Geico Case Study

Topics: Employment, Credit card, Loyalty program Pages: 9 (1423 words) Published: October 26, 2012
Assignment 1


HRM 533

Date: April 22, 2012

Geico Employees Insurance Company has been in existence since in 1936 and was founded

by Leo and Lillian Goodwin. Geico was established to provide auto insurance for governmental

employees in the entire United States. Geico was based on the idea the governmental employees

were safer and more financially dependable then the general public. With this way of thinking

Geico was able to cut out the middle man and saving the company money. Therefore, they were

able to pass these savings onto the customers, employees, and advertising.

Geico total rewards program aligns with the basic total rewards program that is

Compensation, Benefits, work-life, Performance & Recognition, and Development & Career

Opportunities. This set up was designed and implemented to mirror how the government was

operating. The way Geico was structure it developed and promoted internally. They used this

technique at Geico to develop well knowledgeable employees as well as maintain a low

employee turnover ratio. Theses principles help develop the company that people see today.

There are several advantages to using a total rewards approach to compensating the

workforce. The top five are described in the text (pp. 15-17). The following paragraphs discuss

the facets of the Geico total rewards program that align with these advantages:

Advantages to a Total Rewards Approach

The first facet when reviewing Geico’s compensation scale and comparing it to its

competitiors. Geico salaries are competitive to its completion like State Farm and All State. For

the most part Geico salaries exceed the industry. When reviewing the salaries that were posted

by position it compensated all positions well from entry level customer services representative

all the way up to their senior executives. Geico pays their employees based off of their skill level

and experience. Geico takes the time to place a monetary value on the work that n an employee

provides for their company. These salaries are based on not only competitor’s salaries but also on

the overall cooperate budget of the agency. Throughout the past few years with the economic

decline Geico was one of the few employers able to sustain the decline without having to cut

their work force.

Benefits are the second facet of the total rewards structure that Geico pays close attention to

maintain their employee’s quality of life. Benefits are programs an employer uses to supplement

the cash compensation that employees receive. These health, income protection, savings, and

retirement programs provide security for employees and their families (Ruddy, 2007) Geico

provides health, dental, and vision coverage. These benefits are available to employees directly

after the first pay roll. Employees also have available to them short term, and long term disability

coverage as well physical fitness gym memberships and a discount to promote wellness.

The third facet of the total rewards program is Work-life, a specific setoff organizational

practices, policies, and programs plus a philosophy that actively supports efforts to help

employees achieve success at both work and home (Ruddy, 2007) important to any employee

especially to the ones that have families and are planning to have families. At Geico they prepare

for any leave that an employee will need. Anything from the need to take a vacation to the days

you’re just under the weather. Also they prepare for the dreaded jury duty to the emotional

challenges from a death of a family member or the new edition of a family member. But through

it all Geico is ready for those changes an employee can rest a assure that they have the support of

their company.

The fourth facet of the total reward framework is the Development and Career...
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