MGT431 Incentive Plans paper week 4 ind. assign.
MGT431 Incentive Plans paper week 4 ind. assign.
Popular in Course
verified elite notetaker
Popular in Department
This 5 page Study Guide was uploaded by Experthelper Notetaker on Thursday November 12, 2015. The Study Guide belongs to a course at a university taught by a professor in Fall. Since its upload, it has received 19 views.
Reviews for MGT431 Incentive Plans paper week 4 ind. assign.
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 11/12/15
Ince1tive Plans for Farm Bureau Insurance Incentive Plans for Farm Bureau Insurance NAME MGT 431 Human Resources Management DATE Incentive Plans for Far2 Bureau Insurance Incentive Plans for WHATEVER COMPANY YOU CHOOSE Farm Bureau Insurance offers two incentives to employees. The incentives include a yearly bonus and a company vehicle included with 6,000 personal miles a year. The incentive plans of Farm Bureau Insurance relate to the organization’s needs and objectives by keeping premiums as low as possible while maintaining a profit margin to gain revenue. At the end of each fiscal year the loss to gain ratio is evaluated. The outcome of this ratio determines rather or not employees receive a bonus. The incentive plans rely solely on how much premiums are brought in compared to loss ratios. For example, if Farm Bureau were to bring in $100,000 in premiums and had only $30,000 in losses, bonuses would be a definite for all employees that year. With Farm Bureau being an insurance organization, incentives rely on the number of customers, amount of premiums, and amount of losses in a year. If Farm Bureau were to be faced with many tragic storms in many areas losses would be sky high. Although premiums are being paid, the amount of losses could be too high to pay out bonuses to employees. Farm Bureau thrives to project the best case scenario with premiums and losses. Farm Bureau advertises to increase customer level and makes sure to provide the right amount of coverage for each individual with all of their valuable property. Farm equipment is a big factor with a lot of Farm Bureau customers. Farm equipment is some of the most expensive business tools in the world. For example, a combine tractor can run in the hundreds of thousands of dollars and is much needed to harvest crops. An auger is used to move the grain out of a bin into a truck and usually costs around $50, 000. Incentive Plans for Farm3Bureau Insurance Farmers must make sure to protect this equipment because it brings in their income and feeds their family. Farmers paying a small premium offer peace of mind protecting them from an accident or natural disaster. Fore example, a customer can pay only one month of premiums, total their equipment and we will pay to replace the entire amount of damage or price to replace equipment. The company truck enables employees to drive wherever they need to in order to be there for the customers of Farm Bureau. This keeps the customers paying their premiums and recommending us to friends and family. This company vehicle allows employees to travel many miles within their assigned counties without having to pay for their own gas. A company credit card is provided with the vehicle to fill up the tank whenever needed. Traveling is a big component of Farm Bureau employees because customers are all over the state. Employees do not have to worry about putting wear and tear on their personal vehicle while driving numerous miles. The 6,000 personal miles offer the employees a bit of reward that they can use to their own desire. For example, if an employee and their family wanted to take a vacation Farm Bureau would pay for their gas if the company vehicle was used. Farm Bureau’s incentive plans do not help the organization achieve goals and objectives. The goals of Farm Bureau Insurance are too obtain and keep as many customers as possible while bringing in an adequate amount of premiums to cover the reported losses each year. Insurance companies pay out in losses each year which make it difficult to provide incentives. “Companies that don't carefully devise and execute their incentive plans run the risk of including disincentives that can jeopardize highquality Incentive Plans for Farm 4ureau Insurance performance and adversely affect the company, its employees and its customers (CBS Interactive Inc., 2010).” Yearly bonuses are the only incentives because insurance companies are structured to collect premiums and pay out claims leaving little to no funds available for vacation time or cash rewards. Yearly bonuses based on loss ratios do not help the organization reach its goals because they are not affected by the actions of employees. Employees do not get a bigger bonus if they work so many houses or pay so many claims. It is a simple calculation that makes either possible or impossible within that fiscal year. This incentive does not motivate employees to work harder or be more creative. Insurance companies are known for overworking underpaid employees. “If employees do have an appetite for incentives and pay at risk, companies need to ensure that the size of the incentive is appropriate and motivating. The incentive itself must be meaningful enough to have the desired motivational effect (CBS Interactive Inc., 2010).” Incentives are a great way for many organizations to motivate employees to work harder and make more of a contribution. However, certain organizations like insurance companies are not able to do so. Yearly bonuses based on premiums and loss ratios are as far as they can go and although are not motivation to sell more make an employee feel appreciated. Farm Bureau thrives to keep the customers happy so they will pay their premiums and feel fairly treated. Since employees are the man power in doing this yearly bonuses are presented in order to satisfy employees and give them something to look forward to. This incentive doesn’t motivate employees like most incentives do but is what most employees say is better than nothing. Incentive Plans for Fa5m Bureau Insurance Reference: CBS Interactive Inc.. (2010). Business Services Industry. Retrieved from http://findarticles.com/p/articles/mi_m3495/is_6_52/ai_n19311779/pg_2/? tag=content;col1
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'