal strengths and weaknesses. ? Plays an important role in Personal career and succession planning. ? Clarifies team roles and facilitates team building. ? Plays major role in organizational training needs assessment and analysis. ? Improves understanding and relationship between the employee and the reporting manager and also helps in resolving confusions and misunderstandings. ? Plays an important tool for communicating the organization?s philosophies, values, aims, strategies, priorities, etc among its employees. ? Helps in counseling and feedback.
BASIS OF THE STUDY Performance Appraisal is the important aspect in the organization to evaluate the employee?s performance. It helps in understanding the employees work culture, involvement, and satisfaction. It helps the organization in deciding employee?s promotion, transfer, incentives, and pay increase.
MODERN APPRAISAL Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual etc), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations, appraisals are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performance of advisors who should get the majority of available bonuses, promotions and merits. By the same time, appraisals are used to identify the poor performers, who may require training, decreases in bonus and other forms.
FEATURES OF PERFORMANCE APPRAISAL
Systematic process Periodic process Evaluating process Performance appraisal
Determines employees potentialities Futureoriented
Employee development
TARGET BASED PERFORMANCE APPRASAL
Goals lay down targets to be achieved infuture.they influence the behavior of employees and also their motivation. When the employees participate in goal setting, they see how their efforts will lead to performance, rewards and personal satisfaction. Thus, goals provide a sense of direction to the employees. Moreover, attainment of goals is rewarding as it helps to satisfy the needs of the employees and stimulates them to set higher goals for the future. TYPES OF GOALS 1) On the basis of level of organizations: Strategic goals: Broad statements of where the organization wants to be in the future; pertain to the organization as a whole rather than to specific divisions or departments. Tactical goals: Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals. Operational goals: Specific measurable results expected from departments, work groups, and individuals within the organization.
2) On the basis of individual course of action: Achievement goals: These describe the results that one will have when finished the goal. Action goals: These describe specific actions that one will take to accomplish achievement goals. Limit goals: These goals set boundaries and help to manage priorities.
Rate goals: These specify actions repeatedly done over time. Many personal growth activities can be performed as rate goals. Exclusion goals: These states things that one will not do. These help people to decide in advance which activities they will avoid. Layered goals: These specify the same goal with different levels of priority and difficulty. They use layered goals to stretch the performance beyond minimum achievements.
Incredible goals: These goals are highly optimistic, farfetched, or uncommonly aggressive. ELEMENTS OF TARGET SETTING These elements are studied by EDWIN LOCKE 1) Goal acceptance: The employees should understand the implications of goals for them and also accept them. If difficult goals are assigned to individuals, they may not feel attached to the goals.thats why it is desired that the managers should follow a participative approach in setting the goals for the subordinates. 2) Goal specificity: A specific goal identifies the target in quantitiave or measurable terms. This would enable the worker to evaluate his performance and judge as to how he is doing in relation to the goal. Meeting a goal provides the worker with a sense of achievement, pride and personal satisfaction. This results in improved performance. 3) Goal challenge: Difficult but feasible goals provide more challenge than easy goals. Reaching an easy target is not competitive and hence hardly exciting. This is particularly true for high need achievers. However, even the challenging goals must be achievable, given the capability and experience of the individuals and the resources available.
4) Performance feedback: The employees, who have set challenging goals for themselves, need feedback about how well they are doing and how successful they are. Proper feedback can motivate them further. Performance feedback tends to encourage better job performance and self generated feedback is an especially powerful motivational tool. TARGET SETTING AND TARGET ACHIEVEMENT: It is the relation between goal-setting and subsequent success and failure in goal achievement. It is concluded by Kolb et al. 1) Conscious goal-setting facilitates goal achievement. Individuals tend to change more in those areas, which are related to their consciously set goals. 2) These changes are independent of the difficulty of the goal; and are not a result of an initial choice of easy to achieve goals. 3) Awareness of forces related to the goal, high expectations of success, high psychological safety, a concern for measuring progress, and an emphasis on selfcontrolled evaluation are all precursors of successful goal achievement.
PERFORMANCE APPRAISAL METHODS
1. Critical incident method This format of performance appraisal is a method which is involved identifying and describing specific incidents where employees did something really well or that needs improving during their performance period. 2. Weighted checklist method In this style, performance appraisal is made under a method where the jobs being evaluated based on descriptive statements about effective and ineffective behavior on jobs. 3. Paired comparison analysis This form of performance appraisal is a good way to make full use of the methods of options. There will be a list of relevant options. Each option is in comparison with the others in the list. The results will be calculated and then such option with highest score will be mostly chosen. 4. Graphic rating scales This format is considered the oldest and most popular method to assess the employee?s performance. In this style of performance appraisal, the management just simply does checks on the performance levels of their staff.
5. Essay Evaluation method In this style of performance appraisal, managers/ supervisors are required to figure out the strong and weak points of staff?s behaviors. Essay evaluation method is a nonquantitative technique. It is often mixed with the method the graphic rating scale. 6. Behaviorally anchored rating scales This formatted performance appraisal is based on making rates on behaviors or sets of indicators to determine the effectiveness or ineffectiveness of working performance. The form is a mix of the rating scale and critical incident techniques to assess performance of the staff. 7. Performance ranking method The performance appraisal of ranking is used to assess the working performance of employees from the highest to lowest levels. Managers will make comparisons of an employee with the others, instead of making comparison of each employee with some certain standards. 8. Management by Objectives (MBO) method MBO is a method of performance appraisal in which managers or employers set a list of objectives and make assessments on their performance on a regular basis, and finally make rewards based on the results achieved. This method mostly cares about the results achieved (goals) but not to the way how employees can fulfill them.
