A PROJECT REPORT
ON
METHODOLOGY OF RECRUITMENT OF ADVISOR IN
RELIANCE LIFE INSURANCE
1
TABLE OF CONTENTS ACKNOWLEDGEMENTS EXECUTIVE SUMMARY INTRODUCTIONS.NO
PARTICULARS PAGE NO.
1. INDUSTRY PROFILE: ABOUT INSURANCE INDUSTRY WHAT IS LIFE INSURANCE LIFE INSURANCE VS OTHER SAVINGS
12-19
2. COMPANY PROFILE: ABOUT RELIANCE CORPORATE OBJECTIVE CORPORATE MISSION PLANS OFFERED BY RELIANCE
20-26
3. INTRODUCTION OF METHODOLOGY OF RECRUITMENT OF ADVISORS:
WHAT IS RECRUITMENT PURPOSE AND IMPORTANCE SOURCES
WHAT IS SELECTION ROLE AND PROCESS
27-42
4. INSURANCE ADVISOR AT RELIANCE: ROLE RESPONSIBILITY
43-44
5. CONCLUSION AND SUGGESTIONS 45-47
2
EXECUTIVE SUMMARY
In today’s corporate and competitive world, I find that insurance sector has the maximum
growth and potential as compared to the other sectors. Insurance has the maximum
growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This
growth potential attracts me to enter in this sector and RELIANCE LIFE INSURANCE
has given me the opportunity to work and get experience in highly competitive and
enhancing sector.
The success story of good market share of different market organizations depends
upon the availability of the product and services near to the customer, which can
be distributed through a distribution channel. In Insurance sector, distribution
channel includes only agents or agency holders of the company. If a company like
RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in
the market they can capture big market as compared to the other companies.
Agents are the only way for a company of Insurance sector through which
policies and benefits of the company can be explained to the customer .
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INTRODUCTION
The story of insurance is probably as old as the story of mankind.
The same instinct that prompts modern businessmen today to secure themselves
against loss and disaster existed in primitive men also. They too sought to avert
the evil consequences of fire and flood and loss of life and were willing to make
some sort of sacrifice in order to achieve security. Though the concept of
insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date back almost 6000
years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these
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companies. However, later with the efforts of eminent people like Babu Muttylal
Seal, the
foreign life insurance companies started insuring lives.But Indian lives were being
treated as sub-standard lives and heavy extra premiums were being charged on
them.Bombay Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal rates.
Starting as Indian enterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social security through
insurance to various sectors of society. Bharat Insurance Company (1896) was
also one of such companies inspired by nationalism. The Swadeshi movement of
1905-1907 gave rise to more insurance companies. The United India in Madras,
National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906.In 1907, Hindustan Co-operative
Insurance
Company took its birth in one of the rooms of the Jorasanko, house of the great
poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were
some of the companies established during the same
period.Prior to 1912 India had no legislation to
regulate insurance business.
In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act
were passed. The Life Insurance Companies Act 1912 made it necessary that the
premium rate tables and periodical valuations of companies should be certified by
an actuary. But the Act discriminated between foreign and Indian companies on
many accounts, putting the Indian companies at a disadvantage.
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The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938.
During the mushrooming of insurance companies many financially unsound
concerns were also floated which failed miserably. The Insurance Act 1938 was
the first legislation governing not only life
insurance but also non-life insurance to provide strict
state control over insurance business. The demand for
nationalization of life insurance industry was made
repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938
Was introduced in the Legislative Assembly. However,
it was much later on the 19th of January 1956 that life
insurance in India was nationalized. About 154 Indian
insurance companies, 16 non-Indian companies and 75
provident were operating in India at the time of
nationalization. Nationalization was accomplished in
two stages; initially the management of the companies
was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill.
The Parliament of India passed the Life Insurance
Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life
insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in
the country, providing them adequate financial cover
at a reasonable cost.
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PURPOSE OF RESEARCH STUDY
SCOPE OF THE STUDY:
o I have made my research study at Reliance Life Insurance company and
hence my scope of study is limited to procedures and practices at Reliance
.
OBJECTIVES OF THE STUDY:
o To understand the process and procedure of recruitment of advisors at
reliance.
o To analyse various aspects that takes place at reliance related to
recruitment of advisors.
o To suggest fresh ways of recruitment.
