Aflac Insurance
Company InformatIon:
Aflac is a Fortune 500 insurance company founded in 1955 by
three brothers, John, Paul and Bill Amos. Today, Aflac employs more
than 4,500 people and has more than 71,000 licensed independent
agents throughout the United States and Japan. The following is an
excerpt from the New York Stock Exchange business summary.
“Aflac Incorporated is a general business holding company and acts
as a management company, overseeing the operations of its
subsidiaries by providing management services and making capital
available. Its principal business is supplemental health and life
insurance, which is marketed and administered through its
subsidiary, American Family Life Assurance Company of Columbus
(Aflac), which operates in the United States (Aflac U.S.) and as a
branch in Japan (Aflac Japan). Aflac’s insurance business consists
of two segments: Aflac Japan and Aflac U.S. Aflac Japan sells
cancer plans, care plans, general medical indemnity plans,
medical/sickness riders, living benefit life plans, ordinary life
insurance plans and annuities. Aflac U.S. sells cancer plans and
various types of health insurance, including accident/disability,
fixed-benefit dental, sickness and hospital indemnity, vision care,
hospital intensive care, long-term care, ordinary life and
short-term disability plans.”
aflac Corporate Philosophy:
“Since its beginning, Aflac has believed that the best way to
succeed in our business is to value people. Treating employees with
care, dignity and fairness are founding principles of Aflac.”
aflac’s mission:
To combine innovative strategic marketing with quality products
and services at competitive prices to provide the best insurance
value for consumers.
Guiding Principles:
To offer quality products and services at competitive prices and
use new technology to better serve our policyholders.
Build better value for our shareholders.
Supply quality service for our agents.
Provide an enriching and rewarding workplace for our
employees.
the case at aflac
With a desire to be an employer of choice, Aflac Insurance is no
stranger to the competition for talent among employers in the
United States. In fact, according to the Bureau of Labor Statistics
(BLS), the unemployment rate in the insurance industry was at 3.3
percent in March 2008, a number consistently below the national and
state levels in other industries (Exhibits A and B). This makes
finding and retaining qualified individuals to deliver positive
results to shareholders an ongoing challenge.
Organizational outcomes related to human resources at Aflac reflect
many of the basic functions, including recruiting, retention,
diversity and training. At Aflac, the company strives to deliver
quality service to its 4,500 employees while staying competitive in
the insurance market. Aflac prides itself on being ahead of the
curve from a consumer perspective and desires to mirror that
philosophy in its treatment of employees. How does the company made
famous by the duck maintain the integrity of its brand while
delivering results through its people? How important are benefits
and compensation to the company’s ability to compete in a growing
industry?
Casey Graves, vice president of human resources in charge of
compensation and benefits at Aflac, says that the needs of the
company’s employees continue to be the driving factor behind
Aflac’s total rewards programs. As with most programs, it begins
with an employee needs assessment and continues to be measured
through outcomes, which have been directly influenced through the
company’s enhanced total rewards efforts. The consistent thread
throughout this process, according to Graves, is the quality of
communication. Graves explains that Aflac’s total rewards
statements have evolved from a one-page document to an in-depth
review of the true value of the employment compensation and
benefits.
Employee satisfaction surveys and focus groups conducted in 2007
with Aflac employees and managers drove the needs identification
process. A key focus of the survey was to help recruit talent and
improve retention in an industry with low unemployment rates.
Although survey results varied, Aflac’s response was consistent: to
give employees what they need from a benefits perspective while
balancing the cost, all within a rapid period of growth.
Throughout the process, the company focused on providing
value-added programs that would improve employee job satisfaction,
support organizational initiatives and provide opportunities for
professional development. Aflac seeks to accomplish this by:
Providing Aflac products to employees at little to no
cost —for example, offering employer-paid life insurance,
a company-paid cancer policy and companysubsidized accident
protection insurance.
Providing total rewards in line with philanthropic
goals. Aflac dedicates resources to efforts that support
the community in four areas: health, education, youth and the arts.
