Suggestions on Incentive Bonus Scheme.

NAME OF THESCHEME: The name of the scheme should be changed to Incentive BonusScheme, and not GOIB.
COST FACTORS: -Fixed Conveyance allowance, Reimbursement of Telephone/Mobile bills, Vehicle Insurance,should be removed from costing as they cannot be considered as Income and arenot regular in nature like Basic Pay, DA etc.,
ELIGIBILITY FOR BIB: -Present eligibility for IB is 15% orLess and when computing BIB on qualifying premium, many dev officers are notgetting BIB. So also they are not eligible for addl.conveyance allowance astheir cost ratio is 15% or less and they are deprived of BIB as well as Addl.Conveyance allowance as is being paid to non incentive earners. Hence the costratio for getting I B eligibility should be changed to 20%.
Though the eligibility for I.B is 15% No Development Officer Now isgetting incentive bonus if his cost ratio is 15%, as the premium afterlapsation and gradation is taken for incentive. Hence except for the newdevelopment officers no development officer is getting incentive. OnlyDevelopment Officers performing at around 8% are getting any incentive in thepresent scheme.
When the cost which should be brought by a Development Officer is sayaround Rs.15 lakhs and he brings around 35 lakhs, he is not getting anyincentive. The additional premium which he brought for LIC is with his own costwhich he is incurring and for which he is not getting any incentive from LIC orat least get back his expenses. The expenses are borne by a D.O from his salarywhich is his right.
Hence to re-imburse the expenses for procurement of businessDevelopment Officer should be paid at least 3% incentive from the basic premiumbrought in by him. This will at least re-imburse the expenses paid byDevelopment Officers to procure business and this will also encourage D.O’s todo more business spending amount in the field which is very much essential toprocure new business.
RATE OF BIB: - As the cost ratio is asked to change from 15%to 20%, the rates of BIB should also be changed as follows.
Qualifying premium in the appraisalyear in excess of 5times the Annual remuneration instead of present 6 times andrate should be 15% (14.5% was offered in the initial proposal by the managementin 2004) instead of 12.5%.
3% should be from base premium.
Accordingly the next slabs shouldbe reviewed and changed positively.
FORMULA FOR MODIFYING BIB: - There should not be anydecrease in BIB in the form of modification on any count as the BIB is givenfor performing well and He has already lost his earnings for not performing
The Modification of BIB should bein enhancement of BIB only for showing still better performance on variouscounts viz., Growth in Premium, No. of Lives, Productive Agents, MaintainingLarge Agency organization etc., Maximum ceiling should be removed for for allthe above and also on recruitment of Agents.
RURAL CREDIT: 50% of the Agency organization at thebeginning of the year should be changed to the END of the Year. Many of thePDO’s are being denied the benefit.
URBAN DEVELOPMENT OFFICERS: Urban Development Officersshould be given 1% more incentive as they have to face the competition more. Toeffectively counter the competitors this is necessary.
QUALIFYING AGENT FOR CLUB MEMBERSHIP: Reward for qualifyingagents for club membership also should be given. The condition of Making MDRTin the first 3 years of recruitment should be removed.
PRODUCTIVE AGENT: The Development Officer should be given achoice to take the Deemed productive agent to the relevant appraisal or asPRODUCTIVE agent in the succeeding appraisal to the relevant appraisal year.
ADDL INCENTIVE FOR PERFORMING DEV. OFFICERS: - The Conditionof 11 years service and the cost ratio on qualifying premium should bemodified. There should not be service condition and cost ratio should be oneligible premium instead of qualifying premium.
COMPUTATION OF NO. OF LIVES: - Six months period should beremoved and different policies on the same life should be given credit. Aperson take one policy today and another agent friend of the same dev officerbrings another policy with the involvement of dev officer, denial of credit asit is on the same life and within a period of 6 months is a prerogative anddiscourages the force.
GRADED SYSTEM OF CREDIT: - The agent starts working in full swingin general from 7 and onwards. The dev officer is losing the credit when agentstarts working. Hence the floor level of graded system should start from 10years instead of 7 yrs. There should be only two slabs of below 10years andabove 10years. For below 10years agent credit should be 100% and above 10yearsagents 90%. And as usual 100% credit onthe last years performance for above 10 years agents.
ULIPS: There should not be any grading and Lapsation for theULIPS. As the credit for D.O’s is already less the premium brought from ULIPSshould not be taken for grading. As the charges are recovered from the policyholder there should not be any Lapsation . No grading for policies where aDevelopment Officer will not get 100% credit. Ex: Table 102, and less creditbased on the premium payment term. Ex:14-10,159-13 where we get 60% credit.
Escape Route to Graded System: - Any Development Officerrecruiting and qualifying 5 agents every year should not have grading. The verypurpose of graded credit is that Development Officers are not recruiting anddependent on few agents. This will solve the problem of corporation and theDevelopment Officer is not to put to loss for the hard work he has done inbuilding his agency organization. He will not be penalized for his hard work ofcreating a stable agency force. OR
Let 30% of the Business should bebrought in by agents of below 10years to escape gradation.
For Development Officers having more than 50 agents there should not beany grading.
UNIT MEETINGS : Six unit meetings during the appraisal year.An agent today is having many opportunities in the market. To keep the agentwithin the fold of LIC a meeting every 2 months to motivate and give inputs tothe agent is must.
RECRUITMENT OF AGENTS: An amount of Rs.1500 to be given to aDevelopment Officer Immediately on recruitment of an agent.
CREDIT OF CLIA S PERFORMANCE: - If the Dev officer is givencredit over the premium brought in by the agents of CLIA, there will be atremendous change in the activity of CLIA in recruitment and their performance.A Positive attitude and outlook by the Management is highly appreciated in theinterest of the organization.
There should be a condition thatthe premium of a CLIA should show growth over the last year or at leastmaintain the last year premium, so that he can concentrate on his business alsoand do not neglect his business. This will be helpful for the organization.
The spouse of a CLIA agent shouldbe given agency under a Development Officer only and not under CLIA.
BENCHMARK IN TERMS OF ELIGIBLE PREMIUM UNDER SPECIFIED PLANS :- This should be removed.
ADVANCE ON I.B: The Development Officer should be givenadvance on I.B on reaching eligibility. If a Development Officer is eligible,Every month advance should be given, as it motivates the Development officer.
MAXIMUM DEBIT UNDER ALL HEADS SHOULD BE 10% OF I.B OR RS.50000 only.
MYDEAR COMRADES, PLZ GO THROUGH ABOVE SUGGETIONS ON OUR NEW INCENTIVE BONUS SCHEME, I REQUEST U TO SUGGEST ANY OTHER POINTS ALSO. THANKING U
URSCHANDRASEKHAR