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CHAPTER 1: INDUSTRY PROFILE
ABOUT INSURANCE INDUSTRY
Insurance industry records a booming growth:
The insurance industry recorded a booming growth of 35% in premium income
during 2005-06 with the 13 private sector players walking away with an
impressive 129% while the Life Insurance Corporation of India recorded a 21%
growth. Thus the market share of state behemoth’s dropped to 78% in 2004-05
from 87% a year ago.
According to ASSOCHAM Eco Pulse (AEP) Study, the
industry premium increased to Rs253.42bn in 2005-06
from Rs187.1bn in 2004-05. The LIC total premium
for the year 2005-06 amounted to Rs197.85bn as
against the Rs162.84bn during previous year.
The figures for the first two months of the fiscal 2006-07
also speak of the growing share of the private insurers.
The share of LIC for this period has further come down
to 75%, while the privatE players have grabbed over 24% share.
“With the huge potential the market has, the Government should, more seriously
look into increasing the FDI cap in the sector” said Mahendra K. Sanghi,
ASSOCHAM President.
During April-June 2005, the largest private company ICICI Prudential has
increased its share from 6.25% in 2004-05 to 7.68% in current fiscal.
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The opening up of the sector has given some of the most innovative products like
the customized insurance policies and now the unit linked policies that have
gained much of customer attention. The sector has huge potential and certain
other new and innovative areas can also be looked into for enhancing market
share and premium income, said Sanghi.
HDFC is next in the row with 2.91% market share which has increased from
1.92% last fiscal followed by TATA AIG which now shares 2% of the market
from
1.18% last fiscal. Birla Sun life’s share has dropped
From 2.45% during FY’05 to 1.76% in first two months
of FY’06. SBI life comes next with 1.72% share and has
infact dropped a few percent points from
last year.Max New York life and Aviva Life Insurance
have captured more than 1% share each from less than
1%share during FY’05. Others like ING, AMP Sanmar,
Met Life and Sahara India have less than 1% share.
The details of the market share of life insurance companies are attached. The
market share of the private players has doubled every year from 5.6% in 2002-03
to 12% in 2003-04 and close to 22% in 2004-05.
The state run insurance company has the biggest advantage of its huge network,
which the company can use to penetrate into rural market that is still lying
untapped. Another option with the life insurance companies to capture more and
more market share
could be product innovation and constantly developing
an insurance product in order to meet the ever-
changing requirements of the customer.
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Quality customer service and education can be
another area where company can differentiate itself
from other companies.
What Is Life Insurance?
Life insurance is a contract that pledges payment of an amount to the person assured
(or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
The date of maturity, or Specified dates at periodic intervals, or Unfortunate
death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is universally
acknowledged to be an institution, which eliminates 'risk', substituting certainty
for uncertainty and comes to the timely aid of the family in the unfortunate event
of death of the breadwinner.
By and large, life insurance is civilization’s partial solution to the problems
caused by death.insurance, in short, is concerned with two hazards that
stand across the life-path of every person:That of dying
prematurely leaving a dependent family means of
support.
LIFE INSURANCE VS OTHER SAVINGS:
Contract Of Insurance:
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i) A contract of insurance is a contract of utmost good faith technically known
as uberrima fides. The doctrine of disclosing all material facts is embodied in
this important principle, which applies to all forms of insurance.
ii) At the time of taking a policy, policyholder should ensure that all questions in
the proposal form are correctly answered. Any misrepresentation, non-
disclosure or fraud in any document leading to the acceptance of the risk
would render the insurance contract null and void.
Protection:
i) Savings through life insurance guarantee full protection against risk of death
of the saver. Also, in case of demise, life insurance assures payment of the
entire amount assured (with bonuses wherever applicable) whereas in other
savings schemes,
only the amount saved (with interest) is payable.
AID TO THRIFT:
ii) Life insurance encourages 'thrift'. It allows long-term savings since payments
can be made effortlessly because of the 'easy installment' facility built into the
scheme. (Premium payment for insurance is either monthly, quarterly, half
yearly or yearly).
iii) For example: The Salary Saving Scheme popularly known as SSS, provides a
convenient method of paying premium each month by deduction from one's
salary.
iv) In this case the employer directly pays the deducted premium to LIC. The
Salary Saving Scheme is ideal for any institution or establishment subject to
specified terms and conditions.
