Running Head: ASSIGNMENT

Total Rewards Program

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ASSIGNMENT 1

Total Rewards Program

Geico Total Rewards Program and its Advantages

The Geico total reward Model that establishes the bases to design reward packages that

obtain, on the one hand, the satisfaction and commitment of the employees and, on the other, the

good performance of the organization. This model establishes that in order to design a Geico

total reward strategy it is necessary for the organization to take into account external agents

(economy, labour market, culture and regulations) and strategic elements (organizational culture,

business strategy and human resources strategy) (Victor & Hoole, 2017). This analysis allows us

to understand the environment and the company to combine, in the most appropriate way to each

organization, the six elements of reward. These are:

 Compensation: compensation given to a worker for the administrations gave (e.g. time,

exertion, and aptitudes). This incorporates both the settled and the variable connected to

execution.

 Benefits: are programs that the business uses to enhance money pay. Advantages, for

example, wellbeing, monetary insurance, funds, and retirement programs offer security to

representatives and their families.

 Effectiveness of the conciliation: it consists of a set of specific practices, policies and

programs that, together with the philosophy, support and help the employee to achieve

success both at work and at home (Pregnolato et.al, 2017).

 Recognition: are programs that value the actions, efforts, behaviours or performance of

employees. They strengthen the business system by strengthening certain practices (e.g.
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uncommon accomplishments) that add to the achievement of the association. These

programs can be formal or informal.

 Performance management: consists of aligning the efforts that must be made individually

and collectively to achieve the business objectives.

 Development of talent: gives representatives the chance and the devices to propel their

abilities and skills in both their here and now and long haul professions.

The key to the success of the design of the Geico total reward consists of combining these

elements forming a remunerative mix that responds to the needs of the business and the

organization, to its culture, strategy, life cycle, without forgetting at any time the satisfaction of

the employees (Lyons & Ben-Ora, 2002). To implement a Geico total reward strategy it is

important:

 Be aware of the environment: know the sector, the applicable legislation, the labour

market, the customs and cultures of each region.

 Know the organization: keep in mind the mission, vision and values. Know the strategy

of the company as well as the objectives that have been established.

 Design a tailor-made Geico total reward strategy: taking as a reference what competitors

do does not always work. A certain remunerative mix can work perfectly in one

organization and not in another.

 Understand the different elements of reward and manage them together: it is important to

visualize the strategy of Geico total reward as a puzzle in which each reward element is a

piece. Managing in isolation each element will only produce higher costs, lower return on

investment and greater confusion in the organization (Haider et.al, 2015).

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 Consider employees as an asset and not as a cost: conceiving employees as the main asset

of the organization is a tremendously useful approach to understanding their needs and

concerns and offering them, through reward, what they really need as long as it is

consistent with the needs of the company.

In short, what the Geico total reward Model allows us is to design a reward strategy that

increases the company's competitive advantage while increasing employee satisfaction and

commitment (McCormick, 2015).

Organization’s Strategy in designing Geico Total Rewards Strategy

Models or Flexible Reward Plans allow the employees to choose on the composition of

their total reward, both in regards to your cash as to the social benefits they receive, always

complying with the regulations in strength of each country. This reward scheme allows

organizations, in addition to adapt to the needs of workers, increase your net salary without

additional salary costs for the company (Smit et.al, 2015). The flexibility of these models is

based on offering the possibility for workers to replace payments money for payments in kind.

This choice, despite decreasing its gross salary, increases its final liquidity as it reduces yields of

work subject to taxation thanks to the best tax treatment that grants in US certain forms of

reward in kind, also attenuates the progressivity of the tax.

This aspect is important when designing the package of benefits that the company offers

to employees because the positive fiscal repercussions are, in many cases, increase the

attractiveness and profitability for the worker who perceive this reward (Gulyani & Sharma,

2018). However, these models should not be understood only as a tax saving instrument for

employees since, if so, these systems would not be valid in those countries whose labour and
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fiscal legislation did not favour any form of retribution in kind. Flexible compensation offers

also other advantages to both the employee and the company.

On the other hand, this reward system does not only pursue economic purposes but also

aims to offer a deal customized to the worker, adapting to their needs personal according to these

vary. The adaptation of the reward to the interests of workers increases their link with the

company. It responds with it to an increasingly diverse workforce in its composition: age, sex,

economic situation, family responsibilities, culture, etc., with very different needs. That

adaptation individual reward increases the perception of equity of the workers in the distribution

of benefits (Werner et.al, 2017). From the point of view of the company, the professional partner

of his reward package achieves that the employee values much more the effort made by the

company for his person and their needs, increasing the perception personnel of the total

compensation received.

Elements of Geico Total Rewards Communication Program

Reward is a critical point of the employment relationship between employee and

employer. The way to manage it has evolved over time as the characteristics and aspirations of

companies and workers. From a routine view, the retribution has gone from being considered

strategic, not only because of its economic importance, for its impact on other aspects of the

organization (Victor & Hoole, 2017). The shape of compensating the staff is a key instrument

not only inhuman resources policies, but also for one's own business strategy In this sense,

companies are each day more aware that, acting in this field, they can have the best professionals

and improve their performance by acting on the behaviour of workers and their job satisfaction.

