Performance Management

With Reference to the Worker Level Employees

In Insurance Industry.

By

S.K Bandara

Advanced Certificate Course in Human Resource Management,

National Institute of Business Management,

March,2013.

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 Acknowledgement.

I would like to express my special appreciation and thanks to Course

Director,Miss.Shamalka Uduwella,for her guidance on this project. My special thanks to
Assistant Managers,Mr ……………………., and Mr…………………, General Manager,
Mr………………..(human Resource) for their kind co-operation in collecting necessary
inormation with regard to my project work.

I also wish to express my gratitude to all the Staff members of the organization who
rendered their help during the period of my project work.

A special thanks to my family. I am very much grateful to my mother and father for
their support on behalf of this project. I would also like to thank all of my friends who
supported and encouraged me to compete this project.

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 Abstract.

This survey has been done regarding the Performance Management of worker level
employees in Insurance Industry, this survey brings to light planned approaches to
Performance Management in the company’s Kandy branch.

In this project,Performance Management system that has been implemented in the

company has been surveyed including the current issues that prevail within the system.
The manner in which Performance Management system is operating in the company
with regard to the worker level employees, has been examined during the research.
The researcher also brings to light on some aspects about performance evaluation
briefly.

Prime concern is to find out whether the elements of a strong Performance

Management System is truly practiced in the organization. Therefore researcher has
closely observed the present state of Performance Management System including some
aspects of performance evaluation procedure. Hence this is an attempt to identify,
observe and analyze the implementation of Performance management system in
Insurance industry.

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 List of Content Page no

Acknowledgement 02

Abstract 03

List of Content 04 - 05

Chapter 1

Introduction to theoretical background

1.1 Introduction to Performance Management. 06 - 08

1.2 Why Manage Performance?? 08 - 09
1.3 Functions of Performance Management 09 - 10
1.3.1 Develop Performance Plans 09
1.3.2 Selection of Appropriate People 09
1.3.3 Plans for Development of Employees 09
1.3.4 Measurement of Performance 10
1.3.5 Conducts Performance Feedback 10
1.4 Processes and Systems for Managing Performance. 10 - 12

Chapter 2

Introduction to the selected Organization

2.1 Introduction 13 - 14

2.2 Organizational Profile 14 - 15

2.3 Establishment and Expansion 16

2.4 Vision 16

2.5 Mission 16

2.6 Structure 17

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2.7 Economic and Social importance 18 - 19

2.7.1 Economic importance . 18

2.7.2 Social importance. 18 - 19

2.8 Present Functions of the Organization Concerning the 19 - 21

problem area.
2.8.1 Managers’ participation and accountability 19
2.8.2 Training employees to improve performance. 20
2.8.3 Work culture 20
2.8.4 Review and update 20
2.8.5 Involvement of employees 20
2.8.6 Focus on Behaviors 20 - 21
2.8.7 Use of Rankings and ratings 21

2.8.8 High claims ratio, in the Motor segment 21

2.8.9 Review of Performance 21

2.8.10 Designing schemes of performance related 21

remuneration

Chapter 3

3.1 Conclusion 22

3.2 Recommendations 22 - 23

References 23

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 CHAPTER 1

INTRODUCTION TO THEORETICAL BACKGROUND

1.1 Introduction to Performance Management.

There are few comprehensive definitions of Performance Management. Performance

Management as “Managing the Performance of an organisation or individual”.
(HM Treasury,2001). Whilst this is not a precise definition grounded in literature it
demonstrates the breadth of performance management and hence the difficulties in
defining its scope, activities and practices. It demonstrates that performance
management is concerned with the management of performance throughout the
organisation and as a result is a multidisciplinary activity.

The field of performance management has developed from diverse origins. Different
measurement and management techniques and approaches have developed
independently. Financial and particularly management accounting have been concerned
with measuring and controlling the financial performance of organisations, operations
have been concerned with “shop floor” performance often focusing on improving
throughput and efficiency whether that be from a manufacturing or a service
perspective, strategy have been concerned with developing plans to deliver future
objectives and personnel have been concerned with managing the performance of
people. It is relatively recently that performance management from these disparate
disciplines has begun to converge and recognize the need for integration into a
multidisciplinary approach to managing performance.

