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Performance Appraisal : Assess & Improve!

Administrator — Sat, 12 Sep 2009 18:00:49 +0000

Mr V Dhananjayan, Development Officer, LIC, Mylapore Branch, Chennai

Performance Appraisal

Assess & Improve!

K Nitya Kalyani

Just like a mirror helps to look at your appearance, performance appraisal (PA) systems have been designed to help look at how a person is working. But mirrors reflect only the external appearance and not the abilities or

potential of people.

‘‘There is a basic human tendency to make judgements about those one is

working with, as well as about oneself,’’ says Victor Dulewicz, psychologist who

has co-authored books on

emotional intelligence.

In the early days, employers used PA

systems only to measure salary against the output of the employees. Higher

salaries were paid to those who performed better and pay cuts followed if the

employees’ performance was not

satisfactory. The employers paid no

attention to the possibilities of improving the performance of the employees.

Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.

Even then motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite

different levels of motivation and

performance. These observations were confirmed by experiments and scientific studies. Income was important, yes; but it was not the only element that had an

impact on employee performance.

Morale & Self-Esteem

It was found that other issues, such as morale and self-esteem, could also have a major influence. Employees did not have to fear that they had to ‘‘Do or Die.’’

The question that arises is how can a PA system motivate workers and evaluate all of their performances fairly.

Sharing his experience is Mr Sudipta BDutta Choudhury, Development Officer, Life Insurance Corporation of India (LIC,) Silchar, Assam: “We approach the agents one on one and talk to them if their performance is not up to the mark. It is a big effort to keep them motivated and evaluate their performance.”

Says Mr V Dhananjayan, Development Officer, LIC, Mylapore Branch, Chennai, ‘‘I don’t pressurise my agents to perform by bringing in premium, but pressurise them to do their best. Try till the last date and work maximum. If you don’t succeed there is the next time….

“I don’t believe in pulling them up in an open meeting, it will give them a complex. But I publicise today’s hero or heroine in First Premium Income or number of lives. The entire team will congratulate each other. If someone is not performing to

potential I go to his place personally and tell him or her that they can do better.

I have a definition of success – ‘‘It is

exclusively my dream to reach the top.’’ But I don’t define the ‘top.’ If you define you confine.’’

PA – A Report Card

Over the years PA has taken the form of a structured formal interaction between a subordinate and supervisor, in which the work performance of the subordinate

is examined and discussed to identify weaknesses and strengths as well as

opportunities for improvement and

skills development.

Says Mr Murali Iyer, National

Head – Sales (Agency & Alliances), IDBI Fortis Life Insurance Company: “The

performance appraisal process at IDBI Fortis is called Goalsurance™. Since

performance is all about being aware of and achieving one’s goals, it is a simple metric based system that focusses on the Key Result Areas (KRAs) measured by Key Performance Indicators (KPIs). The KRAs and KPIs are discussed with the employee at the beginning of the appraisal year and the periodicity of the review

process is duly communicated. Based on pre-determined parameters, the appraisal process classifies performance into

several buckets. Accordingly, employees’ performance are assessed and

differentiated into those who will get

rewarded for exceeding their targets or those who will get into the performance improvement programme called the Goalsurance Enabler Plan (GEP) for not meeting their targets.”

performance on a monthly basis. I break up their targets month-wise for a year and give it to them in the form of a chart. Every month I keep motivating them and this has had a positive effect. Last year someone who performed up to 30 per cent of his capacity is now doing 65 per cent.

I work more with those who respond. So once a week, I have an advance group. They can study the market on their own and operate independently.

I also have a general group and a new group. For all of them motivation and

appraisal has to be done with

different approaches.

Mr Dhananjayan’s approach has some

differences. Says he, “I have a team of 76 people. Based on the area they operate in, I segregated them into four different teams 15 years ago and gave the teams names like Anand, Mitra, Anurag and Surabhi. Each team elects its guide and deputy guide. Each quarter I call the guides and deputy guides and discuss activities with them. We go to schools and sponsor

drawing competitions, collect contact

information from parents and approach them for buying policies.

“Similarly, we are into the Pulse Polio

campaign. We reach people during this

outreach and also tell them the

importance of insurance.

“The guides and deputy guides conduct their own meetings and I don’t interfere. They plan the premium targets for the month and focus on that and how to achieve them.

For 18 years, every second Sunday from 2 to 5 pm, I have been conducting a

meeting of all agents and reviewing

their performance. I will do this till my

last day. Even if there is a family function I will miss it.”

The importance of PA

Like in Mr Dhananjayan’s case it has been proved that over the years, PA has become an important management tool for

Development Officers to motivate their agents. No other management process has as much influence over individuals’ careers and work lives. Used well, PA is the most powerful instrument that organisations have to mobilise the energy of every

employee of the enterprise toward the achievement of strategic goals and the company’s mission, vision and value. But used poorly, the procedure quickly

becomes ineffective and the butt of jokes among the agents. Worse still, it can cause heartburn and anxieties if misused to settle scores or show favourtism.

Mr Dutta Choudhury shares one of his

positive experiences: There was an agent in my team who was doing only 12 to

13 lives for over 8 or 9 years. After I

brought in my performance appraisal

system he deposited almost 180 policies in a single day.

What I found when I did his appraisal was that he was lacking in motivation to meet the customer. He had a fear of facing the customer. The second fear that I

discovered he had was not knowing what to give the customer. I try to teach agents new techniques so that their performance can improve. Most of it is developed

internally and there is no education

system. We are trying to give tuitions.

Says Mr Dhananjayan: Every year, once a quarter or two months I conduct my own competition. In the subsequent monthly meeting I honour them. I set them small targets they can easily achieve. This

public honour gives them confidence.

Every year after the financial year closing I honour each agent based on

performance. Their families and children are also invited for that meeting!

