I/O Psychological theories at Ceylinco Consolidated Pvt. Ltd

I/O Psychological theories at Ceylinco Consolidated Pvt. Ltd Abstract Psychology can be applied where there are people. The industrial or organizational psychology which tries to apply basic principles of psychology to workplace consists of very important psychological teachings which equally helpful for the development of both organization and employee. Like most of the organizations and companies in the world, Sri Lanka also has given attention to Industrial or Organizational psychology. Ceylinco Consolidated Pvt. Ltd. is one of the companies in Sri Lanka that use I/O psychological theories at their workplace. By, doing this assignment, our group members have taken an effort to find out how Ceylinco Consolidated Pvt. Ltd. applies psychological theories taught in I/O psychology. Here, mainly our attention is given to the theories we learnt in our I/O psychology class (PSY305). Introduction Today, in the world, all most all the government and private organizations, companies, institutes etc. have understood the importance of psychology for their organizations’ and companies’ development. Therefore, a separate branch of psychology called industrial and organizational psychology which involves the scientific study of employees, workplaces and organizations has emerged. Industrial or organizational psychologists contribute to an organization's success by improving the workplace and the performance, satisfaction and well-being of its people. This branch of psychology tries to apply the basic principles of psychology for wherever work takes place. The Sri Lankan companies and organizations also have understood the importance of the industrial or organizational psychology or just psychology and they practically apply those psychological theories at their work places. One of such companies that use psychological theories at their workplace is Ceylinco Consolidated Pvt. Ltd. Ceylinco Consolidated Pvt. Ltd. is one of the leading insurance companies in Sri Lanka, with the largest network of branches and agents in the insurance industry. Their goals include becoming the leading provider of protection and financial security in Sri Lanka and in select international markets. It has more than 450 offices with a cadre of over 30000 employees. The Company has branches in Nepal, Bangladesh and Maldives Islands also. Its annual net income is over than US $ 120 million. Ceylinco Company has more than 500 subsidiaries which have spread among a vast area of business operation sectors in Sri Lanka and abroad. Now the company has spread to various economic fields of banking, insurance, non- banking finance, investment banking, housing and property development, travel and leisure, communication and information technology, education and healthcare. A few of the many companies incorporated are Ceylinco Life, Ceylinco Homes, Ceylinco Leasing, Ceylinco Selna, Ceylinco Grameen Credit Co. Ltd, Ceylinco Express Remittance Pvt. Ltd., IC and CS Software Solutions, IC and CS Pvt. Ltd. The mission of Ceylinco Consolidated Pvt. Ltd. is to provide protection and financial security of the highest quality to society, whilst adding to shareholders’ wealth and recognizing, rewarding and valuing the dignity of their staff. Their favorite saying is “Big or Small Ceylinco Protects Them All.” They have won the prizes like “Asia Insurance Industry Award – 2005 (No. 1 in Asia for Corporate Social Responsibility), “Asia Insurance Industry Award - 2003 and 2006” (Innovation of the year in Asia), “POP Awards - 2006, 2007, 2008, 2009 and 2010 (Peoples Insurance Company of the year), No. 1 Service Brand in Sri Lanka - 2004, 2005 and 2008, No. 1 Brand of the year – 2005, Innovative Brand of the year – 2005, Gold Award in National Business Excellence Awards -2008, 2010 & 2011 etc. The Ceylinco Company accepts that the quality of an organization depends heavily on its employees; their enthusiasm and satisfaction with their jobs, their experience and sense of fair treatment, all affect the productivity, customer service, reputation and survival of the firm. It also believes that the employees are the main driving force of the Company. When we clearly examine the Ceylinco Consolidated Pvt. Ltd., we can see that Ceylinco Company practically use psychological theories taught in I/O psychology. From the recruitment to the retirement this company follows a psychologically based process. That is how they have become the leading insurance company in Sri Lanka and won the fame of the world. Personnel Recruitment and Selection- Personnel selection which comes in I/O psychology is the systematic process of hiring and promoting personnel (Cole, 1997). Personnel selection systems employ evidence-based practices to determine the most qualified candidates. Ceylinco for that use ability tests (e.g., cognitive, physical or psychomotor), knowledge tests, personality tests, structured interviews