Liquidity:
i) In case of insurance, it is easy to acquire loans on the sole security of any
policy that has acquired loan value. Besides, a life insurance policy is also
generally accepted as security, even for a commercial loan.
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Tax Relief:
ii) Life Insurance is the best way to enjoy tax deductions on income tax and
wealth tax. This is
available for amounts paid by way of premium for life insurance subject to
income tax rates in force.
iii) Assesses can also avail of provisions in the law for tax relief. In such cases the
assured in effect pays a lower premium for insurance than otherwise.
Money When You Need It:
i) A policy that has a suitable insurance plan or a combination of different plans
can be effectively used to meet certain monetary needs that may arise from
time-to-time.
ii) Children's education, start-in-life or marriage provision or even periodical
needs for cash over a stretch of time can be less stressful with the help of these
policies.
iii) Alternatively, policy money can be made available at
the time of one's retirement from service and used
for any specific purpose, such as, purchase of a
house or for other investments. Also, loans are
granted to policyholders for house building or for
purchase of flats (subject to certain conditions).
Who Can Buy A Policy?
i) Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.
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ii) Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant
factors are considered by the Corporation.
CHAPTER-2,COMPANY PROFILE
COMPANY PROFILE OF RELIANCE LIFE INSURANCE:
FOUNDER
Few men in history have made as dramatic a contribution to their country’s economic
fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have
left behind a legacy that is more enduring and timeless.
As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of India’s capital markets, the champion of shareholder interest.
But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth
creator. In one lifetime, he built, starting from the proverbial scratch, India’s
largest private sector enterprise.
When Dhirubhai embarked on his first business venture, he had a seed capital of
barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he
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converted this fledgling enterprise into a Rs 60,000 crore colossus—an
achievement which
earned Reliance a place on the global Fortune 500 list, the first ever Indian private
company to do so. Dhirubhai is widely regarded as the father of India’s
capital markets. In 1977, when Reliance Textile Industries Limited first went
public, the Indian stock market was a place patronised by a small club of elite
investors which dabbled in a handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time retail
investors to participate in the unfolding Reliance story and put their hard-earned
money in the Reliance Textile IPO, promising them, in exchange for their trust,
substantial return on their investments. It was to be the start of one of great stories
of mutual respect and reciprocal gain in the Indian markets.
Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of
the greatest growth stories in corporate history anywhere in the world, and went
on to become India’s largest private sector enterprise.
Through out this amazing journey, Dhirubhai always kept the interests of the
ordinary shareholder uppermost in mind, in the process making millionaires out of
many of the initial investors in the Reliance
stock, and creating one of the world’s largest shareholder families.
ABOUT RELIANCE
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the
Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading
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private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services.
Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)
registered with the Reserve Bank of India under section 45-IA of the Reserve
Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing financial services
sector in India and aims to become a dominant player in this industry and offer
fully integrated financial services.
Reliance Life Insurance is another step forward for Reliance Capital Limited to
offer need based Life Insurance solutions to individuals and Corporates.
CORPORATE OBJECTIVE
At Reliance Life Insurance, we strongly believe that as life is different at every stage, life
insurance must offer flexibility and choice to go with that stage. We are fully prepared
and committed to guide you on insurance products and services through our well-trained
advisors, backed by competent marketing and customer services, in the best possible
way.
It is our aim to become one of the top private life insurance companies in India
and to become acornerstone of RLI integrated financial services business in
India.
CORPORATE MISSION
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“To set the standard in helping our customers manage their financial
future.”
CHAPTER3: INTRODUCTION OF
METHODOLOGY OF ADVISORS
RESEARCH METHODOLOGY
A Research Methodology defines the purpose of the research, how it proceeds, how to
measure progress and what constitute success with respect to the objectives determined
for carrying out the research study.The appropriate research design formulated is detailed
below.
Exploratory research : this kind of research has the primary objective of
development of insights into the problem. It studies the main area where the
problem lies and also tries to evaluate some appropriate courses of action.
