Strategic Management

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Dr. David Fountaine

Total Rewards - HRM533 016-1128

October 28, 2012

Geico built on ingenuity, perseverance, innovation, resilience and hard, honest work. From its humble beginnings in the midst of the Great Depression to its current place as one of the most successful companies in the nation, GEICO represents a quintessential American success story. The name GEICO goes back to the beginnings of the company. Founder Leo Goodwin first targeted a customer base of U.S. government employees and military personnel.

Today, of course, the company has grown to provide insurance to a wide range of customers, no

matter whether their employed, by Uncle Sam or the private sector. In 1996, GEICO became a

wholly owned subsidiary of Berkshire Hathaway, headed by Warren Buffett, one of the country’s

most successful investors. Geico’s Total Rewards aligned with the definition of total rewards. Total

reward is used to describe a reward strategy that brings additional components such as learning

and development, together with aspects of the working environment, into the benefits package

(Benko and Weismann, 2007). Worldatwork, the Total Rewards Association of U.S., defines total rewards as all of the tools available to the employer that may be used to attract, motivate and retain employees. According to WorldatWork, the organizations that understand this concept as it affects their industry and competitive environment and deploy critical resources to their strategic advantage will be the clear winners in the battle for talent. A successful Total Rewards program involves understanding your industry and developing the correct combination of the three components. The key is to balance the mix appropriately and not view any one aspect in a silo. It also indicates that total rewards include everything the employee perceives to be of value resulting from the employment relationship (Worldatwork, 2007).

Determine which facets of the Geico’s...