9. 360 degree performance appraisal The style of 360 degree performance appraisal is a method that employees will give confidential and anonymous assessments on their colleagues. This post also information that can be used as references for such methods of performance assessments of 720, 540, 180… 10. Forced ranking (forced distribution) In this style of performance appraisal, employees are ranked in terms of forced allocations. For instance, it is vital that the proportions be shared in the way that 10 or 20 % will be the highest levels of performances, while 70 or 80% will be in the middle level and the rest will be in the lowest one.
PROBLEMS IN PERFORMANCE APPRAISAL
Rating Errors in Performance Appraisals Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as 'rating errors'. These errors can seriously affect assessment results. Some of the most common rating errors are: Leniency or severity: - Leniency or severity on the part of the rater makes the assessment subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are lenient for the following reasons: a) The rater may feel that anyone under his or her jurisdiction who is
rated unfavorably will reflect poorly on his or her own worthiness.
b)
Hershel may feel that a derogatory rating will be revealed to the rate to
detriment the relations between the rater and the rate. c) He/ She may rate leniently in order to win promotions for the
subordinates and therefore, indirectly increase his/her hold over him. Central tendency: - This occurs when employees are incorrectly rated near the average or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from certain doubts and anxieties, which the raters have been assessing the rates. Halo error: - A halo error takes place when one aspect of an individual's performance influences the evaluation of the entire performance of the individual. The halo error occurs when an employee who works late constantly might be rated high on productivity and quality of output as well as on motivation. Similarly, an attractive or popular personality might be given a high overall rating. Rating employees separately on each of the performance measures and encouraging raters to guard against the halo effect are the two ways to reduce the halo effect. Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score are given only to certain individuals or groups based on the rater's attitude towards them and not on actual outcomes or behaviors; sex, age, race and friendship biases are examples of this type of error. Primacy and Regency effects: - The rater's rating is heavily influenced either by behavior exhibited by the ratee during his early stage of the review period (primacy) or by the outcomes, or behavior exhibited by the ratee near the end of the review period (regency). For example, if a salesperson captures an important contract/sale just before the completion of the appraisal, the timing of the incident may inflate his or her standing, even though the overall performance of the sales person may not have been encouraging. One way of guarding against such an error is to ask the rater to consider the composite performance of the rate and not to be influenced by one incident or an achievement.
Performance dimension order: - Two or more dimensions on a performance instrument follow each other and both describe or rotate to a similar quality. The rater rates the first dimensions accurately and then rates the second dimension to the first because of the proximity. If the dimensions had been arranged in a significantly different order, the ratings might have been different. Spillover effect: - This refers lo allowing past performance appraisal rating lo unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating for current period although the demonstrated behavior docs not deserve the rating, good or bad.
The history of performance appraisal is quite brief. It?s in the early 20th century can be traced to Taylor?s pioneering time and motion studies. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of second world war- not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art.
There is, says DULEWICZ (1989), a basic human tendency to make judgments about those one is working with, as well as about oneself.” Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the work place. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the bonus or commission of an advisor was justified. The process was firmly linked to material outcomes. If a performance of an advisor found to be poor, there will be no bonus or fewer bonuses given are followed. On the other hand, if their performance was better there will be a bonus given according to their performance.
In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. Shirmeyer, Roslyn, (1999) in his article “current trends in performance appraisal” explained performance appraisal continues to be a subject of interest and
importance to human resource specialists. For decades, performance appraisal has received considerable attention in the literature, from both researchers and practitioners alike. Many others (Bernardin & KLatt, 1985; Hall, posner, &hardener, 1989; Maroney& Buckley, 1992; Thomas & Bretz, 1994) maintain that there is a considerable gap between theory and practice, and that human resource specialists are not making full use of the psychometric tools available. To support their claim, these authors cite surveys of practitioners concerning current performance appraisal methods and use. Taylor and Zawacki (1976) in his article “performance appraisal” explained that documented trends in performance appraisal usage among U.S. organizations. When comparing the results of two surveys taken five years apart, the authors noted a remarkable shift away from what they called collaborative approaches(e.g., MBO,BARS) and toward the more traditional performance appraisal techniques (graphic rating scales). Taylor and Zawacki (1984) hypothesized that managers, responding to the legal constraints prevalent in the 1980s, preferred techniques that were defensible in court. Accordingly, managers tended to be more satisfied with the objective traditional approaches, whereas their subordinates seemed to prefer the developmental collaborative methods. Bernardin and KLatt (1985) in his articles “performance appraisal practice” explained that small firms tended to rely heavily on trait-based approaches, while larger firms relied on a combination of trait, behavioral, and results-based techniques. They noted that one in five organizations did not give employees the opportunity to review the performance appraisal results. In another study, Locher and Teel (1988) identified graphic rating scales (57.1%), the open-ended essay (21.3%), and management- by- objectives (18.1%) as the most popular performance appraisal techniques. Unlike Taylor and Zawacki (1984) before them, Locher and Teel identified a trend toward the use of MBO as a popular technique.
