A PROJECT REPORT ON

Performance Appraisal System of HDFC Life Insurance

SUBMITTED
TO THE UNIVERSITY OF MUMBAI

AS A PARTIAL REQUIREMENT FOR COMPLETING THE

DEGREE OF B.M.S (HUMAN RESOURCES) SEMESTER VI

SUBMITTED BY

SHUBHAM VASANT GHODAPKAR

ROLL NO: - 36

UNDER THE GUIDANCE

SAMEER SHIKALGAR
SIDDHARTH COLLEGE OF ARTS, SCIENCE AND COMMERCE
(2020-21)
 CERTIFICATE
This is to certify that SHUBHAM VASANT GHODAPKAR of BMS Semester VI
(Academic year 2021-22) has successfully completed a research project on
“Performance Appraisal System of HDFC Life Insurance” under the
guidance of SAMEER SHIKALGAR

SAMEER SHIKALGAR SURAJ PURENDARE

(PROJECT GUIDE) (COURSE CO-ORDINATOR)

________________________ ________________________

(EXTERNAL EXAMINER) (PRINCIPAL)

PLACE: - MUMBAI
DATE:-
 DECLARATION
I, HARSHAL PRKASH KHAMKAR, Student of B.M.S (Human Resources) Semester VI
(Academic year 2021-22) hereby declare that I have completed the research
project on- “Performance Appraisal System of HDFC Life Insurance”

This information presented in this project is true and original to the best of my knowledge. This
Project was previously not submitted to any university for any Degree or Diploma Course of this
or any other university.

(SHUBHAM VASANT GHODAPKAR)

Roll no: - 36

Place: -Mumbai
Date: -
 ACKNOWLEDGEMENT

I would like to thank the University of Mumbai for introducing BMS (Human
Resources) Semester VI course, thereby giving its student a platform to be abreast
with changing business scenario, with the help of theory as a base and practical as
a solution.

I am indebted to our Principal Dr. G. V. RAO for providing necessary facilities

required for completion of the project.

I take this opportunity to thank our Co-Coordinator PROF SURAJ PURENDARE for
her support and guidance. I would sincerely like to thank her for all efforts.

I would like to express my sincere gratitude towards my project guide SAMEER

SHIKALGAR whose guidance and care made the project successful.

I would like to thank my college library for having provided various references
books and magazines related to my project.

Finally, I would like to thank my parents for giving the best education and for their
support and contribution without which this Project would not have been
possible.
 INDEX
Sr No. PARTICULAR PAGE NO.
1. INTRODUCTION
 CHAPTER –1
INTRODUCTION
 INTRODUCTION

The process of Human Resource Development (HRD) helps the employee's to acquire and
develop technical, managerial and behavioral knowledge, skills & abilities and the values, beliefs
&attitudes necessary to perform present and future roles. The process of Performance Appraisal
helps the employees and management to know the level of employees Performance compared to
the standard or predetermined level.

Performance Appraisal is important to understand and improve the employee's performance

through HRD. In fact, Performance Appraisal is the basis of HRD. It was viewed that
Performance Appraisal was useful decide employee's promotion or transfer, salary
determination. But the recent developments in HRD indicate that Performance Appraisal is the
basis for employee development. Performance Appraisal indicates the level of desired
performance level and actual performance and the gap between these two. This gap should be
bridged through training, counseling, and motivation etc.

In every organization, the process of HRD helps the employees to acquire and development
technical, managerial, and behavioral knowledge, skill, and abilities, belief, and attitudes
necessary exists to achieve goals; the degree of success obtained by the individual employee in
achieving individual's goals directly determine the organizational effectiveness. The assessment
of the degree of success of an individual employee is an important part of HRM that leads to the
Performance Appraisal.

In American business, the Performance Appraisal is done to determine wage increase,

promotion, transfer, regarding the emphasis for the feedback to the employee's and assessing the
need for their training is very less or we can say it's little. In contrast, Indian companies use
Performance Appraisal for training and

development, providing feedback to the employees and personal research. They also use it in
determining wages and transfers as they do it in the American companies.