The management discipline which most often associates itself with the term is in Human
Resources, performance management is often associated with the management of the
performance of people. However even in the HR field best practice emphasises the
contribution of people to the achievement of organisational performance. From the HR
field Armstrong and Baron highlight the importance of performance management being
strategic, integrated (vertical, functional, HR integration and integration of individual
needs), concerned with performance improvement and concerned with development.

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The breadth of the subject area and lack of a concise definition make it difficult to
identify the boundaries of what is and isn’t performance management. The area which
is most indicative of the evolution of performance management, and the area perhaps
has the most identifiable stream of literature is that of performance measurement, and
in particular that of the Balanced Scorecard, with which in many people’s eyes it has
become synonymous. The Balanced Scorecard began life as an operational tool designed
to measure and help improve operational performance in a manufacturing organisation.
Once discovered by an accounting Professor, Bob Kaplan, its scope broadened to the
measurement of organisational performance. It has now developed from a
measurement tool into a strategic performance management approach of which
measurement is but a small part. Balanced Scorecard is a much used, and abused term,
in the field but it is the most identifiable concept. However in order to study
performance management the comprehensiveness of the subject must be reflected,
recognising its vertical and horizontal spread throughout organisations.

With its origins in different management disciplines, performance management includes

a variety of activities including the planning and execution of actions required to ensure
performance objectives are achieved.

An organization has certain objectives to achieve. These objectives can be achieved by

utilizing the resources like men, machines, materials and money. All these resources are
important but out of these the manpower is the most important. It plays an important
role in performing tasks for accomplishing the goals. Out of all the factors of production
manpower has the highest priority and is the most significant factor of production and
plays a pivotal role in areas of productivity and quality.

The question arises that how these resources are utilizes by manpower. Further, the
business environment is changing drastically. The environmental factors are
uncontrollable. These are beyond control of management of the firms. One has to
adjust with the external factors to do the business in the market. Every environmental
factor like social, cultural, legal,political, economic, technology and competition gets
changed very fast. For effective working the knowledge of these factors is must
otherwise the plan will misfire. In present situation it is difficult to predict about
anything. It is uncertain to say that what will happen tomorrow. Again the need for
highly skilled and dedicated manpower is felt who can give the best output. Nowadays
the markets are also very competitive and there is cut throat competition. For every
organization it is difficult to start, survive, stabilize and excel in the business. The firm
that gets the advantage over other competitors through their talented and dedicated

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manpower can take the lead in the market. The contribution of employees on job is the
most important factor for development and excellence in business. The performance of
employees on different jobs in close coordination is needed for success of the unit.
Employees are performing different jobs in an organization depending upon the nature
of the organization. They mainly perform tasks like production, storage,
manufacturing,transportation, marketing, purchasing, distribution, promotion of
business, finance and accounting, human resource, research and public relations. All
these activities are inter-related to achieve the targets. These are to be performed by
the employees properly so they can give their best out put at the job. This will have
great impact on the total production, sales, profit, progress and market position of the
company in the market. Various factors like skills, training,motivation, dedication,
welfare, management policies, fringe benefits, salary and packages,promotion,
communication etc. are responsible to encourage the people to work sincerely and give
their best output. The importance of employees’ performance must be understood by
the management and sincere efforts must be put in that direction. The management of
the company taking timely steps in that direction will be in position to develop and
motivate the people to do so. Finally the company may take the lead the market and
grab the opportunities available in the market.

1.2 Why Manage Performance??

There are host of reasons for managing performance falling in to the following
categories.