Benefits of PA

Says Mr. Murali Iyer, “A robust

performance appraisal system, like we have initiated at IDBI Fortis, allows us to get insights into the reasons for success or failure. This helps us evolve best

practices within the channel. Most of the benefits of a formal appraisal process come from sharing and close

implementation of these best practices. All the turnaround stories that I have been involved with, and there are many of them, have a simple message coming

out- ‘‘Go back to the basics and implement the best practices.’’

‘Performance Appraisal should be Dynamic’

Mr Murali Iyer, who is responsible for sales and development of the tied agency, corporate agency and broker channels of IDBI Fortis Life Insurance Company.

The Objective of Performance Appraisal

Performance appraisal in a retail sales channel is a mechanism that addresses

several key factors. Agency Channel is a people intensive channel where the

annual targets for sales personnel are broken down into monthly or

quarterly targets.

Through performance appraisals individuals are made aware of their

performance levels at periodic intervals so that the road ahead becomes clearer to them. It also serves as an enabler to help individuals perform to their potential and highlight issues that may be hindering their performance.

Performance management helps recognise good performers and motivate them to reach the next level of achievement. At this nascent stage in IDBI Fortis, we have already put a formal performance appraisal in place aiming to define a culture

of high-performance.

How good a tool is it?

Any tool is as good as its implementation. In my own experience a formal

performance appraisal process that is transparent and action-oriented can

actually help create a culture of high performance. You set up clear ben

chmarks, communicate the same to employees so that they are clear on

expectations and then monitor their performance. There are no downsides to a

performance appraisal process if it is dynamic enough to keep up with

changing circumstances. At IDBI Fortis, we believe that each resource is an

investment on which we expect a return. Performance appraisal is the tool by which we optimise our return on investment. By differentiating performance we can put

non-performers back in training and reward the meritorious. This drives the overall

performance of the channel.

‘‘There is a basic human tendency to make judgements about those one is working with, as well as about oneself,’’ says Victor Dulewicz, psychologist who has co-authored books on emotional intelligence.

In the early days, employers used PA systems only to measure salary against the output of the employees. Higher salaries were paid to those who performed better and pay cuts followed if the employees’ performance was not satisfactory. The employers paid no attention to the possibilities of improving the performance of the employees.

Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.

Even then motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed by experiments and scientific studies. Income was important, yes; but it was not the only element that had an impact on employee performance.

Morale & Self-Esteem

It was found that other issues, such as morale and self-esteem, could also have a major influence. Employees did not have to fear that they had to ‘‘Do or Die.’’

The question that arises is how can a PA system motivate workers and evaluate all of their performances fairly.

Mr Sudipta BDutta Choudhury, Development Officer, Life Insurance Corporation of India (LIC,) Silchar, Assam

Mr V Dhananjayan, Development Officer, LIC, Mylapore Branch, Chennai

I have a definition of success – ‘‘It is exclusively my dream to reach the top.’’ But I don’t define the ‘top.’ If you define you confine.’’

PA – A Report Card

Over the years PA has taken the form of a structured formal interaction between a subordinate and supervisor, in which the work performance of the subordinate is examined and discussed to identify weaknesses and strengths as well as opportunities for improvement and skills development.

Says Mr Murali Iyer, National Head – Sales (Agency & Alliances), IDBI Fortis Life Insurance Company: “The performance appraisal process at IDBI Fortis is called Goalsurance™. Since performance is all about being aware of and achieving one’s goals, it is a simple metric based system that focusses on the Key Result Areas (KRAs) measured by Key Performance Indicators (KPIs). The KRAs and KPIs are discussed with the employee at the beginning of the appraisal year and the periodicity of the review process is duly communicated. Based on pre-determined parameters, the appraisal process classifies performance into several buckets. Accordingly, employees’ performance are assessed and differentiated into those who will get rewarded for exceeding their targets or those who will get into the performance improvement programme called the Goalsurance Enabler Plan (GEP) for not meeting their targets.”

Says Mr Dutta Choudhury: “I call each agent once a month. I also meet them in small groups. I prepare a one to one study programme for each of them as we don’t get well trained people for this profession. So as per their capacity I organise some training. I share my feedback of their performance on a monthly basis. I break up their targets month-wise for a year and give it to them in the form of a chart. Every month I keep motivating them and this has had a positive effect. Last year someone who performed up to 30 per cent of his capacity is now doing 65 per cent.

I work more with those who respond. So once a week, I have an advance group. They can study the market on their own and operate independently.

I also have a general group and a new group. For all of them motivation and appraisal has to be done with different approaches.

Mr Dhananjayan’s approach has some differences. Says he, “I have a team of 76 people. Based on the area they operate in, I segregated them into four different teams 15 years ago and gave the teams names like Anand, Mitra, Anurag and Surabhi. Each team elects its guide and deputy guide. Each quarter I call the guides and deputy guides and discuss activities with them. We go to schools and sponsor drawing competitions, collect contact information from parents and approach them for buying policies.

“Similarly, we are into the Pulse Polio campaign. We reach people during this outreach and also tell them the importance of insurance.

“The guides and deputy guides conduct their own meetings and I don’t interfere. They plan the premium targets for the month and focus on that and how to achieve them.

For 18 years, every second Sunday from 2 to 5 pm, I have been conducting a meeting of all agents and reviewing their performance. I will do this till my last day. Even if there is a family function I will miss it.”

The importance of PA Like in Mr Dhananjayan’s case it has been proved that over the years, PA has become an important management tool for Development Officers to motivate their agents. No other management process has as much influence over individuals’ careers and work lives. Used well, PA is the most powerful instrument that organisations have to mobilise the energy of every

employee of the enterprise toward the achievement of strategic goals and the company’s mission, vision and value. But used poorly, the procedure quickly

becomes ineffective and the butt of jokes among the agents. Worse still, it can cause heartburn and anxieties if misused to settle scores or show favourtism.