One benefit offered to Aflac employees is the recognition of a
“Volunteer of the Month,” in which an employee is awarded for the
time spent volunteering at his or her charity of choice.
Developing employees for their next career level through
extensive n employee training and leadership programs to keep pace
with the strategic growth goals being executed company-
wide. More than 91 percent of Aflac’s employees at the
senior vice president level and above have been promoted through
the ranks. Aflac’s corporate training department hosts two employee
learning initiatives. The first is a leadership development program
with on-site courses for all employees from entry level to senior
management. There are three levels of classes; some classes require
employees to have taken prerequisite courses that are a part of the
offered curriculum. Instructor-led classes offer a variety of
subjects for workers seeking both career and personal development
and are designed to help employees achieve a quality work/life
balance. Course topics range from “Managing Your Career” to
“Preventing Diabetes.”
Cost-containment is on every HR professional’s mind when discussing
employee benefits. According to the National Coalition on
Healthcare, the cost of offering health insurance continues to
outpace inflation. In fact, “in 2007, employer health insurance
premiums increased by 6.1 percent, which was two times the rate of
inflation. The annual premium for an employer health plan covering
a family of four averaged nearly $12,100. The annual premium for
single coverage averaged over $4,400.” And, as Graves points out,
that is added to the cost of steadily growing the business each
year, which includes adding staff. Suddenly, employee benefits
become a conspicuous line item on profit and loss statements and
must therefore enhance the achievement of organizational outcomes
in order to be justified. An important theme in Aflac’s
communication to its employees is that the health care cost
containment is an employer and employee shared
responsibility.
Aflac seeks to administer benefits in a cost-effective manner while
staying true to the concept of employee service. Aflac recognizes
the actual value of employee benefits, and as a result, its overall
philosophy is that “it’s all about the employee.” For Aflac, in
addition to competitive salaries, it includes designing benefits
packages that reflect the needs of a multi-generational
workforce—some seeking portability, others seeking stability. It is
about creating a positive work environment that is conducive to
productivity—by offering one of the largest on-site child care
facilities in the United States. Aflac sponsors outdoor adventure
days, on-site fitness centers and service discounts. It pays 100
percent of the employee premium for its ground-breaking cancer
insurance, in line with the company’s philanthropic commitments as
a socially responsible organization, positioning Aflac to lead its
industry to enhanced service levels. These benefits, according to
Graves, send the message to employees that they and their
lifestyles are important to the organization. The proof continues
to be demonstrated in recent employee survey results:
Approximately 90 percent of employees were attracted to and remain
at Aflac n because of company reputation.
Employees are happy with the profit-sharing bonus, with 81 percent
of employees n saying they believe it is better than that of other
companies.
Eighty-nine percent of employees consider Aflac’s total rewards
statement an n effective communication tool.
Perhaps most telling of all in the competitive world of
insurance—employee turnover fell below 10 percent in the first
quarter of 2008.
Questions (Detail Answers )
1. The internal strengths and weaknesses your team identified and how the company responded to these factors from a total rewards perspective.
2. The external opportunities and threats your team identified and how the company responded to these factors from a total rewards perspective.
3.Examples of traditional and non-traditional rewards and how they are used to meet organizational objectives.
4. How the company aligns its benefits with its corporate values.
5. Recommendations by the team regarding an expansion of the benefits programs offered at the company that would further align HR with the accomplishment of organizational goals and values.
Answer 1) Strength:
The company has excellent staff with strong knowledge of company's business.
Weakness:
Company is struggling to meet the deadlines set by the organization.
Answer 2) Opportunity:
Company has a large customer demand.
Threat:
Company's competitors have a similar product.
Answer 3) Traditional reward:
Company have incorporated bonuses and provide life insurance to their employees.
Non-traditional Rewards:
Company has provided ground breaking cancer insurance to their employees.
Benefits with its corporate values:
Company get benefitted from its values in terms of business relationships and reputation in market.
Answer 4) Ethical behavior has proved to be the core components for all company activities.
Aflac Insurance Company InformatIon: Aflac is a Fortune 500 insurance company founded in 1955 by three...
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