Thomas and Bretz(1994) in his articles “performance information” explained report that performance information is most likely to be used for employee development or to administer performance, communicating expectations, determining employee potential and aiding employee counseling .other common administrative uses included promotions, lay-offs, transfers, terminations, and validations of hiring decisions. In addition, Hall, Posner, and Hardener (1989) identified common objectives of performance appraisal as reviewing past performance, rewarding past performance, goal setting for future performance, and employee development. Cleveland, Murphy, and Williams (1989) warned that organizations should exercise caution when using the same performance appraisal methods for multiple applications (e.g., counseling vs. evaluation), since different performance appraisal methods may yield different types of data (e.g., qualitative vs. quantitative). McAfee and Green (1977) in his articles “performance appraisal method” explained these included employee development, administrative, personnel research, economic, and validity criteria. Human resource specialists must weigh these to determine which format represents the best match with their needs. For example, formats that meet the administrative requirements of the company (e.g., salary and promotion) may be beyond the economic means of the firm (e.g., BARS). Relative to these factors, the narrative essay format rates well against economic criteria and may be suitable for employee development. However, it is not amenable to administrative decisions, personnel research, or validity studies. Bretz, Milkovich, & Read (1992), in his articles “performance improvement is desired” explained if performance improvement is desired, perhaps emphasis on job redesign is necessary. For example, production workers whose job has been redesigned to include feedback concerning their own quality are more likely to see improvement than those who receive feedback from external sources such as quality control officers.
Organizations should rethink how they use performance appraisal and tailor the process to the kinds of outcomes they desire.
Controversy Few issues in management stir up more controversy than performance appraisal. There are many reputable sourcesresearchers, management commentators, and
psychometricians-who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be 8impossible to perfect it. At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially”…. The most crucial aspect of organizational life” LAWRIE(1990)
Link to Rewards
Research (BANNISTOR & BALKIN, 1990) has reported that appraises seem to have greater acceptance of the appraisal process , and feel more satisfied with it, when the process is directly linked to rewards, such findings are a serious challenge to those who feel that appraisal results and reward outcomes must be strictly isolated from each other.
4.1GENDER
Table 1 Gender of the respondents
S.No 1 2
Options Male Female Total
Frequency 84 46 130
Percent 64.6 35.4 100.0
The above table shows that 64.6% of the respondents were male and remaining of them was female.
4.2. AGE GROUP OF THE RESPONDENTS
Table 2 Age group of the respondents S.No 1 2 3 Age Up to 20 yrs 20-30 yrs 30-40 yrs Total Frequency 15 54 61 130 Percent 11.5 41.5 46.9 100.0
The above table shows that 46.9% of the respondents belong to the age group 30-40years and around 41.5% of respondents belong to 20-30years and remaining respondents are from age group of up to 20years.
FIGURE 1
AGE GROUP OF THE RESPONDENTS
RESPONDENTS
60 40 20 0 Up to 20 11.5
41.5
46.9
Percent 20-30 AGE GROUP
30-40
4.3. MARITAL STATUS
Table 3 Marital status of the respondents
S.No 1 2
Marital status Married Unmarried Total
Frequency 89 41 130
Percent 68.5 31.5 100.0
The above table shows that 68.5% of the respondents were single and remaining of them was married.
4.4. EDUCATIONAL QUALIFICATION
Table 4 Educational qualifications of the respondents
S.No 1 2 3
Educational qualification Schooling Degree PG Degree Total
Frequency 20 78 32 130
Percent 15.4 60.0 24.6 100.0
The above table shows that 60% of the respondents belong to Degree qualified and 24.6% of the respondents belong to PG degree qualified and 15.4% of respondents belong to schooling.
4.5. STATUS
Table 5 Status of the respondents
S.No 1 2 3
Status Employee Student Others Total
Frequency 86 22 22 130
Percent 66.2 16.9 16.9 100.0
The above table shows that 66.2% of respondents are stated as employees and oth er respondents are stated as a student and other occupations.
FIGURE 2
STATUS OF THE RESPONDENTS
70 60 50 40 30 20 10 0 66.2
RESPONDENTS
16.9
16.9
Percent
Employee
Student STATUS
Others
4.6. YEAR OF SERVICE
Table 6 Year of service
S.No 1 2 3
Options up to 3yrs 3-6yrs above 6yrs Total
Frequency 64 29 37 130
Percent 49.2 22.3 28.5 100.0
The above table shows that 49.2% of the respondents belong to up to 3 years of experience and only 22.3% of the respondents belong to 3-6 years of experience. 28.5% of respondents are having experience of above 6 years.
FIGURE 3 YEAR OF SERVICE
60 50 40 30 20 10 0 RESPONDENTS 49.2 28.5
22.3
up to 3yrs
3-6yrs YEARS
above 6yrs
4.7. NATURE OF JOB Table 7 Nature of job
S.No 1 2 3
Options Easy Moderate Tough Total
Frequency 39 44 47 130
Percent 30.0 33.8 36.2 100.0
above
The
table shows that 36.2% of the respondents said that their job as financial advisor was tough and 33.8% of respondents said their job was moderate and 30.0% of the respondents feel that their job was easy.
4.8. TARGET SET BY COMPANY
Table 8 Target set by company
S.No 1
Options optimum utilization of resources
Frequency 10
Percent 7.7
2 3
To perform well To know the knowledge of the financial advisors
14 15
10.8 11.5
4
To develop themselves and the company
40
30.8
5
All the above Total
51 130
39.2 100.0
The above table shows that majority (39.2%) of respondents feels that the target is set by company for financial advisors need all the above reasons and least number of respondents (7.7%) said that the reason to set target by company is to use the optimum utilization of resources.
