STRAYERUNIVERSITY

CASE STUDY: ALLSTATE INSURANCE COMPANY

SUBMITTED TO

DR. DEMETRIUS CAROLINA

IN PARTIAL FULLFILLMENT OF THE

COURSE-BUS 520

BY

MORLU DUWOR

STRAYERUNIVERSITY

LOWER BUCKS CAMPUS, PHILADEPHIA

SEPTEMBER2011

Table of Contents

BACKGROUND /INTRODUCTION 1

USING THE MODEL OF GOAL SETTING 1-2

ALLSTATE COMPETITIVE ADVANTAGE FROM THE DIVERSITY INDEX 3

HIGH PERFROMANCE REWARD SYSTEM THAT MOTIVATE EMPLOYEES3 -4

MOTIVATION BY THE DIVERSITY INDEX AND QLMS4-5

CONCLUSIONS/RECOMMENDATION5

REFERENCES CITED 6

Assignment #2 – Case Study: “Allstate Insurance Company”
.
Introduction/Background Allstate Insurance Company is America’s second largest personal insurance carrier, insuring one of every eight homes and automobiles in the country. Of its 50,000 employees, 52.2% are women and 24.7% are minorities--14.3% of whom are African American. Allstate boasts a minority representation among executives and managers of 21%, with 66% of that number being African American. In1993 when its president and CEO backed diversity as a "strategic imperative." Allstate officially launched effort. The effort of Allstate Insurance centers around two goals: 1) expanding career and advancement opportunities for women and minorities; and 2) fostering greater customer growth, retention and satisfaction. The latter is especially important since Allstate is one of the country's largest insurers of African Americans and Hispanics.
Using the model for goal setting, evaluate Allstate’s goal setting process to determine whether or not Allstate has an effective goal-setting program. There are many benefits of goal setting. According to our text, goal setting is the process of specifying desired outcomes towards which individuals, teams, departments, and organizations will strive and is intended to increase organizational efficiency and effectiveness (Hellriegel& Slocum, 2001, pg 192). At Allstate, goal setting program has been very successful. The employees at Allstate are provided with a road map to succeed by executing the goal setting definitions. Allstate provides employees the tools and resources to become better. Employees are given opportunity to provide feedback to management through quarterly leadership measurements as well as the survey. Allstate see diversity as a strategy for leveraging differences in order to create a competitive advantage. Allstate has created four steps process to reach their effective goals.

Allstate identified and developed candidates for each key position which is referred to as the succession programming. Allstate provides training to help keep the strength of the organization now and in the future. The organization endeavors to ensuring that the company’s future workforce will be diverse at all levels. At Allstate, diversity can vividly be seen. Through various categories of people, you can see that women are empowered, minorities grew above national averages, Hispanics, and people with diverse cultures now have positions in the company. Allstate also believe in staff development. Through the program called the company’s employee development process, all employees receive an assessment of their current job skills and a road map for developing the critical skills necessary for advancement. Third, is the diversity index which measurement allows the company to take a survey called the Diversity Index twice a year. An online employee survey and feedback process called the Quarterly Leadership Measurement System.

Allstate emphasizes diversity education to meet its goals/ objectives. The training sessions focus on skill-based education that provides practical advice to enable employees to interact more effectively with customers and each other. The topics covered include conflict management, managing differences and the negative impact of stereotyping. Six months after training, employees go through a feedback process to determine if they are practicing what they've learned.

