GEICO - a Total Rewards Approach to Compensating the Workforce - Case Study Example

GEICO Unlike the perception, that many people would take that retention and motivation of workers,the development of total reward system has revealed that a number of factors and not just through pay as well as benefits motivates employees. The total reward system outlines ways that best suits employee attraction, engagement as well as retention. Research studies in the past has revealed at least six motivators which influence the employees within an organization and they include growth, recognition, advancement, work itself, responsibility as well as achievement where benefits and pay are categorized as mere hygiene factors (Gohari, Kamkar, Hosseinipour & Zohoori, 2013). There are several advantages to using a total rewards approach to compensating the workforce. The top five are described in the text by Willey (2007, pp. 15—17). Advantages to a Total Rewards Approach The five main advantages of a total reward system as presented in the text include increased flexibility, improved recruitment as well as retention, reduction in labor costs (costs of turnover), increased visibility within a tight market of labor as well as a general enhanced profitability. First, GEICO provides various benefits to the employees especially the full time ones and the benefits include such as related to health and wellbeing, education and training, finance and retirement, leave as well as time off, and benefits concerning family and life (GEICO, 1996-2014). The company has in offer a variety of benefits to the associates regarding their health and well being and these are seen through medical, dental as well as vision coverage programs, AAP (associate assistance programs), LTD (long term disability programs as well as programs on physical fitness. Though these benefits are variant on nature of employment as being long term or short term contracts, this is a strategy that is aligned more in the advantage of increased visibility within a tight market of labor as showed by the total reward benefits discussed above. This advantage resonates around the management understanding the value of an individual employee amidst the tight competition in the labor market in the current era. Taking the responsibility of an employee’s interest on health and well-being works not only to improve on an employee’s performance but also for the increased opportunities to retain the employee in such a tight competition. GEICO therefore appears to have understood this principle and therefore develops and adopts the policy of caring about the employees’ well being and health. The second facet is on education and training where it is a determination of the company to offer the employees opportunities to grow personally as well as professionally and has the following programs on offer to this effect. Leading training (from the industry) especially on service personnel, re-imbursement on tuition used by the employees for education, GEICO university, insurance studies, job posts (promotion from within) as well as the provision of family scholarships. This facet well resonates around the advantage of improved recruitment as well as retention as developed within the total reward system. This is because, the total reward system ideology shows that companies are aware of the essence of having ‘well laid strategies’ to attract and retain employees through education and facilitating training. The modern day labor market is very alert on employee competitiveness shown through levels of education and training and therefore, such companies are exploiting the benefits that would accrue from improved training and academic prowess (Parus, 1999). These programs outlined on how GEICO promotes education and training shows how the company is enshrined in the total reward system in organizational management especially concerning employees. The third facet finance and retirement where the company highly esteems employees’ compensation as well as retirement as seen through the efforts to develop programs that promote employee saving culture. The company has a well-laid strategy to have employees enjoy competitive salaries, promotions based on merit, awards on profit sharing within the company as well as other systems geared towards securing better futures of the employees. Besides there are various insurance programs that are developed within the company and which equally contributes towards brightening the employees’ futures. This would be viewed from the perspective of improved profitability by a firm especially where the employees are diverse in age and terms of contract. The organization would therefore fore see the need to be strategic in meeting the retirement needs for the employees and this would be much more if no better strategies are not in place to have the employees contribute towards own pension benefit kit. The fourth facet is on issue of time off and leave as much esteemed by rational employees in any organization. The GEICO organization understands the essence of developing a balanced life between work and the personal lives for the employees. In order to facilitate this, GEICO has embraced specific programs, which include paying for employee vocations and holidays, as well as programs on sick days and leaves. This is in line with the advantage of adopting a full time reward system that provides increased flexibility that allows wards and such motivations be used in order to meet motivational as well as emotional needs of employees. This is because both employers and employees within the modern day relation need emotional