CORRELATION
The researcher was interested to know the correlation between education qualification and target set by the company for financial advisors. The hypothesis for the test was framed as follows: The null hypothesis There is no relationship between education qualification and target set by company. The alternative hypothesis There is relationship between education qualification and target set by company. The table shows the result of the correlation. Table 9 Correlation
Variable
Pearson’s Correlation
P Value
Inference
Education Qualification .068 Target set by company .440 Positive Correlation
The Pearson Correlation obtained was .068 for relation between the Education Qualification and target set by company. Thus there is a positive correlation between the two variables. The P value was .440 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted.
CONCLUSION
Hence there is no relationship between education qualification and target set by company.
From this it is inferred that, the target set by the company for financial advisors is not based on the educational qualification and it may be based on the skills possessed by financial advisors which is analyzed while in interview.
4.9. IMPORTANCE OF FINANCIAL ADVISOR
Table 10 Importance of financial advisor
S.No 1 2 3 4 5
Options To maintain customer relationship Source generator Linking the employee and customer Receive feedback from customer All the above Total
Frequency 39 18 19 7 47 130
Percent 30.0 13.8 14.6 5.4 36.2 100.0
The above table shows that 36.2% of respondents feel that importance of financial advisor for the company is all the above in the given options and 5.4% of respondents feels that receiving feedback from customer is importance of financial advisor.
4.10. TARGET ACHIEVEMENT PERIOD
Table 11 Target achievement period
S.NO 1 2 3
Options Weekly Monthly Yearly Total
Frequency 56 48 26 130
Percent 43.1 36.9 20.0 100.0
The above table shows that majority (43.1%) of the respondents opinions that the target is achieved in weekly, 36.9% of respondents say that the target is achieved in monthly and 20% of respondents opinions are the target is achieved through the year. It is concluded that the target period is differ because this target period is fixed according to the size of the target. And it is inferred through the interviews from financial advisors.
4.11. KIND OF BENEFITS
Table 12 Kind of benefits
S.No 1 2 3 4
Options Promotion Bonus Gifts Any other Total
Frequency 48 59 16 7 130
Percent 36.9 45.4 12.3 5.4 100.0
The above table shows that 36.9% of respondents said that the benefits given by company is promotion and 45.4% of respondents opinions are bonus is given , and 12.3% of respondents are gifts is given and 5.4% of respondents are feels that any other benefits like tour packages, rewards, appreciations etc… are given by company.
CORRELATION
The researcher was interested to know the correlation between year of service and kind of benefits given by the company. The hypothesis for the test was framed as follows:
The null hypothesis There is no relationship between year of service and kind of benefits. The alternative hypothesis There is relationship between year of service and kind of benefits.
The table below shows the result of the correlation. Table 13 Correlation
Variable Year of service Kind of benefits
Pearson’s Correlation -.040
P Value .648
Inference Negative Correlation
The Pearson correlation obtained was -.040 for relation between the year of service and kind of benefits. Thus there is a negative correlation between the two variables. The p value is .648 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted.
CONCLUSION
Hence there is no relationship between year of service and kind of benefits.
From this analyze it is inferred that the benefits given is not based on their experience, and it is based on the performance of financial advisors.
4.12. ACHIEVABLE TARGET
Table 14 Achievable target
S.No 1 2
Opinions Yes No Total
Frequency 116 14 130
Percent 89.2 10.8 100.0
The above table shows that 89.2% of the respondents stated that the target given is achievable and 10.8% of the respondents feel that the target given is not achievable.
4.13. BONUS/COMMISSION GIVEN IMMEDIATELY
Table 15 Immediate bonus/commission S.No 1 2 3 Opinions Yes No Sometimes Total Frequency 100 11 19 130 Percent 76.9 8.5 14.6 100.0
The above table shows that 76.9% of respondents stated that the bonus/commission according to their performance is given immediately and 8.5% of the respondents said that the bonus/ commission are not given immediately.
FIGURE 4
IMMEDIATE BONUS/COMMISSION
100 RESPONDENTS 80 60 40 20 0 Yes No OPINIONS Sometimes 8.5 14.6 Percent 76.9
4.14. PREFRENCE OF BENEFITS Table 16 Preference of benefits
S.No 1 2 3
Options Annual benefits Monthly benefits Spot benefits Total
Frequency 28 65 37 130
Percent 21.5 50.0 28.5 100.0
The above table shows that 50.0% of respondents stated that monthly benefits are preferred by them and 21.5% of respondent?s states that annual benefits are preferred.
CONCLUSION
It is concluded that financial advisors psychology is to get on monthly basis as salary, the same thing is being expected for the extra benefits as monthly basis.
FIGURE 5
PREFERENCE OF BENEFITS
Spot benefits 28% Annual benefits 22%
Monthly benefits 50%
Table 17 GENDER & PREFERENCE OF BENEFITS PREFERENCE OF BENEFITS PARTICULARS Annual benefits 16 Male (12.3%) GENDER 12 Female (9.2%) TOTAL 28 (18.5%) 65 (7.7%) 37 130 24 10 46 (31.5%) (20.8%) Monthly benefits 41 Spot benefits 27 84 TOTAL
The above table shows that 31.5% of male respondents are preferred the monthly benefits and least 7.7% of female respondents are preferred the spot benefits.
4.15. SATISFACTION OF BONUS/COMMISSION
Table 18 Satisfaction of bonus/commission S. No 1 2 3 Opinions Highly satisfied Satisfied Dissatisfied Total Frequency 44 73 13 130 Percent 33.8 56.2 10.0 100.0
The above table shows that 56.2% of respondents are satisfied by bonus/commission given by the company and 10% of respondents are dissatisfied by bonus/commission given by the company.
