Total Reward Programming at Aflac Inc

Aflac, Inc. Case Study

The purpose of this paper is to provide a review of a case study concerning the total rewards strategy at the American Family Life Assurance Company, Inc. (Aflac) and how it aligns with the company’s guiding values and principles. To this end, a discussion concerning the company’s internal strengths and weaknesses and the external opportunities and threats of the company as well as how it responded from a total rewards perspective. In addition, based on the corporate values of the company, salient revisions are proposed that would make its benefits program better aligned with the accomplishment of the company\'s organizational goals and values. Finally, the paper provides a summary of the main findings that emerged from the case study concerning the company’s total reward strategy in the conclusion.

Think about the internal strengths and weaknesses of the company. How, if at all, did the firm respond to these factors from a total rewards perspective?

Strengths. The case study makes it clear that Aflac (hereinafter alternatively “the company”) is a highly principled and ethical organization that is committed to promoting the well-being of its employees. In this regard, Reed et al. (2009) reports that, “Since its beginnings, 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” (p. 2). While many corporations make similar claims about how much they care about their employees, it turns out that the company is good for its word.

The company’s strong global brand and ubiquitous duck have succeeded in creating a firm connection in the minds of consumers that Aflac is a company that helps people when they need it the most. For instance, the company reports that:

Aflac provide[s] financial protection to more than 50 million people worldwide. When a policyholder or insured gets sick or hurt, Aflac pays cash benefits promptly, for eligible claims, directly to the insured. For more than six decades, Aflac voluntary insurance policies have given policyholders the opportunity to focus on recovery, not financial stress. (About Aflac, 2023, para. 2)

Likewise, the company has a formal commitment to providing high quality perquisites to its 4,500 employees based on an employee needs assessment and follow-up analyses (Reed et al., 2009). Moreover, the company even codifies this commitment to its employees in its three guiding principles, to-wit:

· Build better value for our shareholders;

· Supply quality service for our agents; and,

· Provide an enriching and rewarding workplace for our employees (as cited in Reed et al., 2009, p. 3).

Other strengths of the company include its consistently high satisfaction ratings by its customers, its highly trained and skilled workforce, as well as repeated international awards that recognize Aflac as one of the world’s most ethical companies and one the one hundred best companies to work for (Shastri, 2022).

Taken together, the company has multiple strengths moving forward, but Aflac has made its total rewards program the cornerstone of its approach to building and sustaining a competitive advantage in an increasingly globalized insurance marketplace. Indeed, the case study emphasizes that, “The needs of the company’s employees continue to be the driving factor behind Aflac’s total rewards program” (Reed et al., 2009, p. 3). The effectiveness of the company’s total rewards strategy can easily be discerned from its human resource track record. For example, Reed et al. also note that, “Perhaps most telling of all in the competitive world of insurance – employee turnover fell below 10 percent in the first quarter of 2008” (p. 5).

It is also important to note, however, that the company also has some weaknesses that must taken into account, including those discussed below.

Weaknesses. Notwithstanding its stated commitment to providing an enriching and rewarding workplace for its employees, the company does not enjoy the deep pockets that Google, for example, has to pamper its workers. The case study repeatedly indicates that Alfac’s generosity in providing a comprehensive total rewards program is limited by cost considerations. This reality can be attributed in large part to the stagnated growth the company has experienced over the past several years (McCann, 2019) as shown in Figure 1 below.

Figure 1. Total revenue of Aflac: 2009-2020

Source: Statista (2023) at https://www.statis ta.com/statistics/209508/total-revenue-of-aflac/

It is noteworthy, though, that this is the only internal weakness identified by Reed and her associates. In response, the company continues to fine-tune its total rewards program to fit the needs of its increasingly diverse and multigenerational workforce while concomitantly keeping an eye on its bottom line.

Consider the external opportunities and threats of the company. How, if at all, did the firm respond to these factors from a total rewards perspective?

Opportunities. Although the case study is essentially silent concerning the company’s external opportunities and threats, there have been some recent trends in the insurance industry that highlights these issues. For example, at present, the company maintains a strong social media presence that is has successfully leveraged in the past to attract and retain new intergenerational customers. In this regard, one recent social media campaign focused on the millennial generation (e.g., people born between 1981 and 1996). According to an analysis of the campaign by Azfar (2017), “Aflac is looking to arm millennials against unforeseen circumstances with its latest campaign, which uses humor and social media-inspired aesthetic to communicate practicality in the face of an accident” (para. 5). The success of this campaign underscores just how valuable social media resources can be the company’s intergenerational marketing. As Shastri (2022) points out, “Over the years the number of active users on social media channels has increased and with this Aflac can make use of its social media handles to promote its products, interact with customers and even provide after-sale services” (para. 6).

Threats. The company faces increasing competition in the global insurance market, with its top five competitors also enjoying strong brand recognition as follows:

· Liberty Mutual Insurance

· Humana

· Allstate

· State Farm Insurance

· Aetna (Shastri, 2022).

In addition, the company also faces the same type of threat that is shared by the entire industry with respect to fundamental changes in employment patterns in the countries in which it competes. Due in part to the ongoing Covid-19 pandemic and other existential threats currently facing humankind, increasing numbers of workers are reevaluating their definition of professional success. As a result, there has been a veritable exodus from organized companies into the so-called “gig economy,” a trend that “has resulted in an enormous loss for the insurance companies” (Shastri, 2022, para. 10).

Given the corporate values of the organization, what revisions would you make to its benefits program in order to better align it with the accomplishment of the company\'s organizational goals and values?