etc. to select the best one for their company. By these tests and interviews, people’s attitudes are measured and then they are directed towards the most suitable section. For example, if the candidate is an extrovert person he or she is appointed as a salesman or women. In the selection process, there is no gender discrimination no political influence or any other biases are considered. Training and Development- For the development of a company employee training is very important. From the year 2005, the Ceylinco has invested heavily in the development of its staff by providing access to a gamut of local and foreign training opportunities. All training programs were designed in accordance with their training needs, such as skills development were conducted with a systematic approach, covering all staff categories. When considering skill training every new comer is given 10 days special training to make well aware of the system. Once in three months, they were given training called “Refresher” where employees are trained to work on personal targets and company targets comparatively. Through this type of trainings, company makes personal development in employees where employees feel they are skilled ones. According to Heizberg’s theory it can be known as satisfiers and hygiene factors that motivate the employees. Motivation is a very important fact in I/O psychology. Goal, Objective and Decision Making - According to I/O psychology for the development of the company, consensus in decision making is very important. It gives employees validity. By that, they think that they work according to their decision. It strengthens employees’ self esteem. According to Hugo Munsterberg also, monotony in the workplace leads to less productivity and fatigue in employees. Ceylinco has understood it. They have a well organized communication system. They have upward communication system (grievances procedures suggestion box, open door practice etc.) and downward communication systems (handbook, newsletter, bulletin board, meeting and electronic media). The Ceylinco follows a chain of command when dealing with downward communication understanding that it is very effective. The message follows General Manager Director>Assistant General Manager Director> Senior Manager Business Development to at last sale consultant. As the personnel differences are considered when communicating, the sender’s and receivers’ horizon of experience theory can be seen in Ceylinco. The parallel communication can be seen among the employees of a branch while the vertical communication can be seen among the high positions of the company. In the same way, the company, every 1st day of each month calls a planning meeting which is called “Performance Review” in every branch. In this meeting, the ideas and opinions of employees are considered and every employee is given a specific target to archive in a specific time bound. The goal setting theory of I/O psychology talks about this. Ceylinco has a long term planning. To success it, the area manager gets monthly goal from the head office. Area Managers divide the goals among branch managers by asking how many goals they could archive in a month. Then branch manager divide his goals among executive managers and again executive managers divide their goals to their sales consultant. Likewise they share the goals into team groups by asking their targets and abilities. When team members individually and collectively commit to team goals, team effectiveness is increased and is a function of increased supportive team behaviors (Aube & Rousseau, 2005). According to Mitchell and Silver, individual goals must be in line with team goals to be effective. That is why Ceylinco uses a hierarchical level when dividing goals. In the team setting, goal difficulty is related to group belief that the team can accomplish the tasks required to meet the assigned goal (Whitney, 1994). So, Ceylinco does not give so easy or so difficult goals for their employees. The “Performance Review” meeting of Ceylico has a close relationship with the control theory in I/O psychology which talks about the impact of giving feedback in employees work. I/O psychology mentions that if there is novelty in the workplace, it increases the productivity. Ceylinco having considered it, change the work style of employees. New ways and methods of doing the job are discussed in this meeting. The Job Analysis – This concept in I/O psychology involves the systematic collection of information about a job. One approach; the task-oriented job analysis, involves an examination of the duties, tasks, and/or competencies required by a job. The second approach, a worker-oriented job analysis, involves an examination of the knowledge, skills, abilities, and other characteristics (KSAOs) required to successfully perform the work. In Ceylinco, the work of each and every employee is examined by a higher officer. In the “Performance Review” meeting, the