 Strategy Formulation, determining what the objectives of the organisation are

and how the organisation plans to achieve them.
 Manage the strategy implementation process, by examining whether an
intended strategy is being put into practice as planned.
 Challenge assumptions, by focusing not only on the implementation of an
intended strategy but also on making sure that its content is still valid.
 Check position, by looking at whether the expected performance results are
being achieved.
 Comply with the non-negotiable parameters, by making sure that the
organisation is achieving the minimum standards needed, if it is to survive (e.g.
legal requirements, environmental parameters, etc.)

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  Communicate direction to the rest of the employees, by passing on information
about what are the strategic goals individuals are expected to achieve.
 Provide feedback, by reporting to employees how they are, their group and the
organisation as a whole is performing against the expected goals.
 Evaluate and reward behaviour, in order to focus employees’ attention on
strategic priorities; and to motivate them to take actions and make decisions,
which are consistent with organisational goals.
 Benchmark the performance of different organisations, plants, departments,
teams and individuals.
 Inform managerial decision-making processes.
 Encourage improvement and learning

1.3 Functions of Performance Management

The performance management is mainly concern with the performance of the

people, systems and organization. To achieve this objective performance
management performs a variety of functions

1.3.1 Develop Performance Plans

Management goes for planning of the job, competencies required for performing
the jobs and standards required for performance of the jobs. It includes job
description, job specification and fixation of job performance standard. Through
these plans only the type of person required can be ascertained.

1.3.2 Selection of Appropriate People

To carry out the various types of jobs in the organization manpower is needed.
The required type and number of people are to be selected from the aspirants.
So they may be made available at right place in right time for accomplishment of
the tasks at required time. This is possible through proper recruitment and
selection of employees.

1.3.3 Plans for Development of Employees

Performance management is interested for development of both employees and
organization.With the development of one is the development of both. He
conducts orientation of the persons, provides education, and finds out the need
for training and conduct training programme for development of skills,

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 knowledge and competencies. This can contribute in improvement of the
performance of persons and company.

1.3.4 Measurement of Performance

After planning and development activities the next task of performance
management is to measure the performance of the people at work. For
measurement of performance the different criteria has been fixed such as
output per hour/shift quality of work, behaviour, discipline, level of commitment
etc. This helps to find out the poor and good performers out of the lot. On the
basis of the measurement of performance further remedial action can be taken.

1.3.5 Conducts Performance Feedback

After measurement of performance of all employees the management finds the
slow moving persons. The objective of performance management is to find out
the reasons for slow going.They conduct coaching session for such people and
give feed back to them. They suggest ways to improve their performance also.
This clarifies many doubts of the employees. It helps a lot the persons to
understand their caliber and difficulties. Through the coaching and counseling
session the attitude of the employees is changed positive.

1.4 Processes and Systems for Managing Performance.

Performance Management Process can be explained as a set of activities and these

activities are arranged in a logical sequence of occurring. The sequence of activities
cannot be disturbed. If it is disturbed then the function cannot be performed out of sub
activities performed. The activities in performance management are similar to the other
process in organisation like planning, organising, controlling and management by
objectives. In it a set of activities are involved. To perform the functions of performance
management these activities are to be carried out in their required sequence. The
performance management process requires many ongoing activities in the
organization.. This includes identifying and prioritizing goals, defining what constitutes
progress towards goals, setting standards for measuring results, and monitoring
performance,counseling, coaching, communication, motivation and feedback of
performance to employees,review of performance, development plans, implementing
effective goal-oriented activities,and intervening to create improvements when need.

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It is common to see performance reports used by Executives which consist of tables of
data or limited visualisations of data which provide little insight into the actual
performance situation or action that is required to improve. In the field of quality
management, the Demming Cycle is a well established improvement methodology
which incorporates four stages Plan, Do, Check, Act. Primarily the Demming cycle is
applied to individual processes however its constituent phases lie at the heart of
performance management as they integrate planning, action and monitoring of
performance to ensure continuous improvement and the achievement of objectives.
Furthermore the Demming Cycle is all about learning – learning in a systematic way
what works and what does not.