The purpose of Performance Appraisal to make a distinction between performer and non-
performer on the job.
The aim of the project is to focus on the Performance Appraisal system undergone in HDFC Life
Insurance Co Ltd (HDFC LIC). This project aims to study the need for Performance Appraisal;
how it helps the employees of the Organization to improve their abilities so as to meet both the
personal and organizational present and future requirements. Whether the organization is
reaching its standards by Performance Appraisal resulting in an increase in quality and
productivity of the employees observed.

The overriding purpose of Performance Appraisal is to help HDFC Life Insurance Company
Limited employees to improve and thus to improve organizational effectiveness. Performance
Appraisal therefore institutional needs as well as staff member needs, abilities, motivation and
expectations.
 ABOUT THE COMPANY

HDFC Life, one of India's leading private life insurance companies, offers a range of individual
and group insurance solutions. It is a joint venture between Housing Development Finance
Corporation Limited (HDFC), India's leading housing finance in situation and Standard Life plc,
the leading provider of financial services in the United Kingdom. HDFC Ltd. holds 72.37% and
Standard Life (Mauritius Holding) Ltd. holds 26.00 % of equity in the joint venture, while the
rest is held by others. HDFC Life's product portfolio comprises solutions, which meet various
customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the
added advantage of customizing the plans, by adding optional benefits called riders, at a nominal
price. The company currently has 25 retail and 9 group products in its portfolio, along with 10
optional rider benefits catering to the savings, investment, protection and retirement needs of
customers. HDFC Life continues to have one of the widest reaches among new insurance
companies with about 500 branches in India touching customers in over 900 cities and towns.
The company has also established as on office in Dubai. HDFC Life has a strong presence in its
existing markets with a strong base of Financial Consultants. Standard Life Aberdeen manages
and administers £535 billion of assets worldwide*. It offers active asset management to
institutional, wholesale and strategic insurance clients around the world, in addition to wealth
management, financial planning and advisory services, either directly to customers or through
financial advisers, in the UK.
 Our Vision & Values

OUR VISION
To be the most successful and admired life insurance company, which means that we are the
most trusted Company, the easiest to deal with, offer the best value for money and set the
standards for the industry. “The most obvious choice for all”.

OUR VALUES
Our Values Framework ‘EPICC’ (Excellence, People Engagement, Integrity, Customer-
Centricity, and Collaboration) characterizes the inspiring culture, which fosters growth and
progress, for us and all our stakeholders, for today and tomorrow.

EXCELLENT: To excel in every action with an aspiration to be the best in the industry.
PEOPLE ENGAGEMENT: Respect your colleagues and contribute towards an engaged work
environment.

INTEGRITY: To conduct in a manner that is consistent with the Company's code of conduct
and demonstrates accountability for all professional actions.

CUSTOMER-CENTRICITY: Keep policy holders interest in the center and deliver on all
commitments.

COLLABORATION: Proactively align all actions towards achieving organizational goals.

