Study of salary administration for delta l ife insurance company ltd

A
PROJECT REPORT
ON
STUDY OF SALARY ADMINISTRATION
FOR
DELTA LIFE INSURANCE COMPANY LTD.
DHAKA, BANGLADESH
IN PARTIAL FULFILLMENT OF
MASTER IN BUSINESS ADMINISTRATION
UNIVERSITY OF PUNE
BY
SWARNA SUSMITA SIKDER
M.B.A.
(2005 2007)
GUIDED BY
Prof. RAJESH VHATKAR
VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE

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CERTIFICATE
TO WHOM SO EVER IT MAY CONCERN
This is to certify that SWARNA SUSMITA SIKDER is a bonafide student of
VISHWAKARMA INSTITUTE OF MANAGEMENT. She has successfully
carried out his summer project titled STUDY OF SALARY ADMINISTRATION
at DELTA LIFE INSURANCE COMPANY, DHAKA in the partial fulfillment of
Master of Business Administration course of University of Pune (2005 - 2007).
She has worked under our guidance and direction. Her work is found to be good and
complete in all respect. During the period we found her hardworking, sincere and
loyal. We wish her all the best for future.
DR. SHARAD L. JOSHI PROF. RAJESH
VHATKAR
(DIRECTOR) (PROJECT GUIDE)

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ACKNOWLEDGEMENT
I would like to express my sincere gratitude to Mr. Deba Prasad Das, MD and my
project guide Mr. M.Z.I Talukdar, SVP Delta Life Insurance Company Pvt Ltd,
Dhaka and all colleagues at HRD for the opportunity, support & consideration. It was
a great learning experience being with them for two months. They never considered
me as a summer trainee and involved me in professional activity of the organization
which helped me to learn practical work. Being a part of their work was an extremely
pleasurable, valuable and learning experience.
I specially thank my project guide Mr. Rajesh Vhatkar, Faculty Vishwakarma
Institute of Management, Pune for his valuable guidance, co-operation &
encouragement through the project. I would also like to thank Mr. Mizanur
Rahman, SEO who has always been supporting, providing the information, guiding
me about the project from time to time.
My sincere thanks to other faculty members and Dr. Sharad Joshi, Director, VIM
for lending their support and guidance.
Finally, I am thankful to my family members for giving me the support, strength and
time for accomplishing the task completely.

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Contents
Sr. No. Topic Page No.
1 Executive Summary . 1
2 Objective ... 2
3 Theoretical Background 3
4 Company Profile .. 10
5 Vision, Goal & Values . 22
6 Services . 24
7 Research Methodology .. 33
8 Analysis ............................................ 35
9 Findings & Conclusion 52
10
Limitation ..
53
11 Recommendation . 54
12 Bibliography 55
13 Annexure .. 56

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EXECUTIVE SUMMARY
The project was carried out at Delta Life Insurance Company (DLIC), Dhaka,
Bangladesh. The title of the project is study of Salary Administration. The duration of
the project was of two months from 5th
June 2006 to 5th
August 2006. The objective of
this study is to analyse Salary Administration in DLIC.
The study was conducted to know the structure & scale of salary provided by the
company to its employees. In this project, I studied about the present salary
composition of DLIC along with the evaluation of incentives, bonus, and allowances
given to the employees.
I also studied the execution of Provident Fund, Gratuity and Encashment of Leave for
the final payment of the employee when he/she leaves the company. During the
course of the project, I got a clear idea about Life Insurance sector and about the
overall functioning of the organization.

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OBJECTIVES
Primary Objective
1.To study the salary administration in Delta Life Insurance Company
(DLIC).
2.To analyse the pay scale and fixation of basic salary in DLIC.
Secondary Objective
1.To study the performance appraisal procedure & its implications on
promotion, increment & other benefits in DLIC.
2.To understand the calculation of incentives, bonus, allowances, provident
fund, gratuity, income tax in DLIC.
*********************

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HISTORY OF INSURANCE
Insurance began as a way of reducing the risk of traders, as early as 5000 BC
in China and 4500 BC in Babylon. Life insurance dates only to ancient Rome; "burial
clubs" covered the cost of members' funeral expenses and helped survivors
monetarily. Modern life insurance started in late 17th century England, originally as
insurance for traders: merchants, ship owners and underwriters met to discuss deals at
Lloyd's Coffee House, predecessor to the famous Lloyd's of London.
The first insurance company in the United States was formed in Charleston,
South Carolina in 1732. This company was started for the benefit of Presbyterian
ministers' families, but it provided only fire insurance. Fire insurance is a pro-vision
made by the insured for reimbursement in the event of a loss occurring by fire. On the
part of the in-surer it is a promise to reimburse the insured for the loss that may occur.
In making this promise, the insurer will take into consideration everything that may
possibly increase the chance of a fire and everything that may decrease the chance of
a fire, and, basing his calculation on these two sets of factors, will undertake the
contract of indemnity and determine his charges and the form of contract. The sale of
life insurance in the U.S. began the late 1760s. Some people think of insurance as
gambling. It really isn't gambling even though it has the similarities of probability and
odds. Insurance serves a public good of sharing the financial risks of existence and
life and death among many to serve those who have experienced a loss.
What is Insurance?
Insurance is
- A contract in which one party agrees to pay for another party's financial loss
resulting from a specified event.
- A promise of reimbursement in the case of loss paid to people or companies so
concerned about hazards that they have made prepayments to an insurance company.
- A plan in which individuals and organization who are concerned about potential
risks will pay premiums to an insurance company, who in return, will reimburse them
if there is loss. To generate a profit, the insurer will invest the premiums it receives.

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Examples of the different types of insurance available are automobile, home, health
and worker's compensation. Whereas in most cases the insured is paid for their loss,
with life insurance a beneficiary is paid when the insured person passes away.
- A contract that provides compensation for specific losses in exchange for a periodic
payment.
- An individual contract is known as an insurance policy, and the periodic payment is
known as an insurance premium.
What is Life Insurance?
A Life insurance policy is a contract between one (the policyowner-insured)
and an insurance company (the insurer). Under the terms of a life insurance contract,
the insurer promises to pay a certain amount of money (death benefit) to someone the
policyowner chooses (a beneficiary) when he dies, in exchange for his premium
payments.
Life insurance, sometimes referred to as life assurance, provides for a payment
of a sum of money upon the death of the insured. In addition, life insurance can be
used as a means of investment or saving. An agreement that guarantees the payment
of a stated amount of monetary benefits upon the death of the insured. Life Insurance
is insurance that provides a financial remuneration on the premature death of the
policyholder. By paying an agreed premium over a fixed term, the policyholder is
entitled to receive a financial payout in the event that they die prior to the end date of
the fixed term. It s a product which provides protection against the economic loss
caused by a person's death.
Why do we need life insurance?
The need for life insurance is simple; we should consider life insurance if
anyone depends on our income. Essentially, we transfer the risk (loss of our income)
to the insurer by paying a fee, or premium, to the insurer. The insurer, with a large
capital base and expertise in risk selection and management, is better able to accept
this risk than any single individual would be.
This risk transfer may be helpful in both personal and business situations.

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Personal needs:
Dependent's Support: The major reason people buy life insurance is to replace
income that would be lost because of the death of an income earner. If a person
supports or helps support a family, the loss of income that would result from his death
could mean that his surviving dependents may face financial difficulties. Household
expenses continue, utility bills and school fees must be paid, and food and clothing
must be purchased. Life insurance provides him with a sense of security in the
knowledge that the life insurance money will be available to help support family
members in case of his death.
Education Costs: One of the primary objectives may be to send his children to
a university or college. Due to an untimely death, the tuition may become beyond his
family's reach. Life insurance may be used to provide for the tuition expense.
Burial expenses and estate planning: Life insurance may be used to pay
funeral or burial expenses. In addition, it may be used to pay inheritance taxes.
Investment Income: Life insurance policies that accumulate savings can also
be used as vehicles for personal savings and investment. Over a period of time, the
accumulated savings in a permanent life insurance policy can grow to a substantial
sum and, while growing, will still provide the insured with life insurance coverage.
Charity: One can purchase life insurance in order to donate the proceeds to a
charitable organization, such as a church or an educational institution.
Business needs:
A business continuation insurance plan: When the owner or a key person (any
person whose death would cause the business a significant financial loss) dies, a
business continuation life insurance plan may be used to provide the necessary fund
for the business s continued operation.

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Buy-Sell Agreement: If one business partner dies and the other partner does
not have enough money to buy his partner's financial interest in the company, life
insurance may be arranged to cover this cost.
Life insurance as Employee Benefits: Businesses often use life insurance to
provide benefits for their employees. Employers pay for all or part of these employee
benefits as part of the total package under which they compensate their employees.

