Geico Study

Assignment # 1

Hooks, Tarik

For Dr. Larry Byrd

HRM533

January 8, 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 “agents” saving money the company money. So they were able to pass these saving 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 maintaining a low employee turnover ratio. These principles help develop the company that people see today.

Advantages to a Total Rewards Approach

The first facet when reviewing Geico’s compensation scale and comparing it to its competitors. Geico salaries are competitive to its competition like State Farm and All State. For the most part Geico salaries exceed the industry. When reviewing the salaries that was posted by position it compensated all positions well from entry level customer services representatives 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 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...