higher officers in the company examine the performance, skills, present growth of employees. Specially, performance appraisal or performance evaluation which is the process of measuring an individual's work behaviors and outcomes against the expectations of the job is considered. According to I/O psychology, individual assessment involves the measurement of individual differences. Ceylinco clearly follow this. Leadership-This means the process of influencing others to agree on a shared purpose and to work towards shared objectives. Leaders undertake the tasks of setting a direction or vision, aligning people to shared goals, communicating and motivating. All the leaders of Ceylinco has those qualities. Leaders are friendly and not authoritarian. When the leadership qualities are found in group activities they are motivated and they are given promotions. All the leaders are advised to hold a friendly relationship with employees. The democratic leadership which respects the opinions of others and concerned about majority can be seen in Ceylinco. Flexibility: - It has very flexibility in working. Generally employees have to report daily at 8:30 am. If they are unable to come at that time they can inform the office and come in evening. The employees who are from far away from work place have report office only 3days a week. This kind of flexibility can known as hygiene factors of working conditions. In the same way, the working condition inside the company is good. Office environment is quiet and free from obstacles. Salaries:- The main motivational factor as every I/O psychologist accepts is money. The Taylor’s motivational theory also certifies it. Ceylinco has Cleary understood this. Every employee of the company works on commission. Every sale consultant should have to get minimum four customers per month which make start their monthly salary. For first three months, new comers are given Rs.5000/- per month for traveling fares. And all employees are given official telephone connection of Rs.2500/- per month. Their salaries will increase totally based on targets achievement and promotion. So, we can see that teachings of the Equity theory have been considered. Employees get their salaries according to their work. Personal Development Training Programs:- The personality development and job attitude is very important for the development of a company. Ceylinco, once in every three month a special leadership programs are organized to develop employees’ personality background and job attitude. Sri Lanka’s well-known skill trainer lectures like Mr. Kuma Iddamalgoda, Mr. Dayarathna Athukorala are invited to conduct the programs. In these programs, employees are taught to work using psychology as emotional intelligence. They are given the idea that they are capable of doing anything. Here, the self efficacy theory has been considered. These types of educational programs and professional guidance help to develop their self esteem and make a ride for self fulfillment according to Maslow’s Theory. In the interest of the employee, the company empower them to do well known international management diploma course like PDS (Product Development System) and AMTC (Agency Management Training Course). Here, admiring, praising and recognizing the skillful employee motivates the employee and by that the development of the company occurs. Personal Goal Achievement:- Employee’s personnel goals are very important because, employees work positively and with motivation if their personal goals are achieved. David MacClland also talks about this. Without that they do not function well. Ceylinco knows this. That is why every beginning of a year all employees are asked to display their personal goal achievement schedule for the year. For example, one may have different personal goal achievements like to buy a motor vehicle, own a house or land etc. Then the company compares employees’ personal goals with company goals. And the company gives loans to fulfill their goals if needed. Victor Vroom’s motivation theory talks about this and it is a very important factor in I/O psychology. Considering Pygmalion effect, Ceylinco expect the development of the company and employee while motivating them. Job Security:- Job security is one of the most important factors mentioned in organizational psychology. In Ceylinco, job security is high. If someone is unable to perform well and achieved targets within three months the senior supervisor will do supervision on him to find out the weak point by field visiting and personal assessment. If he or she may have family problems or other problems, he or she will be sent to a professional psycho counselor. In the same way, there is a reasonable disciplinary procedure for wrong doers. Employees are not fired just at once. They can do their job till their retirement. The company always deserve a smart personality for smart team work. Above mentioned both retirement plan and job security