and motivational boost and hence the likelihood that GEICO deliberately embraces the system. Finally, the company embraces the facet of family and life where every person cares for the good of each other. Among other programs that are adopted for this facet are dependent care FSA, assistance of adoption, long-term care insurance as well as associate assistance programs among others. This is in line with an advantage of reduced employees costs where as shown by the text by Wiley that the cost of losing an employee is far much than offering supportive services to employees. Embracing a corporate system that cares for individual employees provides the organization an opportunity to avoid effects of losing employees and distracting other employees through such losses. Total Rewards Strategy It is noted that total reward system in the modern day addresses the business needs for effectiveness in management of an organization’s costs as well as growth. Besides, the approach meets the evolving needs for the current day employees and it fits with a movement away from stock and cash. The five main advantages of a total reward system as presented in the text include increased flexibility, improved recruitment as well as retention, reduction in labor costs (costs of turnover), increased visibility within a tight market of labor as well as a general enhanced profitability (Pfau, 2012). GEICO therefore should follow the following strategy toward the full implementation of the total reward system. Basic is the need to have the management re-evaluate the quantitative benefits that accrue from the adopted programs as analyzed through the benefits above. Pursuing the above benefits may require strategic critical management practices and thus, effects of change of management systems and persons may be detrimental. This paper therefore proposes that GEICO adopts a system, which will have relatively permanent employees especially at the management level in order to have these features fully exploited. Frequent evaluation and stock taking on the levels or realizing the benefits would be highly advocated for in order to keep track of the organization’s performances. The Communications Plan The first change is by designing the website in a more attractive manner in that the general appearance of the website at a glance has implications on the interest created to the reader. Aesthetic feature in websites and such media play an important role in effective communication to the visitors. The outright appearance of the website as is currently provided lacks that appeal and this would have an effect in effective communication hence the need to re-evaluate it. The second change is creating a more detailed platform on the website to allow visitors extract the important information out rightly without being redirected to a different web page. This would be effective in providing as much information to a visitor as possible without wasting much time and resources. This paper therefore recommends for an improved engineering for the website in general having much information provided on face as against having the re-directs. Total Rewards Improvements The following changes that should improve the total rewards program are recommended: The first change is the need to have a more comprehensive system designed to incorporate the six basic motivators to employees, which are advancement, growth, responsibility, achievement, recognition as well as work itself. The current system broadly falls short of addressing some of the motivators and therefore seems to be broadly inclined to address rationality to employees as against focusing particular interests of the organization’s employees in specificity. The change would therefore be addressed by having a critical analysis of the main feature that defines the organizational culture and the specific attributes defining the organization unlike approaching it rationally. The second change is the need to customize the reward system to the particular needs of various employee categories as shown by age representation as well as by the organizational culture. Perpetuity in any organization requires that an organization hire the services of employees of different ages which if it is to be assumed in the organization fails to be considered in the programs as they are currently. Besides, generalization of interest of employees may not work appropriately as for example, not all employees would be interested in advancing education and thus such programs that favor advancement of education and training may not be favorable to them. There is therefore the need to customize the entire system in order to be cognizant of the strategic features defining the organization and especially regarding employees. References GEICO, (1996-2014). Total rewards system. Retrieved from http://careers.geico.com/about-geico/total-rewards-program/ Gohari, P., Kamkar, A., Hosseinipour, S. J., & Zohoori, M. (2013). Relationship between rewards and employee performance: a mediating role of job satisfaction. Interdisciplinary Journal of Contemporary Research in Business, 5(3), 571-597. Parus, B. (1999). Designing a total rewards program to retain critical talent in the new millennium. ACA News, 42(2), 20-23. Pfau, B. N., & Kay, I. T. (2002). The five key elements of a total rewards and accountability orientation. Benefits Quarterly, 18(3), 7-15. Wiley, J. (2007). The World at Work Handbook of Compensation, Benefits and Total Rewards: A Comprehensive Guide for HR Professionals. Retrieved from http://my.safaribooksonline.com/book/hr-organizational-management/9780470085806 Read More