Mr Dutta Choudhury shares one of his positive experiences: There was an agent in my team who was doing only 12 to 13 lives for over 8 or 9 years. After I brought in my performance appraisal system he deposited almost 180 policies in a single day.

What I found when I did his appraisal was that he was lacking in motivation to meet the customer. He had a fear of facing the customer. The second fear that I discovered he had was not knowing what to give the customer. I try to teach agents new techniques so that their performance can improve. Most of it is developed internally and there is no education system. We are trying to give tuitions.

Says Mr Dhananjayan: Every year, once a quarter or two months I conduct my own competition. In the subsequent monthly meeting I honour them. I set them small targets they can easily achieve. This public honour gives them confidence.

Every year after the financial year closing I honour each agent based on performance. Their families and children are also invited for that meeting!

Benefits of PA

Says Mr. Murali Iyer, “A robust performance appraisal system, like we have initiated at IDBI Fortis, allows us to get insights into the reasons for success or failure. This helps us evolve best practices within the channel. Most of the benefits of a formal appraisal process come from sharing and close implementation of these best practices. All the turnaround stories that I have been involved with, and there are many of them, have a simple message coming out- ‘‘Go back to the basics and implement the best practices.’’

‘Performance Appraisal should be Dynamic’

Mr Murali Iyer, Head, IDBI Fortis Life Insurance Company

Mr Murali Iyer, who is responsible for sales and development of the tied agency, corporate agency and broker channels of IDBI Fortis Life Insurance Company.

The Objective of Performance Appraisal

Performance appraisal in a retail sales channel is a mechanism that addresses several key factors. Agency Channel is a people intensive channel where the annual targets for sales personnel are broken down into monthly or quarterly targets.

Through performance appraisals individuals are made aware of their performance levels at periodic intervals so that the road ahead becomes clearer to them. It also serves as an enabler to help individuals perform to their potential and highlight issues that may be hindering their performance.

How good a tool is it?

Any tool is as good as its implementation. In my own experience a formal performance appraisal process that is transparent and action-oriented can actually help create a culture of high performance. You set up clear ben chmarks, communicate the same to employees so that they are clear on expectations and then monitor their performance. There are no downsides to a performance appraisal process if it is dynamic enough to keep up with changing circumstances. At IDBI Fortis, we believe that each resource is an investment on which we expect a return. Performance appraisal is the tool by which we optimise our return on investment. By differentiating performance we can put non-performers back in training and reward the meritorious. This drives the overall performance of the channel.

K Nitya Kalyani

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Selection : Choosing the Right Person

Administrator — Tue, 12 May 2009 18:00:20 +0000

Selection

Choosing the Right Person

Rangashree Srinivas

Insurance selling in India is a vast

unexplored territory with just 25 lakh

agents in a country of over a 100 crore people! And, even of these, only a fraction may be selling to their full potential. How do insurance companies view this

situation? What are the success secrets of the selection process that bring talent to the forefront?

Investing in Human Resources

To produce a wholly functional insurance advisor or agent, insurance companies have elaborate recruitment, selection and training programmes. “A lot of money is spent on training after recruitment, but very few advisors understand its

importance. They treat it like an avoidable chore, missing classes to do personal work. Companies should have a coordinated policy for recruitment and training to turn out quality advisors. Now recruitments are done indiscriminately just to fulfill targets,” feels a trainer from a private General

insurance company.

Selection process

Private insurance companies adopt the more conventional route of hiring and look for professional qualifications. “We use a variety of channels to source candidates, the largest of course being the tried and trusted consultant route.

We also regularly participate in the

campus placement seasons of the

regular MBA campuses and the insurance specific courses that have been instituted. We also run a very aggressive employee-get-employee scheme.

Obviously the results in the last channel are the best,” says Mr. Amit Sirsikar, Head – Agency, Tata AIG General Insurance Company Limited.

But hiring in insurance does not always follow the ‘send resume – attend interview’ pattern as in other industries. Insurance is a relationship industry and recruitments also happen due to relationships.

“Many of my clients want to become agents after seeing my single-handed

success,” says Mr Bhiman Das, Kolkata based Life Insurance Corporation of India (LIC) agent who is also a Top of Table member of Million Dollar Round Table (MDRT).

“What I look for is the ‘sales attitude’,” he says. “If that is there, selling insurance is a piece of cake.” As a Chief Life Insurance Advisor (CLIA,) Mr Das has been busy

creating his own team of agents and in training over the last financial year.

Mr Asim Kumar Mondal, another CLIA from LIC, Kolkata also echoes this

sentiment. However, he says he does get applications from those desirous of

becoming agents inspired by successful agents like him. He vets these applications and interviews only those who are

extremely motivated.

“I judge from their body language, attitude and presentation if they can really match up to the rigours of being an agent,” he says. “The employment scene has taken a dramatic turn in the last year. Jobs are hard to come by. Now I find many more aspirants among the young people with B.A. and M.A. degrees who are desperate for a job, any job. Some of them opt for an insurance agency as a last resort. Little do they know that this is a dream profession and the sky is the limit. I select the most ambitious, hard working, enthusiastic and energetic candidates among them,” adds Mr Mondal.

Gauging Enthusiasm

The quality most looked for in an agent is definitely enthusiasm and accompanying energy and ambition. The most successful recruiters in the industry have subtle ways to spot the right people. A comprehensive list of signs to look out for is:

 Persuasiveness

 Achievement Drive

 Interpersonal Understanding

 Initiative and Persistence

But how much of this can be gleaned before the actual face to face interaction?

Mr Sirsikar shares tips on how to shortlist potential candidates from a bunch of

resumes.

