HR in Insurance Sector - Bimtech - 8.7.2023

HRM in Insurance Sector
Rakesh Seth
Agenda – Emerging HR
• Introduction and importance

• Evolution difference between
• personnel and HRM
• Strategic HRM
• Role of HR Manager
• Ethical Issues
Evolution of Human Resource Management
Opportunities in Insurance Sector
• Discussions
Topic
• HRM – Industrial Relations and New Compensation and Benefits

Systems
• By Rakesh Seth
Agenda
•
• Functions of HRM : Managerial Functions, Operative Functions-Procurement, Development, Motivation
and Compensation, Maintenance and Integration
• Managing Industrial Relations: Dynamics of Industrial Relations; Discipline and Grievance Management;
Collective Bargaining; Trade Unions; Industrial Disputes and Labour Legislation role IR:
• New Age Compensation Management : Wage and Salary Administration; Rewards and Incentive Plans and
Fringe Benefits.
•
Meaning & Concept
The term “Industrial Relations” is comprised of two terms:
‘Industry’ and ‘Relations’

“Industry” refers to “any productive activity in which an
individual (or a group of individuals) is (are) engaged”.
By “relations” we mean “the relationships that exist within the
industry between the employer and his workmen.”
Definitions
The Industrial Relation relations also called as labor - management,

employee employers relations.
1) “Employer-employee relationships that are covered specifically

under collective bargaining and industrial relation laws”.
2) “Concerned with the systems, rules and procedures used by unions

& employers to determine the reward for effort & other
conditions of employment.”
OBJECTIVES OF IR
• Employee empowerment: provide an opportunity to the
workers to participate in management and decision making
process.
• Productivity: raise productivity in the organization to curb the

employee turnover and absenteeism.
• Bargaining capacity: to improve the bargaining capacity of the

workers through trade unions.
• Discipline: to ensure discipline in the organization and in the

industry.
OBJECTIVES OF IR
• Economic condition: improvement of economic conditions of

workers.
• Standard of living: to improve the standard of living of the

average worker by providing basic and standard amenities.
• Basic framework: to provide a basic framework for the

management & the employees to resolve their differences.
OBJECTIVES OF IR
• Labor-management interest: to safeguard the interests of the

labor and the management by preventing one of the players
from getting a strong hold over the other.
• Mutual cooperation: to develop & Secure mutual

understanding & good relationships among all the players in
the industrial set-up.
• Resolve and preventing industrial conflict: to maintain

industrial peace & harmony by preventing industrial conflicts.
Dunlop’s Systems Approach
INPUTS
Actors PROCESSES
(Employees, Bargaining
Employers, Conciliation OUTPUT
State) Arbitration
Context
Rules
Adjudication
(Tech, Market, Power Legislation
Indeology)
Feedback
Causes of poor IR
The main reasons are as follows:

➢ An attitude of contempt towards the workers on the part of the
management.
➢ Inadequate fixation of wages or improper wages.
➢ Unhealthy working conditions at the workplace.
➢ Desire of workers for higher bonus, wages or daily allowances.
➢ Desire of employers to pay as little as possible to its workers.
➢ Lack of human relations skills on the part of supervisors and
managers.
Causes of poor IR
➢ Inadequate welfare facilities.

➢ Dispute on sharing the gains of productivity.
➢ Retrenchment, dismissal and lockouts by the management.
➢ Strikes by the workers.
➢ Inter-union rivals.
➢ General economic and political environment such as rising prices,
strikes by others and general indiscipline having their effect on the
employees attitudes.
➢ Mental inertia on the part of the management.
3 Actors of IR
1
EMPLOYEES
2
STATE
3
EMPLOYER
Role of Three Actors to IR
Role of EMPLOYEES
To redress the bargaining advantage on one-to-one basis
To secure better terms and conditions for their members
To obtain improved status for the worker in his/her work
To increase implementation of democratic way of decision

making at various levels
Role of EMPLOYERS Contd.
Creating and sustaining employee motivation
Ensuring commitment from employees
Negotiating terms and conditions of employment with TU

leaders
Sharing decision making with employees

Role of STATE
Labor policies
Labor laws
Industrial tribunals
Wage boards
Industrial relations policy