Discuss the competitive advantage Allstate has from the development of Diversity Index. The Diversity Index is used at Allstate to measure progress toward workplace diversity throughout the organization twice a year. Allstate uses this online index as an employee feedback system that measures employee perceptions. At Allstate performance on this index determines 25% of a manager's merit bonus. The measurement system ensures managers are held accountable for creating a trusting and diverse environment for their employees. An employee feedback system is used to gauge leadership effectiveness in managing diversity. Under this system, all employees are surveyed twice a year through a quarterly leadership measurement system (QLMS). This is an online feedback system which measures employees' perception of how well the company is achieving aspirations for its customers, shareholders and employees. According to Wah, the results from the QLMS are then placed in various indices that are tracked twice a year. The diversity index and leadership index, among others, are compared by senior management to measure the effectiveness of Allstate's diversity efforts and to identify any correlation between them.
Recommend the types of high-performance reward system Allstate should use to motivate its employees to reach its diversity goals.
In its diversity efforts, Allstate also includes career development and succession planning to ensure that a diverse list of qualified candidates is identified by managers and developed for key positions.
In addition, the Allstate organization should expand its education support to agent heading the office, says senior citizens generally are more knowledgeable about insurance and know what they are looking for. But they also have a lot higher level to its employees. Some could be tuition reimbursement program. Moreover, Allstate could provide the opportunity to work from home at times. Allstate could also increase number of daily hours for some shift and reduce the number of work days (say 4 days a week at 10hours/day)
If you were an Allstate employee, discuss whether or not you would be motivated by the Diversity Index and QLMS. Provide a detailed explanation From my understanding, motivation could be any variables influencing people to do something. I am motivated by Allstate concept of diversity which is based on wider perspective that includes diversity in age, religion, sexual orientation, disability, etc and its integrated approach which has been used at all levels. According to D’Souza, motivation comes from within each person, and it is not something leaders can supply directly (D’Souza, 1999). From my understanding leaders do not motivate, but create work environment that makes people want to to their full potential, I believe many people including me have been greatly motivated by the Diversity Index used at All state to measure progress toward workplace diversity throughout the organization twice a year. Allstate uses this online index as an employee feedback system that measures employee perceptions. At Allstate performance on this index determines 25% of a manager's merit bonus, which provides an opportunity for the voice of employees in the organization. This is a high motivation factor for employees, especially me because system makes our voice heard. The measurement system ensures managers are held accountable for creating a trusting and diverse environment for their employees. An employee feedback system is used to gauge leadership effectiveness in managing diversity. Under this system, all employees are surveyed twice a year through a quarterly leadership measurement system (QLMS). This is an online feedback system which measures employees' perception of how well the company is achieving aspirations for its customers, shareholders and employees. According to Yearwood, there is a positive correlation between the diversity index and the leadership index, meaning the better employees perceive their managers' effort to produce a diverse work environment, the more satisfied they are. The spillover effect is greater customer satisfaction and retention (Wah, (1999).
Conclusion/Recommendations
Now a days, a number of progressive companies have begun making diversity a core program. They that had a head start in elevating diversity to a strategic priority are starting to see the results, from better customer satisfaction to increased sales. According to Louisa Wah 1999, ideally, such a well-represented workforce is sensitive to specific needs that may go unfulfilled in a workplace less attuned to other cultures and lifestyles (Wah, (1990). In this way, diversity can be a powerful weapon for capturing a much wider market--one that includes arenas outside the mainstream.

References
Fr. Anthony D’Sauza, S. J, (1999). Theory and Evidence Leadership: A trilogy on leadership and effective management

Wah L. (1990). Diversity at Allstate: A Competitive Weapon

Hellriegel D. & Slocum J. W. (2011). Organizational Behavior

State Farm Story

In 1922, motivated by his philosophy of fairness and doing right by the customer, G.J. Mecherle sold his first auto policy for $11.17. And State Farm was born. State Farm was founded in 1922 by retired farmer George L. Mecherle as mtual automobile insurance company owned by its policyholders. Originally the firm specialized in auto insurance for farmers, and later expanded its services into other types of insurance, such as homeowners and life insurance, in addition to banking and financial services.

Code of Ethics

In 1922, our founder G.J. Mecherle said, “Honesty isn’t the best policy – it is the only policy.” Those words hold true today, as we remain committed to the highest standard of integrity.

Mission

State Farm®'s mission is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams.

State Farm® is a mutual company owned by our policyholders. Our more than 65,000 employees and more than 18,000 Agents service 81 million policies and accounts throughout the U.S. and Canada.