“This requires the fine art of judging the candidate’s ability and intent from bland information and tone of

presentation. In the resume, we look for basic qualifiers or even disqualifiers, like minimum education, work experience and exposure to the relevant market. We also observe the stability of tenure in previous organisations. These days it is common to see CVs that show that the candidate has four years of experience split across three organisations and he is actively searching for the fourth!” he quips.

Interviewer preparation

How much preparation goes into

interviewing a candidate? After all, the

quality of that one interaction is going to be crucial in the hiring process.

immediately gives the candidate a sense of the level of preparedness that has gone into the interview from your side. Given that a lot of young people these days tend to stroll into interviews, this helps set the tone immediately,” says Mr Sirsikar.

“Also, as a first question, I find it useful to put the candidate at ease, by asking an “easy one” about family background,

native place or some other personal but innocuous detail. It serves the dual

purpose of giving the candidate some breathing space to settle down, and help build a mental picture of the candidate. Details like whether the candidate is a small town boy, an only son, if the father runs a thriving business single-handedly, mother is a housewife will tell you a lot about

‘character’ which are not apparent upfront,” he adds.

Hiring old hands

Becoming an advisor with a General

insurance company is an entirely

different story. Usually a person takes up a General insurance agency only over and above a Life insurance agency. “So,

General insurance agents have already gone through the examination and a

50-hour mandatory training. After that, the interview process is just a formality,” says Mr Mukesh D Thakkar, Development

Officer, The New India Assurance

Company, Mumbai.

That said, Mr Thakkar says he himself employs only already experienced agents who are thorough with documentation

procedures since, in his line of work, he has only vehicle dealers as corporate agents under him and they

require people for servicing and not for sales.

Insurance companies are also looking at hiring from a wider talent pool.

Says Mr Sirsikar, “In our company we like a good gender mix, as we have found that women, given an opportunity in a

supposedly male bastion like sales, do

extremely well. We are not too fussy about recruiting only from the General insurance industry. In fact, this year we are

consciously driving an agenda to recruit from other industries like FMCG and pharma to attract a diverse pool of talent. To that extent, we are working towards strengthening an already robust induction and training infrastructure that we have in place,” he says.

Nurture factor

Retired DO of LIC and Director, Academy of Insurance Marketing, a Chennai-based training institution for insurance sales

professionals, Mr K Chandrasekaran, strongly believes that, in the insurance

industry, a candidate is not ‘selected’ but ‘nourished.’ “When you meet a person if you even have a slight inclination that he may be successful as an agent, you can take him under your wing. Moulding them into good agents is in your hands,” he says.

“It is the equation between boss and

employee that really makes all the

difference,” he observes.

Three Qualities of a Good Candidate

 Clarity of thought process in terms of career goals

Why is he applying for this job? Does it fit into a larger design or is it just a reaction to some temporary stimulus like some overt pressure in the current organisation. Is there a match in what the job offers and what he is looking for in a change? If there isn’t, then rest assured even in today’s market, you will be

interviewing someone else for the same position soon!

Problem solving aptitude

Is this person able to think through a problem, drill down to its root cause and figure out how to fix it instantly and also how to avoid a recurrence? He can be tested by being given a problem, not necessarily in a business situation. Unless this quality is present in at least some measure, be prepared for an endless sequence of upward delegation.

Aggression

The person must be able to handle pure and simple number pressure, day on day, month on month and exert the same on the teams below. This is a simple reality of a salesperson’s life. Part of handling pressure is also to know how much to absorb at your level and what to pass down the line.

Please Help Accident Victims

The Supreme Court has ruled that all injured persons, especially in the case of road traffic accidents, physical assaults, etc., when brought to a hospital / medical centre, have to be offered first aid, stabilised and shifted to a higher centre / government centre if required. It is only after this that the hospital can demand payment or complete police formalities. In case you are a bystander and wish to help someone in an accident, please go ahead and do so. Your responsibility ends as soon as you leave the person at the hospital.

The hospital bears the responsibility of informing the police, taking medico-legal action, trauma care, first aid, etc. The Police have no right to harass you after you have done your work by admitting the victim(s) at the hospital.

I wish and hope that you will have no such emergency. But if you see any accident victim on the road, please help him without any fear of harassment.

Mr M K Subramanian, Secretary,

Automobile Association of South India

Insurance selling in India is a vast unexplored territory with just 25 lakh agents in a country of over a 100 crore people! And, even of these, only a fraction may be selling to their full potential. How do insurance companies view this situation? What are the success secrets of the selection process that bring talent to the forefront?

Investing in Human Resources

Selection process

We also regularly participate in the campus placement seasons of the regular MBA campuses and the insurance specific courses that have been instituted. We also run a very aggressive employee-get-employee scheme.

Obviously the results in the last channel are the best,” says Mr. Amit Sirsikar, Head – Agency, Tata AIG General Insurance Company Limited.

Mr Bhiman Das, Agent, LIC & CLIA, Kolkata

“Many of my clients want to become agents after seeing my single-handed success,” says Mr Bhiman Das, Kolkata based Life Insurance Corporation of India (LIC) agent who is also a Top of Table member of Million Dollar Round Table (MDRT).

“What I look for is the ‘sales attitude’,” he says. “If that is there, selling insurance is a piece of cake.” As a Chief Life Insurance Advisor (CLIA,) Mr Das has been busy creating his own team of agents and in training over the last financial year.

Mr Asim Kumar Mondal, another CLIA from LIC, Kolkata also echoes this sentiment. However, he says he does get applications from those desirous ofbecoming agents inspired by successful agents like him. He vets these applications and interviews only those who are extremely motivated.

Mr Asim Kumar Mondal, Agent, LIC & CLIA , Kolkata

Gauging Enthusiasm

Persuasiveness
Achievement Drive
Interpersonal Understanding
Initiative and Persistence

But how much of this can be gleaned before the actual face to face interaction?

Mr Sirsikar shares tips on how to shortlist potential candidates from a bunch of resumes.