The research methodology for the present study has been adopted to reflect these
realties and help reach the logical conclusion in an objective and scientific
manner.The present study contemplated an exploratory research.
RECRUITMENT
Recruitment is the process of finding and attracting capable applicants for
employment. The process begins when new recruits are sought and ends when their
applications are submitted. The result is a pool of candidates from which new
employees are selected.
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PURPOSE AND IMPORTANCE OF RECRUITMENT:
Increase the pool of job candidates at minimum cost.
Meet the organizations legal and social obligations regarding the composition of its
workforce.
Determine the present and future requirements of the organization in conjunction with
its personnel planning and job-analysis activities.
Evaluate the effectiveness of various recruiting techniques and sources for all types of
job applicants.
SOURCES OF RECRUITMENT
EXTERNAL INTERNAL SOURCES. SOURCES.
EMPLOYEE REFERRALS
ADVERTISEMENTS PREVIOUS APPLICANTS EMPLOYMENT EXCHANGE WALK-INS, TALK-INS CONSULTANTS
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COMPETITORS
EXTERNAL SOURCES:
1. ADVERTISEMENTS:
This constitutes a popular method of seeking recruits,
as many recruiters prefer advertisements because of
their wide reach.
Following are the various types of ads:
a) Want ads: This type of ad describes the job and the benefits, identify the
employer. They are the most familiar type of employment advertisements.
b) Blind ads: Large organizations with national reputation will seldom use
blind ads to fill lower-level positions. However, when the organization
does wish to publicize the fact that it is seeking to fill an internal position,
or it when to seeks to recruit for the position in the place of a person likely
to be displaced, a blind ad may be appropriate.
c) Self-ads: A variation to this source of recruitment is that that the
advertisements are released by the job seekers themselves. Such
advertisements describe the qualifications, experience and the areas of
interest of the advertisers.
2. EMPLOYMENT EXCHANGES:
These have been setup all over the country in
deference to the provisions of the employment
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exchange Act, 1959. The act applies to all industrial
establishments having 25 workers or more. Thus
employment exchange acts as a link between the
employers and prospective employees .
3. WALK-INS, TALK-INS:
The most common and least expensive approach for
candidates is direct applications; in which job seeker
submit unsolicited application letter or resumes.Direct
applications can also provide a pool of potential
employees to meet future needs .
From employee’s viewpoint walk-ins are preferable as
They are free from the hassles associated
with other methods of recruitment. While direct
applications are particularly effective in filling entry-
level a pools nd unskilled vacancies, some organizations
compile of potential employees from direct applications
for skilled positions.
4. CONSULTANTS :
ABC Consultants, Human Resource Consultants are some
among the numerous recruiting agencies. Consultants are
useful inasmuch as they have nation-wide contacts and
lend professionalism to the hiring process.
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5.COMPETITORS
Rival firms can be a source of recruitment. Popularly called
poaching’ or raiding this method involves identifying the
right people in rival companies. Offering them better
terms and luring them away.
There are legal and ethical issues involved in raiding rival firms for potential
candidates. From the legal point view,
employee is expected to join a new organization only after obtaining a no objection
certificate from his or her present employer. Violating this requirement shall bind the
employee to pay a few months salary to his or her present employer as a punishment.The
ethical issue is more significant than the legal one.Should an employee desert the
organization which has given training and offered him or her a job simply because
someone else offers you a few hundred rupee more as compensation? Is money
everything in life? Have loyalty and commitment lost their relevance?
MERITS OF EXTERNAL RECRUITMENT:
1. The organization will have benefit of new skills, new talent and new experiences,
if people are hired from external sources.
2. The management will be able to fulfill reservation requirement in favor of the
disadvantaged sections of the society.
3. Scope for resentment, heartburn and jealousy can be avoided by recruiting from
outside
DE -MERITS OF EXTERNAL RECRUITMENT:
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1. Better motivation and increased morale associated with promoting own
employees are lost to the organization.
2. External recruitment is costly
3. If recruitment and selection processes are not properly carried out. Chances of
right candidates being rejected (false positive error) and wrong applicant being
selected (False Negative Error) occur.