FIGURE 6
SATISFACTION OF BONUS/COMMISSION
60 50 40 30 20 10 0 56.2 33.8 RESPONDENTS
10
Percent
Highly satisfied
Satisfied OPINIONS
Dissatisfied
CHI-SQUARE
A chi-square test was conducted to find out the association between year of service and satisfaction of bonus/commission given by the company. The hypothesis for the test was framed as follows The null hypothesis There is no association between year of service and satisfaction of bonus/commission given by the company. The alternative hypothesis There is association between year of service and satisfaction of bonus/commission given by the company.
Chi-Square Test Table 19 Value
a Pearson Chi-Square 2.070
df
4
P value
.723
a. 2 cells (22.2%) have expected count less than 5. The minimum expected count is 2.90.
Pearson chi-square value was obtained 2.070.since p value of 0.723 is greater than 0.05 the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance. CONCLUSION Hence there is no association between year of service and satisfaction of bonus/commission given by the company. From the above table it is interpreted that satisfaction of bonus/commission given by company may be due to performance made by financial advisors not merely by their experiences.
4.16. BONUS RELATED PERFORMANCE
Table 20 Performance bonus
S.NO 1 2
Opinions Yes No Total
Frequency 122 8 130
Percent 93.8 6.2 100.0
The above table shows that 93.8% of respondents stated that the bonus is given according to their performance and 6.2% of respondents are not given the bonus according to their performance.
FIGURE 7
BONUS RELATED PERFORMANCE
RESPONDENTS 93.8 100 50 6.2 0 Yes No OPINIONS Percent
4.17. TRAINING FOR FINANCIAL ADVISORS
Table 21 Training
S.No 1 2
Opinions Yes No Total
Frequency 107 23 130
Percent 82.3 17.7 100.0
The above table shows that 82.3% of respondents states that there is training provided for financial advisors and 17.7% of respondents does not state any training given by the company for financial advisors.
4.18. TARGET NOT ACHIEVED
Table 22 Target not achieved S.No 1 2 3 4 Options Training Changing the post No commission Less commission Total Frequency 25 16 72 17 130 Percent 19.2 12.3 55.4 13.1 100.0
The above table shows that 55.4% of respondents stated that if target is not achieved the company will give no commission and 19.2% of respondents feels that the company is giving
training , and 13.1% of respondents feels that the company gives less commission, 12.3% of respondents stated that the company is changing the post of the financial advisors.
4.19. QUALITIES OF FINANCIAL ADVISORS
Table 23 Qualities of financial advisors S.No 1 2 3 4 5 Options Confidence Presentation about schemes Express words in positive Influencing capability All the above Total Frequency 28 24 14 8 56 130 Percent 21.5 18.5 10.8 6.2 43.1 100.0
The above table shows that majority of the respondents (43.1%) states that all the above skills and abilities of financial advisors are needed, and 6.2% of respondents stated that influencing capability is the quality to be possessed by the financial advisors.
4.20. SKILLS OF FINANCIAL ADVISORS
Table 24 Skills to handle the clients S.No 1 2 3 4 5 Options Communication Scheme knowledge Listening skills Managing the customers All the above Frequency 15 12 10 43 50 Percent 11.5 9.2 7.7 33.1 38.5
Total
130
100.0
The above table shows that 38.5% of respondents feels that the financial advisors need all the skills to handle their clients, and 7.7% of respondents feels that they need listening skills to manage their customers.
4.21. CUSTOMER SATISFACTION
Table 25 Customer satisfaction
S.No 1 2
Opinions Yes No Total
Frequency 104 26 130
Percent 80.0 20.0 100.0
The above table shows that 80% of the respondents are satisfied their customers and 20% of respondents are not satisfying their customers.
4.22. COMPANY SATISFACTION
Table 26 Company satisfaction
S.No 1 2
Opinions Yes No Total
Frequency 96 34 130
Percent 73.8 26.2 100.0
The above table shows that 73.8% of respondents are satisfied their company due to their financial advisor performance and 26.2% of respondents are not satisfying their company.
4.23. AREAS OF IMPROVEMENT
Table 27 Areas of improvement
S.No 1 2 3 4
Options Communication Innovative Handling stress All the above Total
Frequency 22 20 38 50 130
Percent 16.9 15.4 29.2 38.5 100.0
The above table shows that 38.5% of respondents are need to improve all the areas mentioned and 29.2% of respondents are need to improve their handling stress and 16.9% of respondents are to improve their communication , 15.4% of respondents are to improve their innovative skills to be a qualified financial advisor.
4.24. COMMUNICATION WITH SUPERIORS
Table 28 Communication with superiors
S.No 1 2
Opinions Yes No Total
Frequency 114 16 130
Percent 87.7 12.3 100.0
The above table shows that the majority of respondents (87.7%) are having good communication with their superiors and 12.3% of respondents are not having their good communication with their superiors.
4.25. INFORMATION ABOUT APPRAISAL SYSTEM
Table 29 Information about appraisal system
S.No 1 2 3
Opinions Aware Sometimes Do not aware Total
Frequency Percent 78 39 13 130 60.0 30.0 10.0 100.0
The above table shows that 60% of the respondents are aware of the appraisal system and 30% of the respondents are known sometimes about the appraisal system and 10% of respondents are do not aware about the appraisal system.
