HRM533 Assignment 1 Geico Case Study
HRM533 Assignment 1 Geico Case Study
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Date Created: 11/09/15
Geico Case Study ASSIGNMENT 1 GEICO CASE STUDY APRILE R LESTER DR. VALENCIA WESTRAY HRM 533 TOTAL REWARDS JANUARY 25, 2013 Geico Case Study Introduction Government Employees Insurance Company mostly known to the nation as Geico and is one of three largest automobile insurers in the United States. Founded in 1936 by Leo Goodwin, he thought it would be a good idea to show how much he appreciated our armed forces and government employees by offering the most affordable insurance options to also include special discounts and service options; but today Geico has been serving all consumers and has been known to be one of the most successful companies in the nation. Geico has sustained his credibility by building on its ingenuity, perseverance, innovation, resilience and hard, honest work. However, after the change in management and the passing of the Goodwin’s, something else died along with its founder and revenue hit an incredible low and although service offices were now available for walk in customers and even drive thru claims offices were being established, the years of aggressive growth created a certain weakness and this became a difficult time for the company as a whole. It was then mid 1970’s that the new President/ CEO Olza “Tony” Nicely knew there had to be a new and improved strategy implemented and this new strategy would need to also be aligned with a total rewards program, as they continued to grow and expand with a new call center for claims, sales and service and employing more than 27,000 employees. Determine which facets of the Geico total rewards program align with the five (5) top advantages of a total rewards program outlined in Chapter 2 of the textbook and discuss your reasoning. Now, with the focus on the total rewards within Geico, and the emphasis on the meeting the needs of their employees became priority and the five advantages of this program begins with flexibility. The flexibility created a two way relationship between both the employer and their Geico Case Study employees which allowed employees to decide when they work, where they work, and how they work ultimately recognizing that employees desire to integrate their lifestyle and their work (WorldatWork, 2007). Because Geico understands that family needs are important to them, they are very supportive and committed to meet both emotional and motivational needs of the employees and to do so they offer various programs such through their benefit package. Geico expresses that the quality of life now and in the years to come are very important and offer a very comprehensive total rewards program to include medical, dental, prescription drug coverage, traditional and Roth 401k plans, profit sharing, undergraduate tuition reimbursement, life and accident insurance, paid vacation, holidays, floating holidays and sick days just to name a few. The next advantage is improving recruitment and retention. Numerous studies show that employee look at the total rewards package when deciding to join or stay with an organization (WorldatWork, 2007, p. 16). Top performers, top leaders are hard to come by recruiting can being very costly and time consuming but should be the key for a business to succeed. Recruiting talented people and continuing to develop their skills and build their value should be the main focus and Geico does just that by offering undergraduate tuition reimbursement but they also can include improving the quality of employees by also providing job expectations and feedback or what is also known as performance review plans. Implementing additional training as new policies are put in place, and company values change, offering various workshops that can be held right in a Geico facility can also help in retention. Creating a work experience that meets the needs of their employees is important and when you encourage them to be the best they can be that will somehow contribute that employee(s) to give that extra effort and an organization can reach their business goals. The cost of turnover is a big issue with any Geico Case Study organization. The costs of turnover includes indirect cost such as losses from customers and sales, as well as decreased efficiencies as productive employees leave and the remaining workers are distracted (WorldatWork, 2007, p. 16). I believe that any organization should consider today’s business needs for managing costs and growth to help drive the business forward. Next is heightened visibility in a tight labor market, which involves becoming more aware of today’s labor market by becoming more aware of demographic shifts (e.g. the increasing number of women in the workforce) coupled with the new economic forces (e.g. global competition) because if an employer becomes more in sync with their needs, the needs of the business can be met. Carefully developing talent is so critical in the success of many employees and Geico can offer extensive training through various computer modules, on the job training, shadowing, rotation of positions, and coaching because they believe that retaining employees is important and as well as developing talent. Finally with the today’s war on national healthcare, businesses are making cutting costs thus enhancing profitability is also important to the total rewards approach. And what Geico organization does is realizing that every employee matters and gain a better understanding of what employees value, and mixing and matching rewards within