This case involves a fictitious company, D-Bart Industries, formed by the merger of Davis Manufacturing and Bartlund Technologies, 2 former rivals in the fabrication of precision parts used in medical equipment and airline manufacturing. The exercise requires analysis and application of various strategies utilized during downsizing and the use of performance appraisals in the decision-making process.
Aflac Insurance Case Study
How the company uses its own products or services to enhance the total compensation for its employees
Aflac uses its own products to enhance the total compensation that its employees receive. One way of accomplishing this is by providing employees with insurance cover at a reduced cost. Employees are able to enjoy various insurance cover at a lower cost compared to that incurred by the customers. For instance, the company provides employees with a cancer policy and accident protection cover. The cancer policy is free while the company subsidizes the accident protection cover. This means employees enjoy lower costs. The company provides training and development to employees at no cost. This prepares employees for promotions as they advance in their careers. The company provides employees with training opportunities and involvement in leadership programs where they gain critical management or leadership skills. Another way Aflac uses its own products to enhance the total compensation is by paying employees 100 percent of their premium. These premiums relate to the cancer insurance scheme.
The internal and external strengths and weaknesses identified and how the company responded to these factors from a total rewards perspective
They are factors within a company that enables it gain a competitive advantage (Kazmi & Kazmi, 2008). The company has a number of internal strengths. One of its key internal strengths is high employee loyalty. A large segment of Aflac’s employees (90 percent) prefers staying at Aflac while only a small segment would prefer to seek employment elsewhere. This indicates high employee satisfaction levels leading to low employee turnover rates. It is worth noting that high employee turnover rates are costly to business organizations. The company developed high employee loyalty by compensating employees well and by establishing a total rewards program. The company is listed in the New York Stock Exchange. This enables the company to raise enough capital for expansion purposes through the sale of shares. Another strength is brand awareness.
They are factors outside the company that improve its competitive advantage (Kazmi & Kazmi, 2008). Aflac has opened a subsidiary in Japan, Aflac Japan. This helps in cushioning the company from the local economic shocks that the company may experience. For instance, while the U.S. economy may experience sluggishness, the business environment in Japan could be favorable. This would ensure that the company does not suffer a total loss. Another external strength is the relatively stable economic environment the company operates. A stable economic environment fosters growth. From March 2008, the company seems to have recovered from the recession since it added four employees signifying growth.
They are factors within the company that lead to strategic disadvantages. The company has total control over these factors (Kazmi & Kazmi, 2008).The company incurs high expenditure especially in form of employee benefits. In addition, due to business growth the company seeks to hire new employees every year, which increases the cost of doing business. The company has conducted three mass layoff events in 2007 and 2008. These layoff events may negatively affect the productivity of employees due to job insecurity.
They are factors that the company cannot be able to control and lead to strategic disadvantages (Kazmi & Kazmi, 2008). One of the key external weaknesses facing Aflac is lack of a pool of trained work force. The Bureau of Labor Statistics (BLS) indicates that there is a meagre 3.3 percent unemployment rate in the insurance industry. This means that the company has to spend a lot in attracting and retaining employees. This means employees have strong bargaining power, which could hurt the company financially if employees decide to ask for higher compensation. Another external weakness is the rising cost of health premiums, which is higher than inflation rates. As the cost of health providing health premiums increase, the company’s profits reduce. In addition, more consumers may be unable to afford health cover.
Examples of traditional and non-traditional rewards and how they are used to meet organizational objectives
Aflac provides its employees with both traditional and non-traditional rewards. Traditional benefits typically involve medical or health-related covers and insurance schemes (Muse & Wadsworth, 2012). On the other hand, non-traditional rewards include various modern financial incentives such as workplace benefits and childcare assistance (Hill & Jones, 2010). The traditional forms of rewards at Aflac Insurance include employer-paid life insurance, a subsidized accident protection insurance, employer-paid cancer cover, and employee benefits. The non-traditional rewards include recognition dubbed ‘Volunteer of the Month’, providing on-site childcare facilities, and sponsorship of outdoor adventure events for employees. These rewards are used to meet organizational objectives by ensuring that employees develop towards the company. The aim of the benefits is to make the employees develop a positive attitude towards the company. This improves the overall productivity.
How the company aligns its benefits with its corporate values
Aflac Insurance’s philosophy involves treating employees with dignity and respect. Among its guiding principles is to enrich the experience of employees and providing them with a better workplace. In light of this, the company aligns its benefits with its corporate values by being the preferred employer. The company strives to enrich the employee experiences and develop loyalty. The company offers employees the opportunity to grow or advance their careers through training and development. Among its organizational outcomes relating to employees are employee retention and training. The company has leadership programs that help in indoctrinating employees to management positions. Aflac has developed an effective total rewards statement that serves as an effective communication item. This tool help in communicating about cost sharing of the employee benefits and the compensation they are entitled to. This encourages employee retention.
Recommendations regarding an expansion of the benefits programs offered at the company that would further align HR with the accomplishment of organizational goals and values
There is need to expand further the current benefits program offered by Aflac Insurance. The benefits program should be expanded to include a comprehensive health plan. This plan should cater for inpatient and outpatient hospital care, surgery, physician care, prescription drugs, and dental care. The health program should be expanded to cover the employee’s families. The benefits program should include short term and long term disability plans to cater for employees who may experience disability while on duty. Another possible program is a financial planning program to help employees in managing their earnings and in light of growing expenses (Gomez-Mejia, Balkin, & Cardy, 2015). Aflac Insurance should also develop a benefits program that focuses on environmental conservation. In this era of climate change, the company should be at the forefront of fighting climate change as a way of giving back to the community. As the Bible says, man should take care of the environment. In Genesis 2:15, God put man in the Garden of Eden to “work it and keep it.”
Gomez-Mejia, L. R., Balkin, D, B., & Cardy, R.L. (2015). managing human resources. Prentice-Hall.
Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin.
Kazmi, A., & Kazmi, A. (2008). Strategic management and business policy. New Delhi: Tata McGraw Hill Education.
Muse, L. A., & Wadsworth, L. L. (2012). An examination of traditional versus non-traditional benefits. Journal of Managerial Psychology, 27(2), 112-131. doi:10.1108/02683941211199527