State Farm's leadership team is committed to building on our shared values of quality service and relationships, mutual trust, integrity, and financial strength.
State Farm had 67,000 employees and 17,000 agents. In 2008. By March 2009 State Farm State Farm was servicing 77 million policies in the United States and Canada, which comprises of over 40,000,000 insured for automobiles, and more than 2 million bank accounts.[2]The leadership isheaded by Ed Rust, Jr., Chairman & CEO, State Farm Insurance Companies
State Farm has a diverse workforce, The organization considers diversity as the collective strength of experiences, skills, talents, perspectives, and cultures that each agent and employee brings to State Farm. This is how State Farm creates a dynamic business environment to serve its customers. State Farm also practice inclusion which is about respecting and valuing the unique dimension each agent and employee adds to the organization. Agents and employees are considered a valuable part of the organization. It is believed that agents and employees are at their creative and productive best when they work in an inclusive work environment.
State Farm considers diversity and inclusion holistically in terms of the workplace, marketplace, community, and supplier diversity.

State Farm provides services referred to as Safety Patrol – State Farm, in partnership with several U.S. highway authorities, operates a service called the State Farm Safety Patrol which provides free roadside assistance to stranded motorists on participating highways, when you call the designated telephone number for the Safety Patrol they will respond and provide the following services: fuel refills; radiator refills; engine oil refills. Most Safety Patrol personnel are also CPR and Automated External Defibrillator certified. They work to reduce accident rates, minimize the duration time of incidents, assist disabled drivers and remove road debris. Turnpikes which currently participate include, Florida's Turnpike in the State of Florida[18] and the Pennsylvania Turnpike in the Commonwealth of Pennsylvania.[19]

"At State Farm®, diversity isn't a program. It's a state of mind. The variety of experiences and points of view contained in our large and diverse group of associates strengthens the organization. It helps us to understand the marketplace and how we can do an even better job of serving our customers. It helps ensure our future."

State Farm has Employee Resource Groups, which help to know employees with common interests, seek professional development and mentoring relationships, and connect with informal networks. State Farm provides opportunity for employee Job Skills Training, Job Opportunity Program, Mentoring, Industry Education and Professional Designations in the areas of Certified Public Accountant (CPA), Certified Professional Secretary (CPS), and Project Management Professional (PMP), ect .

Professional Designations
State Farm sponsors approved employees working to achieve a professional designation in their field of employment. A few examples include Certified Public Accountant (CPA), Certified Professional Secretary (CPS), and Project Management Professional (PMP).
In the wider community, State Farm provides professional and personal growth opportunities and strive to be known for inclusiveness, opportunity, and development of all agents and employees. State Farn is committed to be a good neighbor in the communities where it live and work. Its focus is on helping all members of the communities be safer, stronger, and better educated.
The organization also serve customers representing a rich fabric of backgrounds and lifestyles. State farm strive to meet the unique needs of all our customers and consumers in communities they exist.

Supplier Diversity

State Farm broaden and strengthen its customer baseby reaching out and supporting a culturally diverse supplier base.

References 1. ^ ab"State Farm Companies". State Farm Mutual Automobile Insurance Company. Retrieved May 28, 2008. 2. ^ abcd"Fast facts about State Farm". State Farm Mutual Automobile Insurance Company. Retrieved May 28, 2008. 3. ^ ab"State Farm Profit Took Hit in Stormy 2011". 'Insurance Journal'. March 1, 2012. Retrieved October 25, 2012. 4. ^ ab"Fortune 500 2012". Time Warner. 2012. Retrieved October 25, 2012. 5. ^"Fortune 500 2009: Top 1000 American Companies". CNN. Retrieved May 24, 2010. 6. ^State Farm – 1960s & 1970s 7. ^Weezer cover of State Farm jingle 8. ^State Farm Announces $1.25 Billion Mutual Auto Policyholder Dividend 9. ^"State Farm Contemporizes Its Brand Logo". State Farm. Retrieved February 5, 2013. 10. ^"Insure- State Farm Loans". Insure.com. Retrieved February 28, 2011. 11. ^"Florida's Unnatural Disaster: Charlie Crist, taxpayers and the next hurricane.".The Wall Street Journal. February 4, 2009. Retrieved March 29, 2009. 12. ^http://www.tampabay.com/news/business/banking/state-farm-will-stay-florida-insurance-regulators-say/1059230 13. ^ Reed, Matt (March 3, 2011). "Insurers still like Florida". Florida Today (Melbourne, Florida). pp. 1B. 14. ^"Auto insurers play hardball in minor-crash