On the other hand, in situations of economic crisis the appropriate talent management becomes a
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critical concern for the companies that consider this fundamental element for its survival and

growth as a source of advantages competitive ones (Pregnolato et.al, 2017). It is now when it

becomes more important to retain, attract and manage talent appropriately to face the new

difficulties and meet the objectives marked.

In this context, organizations they need talented managers, talented employees and ideas

innovators. In addition, the retention of this talent is vital, because the talent of a company is not

their property, where workers can change your organization according to your interests and take

with you they the source of value they represent. In addition, economic crises cause companies

to confront the challenges of recruiting, selecting and retaining the "best" with very limited

funds. The fact that many organizations can not increase the budget line intended for salaries

forces them to offer other solutions in this field that maintain the attractiveness of the company

(Haider et.al, 2015). Before these challenges, improved human resource practices can facilitate

the relations between company and employee, offering new alternatives that improve the

worker's commitment to organization decreasing staff turnover. Among these practices,

compensation systems in emerging markets contribute to the company's ability to attract, Loyalty

and reinforce the talent they need.

With its application, companies want to influence the perception that their workers have

about the support and concern shown by the organization towards their well-being, with the

purpose to improve your satisfaction and increase your loyalty to the company. This results in an

increase in the capacity of retention of the company that is reflected in a decrease in the rate of

external or voluntary rotation (McCormick, 2015). There are several theories that can support the

previous ones reasoning. In the same way the approach based on the adjustment between the

person and the organization defends that employees are more attracted to organizations that they
ASSIGNMENT 6

meet their needs and demands. Dice that flexible compensation plans offer high flexibility that

allows employees to choose the benefits they want to receive and the percentage of the salary

that they want to dedicate to this purpose, the individuals can design their own compensation

based on their concrete needs (Smit et.al, 2015).

Problems and required changes to Geico’s Total Rewards Program

The study of the current situation in the US organizations in the field of labour

motivation revealed the following problems that impede the development of personnel reward

systems, weak flexibility and inadequacy of changes in the external and internal environment,

lack of readiness to introduce advanced personnel reward systems and changes in personnel

management approaches, lack of awareness of the prevailing labour values and motives, the

instability of the financial situation and external conditions for the functioning of organizations

(Gulyani & Sharma, 2018).

There are a number of personal circumstances, such as age, gender, marital status and

number of children, which influence the individual's preference for data benefits. As people in

different life situations have different needs. Considering the traditional packages that do not

take these differences into account, it is to be expected that many people will not have the

additional benefits they would like; which means that many benefit packages do not give a

positive return on their costs (Werner et.al, 2017). A flexible benefit plan makes it clear to

employees exactly how much the organization is expending to compensate them, and ensures

that money will be spent only on benefits that employees want”.

One of the ways to overcome these problems is to create an in-house personnel reward

system aimed at unlocking the potential of each employee through encouraging productivity,
ASSIGNMENT 7

quality of work, recognition of creativity, performance and initiative all those qualities that

contribute to effective performance and lead to the achievement of strategic goals. The absence

in domestic organizations of traditions and technologies for creating a reward system creates the

need to develop a methodology for its construction that is adequate to market relations (Lyons &

Ben-Ora, 2002). You can assess the impact of the implementation of a staff reward system on its

contribution to improving the organization’s activities, on the effectiveness of the human

resource management system, on improving the quality of employees and increase their

satisfaction.
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References

Gulyani, G., & Sharma, T. (2018, June). Total rewards components and work happiness in new

ventures: The mediating role of work engagement. In Evidence-based HRM: a Global

Forum for Empirical Scholarship. Emerald Publishing Limited.

Haider, M., Aamir, A., Abdul Hamid, A. B., & Hashim, M. (2015). A literature Analysis on the

Importance of Non-Financial Rewards for Employees' Job Satisfaction. Abasyn

University Journal of Social Sciences, 8(2).

Lyons, F. H., & Ben-Ora, D. (2002). Total rewards strategy: The best foundation of pay for

performance. Compensation & Benefits Review, 34(2), 34-40.

McCormick, H. (2015). Rethinking Total Rewards. UNC Kenan-Flagler Business School.

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.

Smit, W., Stanz, K., & Bussin, M. (2015). Retention preferences and the relationship between

total rewards, perceived organisational support and perceived supervisor support. SA

Journal of Human Resource Management, 13(1), 1-13.

Victor, J., & Hoole, C. (2017). The influence of organisational rewards on workplace trust and

work engagement. SA Journal of Human Resource Management, 15(1), 1-14.

Werner, S., Blair Jones, C. C. P., CBP, C., John Borneman, C. E. C. P., Brooks, J., Reda, J. F., ...

& Watson, W. T. (2017). 06 Adapting Total Rewards to Industry Factors: The Case of

the Oil and Gas Industry.