Go to the Geico Website to read the “Total Rewards Program” at
https://careers.geico.com/working_at_geico/total_rewards_program.
Create a five to seven (5-7) page paper in which you:
1. Determine which facets of the Geico total rewards program align with the five top advantages of a total rewards program outlined iand discuss your reasoning.
2. Create a strategy for ensuring that the Geico plan addresses all of the advantages.
3. 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.
4. Assuming employees are unhappy with the current plan, offer two (2) improvements or changes to Geico’s total rewards program.
5. Use at least six (6) quality academic resources
Your assignment should follow these formatting requirements:
a. Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references should follow APA or school-specific format.
b. Include a cover page containing the title of the assignment. The cover page and the reference page are not included in the required assignment page length.
The Top Five Advantages of a Total Rewards Approach
1. Increased Flexibility
With the one-size-fits-all approach essentially gone, the twenty-first century may well become the “rewards your way” era. Just as companies create niche products and services to cater to small consumer segments (micromarketing), employers need to start creating different blends of rewards packages for different workforce segments. This is particularly true in a global labor market where workforce diversity is the rule, not the exception, and when specific skills are in short supply.
A total rewards approach—which combines transactional and relational awards— offers tremendous flexibility because it allows awards to be mixed and remixed to meet the different emotional and motivational needs of employees. Indeed, flexibility is a two-way street. Both employers and employees want more of it.
As the importance of flexibility has become more understood, more companies are allowing employees to determine when they work, where they work, and how they work. Total rewards recognizes that employees want, and in many instances demand, the ability to integrate their lifestyle and their work.
2. Improved Recruitment and Retention
Organizations are facing key shortages of best-in-class workers (top performers), Information Technology (IT) workers with hot skills, and workers for entry-level, unskilled jobs. The classic initial solution to a recruitment and retention dilemma is to throw money at the problem. But because this solution is so overused, it does not offer a competitive advantage. Furthermore, it immediately raises costs.
A total rewards strategy is critical to addressing the issues created by recruitment and retention. It can help create a work experience that meets the needs of employees and encourages them to contribute extra effort—developing a deal that addresses a broad range of issues and spending rewards dollars where they will be most effective in addressing workers’ shifting values.
Indeed, today’s workers are looking beyond the “big picture” in deciding where they want to work. Work and personal life should be seen as complementary priorities, not competing ones. When a company helps its employees effectively run both their personal and work lives, the employees feel a stronger commitment to the organization. In addition, numerous studies show that employees look at the total rewards package when deciding whether to join or stay with an organization.
An actual summary statement can be prepared for potential employees, enabling them to see the whole value of being employed by a company. As such, as highly desirable job candidates explore their options with various companies, companies with total rewards have a competitive advantage because they are able to show the “total value” of their employment packages
3. Reduced Labor Costs/Cost of Turnover
The cost of turnover—often the driver of recruitment and retention—is sometimes invisible. In reality, it’s far from cheap. Estimates of the total cost of losing a single position to turnover range from 30 percent of the yearly salary of the position for hourly employees (Cornell University) to 150 percent, as estimated by the Saratoga Institute, and independently by Hewitt Associates (Lermusiaux 2003). In addition, the cost of turnover includes indirect costs such as losses from customers and sales, as well as decreased efficiencies as productive employees leave and the remaining workers are distracted.
4. Heightened Visibility in a Tight Labor Market
Talent shortages have become a chronic condition of business life, and experts agree that the tight labor market is going to get tighter. As a result, employers can no longer afford to simply view their employees as interchangeable parts. Organizations quickly are realizing that every employee matters even more when there are not enough employees to fill the available jobs.
In addition, demographic shifts (e.g., the increasing number of women in the workforce) coupled with new economic forces (e.g., global competition) have changed the employment landscape, creating an unprecedented need for committed employees at a time when loyalty is low. If people can find an environment that’s more in sync with their needs, they will make changes for that. Likewise, they will stay put when they feel their needs are being met.
By gaining a clear understanding of what employees value, and mixing and matching rewards within a comprehensive framework, companies can reallocate their investment dollars to match what employees say they value most, and can communicate the total package versus a patchwork of individual components.
5. Enhanced Profitability
Aside from the high costs of technology, HR professionals also are saddled with escalating benefits costs and changes in health care coverage and medical protocols. Employees want a “new deal” at the same time that companies—struggling to deliver their financial targets—are readily cutting programs to trim costs. How to balance these two realities? Change the mix.
A big misconception about total rewards packages is that they are more expensive. That’s because a number of companies equate the notion of rewards with “more”—more pay, more benefits, and more combinations of rewards. What companies need to realize is that by remixing their rewards in a more cost-effective way, they can strengthen their programs and improve employees’ perception of value without necessarily increasing their overall investment. It’s largely a matter of reallocating dollars rather than finding more dollars.
Indeed, as companies discover the power of targeted reallocation of rewards and begin promoting the total value of their programs, they are abandoning the practice of setting pay, benefits, and other budgets in isolation, without reference to broad strategic and cost objectives. As they begin understanding their true aggregate costs— often for the first time—they are in a position to measure the extent to which their expenditures are in line with, over, or under competitive practice. And they can then measure whether they’re getting a reasonable return on their overall investment.
Today’s workforce includes several distinct generations, each with a different perspective of the employer-employee relationship. Most employee research indicates that younger employees place a far higher priority on work environment and learning and development than on the traditional rewards components. In contrast, older workers put more emphasis on pay and benefits. All employees are concerned with health care, wealth accumulation, career development, and time off. It simply is no longer possible to create a set of rewards that is universally appealing to all employees or to address a series of complex business issues through a single set of solutions.
The challenge is to develop and implement a flexible program that capitalizes on this diverse workforce. Valuing each employee includes understanding that everyone does not want to work the same way or be rewarded the same way. To achieve excellence, employers need a portfolio of total rewards plans.