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Introduction to Salary Administration
What is Salary?
The Roman word salarium linked employment, salt and soldiers, accepting
salt from a person was synonymous with drawing sustenance, taking pay, or being in
that person's service. Soldiers were known to have been paid, and maintain instead
that the salarium was an allowance for the purchase of salt At that time salt
production was strictly controlled by the monarchy or ruling elite. Today, the idea of a
salary continues to evolve as part of a system of all the combined rewards that
employers offer to employees. Salary (also now known as fixed pay) is coming to be
seen as part of a "total rewards" system which includes variable pay (such as bonuses,
incentive pay, and commissions), benefits and perquisites (or perks), and various
other tools which help employers link rewards to an employee's measured
performance.
A salary is a form of periodic payment from an employer to an employee, which is
specified in an employment contract.
From the point of view of running a business, salary can also be viewed as the cost of
acquiring human resources for running operations, and is then termed personnel
expense or salary expense. In accounting, salaries are recorded in payroll accounts.
Salary is compensation to an employee for services rendered on a weekly, monthly or
annual basis. Salary is usually associated with office employees, supervisors,
managers and professional and technical staff. In any organization, salaries and wages
constitute a significant portion of the cost of operation of the business.
Difference between Salary, Wage and Compensation ?
Salary refers to the monetary payment on a monthly or annual basis.
Wages are the remuneration paid by the employer for the service of a worker who is
engaged by the hour, days, week or fortnight. Wages are payments to hourly-rated
production and maintenance employee.

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Compensation refers to all forms of financial returns, tangible services and benefits
employees receive as a part of an employment relationship. Compensation may be
received directly in the form of cash (wage, bonus, incentives) or indirectly through
services and benefits (pensions, health insurance, vacations).
What is Salary Administration?
Salary administration refers to the establishment and implementation of sound
policies and practices of employee s compensation. Salaries represent a significant
portion of the total costs in most of the organizations and so it requires sound
administration. The control of salary level is of paramount importance even though
the amount of control which can be exerted may vary among organizations and within
an organization. Pay can influence employee s work behavior and attitudes. It
becomes crucial for managers to ensure that pay systems are designed and
administered in fair and equitable manner. The salary administration is thus concerned
with the monetary or financial aspects of needs, motivation rewards. The
responsibility for salary administration usually lies with the top management.
Objectives of Salary Administration
1. Control of cost
2. Establishment of fair and equitable structure of remuneration
3. Utilization of wages and salaries as an incentive to greater employee
productivity
4. Maintenance of a satisfactory public image
5. Determination of the system of job description and job evaluation
6. Decision of what and how people will be paid
7. Checking all activities of the salary administration group
8. To recommend changes in the salary policy and specific raises for executives
at various levels
9. To review salary scheme
10. To attract and encourage staff to make full use of their abilities and develop
their potential.

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Salary Policy
Formulation of a sound salary policy is an important function of personnel
department of any company. A sound salary policy is essential to procure, maintain
and develop employees and to get effective results from them. In the word of
Northcott, Wages operate both on the circumference and at the centre of industrial
relations .
An effective salary policy helps
- in achieving and maintaining good industrial relations
- to attract staff of the right caliber and encourage to make full use of their
abilities and develop their potential
- to convince its employees that its policy on salary is fair and realistic
- to reward staff according to their contribution
- in recruiting new employees in times of labor shortage
- to cover specific personnel matters such as promotion, transfer, up gradation
etc.
- to prevent moral dissatisfaction among employees with its levels of pay.

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COMPANY PROFILE
Delta Life Insurance Company Ltd. establish mainly though the initiative of a
group of Bangladeshi professionals working abroad along with a few enterprising
local entrepreneurs, started its operation in 1986, after the Government of Bangladesh
accorded permission in 1984 to carry on the business of insurance in the private
sector. It soon made a mark in the life insurance arena by not only being the leader
among the private sector indigenous companies, but by undertaking and successfully
implementing innovative and welfare oriented life insurance schemes. DLIC now is a
leading life insurance company of the country. This is happened only for its right
operation systems and smooth developing policies. It introduced an array of
conventional Life and Group Insurance Products many of which were the first in
Bangladesh. For the first time, Health Insurance Products were also introduced by
Delta Life.
But more importantly, in fulfillment of the commitment towards social
development, Delta Life for the first time not only in Bangladesh but also in the world
introduced Micro-Life Insurance-cum-savings Products specially suited to the needs
and pockets of poor people of the country who constitute more than 80% of the
people of Bangladesh. It is appreciated by United Nations Organizations (UNO) for
introducing Micro-Insurance in the world. In Micro-Insurance policy the least
premium is Tk.9 per week that provides the much needed life insurance coverage
along with the facility of regular savings on a long-term basis.
Delta Life can take pride in molding the saving habits of the lower and middle
class people and transforming them into prospective policyholders. The potential is
now so strongly perceived that all life insurance companies old and new alike
operating in the country have started their own micro-insurance products.

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DLIC was incorporated in November 10, 1986 and is mainly engaged in
Ordinary Life (OL), Group Insurance (GI), Health Insurance (HI) business and non-
traditional micro-insurance business under the name of Gono-Grameen Bima (GN-
GRB). The company is a publicly traded company and its shares are listed on the
Dhaka Stock Exchange and Chittagong Stock Exchange.
Business Review:
The Company's total revenue has increased by 16.21% to Taka 181.17 crores in 2002.
Gross premium increased by 13.25% to Taka 150.85 crores in 2002 from Tk. 133.20
crores in 2001, although the Company's Gono-Grameen Division could not do well in
respect of its first year premium. Investment and other income increased by Taka 7.91
crores, that is 32.78% over the previous year.
The number of lives covered including those under group life stood at over 10 lac.
The number of valued policies stood at over 194,000 in the Ordinary Life Division
under which gross premium rose from Taka 72.53 crores in 2001 to Taka 89.31 crores
in 2002, an increase of 23.14% over the previous year. In the Gono-Grameen
Division, the number of policyholders stood at above 757,000 and gross premium
increased marginally to Taka 54.03 from Taka 53.07 crores.
The ratio of management expenses to total premium income decreased by 2.16% as
compared to that in the year 2001. In absolute terms, management expenses during
the year have increased by 7.28% from Taka 54.43 crores to Taka 58.50 crores.
Salaries have however increased by less than 1% in 2002.
Life Fund: The Life Fund of Delta Life is Taka 850 crores and the profit earned in
2005-2006 is Taka 258 crores. Actuarial valuation results show the company s Life
Fund being well in excess of the policy liabilities.
Authorised Capital: 5,00,000 Ordinary Shares of Taka 100 each 5 crores.
Paid-up Capital: 3,00,000 Ordinary Shares of Taka 100 each 3 crores.
Investment: Investments, excluding fixed deposits with banks and fixed assets,
amounted to Taka 171.88 crores (at the end of 2002) and provided income of Taka

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18.08 crores. Fixed deposit with banks amounted to Taka 119.60 crores and provided
income of Taka 11.12 crores.
Dividends: The Board of Directors had recommended a dividend of Taka 45.00
(Forty Five) per share of Taka 100 each for 3,00,000 issued shares of the company for
the year 2002. While recommending the dividends, the Board of Directors had taken
into consideration the result of the actuarial valuation of the company s liabilities for
policies issued till 31st
December 2002, the assets as at that date, and the fund
requirement for future development and expansion.
Social Commitment: Delta Life Insurance Company has maintained its commitment
to contribute to the improvement in the social status of women in the country. It has
continued with sponsorship of the Women s Inter-College Handball Championship
and a Nationwide Book Reading Program conducted by Bishwa Sahitya Kendra. The
company has also continued with Nurjahan Smriti Award in the year 2001.
Through its Gono-Grameen Division, the company has been recognized as an
innovator in promoting poverty alleviation. In recognition of this role, Women s
World Banking (WWB) based in New York honored Delta Life by making it a
founding member of an international NGO, namely Global Network for Banking
Innovation in Micro finance (GNBI). The Chairman and Managing Director of DLIC
attended the Annual Conference of GNBI at its headquarters in New York in May,
2002.
Number of Directors: There are 36 Board of Directors.
Board of Committees: There are 4 committees. Finance, Account, Investment &
Audit Committee, Building & Claims Committee, Training & Human Resources
Development, Executive Committee.
Number of Staffs: There are 2500 employees working in DLIC.

