Question

1.
Y Ltd is a bank, functioning in India. It is planning to diversify
into insurance business. Lately, the government of India has
allowed the private sector to gain entry in the insurance
business. Previously, it was the prerogative of LIC and GIC to do
insurance business. But now with liberalisation of the economy
and to make the field competitive other companies have been
given licences to start insurance business under the regulation of
'Insurance Regulatory and Development Authority. Y Ltd plans
to recruit high quality employees and agents and exercise
effective direction to capture a substantial part of life and non-
life insurance business.
• Identify how the company can supervise its employees and
agents effectively? What benefits will the company derive from
effective supervision?
• What financial and non-financial incentives can the company
use for employees and agents separately to motivate them?
What benefits company will get from them?
• How can the company ensure that higher order needs i.e. the
esteem and self-actualisation needs are met?​

Answer 1

Answer:

Solution :

a) The company will appoint supervisors who will provide on the job training to the employees and agents. They will maintain group unity and ensure that the company gets enough insurance business. <br> b) To the employees, the company can give pay and allowances, bonus, retirement benefits, promotion, job security etc. to motivate them for higher performance. <br> To the agents, the company can give the following incentives: <br> i) Profit sharing <br> ii) Stock option (i.e., giving company's share at a price less than market price). <br> c) By giving recognition, autonomy status, etc. and providing growth and self-fulfilment opportunities, the company ensures that higher order needs-esteem and self-actualisation needs are met. <br> d) Informal communication network (i.e., grapevine) can be used by the company to transmit information to know the reactions of the employees and agents to the company's decisions and policies. Grapevine channels can carry insurance market information rapidly.