“This requires the fine art of judging the candidate’s ability and intent from bland information and tone of presentation. In the resume, we look for basic qualifiers or even disqualifiers, like minimum education, work experience and exposure to the relevant market. We also observe the stability of tenure in previous organisations. These days it is common to see CVs that show that the candidate has four years of experience split across three organisations and he is actively searching for the fourth!” he quips.

Interviewer preparation

How much preparation goes into interviewing a candidate? After all, the quality of that one interaction is going to be crucial in the hiring process.

“I find it a good exercise to memorise some essential information from the CV of the candidate like immediate work experience, or any other point that the candidate has chosen to highlight. Mentioning it immediately gives the candidate a sense of the level of preparedness that has gone into the interview from your side. Given that a lot of young people these days tend to stroll into interviews, this helps set the tone immediately,” says Mr Sirsikar.

“Also, as a first question, I find it useful to put the candidate at ease, by asking an “easy one” about family background, native place or some other personal but innocuous detail. It serves the dual purpose of giving the candidate some breathing space to settle down, and help build a mental picture of the candidate. Details like whether the candidate is a small town boy, an only son, if the father runs a thriving business single-handedly, mother is a housewife will tell you a lot about ‘character’ which are not apparent upfront,” he adds.

Hiring old hands

Becoming an advisor with a General insurance company is an entirely different story. Usually a person takes up a General insurance agency only over and above a Life insurance agency. “So, General insurance agents have already gone through the examination and a 50-hour mandatory training. After that, the interview process is just a formality,” says Mr Mukesh D Thakkar, Development Officer, The New India Assurance Company, Mumbai.

[caption id=”attachment_1380″ align=”alignnone” width=”300″ caption=”Mr Mukesh D Thakkar, Development Officer, The New India Assurance Company, Mumbai

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Negotiation : 10 Rules for Master Negotiators

Administrator — Thu, 12 Mar 2009 18:00:22 +0000

”Take it or leave it!” “We can’t keep harping on the same issue” “We don’t want to negotiate,” “We have a time limit. This is all we are going to do.” “This is the final price, if you don’t want it, then fine,” “Why waste time over nitty-gritties?” “Arguing with you is a waste of time.”

How do you feel when you hear statements like this? Angry? Hurt? Bewildered?

But many a time you might have said the same thing to people you deal with.

Unless you are in the armed forces or in an extremely hierarchy bound organisation, if you want to have a relationship with the person on the other side of the table or the phone, you must negotiate. Negotiation is unavoidable!

Being a sales manager, you deal with a lot of people everyday – your agents, clients, top management, vendors, brokers, middle-level management, colleagues, subordinates and clerical staff. You must constantly be on the alert and never let your emotions cloud any negotiation process.

“A negotiation is an interactive communication process that may take place whenever we want something from someone else or another person wants something from us.”

1.Information:

Learn as much as you can about the problem. What information do you need from the other side? What is the nature of the client’s business?

Ms Seema Chandak, Secretary, Tata AIG Producers (GIC) Club, Kolkata

Says Ms Seema Chandak, Secretary, Tata AIG Producers (GIC) Club, Kolkata, and an Insurance Advisor with Tata AIG Life Insurance Company, “Research your client! When I want to start talking to a client, I first read up everything I can about them. Once, I had called the managing director of a cement manufacturing company to ask for an appointment. We soon started talking and we really hit it off. The MD was really impressed that I had done so much research about his company for a cold call. I, of course secured the business a few meetings later.”

2. Leverage:

Use your clout! Evaluate your leverage and the other party’s leverage at the outset. This is important because there may be a number of things you can do to improve your leverage or diminish the leverage of the other side.

What will you do to enhance your leverage? Social networking with friends, relatives and classmates helps increase your leverage. Once you do that, you are in a better position to win in negotiations with them. After all, negotiation is convincing someone to take on your proposition.

Mr Anantha Rama Krishnan, Regional Manager – Agency, Bharti Axa General Insurance Company, Chennai

“I have recruited my friends and acquaintances. One of my friends, who was a home loan consultant, is now a successful agent with Max New York Life Insurance Company and another friend has become a complete financial advisor,” says Mr Anantha Rama Krishnan, Regional Manager – Agency, Bharti Axa General Insurance Company, Chennai.

3. Analysis:

What are the issues? As Mr P R C Panicker, Agent, LIC, Vellakir, Kerala, says “One of my clients wanted a child benefit policy. I could have sold him the policy he wanted. But I sat down with him and asked him a lot of questions. I then suggested a more comprehensive cover which could look after the needs of the entire family better, including the child’s education.”

4. Rapport:

Establish rapport with the opposite party. You need to determine early on if the other party is going to be cooperative; if not, consider employing a mediator as soon as practical. Mr V M Sasikumar, Development Officer, LIC, Salem, states that since insurance is relationship marketing, it is important to observe and look at things from the client’s perspective.

Mr V M Sasikumar, Development Officer, LIC, Salem

“Why is the client objecting? Objections are opportunities. Only if we can strike a positive chord with the client can we can approach them for business at a later date.”

5. Goals and expectations:

Goals are one thing; expectations are something else. Mr Debnarayan Patra, LIC, Development Officer, Howrah, believes there is no ‘closet solution’ to negotiation.

“Negotiation is part of the game. If the client is objecting for the sake of it, you should try to draw him out. Ask him open-ended questions. Pose counter objections. Meet people on an one-one basis with no superiority or inferiority complex. To reach our goals we must be able to take different approaches.”