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Offices: DLIC does business through its 243 Agency Offices, 12 Service Cells and 6
Service Centres over the country.
Agency Offices:
They give license and code number for the marketing people to work at field level.
Agency office is concerned for the commission based employees those are mostly
bringing the profit to the company.
Servicing Cell:
Servicing Cells take premium from the policyholders and issue Primary Receipt (PR).
There should be 4 copies of PR
For the party (policyholder)
For that Servicing Cell
For the Head Office
For the Service Centre a computerized receipt should be sent called
Paka Receipt .
12 Servicing Cells are at Sylhet, Lakshmipur, Munshigonj, Manikgonj, Noakhali,
Jessore, Barisal, Tangail, Thakurgaon, Faridpur, Natore, Chandpur.
Servicing Centres:
Servicing Centres inform the policyholders about the date of deposit the
premium through letters, changing the name of nominees, address, changing the term
or option of the policy etc.
6 Service Centres are at Dhaka, Chittagong, Bogra, Feni, Comilla and Khulna.
Zone Operation Centre (ZOC):
According to the brilliant idea of the honorable professor Safayat Ahmed
Chowdhury (former Chairman and MD), DLIC started the Micro-Insurance Policy
Scheme through out Bangladesh, which is an important milestone in the life insurance

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sector of Bangladesh. As a result, the Gono-Grameen Bima of DLIC started its
journey in October 1993. At present it is performing its operation through out the
country with the help of 18 Zone Operation Centres (ZOC) and about 800 Unit
Offices under the control of them.
The ZOCs over the country are formed in the same pattern and they work
similarly. Generally a ZOC is divided into 2 Sections
(1) Development Section:-
This section is engaged in the marketing activities of GN-GRB with
the help of the unit manager and his subordinate. It is controlled by Senior
Development Manager (SDM).
(2) Operation and Accounts Section:-
It is responsible for all payment and transaction of that ZOC. It is
controlled by Operation Manager.

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DEPARTMENTS OF DELTA LIFE
Functions of each department at a glance:
Head Office :
All types of administrative work are done here. The departments under the
Head Office of Delta Life are below:
Human Resources Department (HRD): The Human Resource Department is basically
responsible for caring out overall personnel management related activities of the
company within the scope of personnel policies, administrative procedures and
coordination with the management.
Public Relations Department (PRD): It is involved to circulate the different financial
statements, activities. They also publish half yearly magazine known as Delta Barta
, produce yearly calendar, diary, and greeting cards. They advertise company s
employment notice subject to the requirements of the HRD.

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MD s Secretariat: This department arranges appointment of the delegates and the
higher officials with Managing Director of the company.
Control and Compliance (C & C): They verify the bills of TA/DA and check the
salary of the employee.
Internal Audit: They visit different offices in order to verify the statements made by
the department. If any irregularity is found then they request the concern department
for necessary actions to correct the error.
Establishment: They look after all visible assets (excluding depositing money) of the
company, purchase all stationary and hardware, computer accessories, maintenance of
the existing assets.
Accounts: They prepare financial statements, annual reports, budget, book keeping of
the company. They are accountable for the over all financial functions of the
company.
Share and Board: Board Affairs is mainly related with the meetings of the Board of
Directors. There are 36 Directors presently with the company.
Share Department is mainly involving transaction of shares of the company.
Investment: This department invests the collected premium as per Insurance Act,
1938. The investment can be in bank, bond, securities, share market etc.
Capital Market Operation (CMO): They transact the shares in the stock exchange,
collect financial information, record keeping of the share and debenture.
Information Technology (IT): They develop software for the use of the company only.
They create and update the websites of the company according to the changes of the
company. They provide the updated information in insurance market to the Directors.
Legal: This department handles all the legal aspects of the company.

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Actuarial: Actuarial department involves in calculation of premium rates, surrender
values, maturity values, reserves and to make decision on policy status, checking and
verification of re-insurance and group insurance accounts.
Re-Insurance: Delta Life Insurance Company mainly makes the re-insurance with
Munich Re-Insurance Company (Germany) and Swiss Re-Insurance Company.
This department arranges to deposit the portion of re-insurance to the aforesaid re-
insurance companies and collect the portion of the sum assured from those
companies.
Training Department: They arrange on-the-job training and also arrange long-term
training program for the newly recruited executives and the marketing people. There
is a separate building newly constructed at Dhaka only for training and development
purpose named as Training Institute which will conduct only the short-term and
long-term training programs and courses on insurance.
Several times number of efficient executives of Delta Life came to National Insurance
Academy of Pune for training and they were sharing and getting knowledge by those
training and after going back to Bangladesh they were conducting a short-term
training program for all other employees to train them what they have learnt in Pune.
Ordinary Life:
This is the main source of the income of the company. The amount of sum
assured (the risk of the company) is huge. The limit can go till crore. The departments
under Ordinary Life are below:
Servicing Department: This department
Issues money receipt
Informs the policyholder about the date of
deposit the premium by sending letters.

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Changes the name of the nominee, address,
terms and options of the policy.
There are three options provided by the company that is done by Alteration Section of
Servicing Department.
Option A At least the policy should run for 2 years to get the paid-up value.
Option B The policy will continue with the given premium till how long it can go.
Option C If the policyholder stops paying premium, he will get only the paid-up
value with bonus.
Development Department: This department looks after the administrative side of the
marketing employees.
There are 2 sections of this department:
(1) Agency Section: Employees are office staff. They give license and code
number to the commission based employees. The lower the post, the longer
the code. The longest code is of 6 digits.
The hierarchy of the people those administrate the marketing of Development
Department
ED
JEVP
VP
JAVP
(2) Commission Section: The hierarchy is below
MA (Marketing Associates)
MO (Marketing Officer)

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AM (Assistant Manager)
AC (Assistant Controller)
DC (Deputy Controller)
The employees get their commission based on the term, plan / sum assured of the
policy. They are paid from the Service Cell after calculating the First year premium
and their commission.
Accounts Department: It plays a vital role for the efficient use of the finance of the
company. It is responsible for all payments and transactions of the company. DLIC
has efficient and qualified team for maintaining its accounts.
The Accounts Department (OL) is basically divided into 7 working wings with
specific functions, duties and responsibilities. The personnel attached to each section
are responsible for work as specified below and they are reporting to their Line
Manager or Supervisor. The wings are
1. Collection, Deposit and Payment Wing
2. Final Account, Budget and MIS Wing
3. Claim, Policy Surrender and Loan Wing
4. Daily Collection Sheet (DCS) Processing Wing
5. Daily Expense Sheet (DES) Processing Wing
6. Bank Memo (BM) Process Wing
7. Computer Wing
Claims Department: Claims Department is divided into another 2 departments
(1) Survival, Maturity and Surrender: This department calculates the final claim at the
end of the period subject to the survival of the policyholder.

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When the policyholder is unable to continue the policy in different circumstances, he
can surrender the policy for getting back the money. Based on the rules of the policy
the party will get a certain rate.
(2) Death Claim: If the policyholder dies before completion of the term, then his/her
nominee can claim for the death benefit. In that case, if the demand is found true
through investigation, sum assured is paid to the nominee of the insured. On the other
hand, if the information given by the insured on proposal form while doing the policy
is found false, the nominee will get only the deposited money.
Underwriting Department: This department is the heart of any insurance company. All
procedure or acceptance of the policy is done here. This is the gateway for people to
meet life insurance.
To make insurance, at first a proposal has been represented before Underwriting
Section. Then the department gives the clearance of adopting any insurance policy.
The department makes sure some criteria before accepting any policy like
Health Checkup
Age
Disease
Risky Jobholder for e.g. jobholder in Air Force
Health Hazard
Educational Qualification i.e. educated persons are health
conscious so life risk is less.
Family History i.e. how many family members died in early
age? Does the policyholder have any hereditary disease?
Social Status
Gono-Grameen Bima Division:
This is the division of Micro-Insurance. They work in villages, rural
areas, thana, district, city, slum area for poor people and small business people.

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The activities of this division are more profit oriented, more suitable premium and
rate of recovery is more. The amount of sum assured is small. The limit is 5000-
100000 Tk.
Management Hierarchy of HR Department of DLIC

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VISION
Delta Life is working to be the premier life insurance company in Bangladesh.
The company will serve their customers with respect and will provide the best
solution for their needs.
It will be a company with qualified professionals who will work together as a
team and serve with dignity and the highest level of integrity.
It believes in excellence and will continuously improve its customer service
and will obtain the loyalty of its customers with service beyond their
expectations.
Adding Value will be the operative words of the organization.
GOAL
Provide financial security to the customers with insurance policies that are
most suitable for them.
Make life insurance as easy-saving instrument and a profitable one with
attractive bonus and improved customer service.
Collect small savings from the people of the country and invest the
accumulated savings in profitable nation building enterprises.