Extension of the Demming cycle principles to organisational level performance

management can bring problems be problematic. It has become increasingly difficult to
convert the large amounts of data available into meaningful information. Managers
today complain of “drowning in data while thirsting for information”( Herrmann, :2001 )
Organisations seem to be generating data at a much faster rate than any manager can
master, and in parallel to that, the useful life of that data is collapsing. “One of the most
enduring traits of the information age is that we have focused too much on mastering
transaction data and not enough on turning it into information and knowledge that can
lead to business results”( Davenport, T: Harris, J: De Long, D: and Jacobson, A: 2000 )

The problem has never been lack of useful tools or proven techniques. Most tools for
data analysis, interpretation, and visualisation have been around for many years.
Various disciplines have provided numerous ways to extract value form data like
Industrial Engineering developments, Quality Management tools, Information
Visualisation techniques, among others. Neither was the problem any lack of capable IT
or business systems to deploy these tools. In the year 2000, World Research Inc (World
research Inc:1999) estimated that the “business intelligence and data warehousing”
tools and services market was growing at an average of more than 50% and was
estimated to reach $113 billion by 2002.

If the skills and knowledge of executives is to be fully exploited then the performance
review process should focus their attention on discussing the issues raised by the
performance measures and the actions necessary to meet organisational objectives,
rather than trying to interpret what the measures actually say. To address this authors
such as Newman, ( Newman V:1995) Rasiel and Friga (Rasiel E. M.and Friga, P. M:2001)
and Kennerley and Bourne (Kennerley.M and Bourne.M:2003) propose approaches
which extend concepts in the Demming cycle process so that it integrate performance

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measurement into the broader performance management activities by ensuring there is
a systematic approach to identifying objectives; collecting, analysing and interpreting
data; communicating insights; making decisions; and monitoring performance to ensure
that objectives are achieved. Furthermore, Marchand et al (Marchand D. A. Kettinger
W. J. and Rollins J. D :2001 ) highlight the need to integrate IT, people and practices to
deliver insights and business results.
A systematic process for using performance measurement to check whether strategy is
being implemented and whether performance is improving in line with strategic
objectives as described represent a process of single-loop strategic learning. Most
continuous improvement targets are based on past performance; and that usually,
targets are imposed by managers without consultation, with rewards linked to the
achievement of those targets.

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 CHAPTER 2

INTRODUCTION TO THE SELECTED ORGANIZATION

2.1 Introduction

Insurance is important because of uncertainty of what might happen. There is a risk of

what will happen to one’s family or dependants when that person dies. In that case
anyone can organize the financial affairs, service pre-existing debts and let the
dependants continue their current standard of living.

An Insurance offers financial services when injured and pay for hospital costs, ongoing
treatment, time off work, pay the living costs for one’s family until the person is fully
recovered. If a person met with a car accident with two other cars and it was
determined that the accident was his fault, could he go to a car showroom and buy
himself a new car? pay for repair or replacement of the other two cars and pay for the
medical bills of the other drivers and their passengers?. If someone’s home is broken
into and his possessions are stolen, can he replace all the items taken and pay for all the
damage to the property caused by the burglars? If a person is running a business and
someone is injured on his premises by falling over a step or is injured during a robbery,
can he cover the cost of his medical treatment and any impending court costs and
rulings? These factors are very helpful especially while choosing the kind of insurance
package.

Janashakthi Insurance PLC is one of the most profitable and stable insurers in Sri Lanka
with the highest stated capital of Rs. 1.49 billion among quoted insurance companies
and a strong track record of claims payments that now tops Rs 20 billion. Spending over
30 million per annum on human capital, it aspires to be simply the best at what it does.
As part of its pledge to offer the fairest and greatest value in risk.

The company has served the nation for 19 years, and continues to blaze a trail in Sri
Lanka's insurance sector. The Company offers life and general insurance products in Sri
Lanka, and provides life, health, vehicle, household, travel, and retirement insurance to
individuals. The company also offers fire, marine, motor, engineering, employee
protection, and other related insurance for corporate customers, in addition to other
miscellaneous insurance policies such as burglary, public liability, professional
indemnity, product liability, fidelity guarantee, and cash in transit insurance.

