Reward System of GEICO



Reward System of GEICO

Introduction

GEICO, the largest automobile insurance company operates in 50 states in USA. It is a government insurance company and is registered in the NYSE stock exchange. It operates in various areas of the automobile business activities (Bandier et al, 2010). It is exclusively owned by Berkshire Hathaway (a semi private company), known for managing the operations of various subsidiaries companies.

Berkshire Hathaway is marketing the automobile sector of government employee insurance company from 2007, and until today has advertise around 13 million vehicles that were purchased by 11 million insurance policy holders of the company. Government employee insurance company has achieved tremendous success throughout the twentieth century, as it believes providing quality services to its customers (Boyne & Hood, 2010).

Company use direct selling model for selling of its product to potential customers as it believes that this approach will enhance the relationship with the customer. The company is facing severe competition from Liberty Mutual Insurance, the Hartford Financial Services Group, and others. For competing in this competitive environment, the management of the company is formulating new strategies for sustaining and enhancing its market position (Sen et al, 2012).

Discussion

Q1) determine which facets of the GGEICO 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

To sustain its market share and to compete against its competitors management has drafted new policies and strategies, and has ensured its implementation throughout the organization. Company prime objective was to sustain its employees for a longer period and for that, it needed to upgrade its reward system because employee's performance is directly related to appraisal it gets from the company. Thus, new reward system of GEICO comprises of following sections

Employee's health and well-being

Continuous education and training of the working people

Finance and retirement benefits

Time off and leave facilities

Amenities and benefits

Advantages of total reward program and GEICO reward program

Companies develop a reward system program because they want to provide special benefits to employees that have played a vital role in the growth of the organization, and employees after continuous focus and devotion accepts to be recognized and appraised by the head of the company (Emmanuel et al, 2007). Work force of the company from top to the bottom layer accepts to increase in the pay scale, flexible work schedule, growth, great working atmosphere, and respect.

Successful reward program provides five advantages to its work force that include an increase in the flexibility of work, improving retention program, reduction in labor cost, heightened visibility of the labor, enhancing profitability. Thus, GEICO has developed its reward program on primary reward principles and has ensured that each of its reward category provide five main advantage to the employees. After analyzing the reward structure of the company, its health and well being, category of reward structures is in line with the five basic advantages of the reward system (Bandiera et al, 2010; Sen et al, ...