Case Study: Geico
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Case Study: Geico
Facets of The Geico Total Rewards Program
Total rewards refer to a variety of tools and strategies organizations use in the compensation of employees. The prizes are generally compensation to employees for their services to the firm. The awards take several forms, such as paid holidays, comfortable offices, and leave days, other than financial compensation. Geico is one of the major insurance firms in the united states with a primary focus on automobile policies. The company employs a unique total rewards program for its employees. The reward programs are tailored to meet the specific needs of each employee ranging from interns to executives (Hoole & Hotz, 2016). However, the program does not adequately address all the advantages associated with reward programs and requires revision periodically to align with all the benefits. In this regard, this paper discusses Geico’s whole rewards program and recommends improvement for areas that do not meet the requirements.
The WorldatWork Handbook of Compensation, Benefits & Total Rewards outlines in increased flexibility and retention of workers as some of the significant advantages of the program. Besides, the book highlights reduced labor costs, enhanced the profitability of the firm, and visibility in the market (Ruddy, 2015). Some of the Geico’s benefits align with the above-listed advantages. The benefits listed are planned for associates working in the company. For instance, Geico’s time off and leave, and family and life programs are aligned with the increased flexibility approach in that they allow their employees flexibility at work. In this case, Geico’s programs such as paid vacations, assistance programs, and leave time which will enable employees more flexibility. Moreover, the program includes three phone and in-person counseling sessions at no cost. Other benefits include daycare and elder care referrals as ell aid during crises (Pregnolato, Bussin & Schlechter, 2017). Geico utilizes the programs to give workers time off, making their work-life experience better.
Furthermore, Geico’s package improves recruitment to a great extent while retaining more employees. The company has a benefits package to help ensure their employees’ future (Ruddy, 2015). The organization understands their employees’ quality of life, which is why they offer a comprehensive total rewards program that includes a variety of options to preserve their health and wellbeing, secures their financial future, and have a balanced life. Consequently, the firm offers a life, disability & accident insurance benefit to the employees to ensure they are comfortable working and are assured of a better future should anything happen. Besides, Geico has numerous education benefits such as paid training, reimbursement of tuition costs, and eLearning classes. The educational benefits increase the rate of recruitment and retention of workers.
Another crucial facet of Geico’s system is recognition and performance. The segment relates to the acknowledgment of employees, giving them attention and rewarding them for their services (Pregnolato, Bussin & Schlechter, 2017). The firm is strict on morals. In this regard, the management ensures high standards by recognizing and rewarding the efforts of the workers to motivate them to behave responsibly.
Strategy to Address All the Advantages
The reward system, however, does not address all the benefits expected of the program, as outlined in the book. Moreover, the system does not adequately discuss the advantages included in the facets which align with the rewards program benefits. Consequently, the organization needs to implement new strategies that will ensure that all the benefits are attained (Ruddy, 2015). Generally, the firm needs to develop a reward program that directly aligns with the company’s business strategy and makes sure that the skills and abilities of the employees meet their needs. The first approach that the company should implement is the enhancement of employee flexibility. The human resource managers should research the workers with various packages to establish their most valued benefits. For instance, the company can offer flex time where the employees work for four days a week, 10 hours each day, and have a day off to handle errands and appointments.
Besides, the company can also improve their hiring habits such that workers are not recruited out of desperation but on merit. Proper hiring habits will ensure that the organization has a skilled workforce who can achieve their goals. In this regard, the skills of a candidate should first be tested before they are hired (Mabaso & Dlamini, 2017). Geico can accomplish this through their human resources department or hiring a recruitment agency to conduct the inquiries. The approach will not only ensure the company has a skilled workforce but also cut down the hiring costs. Contracting a hiring agency cuts down costs since managers do not have to spend time interviewing candidates or placing adverts.
Moreover, Geico can achieve heightened visibility by paying its employees competitively. Although money is not the main thing that attracts workers to an organization, a competitive remuneration contributes significantly to the choices candidates make. Geico should focus on both the salary and other benefits to ensure they are above the other organizations in the industry. Furthermore, the company can hold meetings with high-level employees and those with a potential long term tenure in the firm. Such an approach allows workers to be more productive.
Effectiveness of The Communication
Geico’s website is the primary communication tool that informs the employees and candidates about the benefits the company offers. However, the site only provides brief descriptions of the benefits included in each package. Necessarily, the website does not effectively communicate the rewards program. The company shows a belief that the associate’s quality of life and is vital to them (Mabaso & Dlamini, 2017). Consequently, the full-time associates receive a comprehensive total rewards package. The benefits vary for part-time employees and those employed on a contractual basis. The program includes a variety of benefits with some tailored to preserve the life and wellbeing of employees, secure their financial future, and offer them an opportunity to enjoy life.
Therefore, Geico needs to make changes in various areas within the rewards program. The first change is improving the total rewards benefits package. The nature of the packages is a significant determinant for many people. In this case, most of the workers will not want to enroll in the benefit plan if the cost is too high. The benefit plans should mainly focus on the needs of workers. Additionally, the price of the packages should be easily affordable to all the workers. A high deduction will stop someone from wanting to enroll in the insurance plan. A survey could be done to determine what benefits the employees may have an interest in and go from there. The move will ensure that the company is not providing benefits that nobody will have an interest in. A second change is that as far as the 401(K) plan, the employees should have an option of what percentage they are auto-enrolled (Ruddy, 2015). Geico employees are auto-enrolled to make a 3% pretax contribution plan. Some employees may feel as though they cannot afford 3% and want to drop down to 1 or 2%, depending on their financial needs.
Improvements or changes to Geico’s Total Rewards Program
Although the current rewards program aligns with most of the employees’ crucial needs, some may be unhappy with the program. In the case some employees are dissatisfied with the system, Geico can make the following improvements to their rewards program (Gulyani & Sharma, 2018). The first change necessary is reducing the cost of healthcare benefits. Healthcare is fundamental to all employees. The company can diversify the healthcare benefits at the same time, reducing costs to ensure the workers’ health is checked. Additionally, Geico can restructure their schedules to ensure that employees have a more flexible timeline. In this case, giving employees a day off and covering for it through working 10 hours a day would be ideal. Making employees happy, motivates them to be more productive and remain in the organization.
In summary, Geico has a unique rewards program that allows employees more flexibility and secures their financial future. The company’s system has numerous facets that are per the generalized advantages of such programs. However, their method requires many changes, such as reduced cost of plans, reduced working hours, and the inclusion of better healthcare services in the program. Implementing the changes can make employees happy with the benefits and motivate them to work for the firm. Therefore, Geico should aim at making the benefit programs more diverse and reduce the costs to attract and retain more employees.
References
Gulyani, G., & Sharma, T. (2018, December). Total rewards components and work happiness in new ventures. In Evidence-based HRM: A Global Forum for Empirical Scholarship. Emerald Publishing Limited.
Hoole, C., & Hotz, G. (2016). The impact of a total reward system of work engagement. SA Journal of Industrial Psychology, 42(1), 1-14.
Mabaso, C. M., & Dlamini, B. I. (2017). Impact of compensation and benefits on job satisfaction. Research Journal of Business Management, 11(2), 80-90.
Pregnolato, M., Bussin, M. H., & Schlechter, A. F. (2017). Total rewards that retain: A study of demographic preferences. SA Journal of Human Resource Management, 15(1), 1-10.
Ruddy, A. C. (2015). The World at work Handbook of compensation, Benefits, and Total Rewards: A comprehensive guide for HR professionals. New Jersey: Jhon Wiley & Sons, Inc.