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Janashakthi Insurance PLC, is emerging once again as one of the most consistently
profitable insurers among all quoted insurance companies in Sri Lanka through
continuous achievements as it is one of the most money-spinning and established
insurers in Sri Lanka.

2.2 Organizational profile

Janashakthi Life Insurance Co. Ltd was incorporated in Sri Lanka as a public company
with limited liability in 29th October 1992 and began operations on 15th September
1994, as Sri Lanka's first specialized life insurer. Janashakthi took the concept of
insurance to people's doorsteps. The company embarked on a rapid regionalization
program and established one of the widest branch networks in the industry in 1996.
Janashakthi Life made Profits and the company was able to declare their first bonus to
policyholders. The company moved to an aggressive advertising and marketing strategy
in 1997 with the sponsorship of the Sri Lanka vs. India Test match. The winner's trophy
was brought to the stadium via a Helicopter Drop, a unique and unparalleled feat. Later
on Janashakthi Life and Janashakthi General merged and formed one strong entity
called Janashakthi Insurance Co. Ltd.

Janashakthi Insurance acquired a controlling interest in National Insurance Corporation

Ltd in 2001 and in the same year the Life Operations Department received ISO 9001
International Service Quality Accreditation. Janashakthi was in fact the first insurer in Sri
Lanka to have obtained this certification. After few years Janashakthi Group diversified
into banking, financing, development banking, porcelainware, property development
and Agriculture by investing in strategic stakes of various companies

In 2004 the company's 10th year of operation registered a record turnover of Rs. 3.1
billion premium income, thus becoming the only insurer in Srilanka to surpass the Rs. 3
billion mark within the first 10 years of operations in Srilanka. The company also
relaunched it's comprehensive motor insurance policy as Janaratha Full Option with an
unprecedented package of benefits including onsite claim settlement with a dedicated
24 hr Call Centre. Janashakthi becomes the 3rd largest insurer in Sri Lanka by the end of
1st Quarter 2005, in terms of the overall Gross Written Premium(GWP).

In 2007 Premier motor brand Janashakthi Full Option was re-launched with a new brand
logo identity, in the same year Janashakthi and Nawaloka Hospitals entered into a

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strategic tie-up in order to give a better service and value for money exclusively for
Janashakthi medical policyholders.
The company launched Expacare Worldwide Health Insurance in February 2009. This
policy is fully reinsured with the world-renowned DKV Insurance Company. It provides a
wide range of plans including individual, family, group or corporate covers. In the same
year,Janashakthi Insurance PLC announced its tie-up with renowned global giant re-
insurer Hannover Re and international microinsurance specialist Planet Guarantee to
launch a range of microinsurance products in Sri Lanka

Janashakthi Insurance PLC has created yet another revolution in Sri Lanka’s insurance
industry with the launch of the country’s first-ever 24- hour vehicles breakdown policy-
“Full Option Vehicle Emergency Policy” in 2010.
The company clinched triple honours at the glittering SLIM Awards 2010, thus becoming
the only insurance company in Sri Lanka to win the highest number of awards in the
service category winning the Silver for ‘Turnaround Brand of the Year’, and two Bronze
each for ‘Local Brand of the Year’ and ‘Service Brand of the Year’.

In 2011 Janashakthi insurance launched another revolutionary product- the Janashakthi

livestock insurance Policy. Private owners, Dairy farms, co-operatives, corporate dairies
and livestock breeders across Sri Lanka can take out a policy to insure their cattle, goats
and poultry. The company enriched its wide-ranging portfolio of insurance products
with the launch of ‘Janashakthi Hotel Plus’ for Sri Lanka’s growing tourism and hotel
industry. Hotel Plus is a comprehensive insurance policy, which provides insurance cover
to all operators ranging from star-class hotels, boutique hotels to all Tourist Board
approved Rest Houses. Janashakthi Insurance PLC blazes yet another trail as it offers Sri
Lankan motorcyclists a number of special benefits hitherto not offered to date in the
country’s highly competitive insurance industry.