What is trade union
• Definition
• : An organization of workers or employees formed mainly to _
• Negotiate with the employers on various employment related issues
• ±Improve the terms and conditions at their workplace
• ±Enhance their status in society
• In most countries, there are laws governing theformation,
membership and administration of trade unions.
•
Objectives of a Trade Union
• 1.Collective bargaining
• ±Represent members to negotiate with employers, for better wages
and conditions of employment
• 2.Safeguard jobs
• ±Protect jobs of members
• 3.Cooperate with employers
• ±For the benefits of members, resolve disputes in a mutually
acceptable manner
ORGANISATION STRIVE FOR
PERFORMANCE PRODUCTIVITY
PROFIT
conclusion
“You don’t build a business, you build people and then

people build the business”- Zig Ziglar
• Great
Knowledge
Sharing
Enjoyed Interacting
with you
Compensation
What Is Compensation?
Compensation
refers to all forms
of financial returns
and tangible
services and
benefits employees
receive as part of
an employment
relationship
Rewards, Recognition and Reorganization –
New challenge
• Rewards are designed from:
• Economic perspective – cost of production and livelihood
• Social perspective – Status, reputation and perception
• Political perspective – Power and influence
• Psychological perspective – Motivation side human being
• Ethical perspective – Values and governance
• Competitive perspective – ability to attract and retain
Exhibit
1.4: Total
Returns
for Work
The Importance of Compensation
• Impacts an employer’s ability to attract and retain employees.
• Ensure optimal levels of employee performance in meeting the
organization’s strategic objectives.
• Compensation’s components
• Direct compensation in the form of wages or salary
• Base pay (hourly, weekly, and monthly)
• Incentives (sales bonuses and or commissions)
• Indirect compensation in the form of benefits
• Legally required benefits (e.g., Social Security)
• Optional (e.g., group health benefits)
Types of Base Pay Systems
• Job-based
• Pay the job (not the person)
• Market-based (external equity focus)
• Point factor-based (internal equity focus)
• Skills / knowledge-based
• Pay the person (not the job)
• 62% of F1000 firms used some type of skill based pay in 2018
Compensable Factors
Characteristics in the job that the organizational
values and that help achieve its objectives.
National Position
Hay Factors Evaluation Plan (MAA)
• Know-how • Skill
• Problem solving • Effort
• Accountability • Responsibility
• Job Conditions
Pricing Jobs
Variable Pay Incentives
• Linking performance to pay
• Individual – Bonuses, piece-rates, stock options
• Team – Bonuses and awards
• Plant / Unit / Business – Gainsharing, profit sharing
• Corporation – ESOP’s
• “Line of sight” is the perceived link between

individual behavior and the reward.
Pay for Performance Requires
1. Definition of performance
• How are we going to measure and compare people?
2. Distribution of performance
• Can we distinguish high and low performers?
3. Decide the increase for each level of performance.

• How large a difference between high and low performers?
New Thinking for the New Millennium
• Strategic approaches to may compensation (pay) systems more

responsive:
• Pay the person for individual worth (knowledge, skills and competencies)
rather than for the value of a job they perform.
• Reward excellence through a pay for performance compensation that
establishes a clear relationship between a significant amount of pay and
attainment of organizational objectives.
• Individualize the pay system to give employees choices in how they are
rewarded and what reward they receive.
Overtime
• Overtime: The central or state government may fix the number of
hours that constitute a normal working day. In case employees work
in excess of a normal working day, they will be entitled to overtime
wage, which must be at least twice the normal rate of wages.
Determination of Bonus
• Determination of bonus: All employees whose wages do not exceed a
specific monthly amount, notified by the central or state government,
will be entitled to an annual bonus. The bonus will be at least: (i)
8.33% of his wages, or (ii) Rs 100, whichever is higher. In addition,
the employer will distribute a part of the gross profits amongst the
employees. This will be distributed in proportion to the annual wages
of an employee. An employee can receive a maximum bonus of 20%
of his annual wages.
Dearness Allowance
• From time to time basic salary is revised to align with inflationary

trends in the market.

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HRM in Insurance Sector

• Introduction and importance

• HRM – Industrial Relations and New Compensation and Benefits

‘Industry’ and ‘Relations’

The Industrial Relation relations also called as labor - management,

1) “Employer-employee relationships that are covered specifically

2) “Concerned with the systems, rules and procedures used by unions

• Productivity: raise productivity in the organization to curb the

• Bargaining capacity: to improve the bargaining capacity of the

• Discipline: to ensure discipline in the organization and in the

• Economic condition: improvement of economic conditions of

• Standard of living: to improve the standard of living of the

• Basic framework: to provide a basic framework for the

• Labor-management interest: to safeguard the interests of the

• Mutual cooperation: to develop & Secure mutual

• Resolve and preventing industrial conflict: to maintain

The main reasons are as follows:

➢ Inadequate welfare facilities.

To redress the bargaining advantage on one-to-one basis

To secure better terms and conditions for their members

To obtain improved status for the worker in his/her work

To increase implementation of democratic way of decision

Creating and sustaining employee motivation

Ensuring commitment from employees

Negotiating terms and conditions of employment with TU

Sharing decision making with employees

Industrial relations policy

“You don’t build a business, you build people and then

• “Line of sight” is the perceived link between

3. Decide the increase for each level of performance.

• Strategic approaches to may compensation (pay) systems more

• From time to time basic salary is revised to align with inflationary

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