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Values - TRUEST
Team work
Respect for all people
Unquestionable integrity
Excellence in everything they do
Speed in servicing
Truthfulness

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SERVICES
Types of Insurance Schemes provided by DLIC: Some popular plans of insurance
provided by DLIC are specified below
1. Endowment plan with and without profit:
This plan is most common and widely popular plan. This plan provides for a
fixed sum at the end of a particular term or at earlier death of the assured. The
plan is available under both options i.e. with profit and without profit. This is a
straightforward coverage allowing a person to plan his future needs for
security and projected savings through means of insurance. Endowment
insurance can be useful for people who know that they will have to incur a
specific expense in the future like a wedding or college tuition. They know
that regardless of what the future may hold, the expense will have to be paid.
Endowment insurance allows them to be certain that the money will be there.
2. One-two-three endowment plan with profit:
This plan provides for high security at earlier death of the assured before
expiry of term. The plan provides for double the sum assured at premature
death due to illness or death occurs directly as the result of an accident along
with accrued bonuses till death or maturity as the case may be.
3. Three payments plan:
Given for term like 12, 15, 18, 21 years with or without profits. This plan
provides for one fourth of the sum assured upon expiry of each one third of the
term and on death at anytime within the term the full sum assured payment
of one or all the instalments notwithstanding. In case of survival to the end of
the term, remaining portion of the sum assured along with profits is paid after
deducting the instalments already paid.

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4. Bi-annual payment plan:
Given for 10, 15 & 20 years term and provides for payment of a portion of
sum assured bi-annually after expiry of the 4th
year of the policy, if the
policyholder is then living.
The amount of instalment and when payable is shown in the table below:
Term Amount of
instalment
When payable Amount of Sum
Assured payable on
maturity
10 years 20% Upon expiry of 4th
, 6th
,
8th
years
40%
, 6th
,
8th
, 10th
& 12th
years
25%
, 6th
,
8th
, 10th
, 12th
, 14th
, 16th
& 18th
years
20%
5. Premium back term Insurance plans without profit:
These are comparatively low cost plans. These plans provide for payment of
sum assured in case of premature death within the term or refund of all
premiums paid at the end of term, sum assured keeps on increasing at 8% per
annum on each successive policy anniversary and such increased sum is paid
at death during the term. On survival up to the end of term, all premium paid
during the term is paid. A guaranteed profit to 10% of sum assured is paid
along with full premium at the end of term as survival benefit. On death before
maturity, the sum assured is payable.
6. Pension Plan without profit:

35
Under this plan pensions are provided at quarterly intervals from an age
designated by the policyholder for life, guaranteed for a minimum period of 10
years i.e. if the pensioner dies anytime within 10 years, his designated
nominee will get pension for remaining term of 10 years. Before pension
starts, if the assured policyholder dies, 10 times the annual pension is paid as a
lump-sump to his nominee and the policy is terminated upon such payment.
There is another plan that while providing for full protection against premature
death as described above, provides for pension from a designated age as
elected by the policyholder at an increasing rate i.e. pension will increase at
10% at intervals of 2 years. Payment of pension id guaranteed for at least 10
years and thereafter as long as the pensioner lives.
Both these pension plans provide for waiver of premium in case of permanent
and total disability due to accident before commencement of pension.
7. Child Education Protection Plan with profit:
Multiple benefits in the form of scholarship, monthly annuity etc. in addition
to sum assured is available under this plan. Sum assured or a part thereof is
also payable to the policyholder in case the child dies prematurely.
8. Tri-dimensional Policy:
Built-in benefits for payment of 50% sum assured immediately if critical
illness is diagnosed. Premium and the sum assured will thereafter be halved
and policy continues. Under this plan, a spouse may also be covered for major
disease benefits.

36
9. Moving Term Plan:
Policies under the plan are initially issued and are to be taken for a minimum
term (6 to 10 years) as elected by policyholder. If death occurs within this
minimum term, full sum assured is payable.
At the expiry of the minimum term, the policy may be surrendered for full
refund of premiums paid. However, the policyholder need not terminate his
policy at the end of the minimum specified period. The policy will
automatically continue till age 65 years of the policyholder unless he
terminates it earlier. The survival benefit comprises of refund of all premiums
paid along with bonuses. In case of premature death the nominee(s) is paid the
sum assured plus all premiums paid till death, or all premiums paid with profit
accrued till death whichever is greater.
10. Single Premium Multiple Security Plan:
It is a single premium policy offering multiple security for 5 years term. It
covers natural death, permanent and partial/total disability and 7 major
diseases like heart attack, stroke, coronary artery surgery, cancer, kidney
failure, multiple sclerosis, paralysis and major organ transplant.
11. Micro Insurance:
In GN-GRB the formalities are minimum. A person interested in a policy
submits a simple 2 pages proposal form; it is signed or thumb-imprinted by
him/her. There is no need for medical check-up. The person needs to be of age
between 18 and 45 years, have a monthly income of Tk.5000/=(US $ 100.00),
be of good health and supply a Declaration of Good Health (DGH) at the time
of submitting the proposal form.
Profit policies are offered for 10 and 15 years term both with premium
payment mode being weekly or monthly. Premium rate is same irrespective of
age at entry.

37
12. Group Life Insurance:
Delta Life offers both term and endowment schemes on group basis with a lot
of variations. Some schemes of group life insurance are briefly described
below:
a) Group Term Insurance:
Cheapest form of group insurance cover. It is taken for 3-year term and
renewed for each successive 3-year term. At the end of term, profit
commission as may be agreed upon by reference to size of group &
premium rate, is payable if there arises a profit under the contract.
b) Group Term Insurance with refund of full or partial premium with or
without profit:
Taken for a term of 10 years or more or that linked with superannuation
age of employees. The scheme provides for full sum assured for death-in-
service or refund of full/partial (say 50%) premium paid as the case may
be upon expiry of the term or attainment of superannuation age by am
employee. These plans are also available with guaranteed profits payable
on maturity on premium paid.
c) Group Endowment Scheme with or with profit:
Under this scheme which is given for a fixed term, say 10 years or linked
with the superannuation age of employees (term of cover shall then vary
according to the age of employees), full sum assured is paid in case of
death during the term or on maturity either full or a portion of sum
assured, say 50% is paid. Besides, under with-profit option, profit vested
till maturity or earlier death based on sum payable on expiry of term is
paid.
d) Group Pension Scheme:
Provides for pension based on final pay at a certain percentage for each
year of service.

38
There are number of attractive supplementary covers may be added to any of the basic
schemes described above paying a little extra premium.
a) Accidental Double Indemnity benefit (ADB) Provides for
double the sum assured in case of death directly resulting from an
accident.
b) Permanent Total or Partial Disablement In case of permanent or partial
disablement as a result of accident or sickness depending upon its degree
and extent, this supplementary cover provides for additional sum at a
varying scale in relation to sum assured. Waiver of premium in case of
total disablement as well as benefits for extended term insurance in
available.
c) Hospitalization Insurance The benefits of reimbursement of expenses
incurred as an inpatient in a recognized clinic/hospital at predetermined
scale may also be attached as a supplementary cover.
d) Major Disease Benefit (MDB) Under this supplementary insurance, if an
employee is diagnosed to have one of the diseases mentioned below, a part
of the sum assured (25% or 50%) will be paid immediately.
The diseases are: i) Myocardial infraction (Heart attack) ii) Stroke iii)
Coronary artery surgery iv) Cancer v) Kidney failure vi) Multiple
sclerosis vii) Paralysis and viii) major organ transplant.
When an MDB claim is paid, the sum assured in the original group
policy for that particular employee will be reduced by the amount so
paid out.
13. Health Insurance:
The objective of Health Insurance is to make the modern treatment facilities
affordable to individuals from all socio-economic classes. DLIC is the pioneer
of Health Insurance in Bangladesh. Delta Care Hospitalization Plan , the
brand name of the Hospitalization plan of DLIC. Delta Care Hospital is

39
designed to cover the expenses incurred for in-hospital treatment of its insured
members which includes
Accommodation Consultation Medicine Investigations Surgical
operation Ancillary services like post operative care Blood
transfusion Oxygen therapy Local ambulance service Dressing etc.
Health Insurance Products are:-
a) Individual Health Insurance policy:
This policy is designed for health conscious citizen who likes to ensure
proper and timely treatment for himself and his family members when
needed advanced treatment facilities. An individual aged between 18 to 60
years may take out a policy. Dependent children above 01 (one) year and
spouse or parents (upto 60 years) may also be included in the policy.
Several benefit levels are setup under the policy with reasonable premium
to suit individual need.
b) Group Health Insurance Policy:
This policy is designed with several benefit limits to suit the requirements
and financial setup of any group who likes to ensure proper and timely
treatment of any ailment of its members to keep them active and in good
health.
This scheme is suitable for a company, institution or organization. At least
95% of the total eligible employees/members should join the scheme. Any
employee or a member aged between 18 and 65 years may be included
under the plan and the total number of insured should not be less than 25
in a group. Besides, spouse and dependent children from 3 months upto 25
years living with the employee/member may also be included in the
scheme.

