| Allstate Insurance Company Elizabeth Haskins Strayer University Instructor: Dr. Yohannes Abate Leadership and Organizational Behavior – BUS 520010VA016 July 24, 2011 Abstract As our population becomes grows more ethnically and culturally diverse, companies struggle more and more with the subject of diversity in the workforce. The latest strategy is to leverage diversity as a competitive business strategy.
This paper will evaluate Allstate Insurance Company’s goal setting process and how they have used diversity as a strategy leveraging differences in order to create a competitive advantage in today’s diversified market. It will also discuss Allstate’s competitive advantage with the development of the Diversity Index and recommend what types of high-performance reward systems Allstate could use to motivate its employees to assist the company in reaching its diversity goals. . Introduction
The fundamental point of the case is how Allstate has succeeded in linking their diversity strategy to a competitive advantage. In a competitive, corporate environment companies must constantly be looking for ways to improve performance in parallel with achieving corporate goals and initiatives. Diversity at Allstate is ingrained in the company’s culture; they launched their first affirmative action program in the 1960s; however, their commitment to diversity at that time was not linked to recruitment, development, and retention strategies to business performance or strategy.
It was focused mainly through education and training and therefore, was not linked to the company’s business strategy. Allstate realized it had to reinvent its diversity strategy. According to the director of diversity management the key question had become “How do you take this workforce of differences and bring them together in a more powerful way so that it can impact business results? ” (Hellriegel and Slocum, 2011). In its reinvention, and using the four goal setting process, Allstate has succeeded in making diversity a core value.
Joan Crockett, senior vice president for human resources at Allstate, stresses that the company’s diversity initiative isn’t a nice-to-do, social conscience program. “It’s a compelling business strategy,” (Wah, 1999). Their strategy extends to all facets of the organization, including employees, customers, agents and suppliers and has made Allstate a leader in aligning diversity with their business strategy. Using the model for goal setting, evaluate Allstate’s goal setting process to determine whether or not Allstate has an effective goal-setting program.
In an attempt to bring together the workforce of differences in a more influential way to achieve the business strategy results they were seeking, Allstate developed four specific steps. The first step is the succession programming step, which identifies candidates for key positions for career development and opportunity, which in turn ensures the company’s future workforce will remain diversified at all levels. The second step is Development, wherein employees complete an assessment of their current job skills and the employee’s ambition for possible future advancement.
This step allows management how to address the career goals of their employees, whether through education, coaching or mentoring. The third step, Measurement, uses the Quarterly Leadership Measurement System (QLMS) and utilizes a Diversity Index Survey. This survey allows the employees to evaluate the company’s processes, management style, treatment of customers and relationship with their management. Based on survey results, the company initiates action programs to fix areas that showed concern.
The fourth step, Accountability and Reward, links management compensation to the company’s diversity goals through the QLMS and Diversity Index Survey. Establishing an effective goal setting program is based on several conditions: 1. Employees must be able to obtain the goal. 2. The employee must be committed to the goal. 3. Employee should be provided feedback on their progress towards reaching their goal. 4. Tasks should be broken down so goals can be achieved in a reasonable timeframe. 5. Employees should be provided the resources to obtain their goals.
The four step action that Allstate has implanted in direct alignment with the conditions for succeeding with an effective goals setting program. Discuss the competitive advantage Allstate has from the development of the Diversity Index. In creating the Diversity Index, Allstate established an advantage in the competitive business world. Through the Diversity Index the company developed a way for its management to evaluate what is working and what is not working as far as service, customer satisfaction, employee satisfaction, work behavior, and utilization of employee skills.
In communicating the results of the survey to all employees, employees are able to observe management making an effort produce and improve a diverse work environment. When employees know that management is looking to find areas within the company that need improvement and that such improvements will help make the company a bigger success, employees tend to become much more self-driven to make the company a success as well.
This has worked well for Allstate as according to numerous sources like “Fortune Magazine”, “DiversityInc Magazine”, “Working Mother Magazine”, “Diversity Executive magazine ”, and “Forbes Magazine”, to name a few, which have awarded Allstate such titles as “America’s Most Admired Companies “, “Top 50 Companies for Diversity”, “100 Best Companies for Working Mothers”, “Top Companies for Supplier Diversity “Top 100 in Global 2000 Companies “(Allstate Insurance Company, 2010), Allstate has been highly recognized for its diversity programs.
Recommend the types of high-performance reward system Allstate should use to motivate its employees to reach its diversity goals Specifically for diversity, Allstate could implement a referral program, which most companies today have in place; however, this program will reward a referral bonus based on the hiring of minority employees. For instance, an employee will receive $250. 00 for referring someone from a diverse background. Of course a simple referral does not get the employee the reward. There is typically a 90-day wait or probationary period to ensure the employee does not hire on and leave within a short period of time.
After the 90-day probationary period, the employee receives the bonus. The Company can go one step further and increase the referral bonus for the 2nd candidate referred and hired, and so on. Since motivation is not based solely on monetary awards, a non-monetary reward system can be reached by a mentoring process. Mentoring is typical in today’s business world; however, the company can match candidates with different backgrounds, cultures, nationality, and/or gender. This is a win/win situation for the company as well as the individual.
It allows individuals to learn other areas of the company. For instance, Allstate can team a Hispanic female from the claims department with a black male from the sales department. This system is harder to implement but it is effective in teaching individuals about different areas of the company and learning from someone with a completely different background. If employees know all aspects of how a company works (the inside and outs), they become much more successful, and in turn, the company becomes much more successful. References
Hellriegel, D. , & Slocum, J. W. , Jr. (2011). Organizational behavior: 2011 custom edition (13th Ed. ). Mason, OH: South-Western Cengage Learning. Louisa Wah. (July/August, 1999). Citing Websites. In Business Ethics Review. Diversity at Allstate: A Competitive Weapon. Retrieved July 6, 2011, from http://www. wahansa. com/portfolio/diversity. html. Allstate. (2010). Citing Websites. Allstate Digital Newsroom. Retrieved July 11, 2011, from http://www. allstatenewsroom. com/channels/Awards-and-Recognition/pages/awards-recognition