6. Type of negotiation:

Mr Milind Mane, Development Officer, Life Insurance Corporation of India (LIC), Pune

What type of negotiation will you face? Will this be highly competitive, cooperative, or something unusual? Will you be negotiating face to face, by fax, through a mediator, or in some other manner? The medium is the message”If it’s something really important don’t try to settle it over the phone, meet the client in person and sort it out,” says Mr Milind Mane, Development Officer, Life Insurance Corporation of India (LIC), Pune

7. Budget:

Every negotiation has a cost. You can avoid conflicts by settling for less rather than losing out competition by making the situation confrontational.

Dr A K Saxena, General Manager, Oriental Insurance Company, Delhi says, “many public sector General insurance staff have the attitude that if they just sleep over the claim it will go away. They don’t realise that by not attending to the claim they are worsening the problem. If they had settled it themselves they could have got the client to agree for less. But if the client takes the issue to court, it is going to be only added expense to the client and the company. Even if there are problems, it does not pay to drag it out.”

8. Everything is negotiable:

Mr K Ramachandran, Director, J B Boda Insurance Brokers Pvt. Ltd.

The price, benefits, the coverage; with detarrifing, just about every thing is negotiable in General insurance, says Mr K Ramachandran, Director, J B Boda Insurance Brokers Pvt. Ltd. Novice negotiators do not understand that everything is negotiable all the time. They give up too easily. If you slam shut your briefcase and walk out of a negotiation session, they do not understand that this is a tactic; they interpret it as the end of the negotiation. Master negotiators are always on the look-out for an acceptable compromise, especially as the gap between the parties narrows.

9. Getting the best premium rate:

Mr Vinod Sahgal, Managing Director, Bajaj Capital Insurance Broking Limited, Delhi

There is always negotiation going on between the broker and the client and the broker and the company – to get the right premium rate, says Mr Vinod Sahgal, Managing Director, Bajaj Capital Insurance Broking Limited.

Many negotiations break down because one person has a number in mind and the other person has a different number in mind, and one or both parties adopts a negative attitude about closing the gap. One way to avoid impasses like this is to understand that reaching agreements with people is rarely such an exact science that we can get things down to decimal points. Whether you are trying to settle a claim, buy a policy or bicker over hikes for your department, you must know how much it is worth. Questions you should ask are: “What is my commission on this? Is it worth this much effort?” adds Mr Sahgal.

10. Trade-offs:

Every negotiation involves one or more problems, or “issues”, which can be sub-divided when necessary, to make the negotiation more manageable and to pave the way for partial agreements. If there are multiple issues, look for trade-offs. “When it comes to negotiating for better pay-scales or better facilities, you must also mention your contributions or how your contributions can increase if such and such things are taken care of by the management. What are you bringing to the table? If the other party agrees to your propositions what will be your contributions?” asks Mr Issac Joshua, Trainer, SBI Life Insurance Company, Hyderabad.

Mr Issac Joshua, Trainer, SBI Life Insurance Company, Hyderabad

The endgame of negotiating is fulfilling the promises made. So be careful not to promise what you can’t deliver. Most sales managers or those in middle-level management do not have the authority to make any changes in policy. So when you don’t have the authority or power to negotiate, it is better to say so than to engage in dialogue with clients, says Mr Mane.

Negotiation is an art! So polish up your negotiation skills if you want to get the best out of your agent, client or boss!

D Rachel Chitra

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Motivation : Make Your Team Love their Jobs!

Administrator — Thu, 12 Feb 2009 18:00:27 +0000

Motivation

Make Your Team Love their Jobs!

D Rachel Chitra

Why does one salesperson see his first prospect at seven in the morning and another one is just getting out of bed at eleven?

After a lecture for 1,000 persons, one walks out and says, “I’m going to change my life.” Another walks out with a yawn and says, “I’ve heard all this before.”

Why does this happen?

Disinterest, apathy or low performance can be traced to lack of motivation. A sales manager’s most important task is to keep his team motivated.

Give them the pep talk

“Reinforce your organisation’s purpose in the marketplace. The company is made of people. Unless the people in the company start performing, the company cannot grow. So start thinking what you can do for your company. What is your role? Why do we sell what we sell?” asked Mr S Ramadoss, Chairman cum Managing Director, Oriental Insurance Company, at the launch of an Agents Training Centre in Chennai.

Money is important, there are lots of ways to make money and lots of companies to work for. Give your staff an ongoing reason to be proud of what they do. How is your product contributing to society? Use your weekly sales meetings to reinforce the organisation’s or division’s purpose.

“Insurance is a unique product. It’s the only product that provides social and financial security to families,” says Mr Vinod Sahgal, Managing Director, Bajaj Capital Insurance Broking Limited. “So there’s a moral to selling insurance.”

Says Mr M Shankaranarayanan, Development Officer, Life Insurance Corporation of India (LIC,) “my usual pick-up line (as he puts it) is: “What can you do for your neighbour’s family if your neighbour has just died?” The prospects say, “We’ll try to give the family some money.”

I ask, “How much? And for how long?” Obviously their response would be, ‘not much or not enough, and certainly not for long.’ Then I tell them LIC can give the family all the social security any family would need. And they can take up this noble mission of empowering people financially by taking up the agency profession,”

This line of thought works well in recruiting agents and it works just as well in retaining and motivating them,” he adds.

Highlight achievements

Share success stories of your team members via e-mail, voicemail, in-house newsletters. There can be stories of how your top agents performed this month. You can also get your team members to solicit success stories from people who have bought the insurance.

“We hold in-house contests and give bumper prizes to top agents. We also have a separate section of our website in which we feature success stories. This section also has other motivational features for agents and can be accessed only by agents and sales managers,” says Mr Akshay Mehrotra, Head – Marketing and Corporate Communications, Bajaj Allianz Life Insurance Company.

“There are also other perks like trips to foreign countries. We have an in-house newsletter called AgentsTrack, in which we provide agents with information and feature our top three agents of the month. We get them to tell others what were the methods they employed to get results, adds Mr Mehrotra.