a comprehensive framework will allow companies to reallocate their investment dollars to what employees value most and communicate the total package versus a patchwork of individual components (WorldatWork, 2007, p. 16). Create a strategy for ensuring that Geico plan addresses all of the advantages. Geico should first be sure that their total rewards program is directly aligned with their business strategy, also making sure that employee’s skills and abilities meet the needs of the company’s goals and strategies. However, other suggestions can include different rewards for different Geico Case Study work segments by finding out what motivates them in order to get the most out of them, which can be done by enhancing flexibility. For example my current employer offers flex time where an employee can work a four ten hour days with one day off during a work week. This allows me to continue to earn annual leave, so I can use the day off for appointments or errands that are not able to be done during a normal work week of the four days. Geico can also improve on their recruitment by not hiring out of desperation, just to fill a position but should consider offering skills testing as a method of decreasing employee turnaround and this can be done by either a human resources department or you can contract this responsibility out to a job placement agency. This method will definitely ensure you have found the best fit for the right position and also keep costs down on new applicant recruitment. Every company should have some type of testing or verification of one’s skills and abilities. Also Geico can consider paying competitively, which can attract the candidate but money should not be the main reason people are attracted to employment. Geico can also hold regular sessions with their employees who tend to perform at a higher level and are more likely to achieve longer tenure. To do this Geico should keep them informed of new policies and procedures because an informed and educated employee is a more productive employee which can also increase profitability. Evaluate the effectiveness of the communication of Geico’s total rewards program based upon the Website’s descriptions of the benefits. Recommend two (2) areas for improvement. The effectiveness of the communication of Geico’s total rewards program is top of the pack as they describe themselves as a community inside and out as they not only offer an excellent benefits package from medical to vision, to fitness centers and associate assistance program (AAP) or employee assistance program (EAP), which provides counseling sessions, worklife Geico Case Study programs, financial counseling, and legal consultation. I would also recommend a very extensive recruiting plan. While recruiting exists in some form in virtually every company, staffing is not always a separate function – sometimes recruiters do that too, because hiring the right people at the right time may make or break a company. Depending on the structure of the company, recruiting strategy may be managed geographically by recruiting directors or managers in certain regions or locations or functionally by recruiting directors or managers in certain functions like sales or finance (Strayer, 2005), and Geico could benefit from this structure. The next recommendation involves benefits. Geico has an exclusive benefits package filled with many amenities, however they only apply to those permanent employees, and I think they should expand its health and wellbeing strategy to both interns and part time employees equally. This can secure that those short termed employees are valued and are being shown they are not just appreciated but also part of the Geico family. Mostly, the intern and or the part time employee can become permanent fixtures within Geico, because as a whole it is the employee that is front line to an organizations success. Assuming employees are unhappy with the current plan, offer two (2) improvements or changes to Geico’s total rewards program. Geico or any organization can benefit from increased productivity and capabilities by creating a better linkage between individuals’ efforts and business goals and showing that commitment to valued employees will reduce turnover and increase strength between people’s jobs and skills. Thus employees benefits from higher motivation and commitment, and increased knowledge so they can contribute to company goals (Ellis, 2005). We all know the six main components of talent management include: plan, attract, recruit, assess, develop and retain (Silzer, 2010). Geico could also make happy employees by looking internally to promote and encourage growth, Geico Case Study because they already are aware of the culture, and processes which is also a cost saving to hiring costs and extensive training (Warner, 2004). When employees have the opportunity for growth without having to compete with outside candidates, it shows that organizations including Geico can create a better working environment and improve employee morale. References Ellis, C. W. (2005). Management Skills for New Managers. New York: AMACOM, American Management Association. Silzer, R. A. (2010). Strategy Driven Talent Management. San Francisco: Jossey-Bass. Strayer, S. D. (2005). Vault Guide to Human Resources Careers, Get in the inside story. New York: Vault Career Library. Warner, R. (2004). How to Run a Thriving Business. Berkeley: NOLO. WorldatWork. (2007). The WorldatWork Handbook of compensation, benefits, & total rewards. Hoboken, NJ: John Wiley & Sons.
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