HDFC PROFILE

Housing Development Finance Corporation Ltd. (HDFC), India‟s premier housing finance
institution has assisted more than 3.3 million families own a home, since in inception in
1977 across 2400 cities and town through its network over 250 offices. It has international
offices in Dubai, London and Singapore service associates in Saudi Arabia, Qatar, Kuwait
and Oman to assist NRI‟s and PIO‟s to own a home back in India. As of December 2012,
the total asset size has crossed more than Rs. 95,000 cores including mortgage loan assets of
more than Rs. 83,800 cores.
The corporation has a deposit base of Rs. 17,551 cores, earning the trust of more than 9,
00,000 depositors. Customer Service and satisfaction has been the mainstay of the
organization.
HDFC has set benchmarks for the Indian housing finance industry. Recognition for the
service to the sector has come from several national and international entities including the
World Bank that has lauded HDFC as a model housing finance company for the
developing countries. HDFC has undertaken a lot of consultancies abroad assisting
different countries including Egypt, Maldives, and Bangladesh in the setting up of housing
g finance companies.
HDFC Bank was incorporated in August 1994, and currently has a nationwide network of
1412 Branches and 325‟s ATM‟s in 528 Indian towns and cities. The Housing
Development Finance Corporation Limited (HDFC) was amongst the first to receive an „in
principle‟ approval from the Reserve Bank of India (RBI)to set up a bank in the private
sector, as part of the RBI‟s liberalization of the Indian Banking industry in 1994.
The bank was incorporated in August 1994 in the name of „HDFC‟s Bank Limited‟, with
its registered office in Mumbai, India. HDFC Bank commenced operation as a Scheduled
Commercial Bank in January 1995.
AWARDS AND ACCOLADES:
o Awarded the Economic Times Corporate Citizen award in 2004.

o Presented „Dream Home‟ award for the biggest housing finance provider in 2004.

o HDFC Ranked as India's Third Best Managed Company by Finance Asia 2005.

o HDFC won the Best award for “Investment Management in India” at the Euro
money 2006 Real Estate Awards.

o “Best Home Loan Provider” title at the ZEE Pinnacle Awards 2006.

o “Best Strategy,” at the 4Ps Business, Marketing &Advertising Power Awards 2006.

o Dun & Bradstreet –American Express Corporate Award 2006.

o Sar Utha Ke Jiyo Among India's 60 Glorious Advertising Moments January 2008.

o Received 2008 CIO Bold 100 and CIO Security Awards.

HDFC Group Companies:

Other Companies:
 HDFC Property Ventures Ltd
 HDFC Developers Ltd.
 GRUH Finance Ltd.
 HDFC Ventures Trustee Company Ltd.
 HDFC Trustee Company Ltd
 HDFC Investments Ltd
 HDFC Holdings Ltd
 Credit Information Bureau (India) Ltd
 HDFC Securities
BANC ASSURANCE:

Career:
HDFC Bank is a dynamic bank; with a youthful and enthusiastic team determine to accomplish
the vision of becoming a world-class Indian bank. Our business philosophy is based on four core
values – Customer Focus, Operational Excellence, Product Leadership and People. We believe
that the ultimate identity and success of our bank will reside in the exceptional quality of our
people and their extraordinary efforts. For this reason, we are committed to hiring, developing,
motivating, and retaining the best people in the industry.

E-Corporate Governance:
HDFC Bank recognizes the importance of good corporate governance, which is generally
accepted as a key factor in attaining fairness for all stake holders and achieving organizational
efficiency. This corporate Governance Policy, therefore, is established to provide a direction and
framework for managing and monitoring the bank in accordance with the principle of goods
corporate governance.
Standard Life –UK:
♦ Standard Life Insurance Company is one of the most trusted Insurance Companies
worldwide based in Edinburgh, Scotland (UK). Founded in 1825, Currently over 7
million Customers worldwide, operation in all the important markets of the world like
Austria, Canada, China, Germany, Spain, Hong Kong, Ireland, and India through its
network.
♦ Standard Life listed on 10th July 2006, the biggest float on the London Stock Exchange
in the last five years.
♦ Standard Life Insurance Co. is the largest mutual insurance company in Europe.
♦ Providing a range of saving, pension, and protection and investment products.
♦ As of December 2006, Standard Life Financial Strength has total Assets under
management UK £ 125 billion (more than Rs. 10, 46, 979 or INR 10, 469, 791,000,000
cores.)

Standard Life Group Companies:

 Standard Life Investment manages assets for the group as well as third parties and has a
record of strong investment performance.

 Standard Life Healthcare is one of the largest private medical insurance providers in the
UK.

 Standard Life Bank offers a range of mortgages and savings products and had mortgage
book of £ 10.6 billion as of 31st December 2005.