Janashakthi introduced the 'Full Options locator' application for all its motor customers
recently. Designed and developed in-house by Janashakthi IT team, the app uses the
customers phone's location-based services to allow Janashakthi Full Option team to find
the vehicle and send assistance. The company ties up with Dialog eZ Cash for islandwide
customer convenience in 2012, in the same year Janashakthi Insurance was recognized
amongst the best of South Asia at the prestigious SAFA awards for best annual reports
held in Colombo. Reliable financial information and high quality presentation of its
annual report for 2011, won Janashakthi a merit award, at their first participation at
these awards.
Janashakthi Insurance PLC follows closely the philosophy of Janshakthi group on its
commitment to quality, reliability and complete services that has enable the company
to become one of the countries principle insurance companies.

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 2.3 Establishment and Expansion

Janashakthi Life Insurance Co. Ltd was incorporated in Sri Lanka as a public company
with limited liability in 29th October 1992, and began operations on 15th September
1994, as Sri Lanka's first specialised life insurer.
Janashakthi Insurance PLC has an incredible expansion prospect in the upcoming period
as the Insurance access in the island nation is only about 11 % in the life insurance
section. Furthermore , people consider insurance as a need, not as a want. Hence
Janashakthi was in search of openings abroad in order to increase their exposure in the
Maldives as well. As a result of that, Janashakthi became the first private insurer in Sri
Lanka to open a representative office overseas, establishing a branch office in Maldives.

The company has started refurbishing their branch network from Negombo. While
making remarks on the North East, they are ecstatic in view of the feedback from North
East and branded the region as their most excellent market, hence branches were
established in Jaffna and Batticaloa in the Northern and Eastern Provinces with the
Ceasefire and Memorandum Of Understanding. Janashakthi Insurance opened a new
branch in Athurugiriya for customer convenience and superior service recently.

The company is on an aggressive distribution strategy to further expand its network of

over 100 branches island-wide. The Janashakthi Group diversified into banking,
financing, development banking, porcelainware, property development and Agriculture
by investing in strategic stakes of various companies which proves their rapid expansion.

Furthermore, most of the existing branches will be upgraded with modern comfort and
convenience, to be seen as the best of class in everything to retain and win new
customers. Thus Janashakthi Insurance PLC is emerging as one of the most consistently
profitable insurers among all quoted insurance companies in Sri Lanka.

2.4 Vision

“To be the No 01 Insurer in Sri Lanka” With excellence in service standards.

2.5 Mission

To strive for excellence in :

 Service delivery to policyholders
 The development of the companies human resources
 Attaining a fair return in capital to shareholders
 Continuing to fulfill our social and corporate responsibility

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 2.6 Organizational Structure

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2.7 Economic and Social Importance.

2.7.1 Economic importance

Insurance industry is rapidly developing in Sri lanka. There are plenty of economic
advantages that our country gain through insurance industry. Hence there is a weighted
economic importance in insurance industry. Thus Janashakthi Insurance PLC has
contributed Srilankan economy to flourish through diverse ways.

Janashakthi Insurance PLC, is one of the most money-spinning and established insurers
in Sri Lanka, and the company has set a revenue target of over Rs. 8 billion for the
existing fiscal. The company has accomplished the revenue goals of Rs. 7 billion in
previous year and they have already earned above Rs. 6.7 billion during the first two
quarters of 2012. Jnashakthi Insurance has achieved a remarkable milestone by
recording a profit after tax of 164 million for 1H 2012, and the company is considered as
one of the most consistently profitable insurers in srilanka.

The company's 10th year of operation registered a record turnover of Rs. 3.1 billion
premium income, thus becoming the only insurer in Srilanka to surpass the Rs. 3 billion
mark within the first 10 years of operations in Srilanka. Janashakthi Insurance PLC, is
identified as Sri Lanka’s third biggest insurer, posted a total income of Rs. 7.27 billion
rupees, while total Gross Written Premium income rose 16.0 per cent to Rs. 7.13 billion
for the year- ending December 31, 2011, this is considered as the best ever performance
of the company. Then the Non-life insurance business rose 18.0 per cent to Rs. 5.256
billion during the period under review. The companie’s expansion is evident when
Janashakthi became the 3rd largest insurer in Sri Lanka by the end of 1st Quarter 2005,
in terms of the overall Gross Written Premium(GWP).