FIGURE 8
INFORMATION ABOUT APPRAISAL SYSTEM
Do not aware 10%
Sometimes 30%
Aware 60%
Table 30 YEAR OF SERVICE & INFORMATION ABOUT APPRAISAL SYSTEM PARTICULARS INFORMATION ABOUT APPRAISAL TOTAL
SYSTEM Do Aware Sometimes aware
38 Up to 3yrs (29.2%0
not
19 (14.6%) 12 (9.2%) 8 (6.2%) 39
7 64 (5.4%) 2 29 (1.5%) 4 37 (3.1%) 13 130
15 YEAR OF 3-6yrs (11.5%) SERVICE 25 Above 6yrs (19.2%) TOTAL 78
The above table shows that 29.2% of respondents who are experienced up to 3yrs are aware of the appraisal system and least 1.5% of respondents , experienced about 3-6yrs are do not aware about the appraisal system.
CONCLUSION
From this it can be concluded that in the initial period the advisors will have more curiosity to know their progress and if they become experienced, they gain knowledge about the appraisal system, how it be and there will be less curiosity in knowing about their progress.
4.26. METHOD OF APPRAISAL SYSTEM
Table 31 Methods of appraisal system
S.No 1 2
Options Ranking/Grading system Do not aware Total
Frequency 117 13 130
Percent 90.0 10.0 100.0
The above table shows that 90% of respondents stated that the company is following the ranking/grading system and 10% of respondents are do not aware about the appraisal system followed by the company.
4.27. SATISFACTION OF APPRAISAL SYSTEM
Table 32 Satisfaction of appraisal system
S.No 1 2 3
Opinions Highly satisfied Neutral Not satisfied Total
Frequency 41 82 7 130
Percent 31.5 63.1 5.4 100.0
The above table shows that 63.1% of respondents are either highly satisfied or not satisfied by the appraisal system, 31.5% of respondents are highly satisfied in the appraisal system and only 5.4% of respondents are not satisfied with this appraisal system.
FIGURE 9
SATISFACTION OF APPRAISAL SYSTEM
RESPONDENTS
80 60 40 20 0
63.1 31.5 5.4 Highly satisfied Neutral OPINIONS Not satisfied Percent
CHI-SQUARE
A chi-square test was conducted to find out the association between year of service and satisfaction of appraisal system conducted by the company. The hypothesis for the test was framed as follows The null hypothesis
There is no association between year of service and satisfaction of appraisal system conducted by the company. The alternative hypothesis There is association between year of service and satisfaction of appraisal system conducted by the company.
Chi-Square Test
Table 33
Value Pearson Chi-Square 2.634a
df 4
P value .621
a. 3 cells (33.3%) have expected count less than 5. The minimum expected count is 1.56.
Pearson chi-square test value obtained 2.634. Since p value (.621) is greater than 0.05 the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance. CONCLUSION Hence there is no association between year of service and satisfaction of appraisal system conducted by the company. From the above table it is interpreted that satisfaction of appraisal system followed by company may occur due to some other factors such as attitude of appraiser, may be the impact of post appraisals etc…
4.28. MOTIVATION TO ACHIEVE TARGET
Table 34
Motivation to achieve target S.No 1 2 3 Opinions Motivated Neutral Not-Motivated Total Frequency Percent 99 24 7 130 76.2 18.5 5.4 100.0
The above table shows that 76.2% of respondents stated that there is a motivation to achieve the target and least 5.4% of respondents are stated that there is no motivation to achieve target.
4.29. PERIOD OF PERFORMANCE APPRAISAL
Table 35
Period of performance appraisal
S.No 1 2 3 4
Options Monthly Quarterly Half-yearly Annually Total
Frequency 27 47 40 16 130
Percent 20.8 36.2 30.8 12.3 100.0
The above table shows that majority (36.2%) of respondents are stated that the performance review and evaluation is conducted in the quarterly period, and least no of respondents (12.3%) stated as the appraisal is conducted annually. Because this performance appraisal period is depends upon the nature of the target.
4.30. RECEIVED PERFORMANCE APPRAISAL REPORT
Table 36
Received performance appraisal report S.No 1 2 3 Opinions Yes Sometimes No Total Frequency 78 48 4 130 Percent 60.0 36.9 3.1 100.0
The above table shows that 60% of the respondents accepts that they receives the appraisal report after evaluation, 36.9% of respondents stated that sometimes they receive the appraisal report and 3.1% of respondents stated that they do not receive the appraisal report.
4.31. BENEFITS RECEIVED
Table 37
Benefits received S.No 1 2 Options Monetary benefits Non-monetary benefits Total Frequency 101 29 130 Percent 77.7 22.3 100.0
The above table shows that 77.7% of the respondents receive the monetary benefits and 22.3% of the respondents receive the non-monetary benefits.
4.32. BENEFITS SATISFIED Table 38 Satisfaction of benefits
S.No 1 2 3
Opinions Highly satisfied Neutral Not satisfied Total
Frequency 33 80 17 130
Percent 25.4 61.5 13.1 100.0
The above table shows that 61.5% of respondents are stated that the benefits given is either highly satisfied or not satisfied, and 13.1% of respondents are not satisfied with the benefits given.
FIGURE 10
SATISFACTION OF BENEFITS
RESPONDENTS
80 60 40 20 0
61.5 25.4 13.1 Percent Highly satisfied Neutral OPINIONS Not satisfied
4.33. OVERALL PERFORMANCE APPRAISAL SYSTEM
Table 39 Overall appraisal system
S.No 1 2 3 4
Options Excellent Very good Good Average Total
Frequency 21 59 36 14 130
Percent 16.2 45.4 27.7 10.8 100.0
The above table shows that 45.4% of the respondents stated that the performance system followed by the company is very good, and 10.8% of respondents feel that this appraisal system is in average.