40
For e.g. Bangladesh Cricket Control Board has a group health insurance
policy in this company.
c) Overseas Mediclaim Insurance Policy:
Overseas Mediclaim Insurance policy is a type of health insurance offered
to Bnagladeshi Nationals and Resident Foreigners under which treatment
expenses incurred abroad in the event of sudden and unexpected illness or
accident are covered while on business or official trip and holiday tour.
There are two plans under this policy:
Plan-A : For visiting countries excluding USA and Canada.
Plan-B : For visiting countries including USA and Canada.
Maximum Benefit Limit:
The policy is intended only for use by the insured person in the event of a
sudden and unexpected sickness or accident when the insured is staying
abroad. Any Citizen of Bangladesh or Resident Foreigner within the age limit
of 6 months to 65 years may take out an Overseas Mediclaim Insurance Policy
(OMP). Expenses for physician service, hospital, physician and medical
services and local emergency medical transportation are covered in the policy.
14. Daughter Marriage Insurance:
The policyholder of this plan will be the father. For appropriate reason mother
also can take the policy for her daughter. The age limit of the policyholder (i.e.
father/mother) should be between 21 to 55 years. The terms available for the
policy are from 5 years to 16 years.
Plan-A Plan-B
US $ 50,000 US $ 100,000

41
If the father/mother dies before maturity, then no more premium to be given
and after the end of the term, the daughter will get the full sum assured (at that
time the age of the daughter should be minimum 18 years).
If the daughter dies before, then father can stop depositing the premium and
will get back the paid-up amount.
The range of the premium is from Taka 5,000 to Taka 1,00,000.

43
RESEARCH METHODOLOGY
Introduction
Research is an art of scientific investigation through search of new facts in any branch
of knowledge. It is movement from unknown to known. The study of research
methodology gives the student the necessary training in gathering materials required,
and also training in technique for the collection of data appropriate to particular
problem. It helps in the use of statistics, questionnaire and controlled experimentation
and in recording evidences, sorting it out and interpreting it. Knowledge of research
methodology is helpful in various fields. Research methodology plays key role in
project work. It consists of series of actions or steps necessary to effectively carry out
research and the desired sequencing of these step.
Basic features of a research process are :
Research always start with a question or a problem.
It s purpose is to find answers to questions through the
application of scientific methode.
It is a systematic and intensive study directed towards a more
complete knowledge of the subject studied.
Methods Of Data Collection
Data collection is an elaborate process in which the researcher makes a
planned search for all relevant data and is the foundation of all researches. It is the
raw material with which a researcher functions. The task of data collection begins
after a research problem has been defined and research plan is chalked out. While
deciding about the method of data collection to be used for the study the researcher
should keep in mind two types of data viz., primary data and secondary data.
Sources Of Data

44
A. Secondary data
Secondary data is the data already collected by others for purposes other
than solution of the problem at hand. In case of Secondary data the nature of
data collection work is merely that of compilation. Secondary data has
several supplementary uses.
1. Internal sources
Company Records.
Service Reports.
Annual Report.
Company Brochure.
Company Library.
2. External sources
Web pages of organizations and journals.
Reference Books.
Magazines.
Newspapers.
B. Primary data
The data that is being collected for the first time or to particularly fulfill the
objectives of the project is known as primary data. In my study work,
interpersonal interview was the method of Data Collection.
Data Evaluation
All the data and information collected from the secondary sources and company
officials was filtered & only relevant data is introduced in the report which helped in
achieving objective of the project. This relevant data is finally evaluated to make the
final report and to draw the conclusion.

46
Salary Structure in DLIC
Salary structure of the organization should facilitate the attraction,
retention and motivation of staff so that they stay with the organization and make full
use of their abilities. In DLIC salary is structured matching the importance of jobs in
the company. The employee structure is
Commission Based Employees are the marketing people those are selling the
product of DLIC. From Marketing Associates to Deputy Controller get their
commission based on the term, plan and sum assured of the policy. They are paid
after calculating the First year premium and their commission.
MA MO AM AC DC
The rate of commission is given later on.
Permanent Employees are scale-based employees. They get salary as per salary scale
provided by the company.
Temporary Employees are Record Keeper, Peon, Guard, and Driver. In addition to
the salary scale, they get some extra benefits with their monthly salary. The benefits
they get are given as Allowances which is discussed later on.

47
Salary Scale
DLIC has a large-scale salary range. Each and every employee is paid under the pay
scale of the company.
The salary of SVP and above is fixed by the decision of top management depending
on the bargaining capacity of two parties. The salary scale may be revised time to
time by the management.
This year a new pay scale is given to Delta Life employees. For confirmed/permanent
employees 15% increase in the basic salary and for temporary and probationary
employees 12.5% increase those who have joined the company before October, 2005.
New Pay Scale:
The management has approved the following criteria for the implementation of newly
approved pay scale effective from April, 01, 2006.
i) A new rank of Senior Administrative Officer (SAO) was created to
accommodate the Direct Recruits (previously known as Executive
Officer). Salary offered for the new recruits being not in parity under the
revised pay scale of Executive Officers. Future promotion will depend per
above distinction.
ii) Two new pay scales for Assistant, Record Keeper, and Peon of GN-GRB
Unit Officers were created.
iii) Drivers are to be entitled to receive an increase in their pay at 15% in
addition to their previous increase 15% in basic salary while work-charged
and temporary staff will receive 10% on their existing consolidated gross
salary (i.e. on gross + previous 12.5% ad-hoc where applicable).
The New Pay Scale of 2006:
The New Pay Scale is attached at the adjacent page.

48
Delta Life Insurance Company Ltd.
Pay Scale - 2006
Grade
Designation Payscale
Initial
Basic
House Rent
Allowance
House
Maintenance
Allowance
Corporate
Allowance
Senior Executive Vice President 24000-1200-42000-1400-63000 24,000 15,000 8,000 1,600
1
Existing 16800-800*25-36,800 16,800 11,700 8,000 1,25
Executive Vice President 21000-1000-36000-1200-54000 21,000 12,000 6,500 1,600
2
Existing 14700-700*25-32200 14,700 10,300 6,500 1,250
Joint Executive Vice President 17600-800-29600-900-43100 17,600 10,000 6,000 1,500
3
Existing 12600-600*25-27600 12,600 8,100 6,000 1,150
Senior Vice President 15000-750-26250-800-34250 15,000 8,000 4,500 1,200
4
Existing 11000-550*25-24750 11,000 6,500 4,500 1,000
Joint Senior Vice President 12350-650-22100-700-29100 12,350 7,000 3,000 1,000
5
Existing 8500-500*25-21000 8,500 5,000 3,000 900
Vice President 9600-600-18600-650-25100 9,600 6,000 3,000
6
Existing 7200-450*25-18450 7,200 4,050 3,000
Joint Vice President 8500-500-16000-550-21500 8,500 5,000 2,000
7
Existing 5950-425*25-16575 5,950 3,000 2,000
Assistant Vice President 7650-450-14400-500-19400 7,650 4,000 1,000
8
Existing 5200-400*25-15200 5,200 2,300 1,000
Joint Assistant Vice President 6800-400-12800-450-17300 6,800 3,200 500
9
Existing 4,875 1,975 500

49
Pay Scale - 2006
Grade Designation Payscale Initial Basic
House Rent
Allowance
House
Maintenance
Allowance
Corporate
Allowance
Senior Executive officer 6300-350-11550-440-17550 6,300 3,000
10
Existing 4550-325*25-12675 4,550 1,950
11 SeniorExecutive Officer 5950-350-11200-400-17200 5,950 3,000
Executive officer 5100-300-9600-350-14850 5,100 2,500
12
Existing 4000-250*25-10250 4,000 1,500
Junior Executive
Officer
3750-250-7500-300-12000 3,750 1,800
13
Existing 3375-225*25-9000 3,375 1,125
Officer Gr. - 1 3400-200-7400-250-11150 3,400 1,000
14
Existing 3000-200*25-8000 3,000 600
Officer Gr. -2 2700-150-5700-EB175-8325 2,700 900
15
Existing
2500-125*10-3750-
EB150*25-7500
2,500 450
Assistant / Record
Keeper
2625-125-5125-EB150-8125 2,625 750
16
Existing
2400-100*15-3900-
EB125*20-6400
2,400 400
Peon / Guard 2000-100-400-EB125-6500 2,000 500
17
Existing
1800-75*15-2925-EB100*25-
5425
1,800 250
Only for GN-GRB Unit Office Assistant & Peon

