Factors Influencing Reward Systems in the Insurance Industry: Manulife Hong Kong Case Study Name:
Table of Contents
3.0 Manulife Reward Systems
3.1 New Agents
3.2 Normal Agents
3.3 Agency Managers
4.0 Factors Influencing the Manulife Reward System
4.1 External Factors
4.1.1 Market Competition
4.1.2 Labor Market and Regulations
4.2 Organizational Factors
4.2.1 Human Capital Characteristics
4.2.2 Operations Scale
5.0 Pay Differences Impacts
5.1 Equity Theory
5.2 Reinforcement Theory
5.3 Goal Setting Theory
6.1 Bonus Reward System
6.2 Increased Agents Involvement
8.0 Peer Review
8.2 Learnt Lessons
8.3 Study Challenges
The insurance industry has over the years evolved into its current form. As Borscheid and Haueter (2012, p. 415) notes, initially, the industry was a sub branch of pensions and other related funds. However, the increasing cases of job insecurity, employer-employee conflicts, and the subsequent losses, a resolution was inevitable. In this regard, the insurance industry evolved. While as the industry initially focused on business losses and profits as their cover basis, this has evolved to support and evaluation of business processes. Consequently, unlike in the past where the industry offered single general covers to organizations, today the industry offer process specific insurance covers to organizations (Feng, Rao & Law, 2010). With their increased expansion and influence in the market, insurance firms, require increased workforce to facilitate and execute their operations. As such, the insurance industry has both organizational corporate staff and agents. Consequently, the reward and compensation systems adopted for the two groups differ. This study evaluates the agents reward system in the insurance Industry. This is mainly based on the fact that the agents earn no basic salary and their rewards are based on commissions. Moreover, the commission value is hedged on a number of influencing factors that this study seeks to establish. For clarity purposes, the study adopts the Manulife Financial Company through interview sessions with the management and low-level employees.
The Manulife financial Company was instituted in 1887 under the steward leadership of John A. McDonald in Canada. Over the decades, the company has grown beyond the initial imagined scope to cover areas in Europe, Asia, and USA. In this regard, the company has command bases in each of these regions. In this growth scheme, the company ventured in Hong Kong in 1930. Since then, the company has expanded and increased its market influence in the industry. This is evidenced by its projected increased growth rate forecasts for 2014.
Source: (“Manulife Financial”, 2013).
In its operations, the company uses two types of human resource management portfolios (McQueen, 2009). On one hand, it has its permanent employees who are rewarded on a pre-determined salary basis. On the other hand, the organization has agents. Unlike the employees, the agents are not part of the organizations workforce and are contracted on an independent status credentials. In this case, the company establishes varied contracts with the agents. In particular, the agents are remunerated based on commissions. Moreover, they receive compensations based on the sales volumes made. However, their compensation rates are dissimilar. In this regard, the study seeks to establish the factors influencing the value of rewards in the insurance industry for the organizational agents. Organizational Chart
3.0 Manulife Reward Systems
The Manulife Company rewards its agents differently under three distinct categories that include new agents, normal agents, and agency managers. Each of these three categories is rewarded under...
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