“Our company held an in-house Smile campaign to keep our staff motivated. For the campaign we used motivational quotes and photographs of our own employees from all levels of administration. The idea was to boost the morale of the staff,” says B Anant, Head, HR, ICICI Lombard General Insurance Company.

Making Connections

As a sales manager you could organise monthly lunches for your team members. Since most agents are out for the larger part of the day, they don’t generally see each other face to face. It’s a nice feeling to be able to associate a face with a name and to bond with others with the same experiences.

“LIC as an organisation used to hold many meetings for its agents. But informal get-togethers with agents also help. I used to hold day-long meetings at a fancy hotel to reinforce such connections,” says Mr K Chandrasekaran, Director, Academy of Insurance Management, and former DO, LIC.

“The growth of organisations like Life Underwriters Guild of India (LUGI,) shows how much agents want to connect with each other,” says Mr K Karthikeyan, Chennai based Agent, LIC and MDRT member.

Shaping the team

Sales managers need to bat for their team. They must take personal responsibility when earnings aren’t met, rather than blaming it all on the sales force. Are forecasts realistic? Are your agents getting proper and ongoing training? Is the rest of the organisation (marketing, distribution, clerical, accounting) supporting the sales staff?

“In many cases, when agents bring in business, they are not appreciated for their efforts. There are some administrative staff members who delay the settlement of claims. All the other departments must cooperate with the agent, if he has to succeed,” says Mr G Harshavardhan, General Manager, United India Insurance Company.

If the agent is bogged down by the inefficiency of others in the team, the sales manager should become a catalyst for change and make things happen. Show your staff that you support them. Be a coach and mentor! Accountability starts at the top and works its way down.

Respect your team’s need for personal time. With wireless communications and the Internet, we’re becoming too accessible.

“I am on the Internet for the larger part of the day and I am accessible to my agents at all times – 24X7. I have always told them that they can be free to call me in case of any problem. But that doesn’t mean I should be in touch with them 24X7. There should be a balance,” says Ms K Jayalakshmi, Development Officer, LIC at Hyderabad. The line between work time and home time is dangerously blurred.”

Encourage your sales team to get a life! Nothing nurtures the soul, boosts the morale and keeps stress to a minimum like being able to spend time with family and friends or engaging in activities that have nothing to do with work. “I personally do yoga every day and this really gives me a lot of stamina,” said Mr P Srinivasan, Founder, LUGI, at the recent convention of the organisation’s Chennai Chapter.

Treat your sales staff equitably. Avoid the temptation to give your star salesperson preferential treatment, unless it’s a spelled out benefit that is accessible to anyone who performs at a certain level, says Mr Gaurav Kapoor, Agency Recruitment Manager, Max New York Life Insurance Company. If you have deadlines, they apply to everyone. The same applies for procedures and policies. Consider streamlining certain policies that prevent your sales team from being effective or closing the deal.

Why does one salesperson see his first prospect at seven in the morning and another one is just getting out of bed at eleven?

After a lecture for 1,000 persons, one walks out and says, “I’m going to change my life.” Another walks out with a yawn and says, “I’ve heard all this before.”

Why does this happen?

Disinterest, apathy or low performance can be traced to lack of motivation. A sales manager’s most important task is to keep his team motivated.

Give them the pep talk

Mr S Ramadoss, Chairman cum Managing Director, Oriental Insurance Company, New Delhi

Mr Vinod Sahgal, Managing Director, Bajaj Capital Insurance Broking Limited

Mr M Shankaranarayanan, Development Officer, Life Insurance Corporation of India, Chennai

This line of thought works well in recruiting agents and it works just as well in retaining and motivating them,” he adds.

Highlight achievements

Mr Akshay Mehrotra, Head – Marketing and Corporate Communications, Bajaj Allianz Life Insurance Company, Pune

B Anant, Head, HR, ICICI Lombard General Insurance Company, Mumbai

Making Connections

Mr K Chandrasekaran, Director, Academy of Insurance Management, and former DO, LIC, Chennai

Mr K Karthikeyan, Agent, LIC, Chennai

“The growth of organisations like Life Underwriters Guild of India (LUGI,) shows how much agents want to connect with each other,” says Mr K Karthikeyan, Chennai based Agent, LIC and MDRT member.

Shaping the team

Mr G Harshavardhan, General Manager, United India Insurance Company

Respect your team’s need for personal time. With wireless communications and the Internet, we’re becoming too accessible.

Ms K Jayalakshmi, Development Officer, LIC at Hyderabad

Mr P Srinivasan, Founder, LUGI, Coimbatore

Encourage your sales team to get a life! Nothing nurtures the soul, boosts the morale and keeps stress to a minimum like being able to spend time with family and friends or engaging in activities that have nothing to do with work. “I personally do yoga every day and this really gives me a lot of stamina,” said Mr P Srinivasan, Founder, LUGI, at the recent convention of the organisation’s Chennai Chapter.

D Rachel Chitra

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Problem solving : Nothing is Impossible

Administrator — Mon, 12 Jan 2009 18:00:40 +0000

How can a sales manager tackle problems in his professional life? Former American President Theodore Roosevelt said, “Have you got a problem? Do what you can, where you are, with what you’ve got” or in other words, “When life gives you a lemon, make lemonade.”

Selling insurance is tough. Keeping your team of agents on the track to selling more is even tougher. Some of the problem-solving techniques sales managers need to employ to improve sales are:

1) Task Definition

Sales managers need to be clear about their role. Their duty is not selling. Their duty is to make their team sell. “Many sales managers when faced with the problem of low sales, start going on rounds with their agents to boost sales. This increases the sales manager’s problems as he has to spend his time and money doing an agent’s work, while the agent gets lazier, less informed and less interested,” says Mr Ganesh Kumar, Head – Training, Tata AIG Life Insurance Company.