50
Assistant / Record
Keeper
1500-100*15-3000-125*10-
4250
1,500 700
18
Existing 1100-60*15-2000-80*10-2800 1,100 350
Peon / Guard 900-75*15-2025-100*10-3025 900 300
19
Existing 600-50*15-1350-60*15-2250 600 150
Rules for Fixation of Basic Salary under new pay scale:
The 15% ad-hoc increase on basic salary shall be added with basic salary as on
March 31, 2006 (because the new pay scale will be applied from April, 01, 2006). The
resultant figure is applied to find out the new basic pay at immediately next or equal
to relevant step/slab in the new pay scale. When the difference between the new basic
salary and old basic salary plus ad-hoc is less than one increment in the new pay
scale, an increment in the new pay scale shall be added to the basic pay calculated as
above.
To the new pay thus fixed shall be added one increment each for every 2 years
of service in the same grade, subject to a maximum of 2 increments.
Calculation:
For better understanding of the calculation of fixation of basic salary, here is
an example of a JAVP promoted to AVP.
To calculate his new basic salary (for AVP post), let us assume
The basic of JAVP = 10,500 Tk.
AVP s increment = 450 Tk. (as per pay scale)

51
Step1. Basic of JAVP Increment of AVP = 10,500 450 = 23.44
Step2. Fraction resultant × Increment (1) = 23.44 × 450 = 10,548.00
Step3. Round figure of the resultant × Increment (1) = 24 × 450 = 10,800.00
Step4. Make the difference of step2 & step3 = 10,800 10,548 = 252
Step5. If the difference is less than 1 (one) increment (i.e. 252 less than 450),
then make it 1 increment and add with the basic pay calculated above.
i.e. 10800 + 450 = 11,250 Tk
Therefore, 11,250 Tk is the Basic Salary of the new AVP.
Step6. Now if his service duration as JAVP is 2 years (before April, 01, 2006),
then to the Basic of AVP, he will be added one more increment (as per
the rules for fixation by the company)
i.e. 11,250 + 450 = 11,700 Tk.
Therefore, 11,700 Tk will be his Basic Salary for new AVP post.
Step7. If his service duration as JAVP is 4 years or more than 4 years,
then
he will 2 increments to his basic.
i.e. 11,250 + 450 + 450 = 12,150 Tk
Therefore, 12,150 Tk will be his Basic Salary for new AVP
post.

52
Personal Evaluation Procedure
The objective of an employee s work performance evaluation is to:
- evaluate the employee s performance in relation to her/his hob description
- enable the employee to assess his/her own work and suggest ideas for
improvement
- enable management to plan his/her career development and appropriate
deployment on the basis of this assessment.
Such assessment is normally done once in every year. This
assessment/performance appraisal is regularly carried out for setting work
standards, assessing the employee s actual performance relative to these standards
and providing feedback to the employees with an aim of motivating that person to
eliminate his performance deficiencies or to continue to perform above par.
The Assessment Form for employees:
The Assessment Form for employees evaluated by Management is given in
the Annexure.
How the evaluation is done?
In any department of DLIC, at first the performance appraisal of an
employee is assessed by his Line Manager (LM) according to the rating and
assessment criteria of the performance appraisal. Then again Head of the
Department (HOD) assesses and recommends the appraisal based on the score and
recommendation given by the LM. Then the appraisal form is sent to the Head of
HRD or to the Appraisal Committee. The Appraisal Committee may be
constructed by JSVP and above (upto MD). After final assessment of Appraisal
Committee based on the percentage obtained, the employee is subject to receive
increment(s) in the scale of his/her grade.

53
According to the company s rule and current practice an employee is
entitled to get his/her annual salary increment after finalization of the respective
employee s appraisal procedure.
Annual Increment
On every anniversary of confirmed appointment of an employee,
he/she subject to satisfactory performance during the preceding year will receive
an increment in the scale of his/her grade. If an employee shows outstanding merit
and exceptional ability and quality, he/she may receive additional increments
solely at the discretion of the management.
For salary increase of the employees the following matters are
considered in this year:
1. Existing confirmed staff members with no objection may be given 1 increment
in the scale of their respective grades for the preceding year (2005) effective
from January, 01, 2006.
2. Assistant, Peon, Guard and Cleaner on temporary basis with no objection may
be given yearly financial benefit effective from January, 01, 2006 at the rate of
Assistant Tk. 150
Peon/Guard Tk. 100
Cleaner Tk. 100
Field staff of GN-GRB unit offices where premium income is poor (say, less
thanTk. 50,000) will not receive annual normal salary increase as stated above.
3. Increment may be paid to officers, upto and including Senior Executive Vice
President except B scheme field executives.
4. Employees who have less than 6 months of service after their confirmation
will not receive this normal 1 increment.

54
5. Decision for approving annual 1 increment for the existing confirmed
employees bearing any objection in personal record may be withheld.
Scheme: There are two Schemes of employees. Scheme A and Scheme B.
Scheme A All commission based employees come under A Scheme. From
Marketing Associate (MA) to Deputy Controller (DC).
Scheme B From Deputy Controller who is promoted to JAVP of the company
are called B Scheme employees.
Incentive Plan
An incentive is any factor (financial or non-financial) that provides a motive
for a particular course of action. Financial incentives are said to exist where an
employee can expect some form of material reward especially money in
exchange for acting in a particular way.
Individual Incentive Plans A portion of total profit is given to the
shareholder or policyholder (last year 48% dividend) and another portion given to the
employee. The incentive given to the employee is yearly and may be equal to 1 basic
or 2 basic of the respective grade of that employee.
There is no such Group Incentive Plans in DLIC. Only marketing people get
award in annual conference (award like Dhaka-Kolkata-Dhaka air ticket).
Commission
The payment of commission as remuneration for a service rendered or
products sold is a common way to reward sales people or agent. Payments often will
be calculated on the basis of a percentage of the products sold.

55
Field workers and B Scheme employees get commission against any policy
depending upon the term and sum assured.
The Policy Agent will get 40% commission of the premium in 1st
year.
Suppose sum assured of the policy is 5000 Tk. Then the agent will get 40% of 5000.
i.e. 2000 Tk in first year.
The Marketing Associate (MA) will get 32% commission.
i.e. 32% of 2000.
The Agency Manager (AM) will get 16% commission.
i.e. 16% of 2000.
The Deputy Controller (DC) will get 8% commission.
i.e. 8% of 2000.
In the second year only Agent will get 5% commission of the renewal
premium. If the policy is on force then the agent will get the renewal commission.
Supervisory commission depends on the fulfillment of the target.
Non-financial Incentives
Non-financial incentives are given by the company for the welfare of the
lower grade employees. Cleaner, Driver, Peon and Guard get non-financial incentives
as their Uniform (company dress code) by the company. These four types of
employees get 2 sets of uniforms yearly. The uniform set of male employee includes
pista color shirt, black pant and black shoe (given after every 4 years). The female
employees get 2 sarees. Both male and female employees get an umbrella after every
2 years.

56
Festival Bonus
Every regular employee is entitled to receive annual festival bonus equivalent
to two months basic salary. The bonus is paid in accordance with the religion of the
respective employee.
For Muslim employees the festival bonus is payable in two instalments (for
Eid-ul-Fitra and Eid-ul-Azaha).
For Hindus (Durga Puja), Christians (Christmas) and Buddhists (Buddha
Purnima) the festival bonus is paid in one instalment.
A new employee who has worked at least 6 months with the company will be
entitled to festival bonus. Consolidated employees (temporary & contract basis
employees) will get 60% bonus of their consolidated salary. But they have to join the
company at least before one month of the festival.
Gratuity
Gratuity is a lump sum payment made by employer as a mark of recognition of
the service rendered by employee.
Every employee is entitled to receive gratuity at the end of 3 years of
continuous service up to a maximum of 30 years.
Calculations:
Service with the company 3 years to 5 years = 50% of last basic salary for every
year of service
For e.g., 50% of last basic service length
= 50% of 8000 4 years
= 4000 4
= 16,000 Tk will be paid to the employee as gratuity at the end of his service.
Service with the company more than 5 years = 100% of last basic salary for every
year of service

57
100% of 8000 6 years
=8000 6
= 48,000 Tk. will be paid to the employee as gratuity at the end of his service.
If service length of the employee is 5 years 6 months, then 5 years will be counted
to pay his gratuity.
If service length is 5 years 6 months 1 day, then 6 years will be counted for gratuity
calculation.
Gratuity will be paid on discharge, resignation, retirement or death of the employee.
No payment for gratuity will be made in case of dismissal of breach of discipline or
misconduct.
Provident Fund (PF)
Every regular employee is eligible to be a member of Delta Life Employees
Provident Fund to be administered in accordance with the relevant law. The
membership will only have effect from the Date of Confirmation (DOC).
Upto the year 1996, the own contribution of the employee to his provident
fund was 8.33% of his basic salary. From 1997, the employee has been contributing
10% of the basic salary each month to his PF.
If service length after confirmation is 3 to 5 years, then company contribution
will be 50% of employees own contribution.
If service length is more than 5 years, company contribution will be equivalent
to employees own contribution.
Allowances
An allowance is a term used to describe an allocation of money from one
person to another. It is an amount of money provided to employees to offset specific
expenses such as for travel interstate, food or to buy protective clothing, parents may