Joint venture: Stake Holding Pattern

26.00% 74.00%
HDFC Life Insurance Company Limited is one of India's leading insurance companies, which
offers a range of individual and group insurance solutions. It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Limited), India's leading housing finance
institution and a Group Company of the Standard Life Plc, UK.

♦ As on February 28, 2009, HDFC Ltd, holds 72.43% and Standard Life (Mauritius
Holding) 26.00% of equity in the joint venture, while the rest in held by others.

♦ HDFC Life believes that stabling a strong and ethical foundation is an essential
prerequisite for long term sustainable growth. To ensure this we have concentrated our
focus on expansion of branch network, organizing an efficient well-trained sales force,
and setting up appropriate systems and process with optimum use of technology.

♦ As all these areas from the basic infrastructure for establishing the highest possible
customer service standards.

Key strengths:
Finical Expertise
As a joint venture of leading financial services groups, HDFC Life has the financial expertise
required to manage your long-term investments safety and efficiently.

Range of Solutions
We have a range of individual and group solutions, which can be easily customized to specific
needs. Our group solutions have been desired to offer you complete flexibility combined with a
low charging structure.

Track record so far

Our gross premium income for the year ending March 31, 2009, stood at Rs. 5,564.69 cores. The
company has covered over 10, 00,000 lives as of March 31, 2009.
Our core values are drilled down to all levels of employees, as these are inviolable. We continue
to promote high integrity in business practices and shun shortcuts and unethical practices, as we
wish to be perceived as an institution with high moral standing. Since our inception in 2000,
when Indian insurance space was opened for private participation, we have consistently focused
on setting benchmarks in all aspect on insurance business. Being the first private player to be
registered with the IRDA and the first to issue a policy on December 12, 2000, our differentiators
are.
Brief Profile of the Board of Directors:

Mr. Deepak S. Parekh is the Chairman of the Company. He is the Executive Chairman of
Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited
in a senior management position in 1978. He was inducted as a whole –time director of HDFC
Limited in 1985 and was appointed as its Extenuative Chairman in 1993.He is the Chief
Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Charted
Accountants (England & Wales).

Ms. Bharti Gupta Ramola Ms. Ramola served as a Partner at PwC during 1992-2017. She
currently serves on the Boards of SRF Ltd., Feedback Infrastructure Pvt. Ltd. and Villgro
Innovations Foundation. She is also on the Governing Body of the Lady Shriram College and the
Advisory Council of Transform Rural India (a Tata Trust initiative)

Mr. Keki M. Mistry joined the Board of Directors of the Company in December 2000. He is
currently the Managing Director of HDFC Limited. He joined HDFC Limited in 1981 and
became Executive Director in 1993. He was appointed as its Management Director in November
2000.

Mr. Ketan Dalal Mr. Dalal served as a Managing Partner (West) and Joint Tax Leader of
PwC India. He is also the Founder of Katalyst Advisors Private Ltd. (formerly Katalyst Advisors
LLP), a boutique structuring and advisory company.

Ms. Renu S. Karnad is Executive director of HDFC Limited, is a graduate in law and holds
a Master's degree in economics from Delhi University. She has been employed with HDFC
Limited since 1978 and was appointed as the 21 Executive Director in 2000. She is responsible
for overseeing all aspects of lending operations of HDFC Limited.

Mr. Suresh Badami Mr. Badami joined HDFC Life in October 2013. He is responsible for
managing the sales and distribution function of the Company as an Executive Director. He has
vast experience in business management, banking, financial services and sales & distribution.
Mr. Prasad Chandran Mr. Chandran is the former Chairman and Managing Director of
BASF India Limited (BASF). He was also the Chairman of CIBA India Limited and Cynamide
India Limited, before the two were merged into BASF.

Mr. VK Viswanathan Mr. Viswanathan is the former Chairman, and was also designated as
the Managing Director of Bosch Limited. He was the Country Head and President of Bosch
Group in India from February 2008. He was adjudged the best CEO in India by Business World
Magazine for the year 2012. He is Director on the Boards of several other prominent companies.