Thus, continuous achievements of Janashakthi Insurance PLC has made a great

contribution to the development of economy in Sri lanka. Insurance Industry is emerging
as one of the most money supplying industries in Sri lanka, hence Janashakthi Insurance
is providing a great contribution for the well being of economy through standing as a
significant economic contributor among other insurance companies.

2.7.2 Social Importance

Janashakthi Insurance PLC has provided employment opportunities to vast number of

people in our country. Today however, total number of permanent staff of Janashakthi
insurance stands at over two thousand members and there are more than two thousand
field staff . Hence the company has directly contributed to solve unemployment, which
is an uprising problem in our country.

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The company began exercising social responsibilities as a corporate entity by becoming
involved in several social projects. A massive programme for the safety of people on the
highway, in Colombo, was undertaken at Pedestrian Crossings, Guard Rails and Belisha
Beacons. Janashakthi insurance gives priority for social eccounters, as a result
Janashakthi launches “pahan pelahera” at beira lake with 600 plus employees and 40
orphans writing their hopes on a wishing wall as part of the launch of the light up your
dreams life campaign.

Moreover, as an insurance company, their aim is to provide the best service to people
promptly, hence Janashakthi insurance has launched number of products in order to
serve the society, the Janashakthi livestock insurance Policy is a best example for this,
Private owners, Dairy farms, co-operatives, corporate dairies and livestock breeders
across Sri Lanka can take out a policy to insure their cattle, goats and poultry through
Janashakthi livestock insurance Policy. The company provides“Full Option Vehicle
Emergency Policy” which is another quick service, beneficial for people who own
vehicles. Furthermore Janashakthi Insurance PLC launched a unique Sports Insurance
Policy, for the benefit of all sportsmen and women in Sri Lanka. The company has
successfully attained their goal by serving the society through policies that have been
implemented so far.

2.8 Present Functions of the Organization Concerning the Problem Area.

Performance is an outcome of both organisational and human activities, positive

performance outcomes only arise when the behaviour of employees is aligned with
strategy and when employees are motivated.

2.8.1 Managers’ participation and accountability

Worker level Employees have the support of management team in each and every task
that is perform in the company. Both managers and employees mutually assist on the
development of their products, it also enhances their trust, understanding, and
ownership of the performance measures. Managers are responsible for employees
performance. If there is an employee who perform beyond the expected level,
managers decide necessary performance improvement methods.

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2.8.2 Training employees to improve performance.

The company improves worker level performance by giving them proper training at due
times. Drawbacks of employee performance are identified first, then management
decides on the type of training that the employee should receive in order to improve
performance. Both on the job training and off the job training are given to employees in
order to increase their performance.

2.8.3 Work culture

Janashakthi Insurance PLC has an adorable culture which support employee

performance. This encourage team work within the employees. According to the
interviews conducted, it is obvious that most employees like to work in teams, this
directly affect their performance.

2.8.4 Review and update

Performance management system, process, and strategies are reviewed and updated in
the company. There is a manual system for performance updates. Changes that have
done in performance management process and details regarding employee’s
performance are maintained in files and documents. These records about the
employee’s performance are maintained on the basis of that final assessment of
performance is done. Employees are asked to give feed back regarding their good and
poor performances, and problems faced, that may affect their working efficiency.

2.8.5 Involvement of employees

Employees have their freedom to meet and discuss with their managers and supervisors
regarding accountability, performance standards and behavior . They can discuss with
managers about expectation from them relating to accountability, performance
standards and behavior. This leads to Clarification of doubts if exist from managers and
supervisors about accountability, performance standards and behavior at work. For
better performance they can discuss with their managers and supervisors regarding
managers’ and customers’ expectations, job priorities and budget etc.

