Case Study on "Allstate Insurance Company"

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A first look at the means in which the Allstate Insurance Company establishes its organizational goals would reveal a reduced efficiency of the adjacent process. The findings of the American Association of Justice, who in 2008 catalogued the company as the worst insurer in the United States (Casacchia, 2008), supports this belief. From this standpoint, the firm could replace its current system with the statement of the final goal of financial revenues and work in this direction. It could for instance focus on increasing retail prices to increase its revenues. But such a measure would only generate the desired results for a short time period, after which the company would register losses, in all customers, employees and financial results. By using the current system however -- which does indeed seem ineffective and requires a long process through completion -- the company insures its long-term success.

Question 2: Discuss the competitive advantage Allstate has from the development of the Diversity Index.

Ever since the national boundaries were opened and the process of globalization gained in importance, the diversity in the workplace has entered a new era. But organizational managers were unaware of how to best handle this new element. Some of the organizational leaders have strived to treat everybody in the equal manner and not recognize the differences in culture, whereas others have tried to shadow the culturally diverse individuals. A highly relevant example of the latter category is offered by the hospitality industry, where most of the immigrants and the culturally diverse employees are hidden in kitchen or room cleaning jobs, without any real interaction with the consumers. But in a context in which they would be integrated in front desk or other positions in which they would interact with the customers, they might be able to increase the satisfaction of the culturally diverse clients.

Few were the managers who recognized the importance of diversity and its integration within the workplace. The managerial team at the Allstate Insurance Company was however formed from the type of leaders who comprehended this element and strived to integrate it within the organizational affairs. And not only that they integrated it within business actions and decisions, but they transformed it into a business model. In particular, it has used its Diversity Index to create a powerful competitive advantage. "It has long been Allstate's position that diversity is about neither political mandates nor legal obligation. Rather, the company's vision is stated this way: Diversity is Allstate's strategy for leveraging differences in order to create a competitive advantage" (case).

Diversity is indeed recognized and treated as an element which generates points of difference. And this ability is revealed from two instances. At a primary level, the inclusion and valuing of diversity increased employee motivation, satisfaction and performances and as such increases organizational performances and results. At a secondary level, a culturally diverse workforce is better able to serve the needs of the growingly culturally diverse workforce. "U.S. Census Data shows that our communities are becoming more ethnically and culturally diverse. At Allstate, we believe diversity is critical to meeting the needs of the diverse customers that we serve" (The Allstate Insurance Company Website, 2010).

Question 3: Recommend the types of high-performance reward system Allstate should use to motivate its employees to reach its diversity goals.

The first step in motivating the employees is that of communication the importance of high performances, the importance of the company goals and the means in which the achievement of the organizational goals would help the employees serve their own goals. Aside communications and the enforcement of an organizational culture which promotes performances, the drive of the employees could be generated through the development and implementation of a complex reward system. The elements which could be integrated in the reward system include:

Premiums and bonuses to be offered annually and based on the performance of the individual, or, in exceptional circumstances, upon the completion of a complex project

Flexible working schedules which would allow the staff members to more easily balance the professional tasks with the family responsibilities

The offering of benefits -- including medical coverage or sponsored outgoings -- which would include not only the staff members, but also their families.

A final element which needs to be noted is that sometimes, despite intense efforts, employees do not manage to retrieve high performances. And the reasons for these failures are diverse and often independent from the respective individual, such as an unstable economic climate, the lack of social necessity for the product being sold, a tense political climate which makes the regulation of the item questionable and so on. And when these -- or other reasons -- interfere with the efforts of the employee and prevent him from achieving high performances, they create frustrations. And when the employer itself does not recognize the efforts but frowns upon the lack of performance, the motivation of the employee plunges.

Given this context then, it is recommended that the managerial team at the Allstate Insurance Company focuses also on efforts and hard work of the employee, not just on the actual result. When adequately implemented, this strategy will not stimulate procrastination and reduced efforts, but will even further motivate the employees to work harder.

Question 4: If you were an Allstate employee, discuss whether or not you would be motivated by the Diversity Index and QLMS.

The motivation of each employee is driven by the particular characteristics of each individual. This realization subsequently leads to the necessity of employers to implement complex and vast motivational strategies in order to be able to reach as many staff members as possible. In the case of this writer, the motivational strategy implemented by the Allstate Insurance Company would manage to increase my on the job satisfaction and motivation.

The first component of the motivational strategy at the insurance organization is that of the Diversity Index. The means in which this strategy would motivate me refers to the complete acceptance and integration of all individuals, regardless of nationality and ethnicity. This workplace creates on the one hand the professional advantage of intense and sustained collaborations and pleasant working environment. At a personal level, it creates a setting in which inter-cultural interactions are possible and encouraged. In other words, I would be able to experience different cultures and gather information on various global regions, habits and other such… READ MORE