2) Divide and conquer

Every agent is different. Not everyone in your team can be approached in the same manner or fit into your mould of what a successful agent should be. You need to make adjustments for personality traits, their strengths and weakness.

“When I had a team of 32 agents as a sales manger, only 15 to 20 of my agents were regulars. A few members would drop out of the profession all together and some would show very erratic performance. There were also a few MDRTs and aspiring MDRTs in my team who were really motivated. They were on the drive 24 X 7 and when they wanted books, brochures, power point presentations, I would also work with them 24 X 7,” says Mr Gaurav Kapoor, Agency Recruitment Manager, Max New York Life Insurance Company.

“For the less-high powered performers I used to work on ensuring that they achieved their maximum potential,” he says. “Not every agent can be an MDRT qualifier, the job of the development officer or sales manager is ensuring that every agent gives his best,” he adds.

3) Hill-climbing strategy

In this method, you make attempts to move closer to your goals step by step. The problem with this approach is that many challenges require that you temporarily move farther away from the goal. For example, traveling 1,000 km to the west might require driving a few km east to an airport.

When Mr Subhash Babu, State Head, Maharashtra, SBI Life Insurance Company, was with LIC, he wanted to improve the performance of his new team in Gujarat after his transfer. Many people in the new office were antagonistic toward him. He realised he could not immediately go about increasing performance. His first task was to change the mindset of the his colleagues and bring some unity to the team. He realised that while he had received many accolades from the company, his colleagues’ work had never been remarked upon.

So he started organising mini-functions for which he invited top officials from the Central Office of LIC. Even small success stories were highlighted. The attitude of his colleagues changed, there was more unity and this resulted in high productivity. When he joined the branch in 1997, it was earning Rs 15 crore as premium, this soon tripled to Rs 50 crore.

4) Team’s confidence:

Most problems for sales managers arise because an agent lacks knowledge, initiative or drive. To prevent such problems, he must first make the agent confident.

“Misselling, under-selling, rebates…these are the things which an agent who does not have product knowledge, confidence and ethics will do. It’s the duty of the development officer to see to it that the agent does not engage in misselling intentionally or unintentionally,” says Mr Kumar. The system has checks and balances, a one-time offence can be blamed on the agent, but repeated offences will put the sales manager also in the line of fire, he adds.

“Sometimes, the offence can be unintentional, if the agent markets a critical illness policy as a comprehensive health cover; it is his lack of knowledge that is to be blamed. So training the agent is the key,” says Mr Kumar.

Another development officer in Chennai with LIC, who feels the same way, used to rent out a hall in a nearby school to train his agents. Mr P S Ravindran’s colleagues felt he it would be better if he accompanied his agents on calls, than spending money on training them. But he wanted his agents to be well-informed so that they could work on their own.

“They should learn to do business, not depend on me,” he told his skeptical colleagues. He also started an in-house magazine to educate his agents, giving updates on recent circulars, happenings in the industry, and information on the team and individual performances.

5) Short-term goals:

When managing a team, many team leaders make the mistake of listing out the entire year’s agenda at every meeting. This is not profitable and it will also intimidate agents when they think of the huge amount of work involved in attaining those equally huge targets. Setting short-term goals helps the agent, gives him a sense of satisfaction and also ensures that he works towards them, says Mr Stephen Illango, a Development Officer, Life Insurance Corporation of India (LIC), Tiruchirapalli.

“My special 555 formula for agents is “Meet 5 new leads, 5 new prospects and 5 existing clients for service and referrals. If their aim is higher premiums or number of policies sold, they will feel frustrated if they don’t achieve their target. With the 555 formula, they will have more job satisfaction and perform better,” says Mr Ilango. He adds, last year alone his team sold as many as 4,049 policies earning a premium of Rs 36.66 crores.

6) Limitations

When faced with problems like low performance of agents, many development officers set modest goals for them. They give them what they feel are realistic figures. These are limitations and do not help solve the problem.

“DOs need to think big! My association with my DO Mr A D Raju always motivated me,” says Mr R K Shetty, Agent, LIC and Regional Chairman, Million Dollar Round Table (MDRT).

At a function, he once told the audience that he wanted to be like beer baron Vijay Mallya and Reliance’s Mukesh Ambani. His friends laughed at his ambitions, only his DO believed in him. “Mr Raju wanted me to think big. I thought big and now I have made it!” says Mr Shetty.

Even the current financial crisis can be viewed by some development officers as a problem to sales. “But it is not so! We are placing limitations or restrictions on ourselves.

I have been making lots of sales and qualified again for ToT this year despite the economic downturn,” adds Mr Shetty.

D Rachel Chitra

Selling insurance is tough. Keeping your team of agents on the track to selling more is even tougher. Some of the problem-solving techniques sales managers need to employ to improve sales are:

1) Task Definition

Mr Ganesh Kumar, Head – Training, Tata AIG Life Insurance Company, Mumbai

2) Divide and conquer

3) Hill-climbing strategy

Mr Subhash Babu, State Head, Maharashtra, SBI Life Insurance Company Mumbai

4) Team’s confidence:

Most problems for sales managers arise because an agent lacks knowledge, initiative or drive. To prevent such problems, he must first make the agent confident.

Mr Stephen Illango, Development Officer, LIC, Tiruchirapalli

5) Short-term goals:

Mr R K Shetty, Agent, LIC and Regional Chairman, Million Dollar Round Table (MDRT,) Mumbai

6) Limitations

“DOs need to think big! My association with my DO Mr A D Raju always motivated me,” says Mr R K Shetty, Agent, LIC and Regional Chairman, Million Dollar Round Table (MDRT).

Even the current financial crisis can be viewed by some development officers as a problem to sales. “But it is not so! We are placing limitations or restrictions on ourselves.

I have been making lots of sales and qualified again for ToT this year despite the economic downturn,” adds Mr Shetty.

D Rachel Chitra

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