Total Rewards Program Evaluation: Case Study of Geico
Total rewards are all available tools that employers can use to motivate, attract and retain employees. In other words, rewards are the compensations that organizations provide to employees for the services rendered to the company. However, rewards are not simply to offer payments or direct currencies for employees; however, rewards are the other form of non-financial benefits that can be converted to currencies, which include comfortable offices and favorable interpersonal relationships for employees. Typically, rewards are the compensatory benefits to exchange for the services that employees offer an organization. Total rewards are also defined as everything that an employee perceives as a great value. In a contemporary competitive business environment, organizations are increasingly attracting best talents to achieve business success. Implementation of total rewards for employees is one of the critical business strategies that can enhance competitive market advantages.
Objective of this paper is to evaluate total rewards program that Geico is currently offering and provides suggestions on the strategy that the company can employ to improve its total rewards packages.
Overview of Geico
Geico is one of the largest insurance companies in the United States that offers automobile insurance policies across 50 states in the United States. The company is registered on NYSE (New York Stock Exchange) and focuses on different automobile business operations. Berkshire Hathaway is currently managing Geico, and Berkshire is a company that manages activities of different subsidiaries. In the last few years, Geico implements effective rewards program to attract talented employees in order to enhance its competitive market advantages. In the contemporary business environment, employee performances are linked to rewards a company offers. After reviewing the Geico's website, it is revealed that the company has designed total reward programs tailored to the employees' needs. Geico compensates all its workers starting from the entry to executive levels.
According to Jiang, Xiao, Qi et al. (2009) five elements of total rewards are:
Compensation
Benefits
Work-Life
Recognition and Performance, and Career Opportunities and Development.
Glico compensates its workers based on their experiences and skilled levels. For example, the company compensates all the entry and executives staff of the company using salary and wages for the service rendered for the company. Compensations that Geico offers its employee comprise of two core elements:
Fixed pay and incentive pays are the two types of compensations that the company offers its employees. Fixed pay is known as base pay that is in form of monthly salary that employees receive. The company also offers incentive compensation that it offers to its employees, which is in form of rewards employee receives based on performances. Finally, Geico offers variables compensation for employees that is based on a level of performances. However, employees are given a target before this type of compensations is earned.
Benefits
Geico offers different benefits for its employees to supplement the cash awards that its employees receive. Geico designs this program to protect employees and their families from financial risks. The benefits are to insure the life of employees, and the comprehensive benefits designed by the company are as follows:
Education and Training is part of the total rewards programs that Geico offers its employees. The company offers different lifelong learning that includes mentoring programs, industry-leading training, family scholarship and tuition reimbursement. The company also offers the finance and retirements benefits for its employees. For example, the company offers profit sharing plans, 401(k) and life & accident insurance for its employees.
Benefits of Geico Total Rewards Approach
Several advantages that Geico can derive from total rewards program that it offers its employees. First, increase in the company productivity is one of the benefits that the company stands to enjoy from the rewards program. Health is wealth. A company that composes of healthy workers will record higher productivity than a company that composes of non-healthy workers. The composition of healthy workers assists Geico to increase its total revenues over the years, which assists the company to enhance competitive market advantages. San, Theen, & Heng, (2012) argue that there is a correlation between rewards and performances. The financial and non-financial measurements are the strategies that organizations can employ to measure rewards package. Financial measures include level of revenues, sales growth, gross profits, net profits and overall a company's balance sheets. Essentially, a reward practice enhances job engagement, motivation and job commitment.
Geico offers varieties of health and well being benefits for its full time employees. The benefits range from vision care to medical insurance. The benefits are also designed to meet the needs of employees' family. For example, the company assists its employees to choose dental plan to access dentists across the country. The vision plan also assists employees to have access to a comprehensive eyes examination for contact and glasses lenses. The company also offers AAP (Associate Assistant Program) to offer counsel to employees about strategy they can employ to manage depression,...
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