58
give their children a relatively small amount of money on a recurring basis, such as $5
every weekend.
DLIC provides the following allowances to the regular employees as decided
by the management time to time: (ranges shown in the pay scale)
1. Housing Allowance given to all employees of the company.
2. House Maintenance Allowance given to JAVP and above grade.
3. Medical Allowance given to all employees.
4. Corporate Allowance - given to top management those are the decision
maker of the company. This allowance is given to JSVP and above.
5. Utility Bill it is given for water, gas and electricity bill to VP and above.
6. Entertainment Allowance given to EO and above
7. Conveyance Allowance given upto VP from Peon. JSVP and above get
Free car facility or Car Scheme from the company.
Car Scheme employee can buy the car on instalments. Only JSVP and above
are entitled with this package. The amount of instalment will be deducted from
the monthly salary. When the car is owned by the employee, the company will
bear its maintenance and other cost.
8. Washing Allowances
Peon,Guard and Cleaners they get 100 Tk as Washing Allowance per month.
Driver - There are two types of drivers:
1. Attachment Driver they get 100 Tk Washing Allowance
per month with the Attachment Allowance (the extra time
spent with their boss)
2. Poolet Driver they get only 100 Tk Washing Allowance
per month. They only do the duty during the office hour, no
extra duty with boss.
9. Club Membership Allowance with a view to facilitate professional or
customer contacts for development of business, the company may authorize an
employee from EVP and above to join one approved social or service club
where the employee is posted. All club membership will be approved by the
MD. Company will reimburse the cost of entrance fees and the

59
monthly/annual subscription fee up to the limit as determined by the company
from time to time.
10. Technical Allowance it is for technically skilled employees (like computer
expert) or for highly educational qualification (like CA, Ph.D). By the decision
of top management this allowance is given to the necessary employees.
11. Traveling and Daily Allowance Traveling Allowance (TA) and Daily
Allowance (DA) are applicable only when an employee is on duty outside the
respective duty station.
Rules of TA/DA:
1. Daily and Travel Allowance will be paid for tours outside the duty station
only. Each tour must be approved by the concerned authority in the prescribed
form before commencement of journey.
2. All claims for travel cost must be properly supported by
Tickets/Bills/Vouchers.
3. Where company s vehicles are used, actual fuel cost with toll charges will be
reimbursed and no other travel allowances will be allowed.
4. Full DA shall be given for tours of minimum 24 hours, which will be
calculated from the starting time up to the time of return to duty station.
Lodging Allowance will however be paid for overnight stay.
5. If the tour is at least 6 hours 25%, 7-14 hours 50% and if above 14 hours but
less than 24 hours 75% of Food Allowance will be paid.
6. No DA will be paid for tours within 20 Km distance of the duty station, but a
meal allowance equivalent to maximum 25% of Food Allowance will be paid
only if necessary.
7. Claims for TA/DA duly authorized by LM/HOD must be submitted to the
accounts department along with Tickets/Bills/Vouchers within 14 days of
travel. For outside Dhaka staff, bill should be submitted to the HOD within 30
days and to the accounts department within 45 days of tour.
8. Local conveyance means travel up to a distance of 10 Km. For distance in
excess of 10 Km public transport such as Bus/Coach must be used.
Ticket/Vouchers for local conveyance need not be submitted but must be

60
certified by HOD of the employee. This rule is not applicable for the Grades 6
to above.
9. Officers in Grade 6 and above are entitled to incidental Expense Allowance of
400 Tk. Only for each tour (more than 24 hours).
10. For overseas visits, TA & DA would be decided by the MD.
11. In case of transfer from one district to another an employee is entitled to TA
and for a maximum of 2 day s DA.
12. If an employee is transferred at his own request, no TA/DA and Allowance for
Transfer of Personal Effects will be given.
13. In case of transfer, Transfer Order and Joining Letter must be included with
the claim.
14. In case of attending training, conference or special meetings, where
allowances are fixed by the company or food and lodging are provided by the
company, this rule will not be applicable.
15. Under special circumstances MD can vary the above allowances/limitations.
Mode of Travel:
Grades Mode of Travel
1-2 and Above AC Coach/1st
class/AC Train/Executive Air + Local Conveyance by
Taxi, Baby-Taxi
3-5 AC Coach/1st
class/AC Train/Economy Air + Local Conveyance by
Taxi, Baby-Taxi
6-7 AC Coach/1st
class/AC Train + Local Conveyance by Taxi, Baby
Taxi
8-9 AC Coach/1st
class Train + Local Conveyance by Taxi, Baby Taxi
10-11 AC Coach/1st
class Chair Coach Train + Local Conveyance by
public transport/rickshaw/Baby Taxi (in case of
emergency/necessity)
12-15 Chair Coach/Bus/2nd
class Train (Shovon) + Local Conveyance by
public transport, tempo, costar, van, rickshaw
16 Coach/Bus/2nd
class Train + Local Conveyance by public transport,
tempo, costar, van, rickshaw
17 Coach/Bus/3rd class Train + Local Conveyance by public transport,
tempo, costar, van, rickshaw

61
Daily Allowance (in Taka):
For Divisional
Cities
For Other
Areas
Grades
Lodging Food Lodging Food
Above Actual
1-2 1,500 1,000 1,000 900
3-5 1,000 800 700 600
6-7 800 600 500 400
8-9 500 400 300 300
10 300 300 275 275
11 275 275 250 250
12-13 250 250 200 200
14-15 200 200 175 175
16 175 175 150 150
17 150 150 125 125
11. Transfer Allowance
1. Travel All regular employees are entitled to cost of travel and DA as per
above mode and rate according to the grade, enforced for the time being,
of the post for self and dependent family for each day of journey actually
required for joining a posting on transfer which necessitates a change of
residence.
2. Transfer of Personal Effects the company will pay the cost incurred in
the crating, packing and transportation of reasonable quantity of personal
effects, to be sent by rail or other means on production of documentary
evidences subject to the maximum rates as enforced for the time being.

62
Allowance for Transfer of Personal Effects (in Taka):
Grades
Distance
in Km
3 - 6 7 - 9 10 - 12 13 - 15 16 - 17
0 60 2,500 2,000 1,500 1,000 800
61 150 4,500 3,000 2,000 1,500 1,000
151 250 4,500 3,200 2,200 1,800 1,200
251 350 5,000 3,500 2,500 2,000 1,500
351 450 5,500 3,800 2,800 2,200 1,800
451 550 6,000 4,000 3,000 2,500 2,000
551 - 700 7,000 4,500 3,500 3,000 2,500
13. Apart from all these allowances, overtime payment is there for employees.
Earned Leave Encashment
Employees will receive financial compensation (basic salary only) for any
Earned Leave due to him/her upto a maximum of 120 days only at the following
instances:
Resignation
Termination
Retirement
Death
An employee can enjoy 24 days yearly Leave. 10 days are Earned Leave (EL). But
from the rest 14 days employee will get 12 days only because according to company
rules, yearly leave cannot be more than 120 days.
Earned Leave Encashment = Basic / 30 No. of deposited Leave
If basic is 4500 Tk. and deposited Leave is 45 days, then

63
Earned Leave Encashment = 4500 / 30 45
= 150 45
= 6750 Tk.
Income Tax
"Income tax" means a tax imposed on or measured by net income including
any tax imposed on or measured by an amount arrived at by deducting expenses from
gross income of an individual, corporations.
Income Tax, where applicable, will be borne by the employee and will be
deducted at source from the monthly salaries of the employee by the company to
ensure that the correct legal requirements are followed in this matter. Each individual
employee will be issued a certificate at the end of each fiscal year for the amount of
income tax deducted at source.
If the yearly basic income of the employee is less than 1,20,000 Tk., then no
tax should be payable. If the yearly basic income is more than 1,20,000 Tk., then 10%
tax should be deducted.
1800 Tk is the minimum rate of payable income tax. If the yearly income is
1,30,000 Tk., then he has to pay 1800 Tk. This is the drawback of income tax rules of
the company.
Suppose an employee earns 2,50,000 Tk. working in DLIC, therefore, 10% of
1,30,000 Tk (2,50,000 1,20,000) tax should be deducted. i.e. 13,000 Tk. will be the
tax payable by that employee.
If the yearly income is 3,00,000 Tk., 15% tax should be deducted. i.e. 15% of
1,80,000 Tk (3,00,000 1,20,000) = 27,000 Tk is the payable income tax.
If the yearly income is 3,50,000 Tk., 20% tax should be given. i.e. 20% of
2,30,000 Tk (3,50,000 1,20,000) = 46,000 Tk will be the tax payable.
If yearly income is more than 3,50,000 Tk, 25% is the tax deduction. This is
the maximum rate payable income tax by an employee.