Mr. Sumit Bose Having joined the Indian Administrative Service in 1976, Mr. Bose has
served in various positions with the Government of Madhya Pradesh and the Government of
India, retiring as the Union Finance Secretary. He has also held positions of Secretary -
Disinvestment, Secretary - Expenditure, and Secretary – Revenue, in the Finance Ministry,
Government of India.

Mr. Ranjan Mathai Mr. Mathai joined the Indian Foreign Service in 1974. He has served as
the Foreign Secretary of India. He has also held the positions of High Commissioner of India to
the UK and Ambassador of India in France.

Ms. Vibha Padalkar Ms. Padalkar joined HDFC Life in August 2008. Prior to her
appointment with HDFC Life, Ms. Padalkar worked in varied sectors, such as global Business
Process Management, global FMCG, and in an international audit firm. Ms. Padalkar has been
felicitated twice by the Institute of Chartered Accountants of India, and several times by
Business Today as being amongst the 'Top 30 most powerful women in business'. She has vast
experience in business management, finance and risk management.

Insurance Companies in India (Competitors)

Before Insurance sector was opened to the private sector Life Insurance Corporation (LIC) was
the only insurance company in India. After the opening up of insurance sectors in India there has
been a glut of insurance companies in India. These companies have come up with innovative and
flexible insurance policies to cater to varying needs of the individual. Opening up of the
insurance sector has also forced LIC to tighten up its belt and deliver better service. All in all it
has been a bonanza for the consumer.

Major Life Insurance Companies In India Are:

Aviva life Insurance

SBI Life Insurance

Birla Sun Life Insurance

HDFC Standard Life Insurance

ICICI Prudential Life Insurance

ING Vysya Life Insurance

Kotak Mahindra Life Insurance

LIC

Max New York Life Insurance

Met Life India Insurance

Reliance Life Insurance

Shriram Life Insurance

TATA AIG Life Insurance

Bajaj Allianz Life Insurance

Study Design

Objective of the study

 To study the performance appraisal system of HDFC Life insurance Co Ltd.

 To asses the degree of awareness among employers and employees on performance
appraisal in HDFC Life Insurance Co Ltd.

 To know the satisfactory level and the comfortable level between the employers and
superiors.

 To asses weather the appraisal is done without any bias the employees.

 To know and identify merits and demerits of Performance Appraisal in HDFC Life
Insurance Co Ltd.
 INTRODUCTION OF PERFORMANCE APPRAISAL

In an informal sense, performance appraisal is as old as mankind itself. In a formal sense,

performance appraisal of an individual began in the we dynasty (A.D 261 – 265) in China.
Where an imperial rater appraised the performance members of the official family. In 1883 the
New York City Civil Services in the USA introduced a formal appraisal program shortly before
World War I. The US army adopted the Man to Man rating system for evaluating military
personnel. This early appraisal was called merit rating. In early 50’s, attention shifted to the
performance appraisal of technical professional and Managerial personnel.
Since then, the philosophy of performance appraisal has undergone tremendous changes.
Different expert has used different terms to describe this concept. The common terms used,
include merit rating, behavioral assessment, employee evaluation personnel review, staff
assessment, progress report and performance appraisal.
“Performance appraisal is the process of evaluating the performance & qualification of the
employees in terms of the requirements of the job for which he is employed, for the purpose of
administration including placement, selection for promotion, providing financial rewards & other
action which we required differential treatment among the group as distinguished from actions
affecting all members equally”.

BY HEYEL
“Performance appraisal determines who shall receive merit increase, counsel’s employees their
improvement; determines training needs; determines promo ability; identifies those who should
be transferred more over, it improves employee job performance; encourage employees to
express their views or to seek clarification on duties; broadens their capacity & potential;
promotes a more effective utilization of manpower and improves placement; facilitates selection,
reward and increase the analytical abilities of supervisors.”