FIGURE 11
OVERALL APPRAISAL SYSTEM
Average 11% Good 28% Excellent 16%
Very good 45%
5.1 FINDINGS
The following were the major findings from the study. 1. It was found that majority of the respondents (64.6%) belonged to the female. 2. It was found that majority of the respondents (46.9%) belonged to the age group of 30-40 years. 3. It was found that majority of the respondents (89%) were married. 4. It was found that majority of the respondents (60%) belong to degree qualification. 5. It was found that majority of the respondents (66.2%) are employed. 6. It was found that majority of the respondents (49.2%) were experienced up to 3yrs. 7. It was found that majority of the respondents (33.8%) opinion is that their nature of job is moderate. 8. It was found that majority of the respondents (39.2%) feels that the target set by company for financial advisors is to utilize the resource, to perform well, to know knowledge of the financial advisors, to develop themselves and the company. 9. Correlation test was applied the p value was found to be .440 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted. Hence there is no relationship between educational qualification and target set by company. 10. It was found that majority of the respondents (36.2%) feels that the importance of financial advisors for the company needs all the skills like to maintain customer relationship, source generator, linking the employee and customer, receive feedback from customer etc.. 11. It was found that majority of the respondents stated that the target is achieved in weekly.
12. It was found that majority of the respondents (45.4%) stated that the benefits given by company is bonus for their performance.
13. Correlation test was applied the p value was found to be .648 which is greater than 0.05 therefore alternative hypothesis is rejected and null hypothesis is accepted. Hence there is no relationship between year of service and kind of benefits given by the company.
14. It was found that majority of the respondents (89.2%) feels that the target given by company is achievable.
15. It was found that majority of the respondents (76.9%) stated that the bonus/commission is given immediately according to their performance.
16. It was found that majority of the respondents (50%) prefer the monthly benefits.
17. The comparative study was made it was found that majority of the respondents(31.5%) who prefer the monthly benefits are male and least (7.7%) of respondents who prefer spot benefits are female.
18. It was found that majority of the respondents (56.2%) are stated that they are satisfied by the bonus/commission given by the company.
19. Chi-square test was applied Pearson chi-square value obtained is 2.070, and p value was found to be .723 which is greater than 0.05, therefore the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance.
Hence there is association between the year of service and satisfaction of bonus/commission given by the company.
20. It was found that majority of the respondents (93.8%) feels that the bonus is given according to their performance.
21. It was found that majority of the respondents (82.3%) states that the training is given because if they are lacking of skills for financial advisors by the company.
22. It was found that majority of the respondents (55.4%) opinions are if the target is not achieved, then there is no commission given.
23. It was found that majority of the respondents(43.1%) states that the financial advisors needs the qualities like confidence, presentation about schemes, express words in positive, influencing capability etc..
24. It was found that majority of the respondents (38.5%) stated that the communication, scheme knowledge, listening, managing the customers are the skills needed for financial advisors.
25. It was found that the majority of the respondents (80%) feels that they are satisfied their customers through their performance as a financial advisor.
26. It was found that majority of the respondents (73.8%) stated that they satisfy their company through their performance.
27. It was found that majority of the respondents (38.5%) feels that they need the communication, innovative, handling stress are their areas of improvement for financial advisors.
28. It was found that majority of the respondents (87.7%) are having the good communication with their superiors.
29. It was found that the majority of the respondents (60%) are aware of the appraisal system followed by the company.
30. The comparative study was made it was found that majority of the respondents (29.2%) who are experienced up to 3 years are aware of the appraisal system and least (1.5%) of respondents are experienced about 3-6 years are do not aware about the appraisal system followed by the company.
31. It was found that majority of the respondents (90%) are stated that the company is following the ranking/grading method of appraisal system.
32. It was found that the majority of the respondents (63.1%) are stated that the appraisal system followed by company is neither satisfied nor not satisfied.
33. Chi-square test was applied Pearson chi-square value obtained is 2.634 and p value is found to be .621 which is greater than 0.05, therefore the alternative hypothesis is rejected and null hypothesis is accepted at 5% level of significance. Hence, there is no association between year of service and satisfaction of appraisal system conducted by the company.
34. It was found that the majority of the respondents (76.2%) feel that there is a motivation to achieve target in the company.
35. It was found that majority of the respondents (36.2%) of respondents are stated that the performance review and evaluation is conducted in the quarterly period.
36. It was found that the majority of the respondents (60%) are stated that the financial advisor receives the appraisal report after it is evaluated.
37. It was found that majority of the respondents (77.7%) are feels that the benefits received after the performance is monetary benefits.
38. It was found that the majority of the respondents (61.5%) are stated that the given benefits are neither highly satisfied nor not satisfied.
39. It was found that majority of the respondents (45.4%) feels that the appraisal system followed by the company is very good.
5.2 SUGGESTIONS
From this research work, with the help analysis and finding the following suggestion can be implemented in Metlife
1) From the correlation analysis it was found that the benefits given is not based on
their experience, it is based on performance only. So it may be suggested the benefits can be given to financial advisors by considering their experience as a part of their performances.
2) From the table 22, it was inferred that no commission paid, if target was not achieved
it may be suggest that at least minimum percentage of communication can be given, which help to motivate to continue their task effectively.