64
Tax on Allowance: Tax is also applied on Conveyance Allowance:
If the conveyance allowance is 18,000 Tk., tax will be imposed on allowance.
It will be added with the basic salary and if the amount of basic salary exceeds
1,20,000 Tk, then 10% tax should be deducted and it will follow the rules of income
tax similarly.
Final Payment System
Final payment is the accumulation of PF, Gratuity and Earned Leave
Encashment when the employee is leaving the company.
Bankers
Before the year 2000 upto the grade SEO monthly payment had been given by
cash. After that all payments of all employees has been given by cheque. The
Bankers associated with DLIC where the employees of the company can open a
salary account to encash the monthly salary are:
Bangladesh Krishi Bank
Pubali Bank Limited
Uttara Bank Limited
Rajshahi Krishi Unnayan Bank
Standard Chartered Bank
City Bank N.A
National Bank Limited
Dutch Bangla Bank Limited
Hongkong & Shanghai Banking Corporation Limited (HSBC)

66
FINDINGS AND CONCLUSION
Salary administration is the new function assigned to the HR Department. Earlier
it was handled by Account Department.
A new pay scale is introduced in DLIC from April 1, 2006 ; keeping in mind the
present economic condition & inflation rate.
The new pay scale includes various new schemes and allowances.
After doing the performance appraisal in the company, the new pay scale was
applied. Most of the employees were benefited by increments & promotion given
according to new pay scale.
There is a predetermined rule for computing the fixed basic salary of the
employees those who are getting promotion & increments.
The performance evaluation procedure is not absolutely perfect in DLIC. The
promotion, incentives & other benefits are determined on the basis of
performance evaluation process.
There was certain degree of dissatisfaction & conflict emerged due to the
performance evaluation.
Good incentive plans, bonus, schemes & allowances were given to the employees
in DLIC.
The Final Payment given to the employee is the accumulation of Provident fund,
Gratuity & Earned Leave Encashment.
*********************

68
LIMITATIONS
Salary administration was recently included as a HRD function in the
company, so there was lack of sufficient data.
Shortage of time to go in-depth of the topic.
Due to Companies norms & regulations some of the official & financial data
couldn t be made available.
Sources of data for collection of secondary data were limited.
Sufficient books, publications and journal were not available on the topic.
The overall span of the organization is too big to cover all the aspects
completely related to salary administration.
Many times the officials were so busy that they couldn t answer the queries
related to the topic.
*********************

70
RECOMMENDATIONS
Performance Evaluation procedure should be modified to avoid conflict &
dissatisfaction among the employees.
The HR department should recruit skilled, knowledgeable & competent personals
and should provide them regular training facility for skill enhancement.
Online information should be updated regularly so that the clients and potential
customers must get the latest information regarding various insurance schemes
and plans offered by the company.
Internet connection and Information system should be setup in the HR department
so that its functions could be performed smoothly and efficiently.
Unnecessary man power should be eliminated so that the various packages can be
increased for rest of the employees.
Appraisal should be done fairly so that conflict, dissatisfaction & attrition rate gets
reduced. The employees were found working unhappily after performance
appraisal is done.
All the important and necessary data & files should be properly organized and
preserved, which is not the case in DLIC.
Disciplinary manners should be taught to the lower grade employes.
Technical equipments should be serviced & repaired at regular intervals.
The relationship between top & lower management should be made more cordial
to bridge the gap and to fulfill the target set by the company.
*********************

72
BIBLIOGRAPHY
Human Resource Management
- David A . Decenzo Stephen P . Robbins
Publisher : John Willy & Sons. (7th
edition)
- A.K.Singh, B.R.Duggal, Puneet Mohan
Publisher : Sun India Publications.
- P.G.Aquinas.
Publisher: Vikas Publising House Pvt Ltd
- Anjali Ghanekar
DLIC Annual Report 2003
www.deltalife-bd.com
www.en.wikipedia.org

73
ANNEXURE
Assessment Form For Employees
PF# P- FROM R/K TO VP
NAME: UNIT/ DEPARTMENT:
DESIGNATION LOCATION:
ACADEMIC AND PROFESSIONAL QUALIFICATION DATE OF JOINING:
PROBATION PERIOD:
SALARY DURING
PROBATION PERIOD:
FINAL ASSESSMENT
(final assessment section to be completed by respective HRD after MD (CC)'s approval)
QUALITIES OF STAFF
(Marks to be awarded on the qualities listed below, on grading scale - 10 highest, 0 lowest.
Please see ratings and assessment criteria on the other side of this form)
Score
1.KNOWLEDGE
Has clear understanding of the facts factors pertinent to the job
2.QUALITY
produces work of high quality; work is accurate and error free
3.QUANTITY
produces high volume of acceptable work under normal condition
4. DEPENDABILITY
Has complete confidence of supervisor. Reliable & completes assignments on time.
5. DECISION MAKING
S/he think intelligently & makes his decision.
6. TEAM WORK /RELATIONSHIP WITH CO-WORKERS
Has strong team spirit. Maintains excellent relationship with co-workers.
7. COMMUNICATION
Written: able to write clearly & concisely. Able to convey the message clearly.
Verbal: Can get the message clearly.
8. PUNCTUALITY
Always maintains office hours & working days.
LINE MANAGER'S RECOMMENDATION: Total:
NAME DESIGNATION SIGNATURE/ DATE
PERCENTAGE:

74
COMMENTS AND RECOMMENDATIONS OF HEAD OF THE PROJECT
SIGNATURE OF HEAD OF PROJECT DATE:
COMMENTS AND APPROVAL OF MD
SIGNATURE OF MD DATE:
RATINGS CRITERIA: ASSESSMENT CRITERIA:
9-10 OUTSTANDING
greatly exceeds required performnce
PERCENTAGE DECISIONS
7-8 GOOD
Exceeds required performance.
81% and above To be confirmed + 3 increments
71% and upto 80% To be confirmed + 2 increments
5-6 SATISFACTORY
Acceptable performance
61% and upto 70% To be confirmed + 1 increments
51% and upto 60% To be confirmed
3-4 AVERAGE
Below reqd. performance but
trying to improve
41% and upto 50% Probation period to be extended
1-2 UNSATISFACTORY
Unacceptable performance but
can improve
31% and upto 40% Probation period to be extended
with severe warning
0 POOR
Unacceptable performance
Has no scope for improve
30% and below To be confirmed + 3 increments

75
FREQUENTLY ASKED QUESTIONS
These questions are generally asked by the people and potential customers who want
to take the policy.
Q:1:- How a policyholder can deposit his premium from abroad?
Ans: A policyholder living abroad may deposit premium under his DLIC policy in
Bangladesh Taka or in equivalent foreign exchange by Demand Draft (D/D) or
Accounts Payee Cheque issued in favour of "Delta Life Insurance Co. Ltd.'' and
drawn in a bank in Bangladesh. He should write the policy No.on cheque/DD and sent
the same to DLIC Head Office at Dhaka.
Q:2:- Is policy bonus payable before maturity?
Ans: The bonuses attached with a policy is payable only at the time of final settlement
of the insurance money, i.e. at maturity of the policy or at earlier death of the assured
or when the policy is surrendered, for its surrender value.
Q:3:- Can a policy be transferred in the name of another person?
Ans; A policy cannot be transferred in the name of any other person. But its right and
benefits can be assigned in favour of any person or an organization. In such a case
risk of the policy is borne on the life of original policyholder while the ''Assignee''
receives the benefits that come through the policy.
Q:5:- Does Delta Life offer any Insurance facility for overseas travel?
Ans: DLIC has introduced Overseas Mediclaim Policy (OMP) for short stay abroad.
It is a type of health insurance offered to Bangladeshi Nationals and Resident
Foreigners under which treatment expenses incurred abroad in the event of sudden
and unexpected illness or accident are covered while on business or official trip and

76
holiday tours. Some health insurance cover is now a pre-requisite for a visa to
developed countries.
The policy is intended for use by the insured person in the event of a sudden and
unexpected sickness or accident when the insured is staying abroad. The acceptable
age limit is 6 months to 65 years.
Benefits include expenses for physician service, hospital, medical services and local
emergency medical transportation.
This coverage is given on the basis of following information.
a) Age of the proposer
b) Country which he/she intends to visit.
c) Duration of his/her stay abroad.
d) A declaration of continued good health by the proposer.
Rate of premium is quoted on request. Claim is settled in the country where the
treatment is availed.
Q:6. Why I have to furnish medical requirements for a revival when I am paying all
the arrear premiums and late fees?
Ans: The Company insures a man in good health. When there is a discontinuity the
policy becomes irregular and it no longer bears any risk or bears limited risk as per
policy conditions. So, when a revival is requested, the assured has to produce
evidence of insurable condition of his person. Sometimes a simple declaration of good
health by the assured is enough. But when the period of discontinuity is considerable,
the Company calls for medical evidences.

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