BY RONALD BENJAMIN

PERFORMANCE APPRAISAL
Performance appraisal is one tool available to successfully manage performance
management process.
Performance appraisal may be defined as “The process by which an employees
contribution to the organization during a specified period is assessed.”
Performance appraisal is an important strategic management tool.
Performance Appraisal = Performance + Appraisal
Performance Defined as :-
 Altitudes and Traits
 Achievements of goals and outcomes
 Behaviors

Appraisal Defined as :-
 Measurement of facts, figures and means.
 Analysis of verifiable components of a given job.

Need For Performance Appraisal

To effect promotion based on competence and performance
To asses the training & development needs of the employees
To bridge the gap between the exiting performance & desired performance.
To help each employee to understand his own strengths & weakness.
They can be mechanism of increasing communication between the employee and his.
Supervising officer so that each employee gets to know the difficulties of his subordinates and
attempts to solve them.
It provides legally defensible reasons for making promotion, transfer, and reward and discharge
decision.
They can be instruments to provide an opportunity for employees for self reflection and goal
setting so that individually planned and monitored development takes place.
They can assist in a variety of personnel decisions by generating data about each employee
periodically.
Develop inter personal relationship
To help in salary increment
To prevent grievance & in-disciplinary activities
Provide information about the performance ranks.
Purpose Of Performance Appraisal

Purpose Of Performance Appraisal

Evaluation Development

1) Evaluation:

o Accurately measures performance

o Establishes performance standards that are clearly related to the

organizations missions and objectives.

o Develops employee where necessary or take corrective action where

appropriate.

o Provide continues feedback to employee about their performance.

Development

Assist the training and continued personal development of an employee.

Employee are more motivated committed and competent to achieve.

 Methods Of
Performance Appraisal

Traditional Method Modern Method

Straight Ranking Method Assessment Center

Man to Man Comparison Method Appraisal by Result or Method By

Grading Objective

Graphic Rating Method Human Asset Accounting Method

Forced Distribution Method Behaviorly Anchored Rating Scales

Check List

Free from Easy Method

Critical Incident

Group Appraisal

Field Review Method

Advantages
I. It is easy to understand, use and permits a statistical tabulation of scores.
II. The scores indicate the worth of every individual.
III. It’s the most common evaluation tools in use today.
Disadvantage
Its arbitrary and rating is generally subjective.
It assumes that each characteristics is equally important for all jobs.
 The person who is making the judgements is freed from direct “quantitative” terms in
marketing his decision of merit on any quality.
The person whom is making the judgement can makes as fine discrimination of merit.
Use Of Performance Appraisal

Performance Compensation Informational

Improvement Adjustment Inaccuracies

Use Of
Performance Appraisal

Staffing Process Carrer Planning Placement

Deficiencies And Development Decisions

Performance Improvement:-
Performance appraisal helps in improving the performance of employee through work planning,
skill identification and potential development motivation, learning and development activities are
fulfill in employee’s performance.

Compensation Adjustment:-
When employees give superior performance are rewarded through increase in their compensation
to motivate them to further excel in their job. Performance appraisal most popular differentiates
compensation of employee for performance reason.

Information in accuracies:-
Performance appraisal provides opportunity to employees and their managers to share
information ideas, requirements, expectations and feedback to remove any misunderstanding
between the manager and the employee.

Placement division:-
Performance appraisal is a technique for making decision on employee placements like
promotion, demotion, transfer, relocation, reassignment etc.

Career Planning and Development :-

Performance appraisal give the original data and information about the current performance level
and development needs of employees. By this process we identified the career planning and
developmental need.

Staffing Process Deficiencies :-

By performance appraisal, we identifying the performance and potentialities for future
development of employees. So the accuracy and reliability of recruitment and selection process
can be judge. So the appraisal is test of reliability and validity of selection process and
appropriate adjustment can accordingly be undertaken.