2.8.6 Focus on Behaviors

Different tasks have been assigned to the employees and their accountability has been
fixed. While performing the tasks the employees tend to express their actions and
reaction relating to the work. Management give special focus on it because it is

20
important in evaluation process. During work employees show different aspects of
behaviour such as happy,unhappy, arguments, not arguments, obey, disobey,
discipline,indiscipline, commitment,no commitment etc. The employees are rated on
the basis of these factors.

2.8.7 Use of Rankings and ratings

Janashakthi Insurance PLC use ranking and rating process for evaluation purpose ,and
this is used for different factors. The ranking and ratings identify performance standards
behaviour, discipline, level of commitment to achieve the tasks, leadership quality
shown, initiatives taken for problem solving etc .

2.8.8 High claims ratio, in the Motor segment

There is a low profitability due to high claim costs. The use of claims by some customers
as a means to make profit due to economic hardships, necessitating a high level of
scrutiny to minimise fraudulent claims. This can create a negative impact on
performance.

2.8.9 Review of Performance

The Company has in place a Strategic planning process and an annual business
performance planning process that links into the company’s Strategic plan.

2.8.10 Designing schemes of performance related remuneration.

The Managing Director and employees at all levels are eligible for annual performance
linked bonuses based on the achievement of pre-agreed targets

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 CHAPTER 3

3.1 Conclusion.

This report brings to light present standard of Performance Management system in

Janashakthi Insurance PLC. The purpose of this study is to explain the manner in which
the company maintain performance management system and what are the aspects that
need to be improved in performance management policy. According to the surveys and
interviews that have been conducted, elements of an efficient Performance
Management system can be identified in Janashakthi Insurance PLC.

But there are some drawbacks that need to be clarified, as mentioned in the report,
there is a manual system used for reviews and updates regarding employee
performance. Different tasks are divided among employees in order to increase
efficiency, but according to the interviews that have been conducted by the researcher,
many employees said that they are bored with same routine work life. This may have a
negative impact on employees quality of work life as well. According to the survey and
interviews conducted the researcher found out that many employees are unhappy due
to immense work load, this may lead to poor performance. Moreover high claim ratio in
motor segment has a negative impact on company performance. Hence management
should pay their attention toward these issues in order to maintain a strong
Performance Management system.

3.2 Recommendations.

 Using a computerized system for reviews and updates may help employees to
receive prompt feed back regarding their performance.
 Management can appreciate employees who work hard by giving them rewards,
this may help to increase employee performance
 Management can redesign employee’s jobs and make changes in their jobs in
order to relieve them from same routine work life.
 Maintaining a happy work environment with all the facilities may satisfy
employees and lead to high performance.
 By encouraging team work, employees may find it easy to finish their works and
it will increase productivity.
 The company should manage claims and expenses effectively, by Strengthening
screening of claims to assess their authenticity.

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 References.

 Davenport, T. Harris, J. De Long, D. and Jacobson, A. (2000) Data to Knowledge to

Results – building an analytic capability, Prentice Hall, Englewood Cliffs, New
Jersey.
 Herrmann, K. (2001) Visualizing Your Business – let graphics tell the story.
 HM Treasury (2001) Choosing the Right Fabric, Irwin, Homewood
 Kennerley, M and Bourne, M. (2003) “Assessing and Maximising the Impact of
Measuring Business Performance”, Como Lake, Italy,
 Marchand, D. A. Kettinger W. J. and Rollins J. D. (2001) ‘Information Orientation:
The Link to Business Performance’, Oxford University Press.
 Newman, V. (1995), ‘Problem Solving for Results’ Gower Publishing.
 Rasiel, E. M. and Friga, P. M. (2001) ‘The McKinsey Mind: McGraw Hill
 World research Inc. (1999) Business Intelligence and Data Warehousing (BI/DW)
Programme Competitive Analysis. California, USA
 Janashakthi Insurance PLC hand book.

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