INTERNAL SOURCES:
1) EMPLOYEE REFERRALS:
This can be a good source of internal recruitment. Employees can develop good
prospects for their families and friends by acquainting them with the advantages
of a job with the company, furnishings cards of introduction, and even
encouraging them to apply. This source is usually one of the most effective
methods of recruiting because many qualified people are reached at a very low
cost to the company.
2) PREVIOUS APPLICANTS:
Although not truly an internal source, those who have previously applied for job
can be contacted by mail, a quick and inexpensive way to fill an unexpected
opening. Although ‘WALK-INS’ are likely to be more suitable for filling
unskilled and semi-skilled jobs, some professional openings can be filled by
applicants to previous jobs.
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FOLLOWING SOURCES WERE EMPLOYED AT RELIANCE LIFE INSURANCE DURING THE PROJECT:
1) BLIND ADS.2) DATABASE FROM CONSULTANTS.3) PERSONAL REFERENCES.
SELECTION
Selection is the process of differentiating between applicants in order to identify (and
hire) those with a greater likelihood of success in a job.
ROLE OF SELECTION:
The role of selection in an organization’s effectiveness is crucial for atleast, two reasons.
First, work performance depends upon individuals. The best way to improve
performance is to hire people who have willingness to work.Arguing from the employees
viewpoint,poor or inappropriate choice can be demoralizing to the individual concerned
and de-motivating to the rest of the workforce.Effective selection, therefore, assumes
greater relevance .Second, cost incurred in recruiting and hiring personnel speaks
volumes about the role of selection.
FOR EG. To prove how expensive recruitment has become. Pepsi had gone on a crash
recruitment drive. Six people from the company took over the entire Oberoi Business
Center in Mumbai for six days, 3000 applicants in response to the advertisement issued
earlier were scanned: applicants were asked to respond by fax within 100 hours: finally,
the short listed persons were flown in an and interviewed. Quite an expensive affair by
any standard.
SELECTION PROCESS
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PRELIMENARY INTERVIEW
SELECTION TEST
EMPLOYMENT INTERVIEW
REFERENCE AND BACKGROUND ANALYSIS
PHYSICAL EXAMINATIONEVALUATIONJOB OFFERSELECTION DECISION
EMPLOYMENT CONTRACT
R
E
J
E
C
T
E
D
1) PRELIMENARY INTERVIEW:
The to eliminate the unqualified job seekers based on the information supplied in their
application forms. Preliminary interview on the other hand, helps reject misfits for
reasons, which did not appear in the application forms.Purpose of preliminary interview
is more or less the same as scrutiny of applications, that is, elimination of unqualified
applications. Scrutiny enables the HR specialists
2) SELECTION TESTS:
Job seekers who pass the screening and preliminary interview are called for tests.
Different types of tests may be administered, depending upon the job and the
company. Generally, tests are used to determine the applicant’s ability, aptitude
and personality.
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S.NO TYPE OF TEST DESCRITION
1 WAB Eliciting candidate’s response to specific
questions.
2 BIB Assessing candidate’s response to the
background.
3 TAT Gauging the need for achievement and power.
4 SLC Assessing attitude towards importance of safety.
5 THOMAS PROFILING Identifying behavioral requirements for a job.
3) EMPLOYMENT INTERVIEW:
Interview is a formal, in-depth conversation conducted to evaluate the applicant’s
acceptability. It is considered to be and excellent selection device. Its popularity
stems from its flexibility.
Following are the various types of interview:
TYPE TYPE OF QUESTIONS USUAL APPLICATION
STRUCTURED A predetermined checklist of Useful for valid results,
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questions, usually asked of all
applicants.
especially when dealing
with large number of
applicants.
UNSTRUCTURED Few, if any, planned
questions. Questions are made
up during the interview.
Useful when the
interviewer tries to probe
personal details of the
candidate to analyze why
they are not right for the
job.
MIXED A combination of both
structured and unstructured
questions, which resembles
what is usually done in
practice
A realistic approach that
yields comparable answers
plus in-depth insights.
BEHAVIOURAL Questions limited to
hypothetical situations.
Evaluation is based on the
solution and approach of the
applicant.
Useful to understand
applicant’s reasoning and
analytical abilities under
modest stress.
STRESS A series of harsh, rapid-fire
questions intended to upset
the applicant.
Useful for stressful jobs,
such as handling
complaints.
s
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