Case Study 3 Total Rewards Aflac Insurance

Case Study 3: Total Rewards

Aflac Insurance

Maria Lawrence-Jenkins

Dr. Amy Puderbaugh

BUSI 642

Contemporary Issues in Human Resource Management

Liberty University

Fall 2014 – Session D

In today’s competitive global market, companies must have the ability to maximize employee satisfaction by an effective balance of compensation and benefits. “Studies demonstrate that there is a positive relationship between the resources available to employees, fairness of the compensation, the amount of information exchanged between employees and managers, and workers’ level of stress and burnout on the job” (Mujtaba & Shuaib, 2010, p. 111). Most organizations use a pay-for-performance system, also known as an incentive system. According to Gomez-Mejia, Balkin and Cardy (2013), this system is based on three assumptions:

1. Individual employees and work teams differ in how much they contribute to the firm,

2. The firm’s overall performance depends to a large degree on the performance of individuals and groups within the firm; and

3. To attract, retain, and motivate high performers and to be fair to all employees, the firm needs to reward employees on the basis of their relative performance.

How companies will obtain a certain level of performance and organizational effectiveness is based on how competitive the organization wants to be against its competitors. “Effective, appropriate, timely, and market-driven rewards can be motivational for managers and employees alike” (Mujtaba & Shuaib, 2010, p. 111). Effective reward systems have a direct correlation to morale and productivity for each employee. When employees feel valued and appreciated, they will be more productive and exceed those expectations.

Aflac Insurance was the chosen company to discuss during this paper. According to the case study, the insurance industry is very competitive for recruitment and retention of talent. In 2008, the unemployment rate was 3.3 percent. Aflac’s philosophy...