Case 2 UnimProvident under Fire for Roster of Rejections
1. An insurer like UnumProvident sells policies and invest revenues until it needs the money to pay claims. Its profits come from the earnings on its investments and from charging more for policies than it pays out for claims. How should the goals of Unum's claims handlers (the people who make decisions about paying claims) support the company's profit objectives? In what ways might boosting short-term profits denying claims conflict with other company goals?
These goals should support the company's profit objectives in a clear and fair system in handling investments of people. It is not a good practice for companies to ...view middle of the document...
How can a performance management system help the company with its real or perceived ethics problems?
For me, UnumProvident have shown ethical problems. The company has been filed with cases, wherein they made a concerted effort to reverse staggering financial losses incurred in the disability business by denying more claims. Back in the 1980's, they aggressively marketed and sold "own occupation" policies, which insured individuals against disabilities from their own specific occupational specialties. As "preferred professional" policies, they commanded higher premiums, which could then be invested to earn substantial returns in an era of high interest rates. One of the solutions to be suggested is for having a Performance Management System (PMS) can help the company through evaluating their present performance appraisal process. The evaluation will tell how the company will improve their service in their clients hoping to revive the company’s deteriorating, weakening competence.
Performance management system may help this company by balancing the situations and authority and making evaluations transparent and follows a fixed rubric.
Case 3 The Costco way
1 How can Costco be more profitable than Sam's club even though it pays higher wages? What role does employee retention seem to play?
I think that Costco shouldn’t reduce employee salaries to increase profits and there are three ways to increase profits
1 raise goods, leaving spending at the same level;
2 at the same value to reduce turnover costs;
3 increase in gross revenue, reduce costs