are security special need according to Maslow’s theory. And also they can be known as job security under Hygiene factors of Heizberg Theory. Medical Health Facilities for Employees- When employees work, they sometimes become physically and mentally ill and face accidents. On such an occasion, the help given by the company is very helpful and it increases the faith of the employee towards the company. Ceylinco has several medical health facilities for their employees. Suwa Sampatha – All employees and their dependents will be covered under this policy. The expenses incurred as a result of a hospitalization will be reimbursed to the employees. Such reimbursements range to cover the clerical and minor staff to senior managers and above. The Company will also pay 75% of amounts that exceed the stipulated benefit. In the same way, annually each one gets Rs.50,000/- for medical emergency. If one is married even their wife and children get this benefit. And also even unmarried one gets this benefit to their parents. The physical healthiness can be classified under Security needs of Maslow theory. Personal Accident Benefits – A worldwide Personal Accident Insurance Cover, valid for 24 hours is provided to all employees. Compensation benefits are available for Clerical and Minor Staff to Senior Managers. Moreover, employees will also be entitled to Group Life Insurance Cover, under which they will obtain Critical Illness Cover for 20 specified Critical Illnesses (treated locally or abroad) and Life Insurance Cover, where dependents will be compensated in the event of the death of a permanent employee. Financial Benefits: Annual Bonus – Based on the net profits earned for the year, an Annual Bonus will be declared by the Company. Profit Bonus – In addition to the Annual Bonus declared by the Company, a decided percentage of the net profits earned by the profit centre is equally distributed periodically amongst employees of the profit centre. This is very important motivational factor. Housing Loan – Employees who have completed three years in service after confirmation are entitled to apply for a housing loan from any financial institution. A decided percentage on the interest payable will be reimbursed by the Company. Reward & Recognition:- The company has an employee reward system and it is an integral part of the Company. The contribution made by employees, their skills and competence are key factors in the rewarding system and they are rewarded at the Annual Sales Conference and the annual event the “Pillars of Success.” Moreover, each year, a batch of over one hundred staff members are sent overseas, on holiday, which also includes a ‘Thinking Session.’’ Once who was full filled the competitive targets they were highly rewarded by gifting and recognition. They were named as “Silver, Gold and Platinum.” And also they are gifted money vouchers and holiday tours packages in the island or foreign countries with their family members. This is done continuously and it is a reinforcement which increases motivation. These rewards and recognitions are satisfier factor according to Herzberg theory and they are also factors to increase self esteem according to Maslow theory. Here, the words of the Snr. Asst. General Manager Mr. Alagiyawanna important. His words prove that Ceylinco practically use reward system. He says “………Since the management was impressed with my performance, they recruited me to the Gampaha Sub Office…….Then the management drafted me into the Head Office as a Regional Manager and I was later promoted to Assistant General Manger. I managed to bring more and more business to Ceylinco. I was then rewarded with a brand new BMW car and was promoted as a Senior AGM” (www.ceylincoconsolidated.com). Entertainment:- Ceylinco accepts that there is a sound mind in a sound body. Once a month it has nominated a day called “Fun day.” Every employee is gathered in a place and have a party and play games like cricket. All are gathered in casual dress where everyone is equal. This is important. It makes them friendly environment and built good relationship among each others. Once a year in December there’s an annual party and annual branch trip. And also they have sport meets among branches vs. branches and company vs. company and winners are highly rewarded. Here, employees’ social relationships are strengthened and they learn to work as a group to get a goal. In the same, in these programs, the company recognizes different people like extroverts an introverts etc, and they are put in due place later. Social Cultural Activities:- They’ve various social cultural activities in a year. On every January 1st they start their work by engaging religious activity in their branch offices. And also they celebrate Local New Year on April 14.th Annually they organized a blood donation program. Likewise many other social works are done by the company. These types of Social cultural and entertainment activities