Allstate Insurance Company Goal of Diversity This case focuses on Allstate Insurance Company and its goal of diversity. Allstate Corporation has found that its diversity strategy has become one of the company’s most competitive weapons. The company’s vision states: “Diversity is Allstate’s strategy for leveraging differences in order to create a competitive advantage.” Allstate has divided its strategy to reach diversity into two main points: one internally focused and the other externally focused. James DeVries, senior vice presidents of human resources, states that the internal diversity focus is “unlocking the potential resources, and opportunities to succeed.” The external focus of diversity is making certain that the workplace matches the experiences, backgrounds, and sensitivities of the market it serves. The managers at Allstate look at these views of diversity not as a goal but as a process that is integrated into the daily life of the company. In 1969, Allstate launched its first affirmative action program. At this time the company focused more on affirmative action and diversity awareness through education and training. Allstate has taken four specific steps to impact business results, with a workforce of differences so they can bring them together in a powerful way. The first step is succession programming. In this step, a diverse slate of candidates is identified and developed for each position. The second step is development. In this step each employee receives an assessment of their job skills and receives a development plan for critical skill needed of their jobs. The third step is measurement. At this step each employee takes a survey twice a year called the Diversity Index. Managers at Allstate uses the results from a large online survey called Quarterly Leadership Measurement System (QLMS) to create programs that will solve any diversity problems that my be present within the company. The fourth step is accountability and reward. The company rewards managers with merit based bonuses and provides on-site incentives to the employees.
Using the model for goal setting, evaluate Allstate’s goal setting process Goal setting is the process of specifying desired outcomes toward which individuals, teams, departments, and organizations will strive and is intended to increase organizational efficiency and effectiveness(). The goal-setting model emphasizes the challenges provided for the individual: goal clarity, and self-efficacy(). Allstate succession programming involves a diverse slate of candidates who are identified and developed for each key position. Their management information system enables them to track and measure key drivers of career development and career opportunities for all of their more than 36,000 employees. This ensures that Allstate’s future will be diverse at all levels. Allstate has an effective goal setting program. First, the company’s performance is high because challenging goals have been set. By identifying and developing each employee for key positions, this satisfies the goal difficulty, goal clarity and self-efficacy. Allstate achieves goal clarity by providing educational classes and training. Since Allstate employees have clear and defined goals they are going to be more energetic and productive. Goal difficulty is met, since the employee is challenged by their work, and they know that it is not impossible to achieve since their performance is measured and tracked through Allstate’s management information system. Allstate employees know what is expected of them and how to accomplish such a task, which known as the attribute goal clarity. In step two, Allstate establishes moderators, and this buffers the relationship between goals and performance. Through their employee development process, employees receive an assessment of their current job skills and are given a road map for developing the critical skills that are necessary for advancement. This meets the ability, which is one of the four moderators. To obtain the critical skills that are necessary for advancement, the company gives options that include, education, coaching and mentoring, and classroom training. The other moderators are met through feedback from employees and mandatory diversity training courses. Next, Mediators(direction, effort, persistence, and task strategy), is established by Allstate, through step three: Measurement. Twice a year, the company takes a snapshot of all 36,000 employees through a survey called the Diversity Index. Performance, Rewards, Satisfaction and Consequences are met through the company’s step four: Accountability and Reward. Allstate links compensation to the companies diversity goal by basing 25 percent of managers salaries on the QLMS and the Diversity Index.
Discuss the competitive advantage Allstate has from the development of the Diversity Index. The competitive advantage that Allstate has from the development of their Diversity Index is that through measurement, the company to get feedback from employees on creating action programs to solve problems and improve work processes. As the case stated “Allstate Corporation has found that its diversity strategy has become on of the company’s most important competitive weapons.” Obtaining the feedback from the questions that are asked in the Diversity Index, are important because as Devries stated, “What you measure is what people focus on. This really sends a clear signal that management of people and doing that well are important.” Allstate’s goal setting model is competitive because it allows the employees to receive education and training needed to excel in their job at Allstate. It also is competitive since Allstate’s diversity strategy matches the experiences, backgrounds, and sensitivities of the market it serves. This allows Allstate employees to connect with the people that they serve.
Recommend the types of high-performance reward system Allstate should use to motivate its employees to reach its diversity goals. The type of high-performance reward system that Allstate should use is the Skill-based pay program. Skill-based pay programs are based on the number and level of job-related skills that an employee has learned(). Although Allstate offers a development process for their employees, there should be a compensation for skills that employees can learn and use in the organization, rather than for the specific jobs they are performing. The book states that with this program the underlying assumption is that by focusing on an individual rather than the job. This would be the best reward system for Allstate since it motivates employees to learn new skills and utilize the education classes and training that Allstate provides their employees. The book also states that skill-based programs can also reduce the turnover within a company. I believe this is important because Allstate invests a great deal of time and money into the employees to receive education and training related to their specific jobs.
If you were an Allstate employee, would be motivated by the Diversity Index and QLMS. I would be motivated by this system, since the company goals strategy is challenging. I would especially be motivated if I was a manager at Allstate since 25% of my merit based salary is based on the results of the QLMS. I would also be motivated if I was not a manager because they provide on-site programs for their employees. Allstate also provides educational classes and training for employees to help employees exceed in their jobs. This would motivate me because the company wants all of the employees to exceed or they would not provide these classes and training to employees because these programs would be very costly to the company. It would also motivate me since it is a very important part of the companies culture to achieve diversity within the company.