You are on page 1of 5

Incentive Plans for Farm Bureau Insurance

Incentive Plans for Farm Bureau Insurance
NAME
MGT 431 Human Resources Management
ATE
1
Incentive Plans for Farm Bureau Insurance
Incentive Plans for !HATE"ER #$MPAN% %$& #H$$'E
Farm Bureau Insurance offers t(o incentives to em)lo*ees+ T,e incentives
inclu-e a *earl* .onus an- a com)an* ve,icle inclu-e- (it, /0111 )ersonal miles a *ear+
T,e incentive )lans of Farm Bureau Insurance relate to t,e organi2ation3s nee-s an-
o.4ectives .* 5ee)ing )remiums as lo( as )ossi.le (,ile maintaining a )rofit margin to
gain revenue+ At t,e en- of eac, fiscal *ear t,e loss to gain ratio is evaluate-+ T,e
outcome of t,is ratio -etermines rat,er or not em)lo*ees receive a .onus+ T,e incentive
)lans rel* solel* on ,o( muc, )remiums are .roug,t in com)are- to loss ratios+ For
e6am)le0 if Farm Bureau (ere to .ring in 71110111 in )remiums an- ,a- onl* 7310111 in
losses0 .onuses (oul- .e a -efinite for all em)lo*ees t,at *ear+
!it, Farm Bureau .eing an insurance organi2ation0 incentives rel* on t,e num.er
of customers0 amount of )remiums0 an- amount of losses in a *ear+ If Farm Bureau (ere
to .e face- (it, man* tragic storms in man* areas losses (oul- .e s5* ,ig,+ Alt,oug,
)remiums are .eing )ai-0 t,e amount of losses coul- .e too ,ig, to )a* out .onuses to
em)lo*ees+ Farm Bureau t,rives to )ro4ect t,e .est case scenario (it, )remiums an-
losses+ Farm Bureau a-vertises to increase customer level an- ma5es sure to )rovi-e t,e
rig,t amount of coverage for eac, in-ivi-ual (it, all of t,eir valua.le )ro)ert*+ Farm
e8ui)ment is a .ig factor (it, a lot of Farm Bureau customers+ Farm e8ui)ment is some
of t,e most e6)ensive .usiness tools in t,e (orl-+ For e6am)le0 a com.ine tractor can run
in t,e ,un-re-s of t,ousan-s of -ollars an- is muc, nee-e- to ,arvest cro)s+ An auger is
use- to move t,e grain out of a .in into a truc5 an- usuall* costs aroun- 7910 111+
Farmers must ma5e sure to )rotect t,is e8ui)ment .ecause it .rings in t,eir income an-
fee-s t,eir famil*+ Farmers )a*ing a small )remium offer )eace of min- )rotecting t,em
:
Incentive Plans for Farm Bureau Insurance
from an acci-ent or natural -isaster+ Fore e6am)le0 a customer can )a* onl* one mont, of
)remiums0 total t,eir e8ui)ment an- (e (ill )a* to re)lace t,e entire amount of -amage
or )rice to re)lace e8ui)ment+
T,e com)an* truc5 ena.les em)lo*ees to -rive (,erever t,e* nee- to in or-er to
.e t,ere for t,e customers of Farm Bureau+ T,is 5ee)s t,e customers )a*ing t,eir
)remiums an- recommen-ing us to frien-s an- famil*+ T,is com)an* ve,icle allo(s
em)lo*ees to travel man* miles (it,in t,eir assigne- counties (it,out ,aving to )a* for
t,eir o(n gas+ A com)an* cre-it car- is )rovi-e- (it, t,e ve,icle to fill u) t,e tan5
(,enever nee-e-+ Traveling is a .ig com)onent of Farm Bureau em)lo*ees .ecause
customers are all over t,e state+ Em)lo*ees -o not ,ave to (orr* a.out )utting (ear an-
tear on t,eir )ersonal ve,icle (,ile -riving numerous miles+ T,e /0111 )ersonal miles
offer t,e em)lo*ees a .it of re(ar- t,at t,e* can use to t,eir o(n -esire+ For e6am)le0 if
an em)lo*ee an- t,eir famil* (ante- to ta5e a vacation Farm Bureau (oul- )a* for t,eir
gas if t,e com)an* ve,icle (as use-+
Farm Bureau3s incentive )lans -o not ,el) t,e organi2ation ac,ieve goals an-
o.4ectives+ T,e goals of Farm Bureau Insurance are too o.tain an- 5ee) as man*
customers as )ossi.le (,ile .ringing in an a-e8uate amount of )remiums to cover t,e
re)orte- losses eac, *ear+ Insurance com)anies )a* out in losses eac, *ear (,ic, ma5e it
-ifficult to )rovi-e incentives+ ;#om)anies t,at -on<t carefull* -evise an- e6ecute t,eir
incentive )lans run t,e ris5 of inclu-ing -isincentives t,at can 4eo)ar-i2e ,ig,=8ualit*
)erformance an- a-versel* affect t,e com)an*0 its em)lo*ees an- its customers >#B'
Interactive Inc+0 :111?+@ %earl* .onuses are t,e onl* incentives .ecause insurance
com)anies are structure- to collect )remiums an- )a* out claims leaving little to no fun-s
3
Incentive Plans for Farm Bureau Insurance
availa.le for vacation time or cas, re(ar-s+ %earl* .onuses .ase- on loss ratios -o not
,el) t,e organi2ation reac, its goals .ecause t,e* are not affecte- .* t,e actions of
em)lo*ees+ Em)lo*ees -o not get a .igger .onus if t,e* (or5 so man* ,ouses or )a* so
man* claims+ It is a sim)le calculation t,at ma5es eit,er )ossi.le or im)ossi.le (it,in
t,at fiscal *ear+ T,is incentive -oes not motivate em)lo*ees to (or5 ,ar-er or .e more
creative+ Insurance com)anies are 5no(n for over(or5ing un-er)ai- em)lo*ees+ ;If
em)lo*ees -o ,ave an a))etite for incentives an- )a* at ris50 com)anies nee- to ensure
t,at t,e si2e of t,e incentive is a))ro)riate an- motivating+ T,e incentive itself must .e
meaningful enoug, to ,ave t,e -esire- motivational effect >#B' Interactive Inc+0 :111?+@
Incentives are a great (a* for man* organi2ations to motivate em)lo*ees to (or5
,ar-er an- ma5e more of a contri.ution+ Ho(ever0 certain organi2ations li5e insurance
com)anies are not a.le to -o so+ %earl* .onuses .ase- on )remiums an- loss ratios are as
far as t,e* can go an- alt,oug, are not motivation to sell more ma5e an em)lo*ee feel
a))reciate-+ Farm Bureau t,rives to 5ee) t,e customers ,a))* so t,e* (ill )a* t,eir
)remiums an- feel fairl* treate-+ 'ince em)lo*ees are t,e man )o(er in -oing t,is *earl*
.onuses are )resente- in or-er to satisf* em)lo*ees an- give t,em somet,ing to loo5
for(ar- to+ T,is incentive -oesn3t motivate em)lo*ees li5e most incentives -o .ut is (,at
most em)lo*ees sa* is .etter t,an not,ing+
4
Incentive Plans for Farm Bureau Insurance
ReferenceA
#B' Interactive Inc++ >:111?+ Business Services Industry+ Retrieve- from
,tt)ABBfin-articles+comB)BarticlesBmiCm34D9BisC/C9:BaiCn1D311EEDB)gC:BF
tagGcontentHcol1
9