make them friendlier which help to stronger their interpersonal relationship. In Mayo effect it can be seen as ‘ensuring the wellbeing of others and showing interest in others.” According to Heirzberg it is a hygiene factor of Relationship with co-workers. And In Maslow theory it is known as social needs. Emotional intelligence which simply means the ability to understand emotions and react accordingly is also practically used in Ceylinco. Ceylinco has a large number of employees from different nations, different religious backgrounds etc. So, the attitudes and opinions of the employees different. But, Ceylinco through personality programs, games, social activities etc. build a good relationship between all the employees. Specially, to reduce work stress, those programs are organized Promotion:- There is no any hidden policy to get promotion. All the policy and conditions are displayed transparent as crystal clear. Promotions are based on merits. If anyone has completed the criteria he or she is promoted to higher position. Without gender discrimination, anyone can get following promotions without any political or external intervention. Considering justice theories, specially procedural justice theory in I/O psychology, Ceylinco follows this. The process is- Sale Consultant> Team Leader> Sale Executive> Senior Sales Executive> Assistant Branch Sale Manager (ABSM)> Branch Sale Manager (BSM)> Senior Branch Sale Manager (SBSM) > Assistant Manager Business Development> Manger Business Development >Senior Manager Business Development> Assistant General Manager Director> General Manager Director. According to Maslow’s hierarchy and Heizberg’s satisfiers of growth, the human beings are always will to grow up or develop. This type of promotion criteria obviously help to their growth. Welfare Benefits:-Ceylinco believes in a corporate culture that fosters good health. In order to keep employees happy and mentally and physically fit, they have provided a well stocked library and a fully equipped gym. These facilities are open to all employees of Ceylinco company. Performance Benefits:- Annual Sales Conference – Special awards are presented at the Annual Sales Conference to employees in all categories, in recognition of their outstanding performance and contribution towards the company’s objective. Pillars of Success – Awards are also accorded the non-sales staff, in recognition of outstanding performance and their invaluable contribution towards making the company, what it is today. Underwriters Award Ceremony-Employees who are cleaver in literature, poetry, writing novels etc. are awarded in this ceremony. Other Benefits:- The company has founded a fund called “Funeral Expenses Fund.” If anyone’s relative is passed away he or she will be given Rs.40,000/- by the company fund for funeral occasion. And also if there’s wedding of anyone they will gifted Rs.5000/- This type of contribution make them feel that how worthy they are to the company. The belongingness is known as social needs according to Maslow theory. Retirement Plain:- Every employee will get retirement plain where 10% of annual salaries are deposit to their pension plan. If employee wishes to increase the percentage he is able to make change by discussing with relevant consultant. When considering above facts, it is clear that applying I/O psychological theories at the Ceylinco Consolidated Pvt. Ltd has led to become one of the leading insurance companies in Sri Lanka and to earn a good name in the world. Conclusion The contribution of psychological theories at the workplace leads to the success. Specially, I/O psychological theories mainly designed for the workplace considers both the company and employee important. Among the large companies in Sri Lanka, Ceylinco Consolidated Pvt. Ltd. has become one of the leading insurance companies in Sri Lanka as it practically applies I/O psychological theories at their workplace. Ceylinco has understood the importance of the employee mainly and that understanding has led to the success of the company. So, Ceylinco Consolidated Pvt. Ltd. is a successful company which follows I/O psychological theories. References Cole, G.A., (1997), Personal management theory & practical (4th ed.), Ashford Color Press, Gosport: Landon. Luthans, F. (2002), Organizational Behavior (9th ed), MC Graw-Hill-Irwin: New York. Michel V.P . (1989), Organizational Behavior & Managerial Effectiveness (1st ed), S. Chand & Company Ltd; New York. Moorhead G. & R.W. Griffin, (1999), Organizational Behavior & Managing people and organization, (5thed.), AITBS Publishers & Distributors: New Delhi. Pestongee D.M., (1991), Motivation & Job Satisfaction (1st ed.), Prentice Hall of India (Pvt.) Ltd; New Delhi. Singh, D., Emotional intelligence at work, (2nd ed.), (2003), Response Books: New Delhi. Shane S.L. &. Glinow, M.N.V., (2000), Organizational Behavior (2nd ed.), Irwin MC Graw-Hill; New York. www. ceylincoconsolidated.com.