3) From the table 30, it is inferred that during initial period only the financial advisor
have curiosity at appraisal system, afterwards it was lacking. So it may suggest that the company can provide information about appraisal system, at frequent interval, which helps to identify how much skills are changed over a period.
4) As the open suggestion, every individual will have unique talent, so instead of fixing
a standard target, the company may fix the target based on the individual skills of financial advisors, so that it helps to motivate the financial advisor to achieve their target.
5.3 CONCLUSION
The study was conducted to identify the reasons for the financial advisors whose performances are based upon their targets, and how the targets and the appraisals influence in the performance of the financial advisors. From this study it helps to know the financial advisor duties and responsibilities, roles and how their performance affects company progress. This study helps to know how the performance of advisors is measured and steps taken by company to improve the progress of advisors. Through this research, the analysis helps to find some valuable suggestion if the company implements some of these suggestions, which helps to increase performance of financial advisors, which in turn increase the productivity of the company.
A STUDY ON TARGET BASED PERFORMANCE AND APPRAISAL OF FINANCIAL ADVISORS AT METLIFE INDIA INSURANCE, VELLORE
QUESTIONNAIRE: NAME (optional): GENDER: Male / Female AGE: a) Up to 20yrs b) 20-30yrs c) 30-40yrs
MARITAL STATUS: Married / Unmarried EDUCATIONAL QUALIFICATION: a) Schooling 1) What is your status in the society? a) Employee b) Student c) Others b) Degree c) PG Degree
2) What is your year of service as a Financial Advisor? a) Up to 3yrs b) 3-6yrs c) above 6yrs
3) What kind of job you have? a) Easy b) Moderate c) Tough
4) Why the target is set by the company? a) b) c) d) e) optimum utilization of resources to perform well to know the knowledge of the financial advisors to develop themselves and the company all the above
Why financial advisor are important for the company? a) To maintain customer relationship b) Source generator c) Linking the employee & customer d) Receive feedback from customer e) All the above 5) How the target is achieved? a) Weekly b) monthly c) yearly
7) If the target is achieved what kind of benefits are given? a) Promotion b) bonus c) gifts d) any other
8) Whether the target is achievable? a) Yes b) No
9) Whether the performance bonus/ commission are given immediately? a) Yes b) No c) Sometimes
10) What type of benefits do you prefer? a) Annual benefits b) monthly benefits 11) The bonus/commission given is a) Highly satisfied b) satisfied c) neutral c) Spot benefits
12) Whether the bonus/commission is given according to your performance? a) Yes b) No
13) Whether your company trains the financial advisor? a) Yes b) No
14) If the target is not achieved, the company will give a) Training b) changing the post c) no commission d) less commission
15) What would you need to be a financial advisor? a) Confidence b) presentation about schemes c) express words in positive d) influencing capability e) all the above 16) What knowledge should have the financial advisor to handle their clients? a) Communication b) scheme knowledge c) listening skills d) Managing the customers e) all the above 17) Whether the customers are satisfied by your advice? a) Yes b) No
18) Whether the company is satisfied by your advice? a) Yes b) No
19) What do you think are your areas of improvement? a) Communication b) innovative c) handling stress d) all the above 20) Do you have communication with your superiors? a) Yes b) No
21) Did the company give information about the appraisal system? A) Aware b) sometimes c) do not aware
22) Which method do they follow for appraisal system? a) Ranking/ Grading system b) Do not aware 23) Are you satisfied with this appraisal system, adopted by company? a) Highly satisfied b) Neutral c) not satisfied
24) Whether there is a motivation for achieving the target?
a) Motivated
b) neutral
c) non-motivated
25) How the performances are reviewed and evaluated? a) Monthly b) quarterly c) half-yearly d) annually
26) Do you receive your performance appraisal report after it is evaluated? a) Yes b) sometimes c) No
27) After appraisal do you receive? a) Monetary benefits b) Non-Monetary benefits
28) Are you satisfied with Monetary/Non-Monetary benefits through appraisal system? a) Highly satisfied b) Neutral c) Not satisfied
29) How do you feel overall performance appraisal system followed by the organization? a) Excellent b) very good c) good d) average
If you have any suggestions about the appraisal system: ………………………………………………………………………………………… ………………………………………………………………………………………… …………………………………………………………………
BIBLIOGRAPHY
WEBSITE
? http://www.securities.com/Public/companyprofile/IN/Metlife_India_Insurance_Company_Limited_en_2426227.html ? http://en.wikipedia.org/wiki/MetLife ? https://www.metlife.com/about/corporate-profile/metlife-history/index.html ? www.metlifeindia.com ? www.metlife.co.in ? http://en.wikipedia.org/wiki/Financial_adviser ? http://www.studyvalue.com/_management_sciences/_hrm/definition_of_persormance_apprai sal_32.html ? http://www.readyratios.com/reference/education/financial_advisor.html ? http://www.humanresources.hrvinet.com/problems-in-performance-appraisal/ ? http://mycii.in/KmResourceApplication/E000000073.2466.Indian%20insurance%20report%20fin al.pdf ? http://ztest.net/thread-26498.html ? http://scdlmbaprojects.blogspot.com/2011/07/scdl-mba-project-study-of-performance.html
? http://www.scribd.com/doc/22450531/Performance-Appraisal-project-report
BOOKS
? Management & Organizational Behavior - Rudani - Google Books ? Performance Management: International Edition - Herman Aguinis - Google Books ? Human resources management- J.Jayashankar, Margham Publications.
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