Introduction and Background information on Cincinnati Financial Corporation
Cincinnati Financial Corporation is an Ohio-based company that was formed in 1968. The lead subsidiary to the corporation is the insurance company of Cincinnati, which was founded in 1950. The main line of business that the organization deals with is the insurance of property casualty (Gasbarre, Stansell & Tradii, 2014). The insurance is marketed through different agencies that are independent and situated in thirty-nine States. The companys headquarters is located in Ohio, Fairfield.
The corporation owns three subsidiaries that are the Cincinnati Company of insurance, the CFC Company of investment, and CSU Producer Limited. The company operates under its mission that was set around sixty years ago that states to profitably grow by enhancing the local insurance agents abilities in delivering high-value financial protection to the customers. The company does this through- development of associates who are committed to excellence service, production of competitive and current services and products and finally, provision of market stability to the insurance based on financial strength.
The primary marketers of the corporations property casualty are the various independent agencies established in thirty-nine states. By 2014, all the thirty-nine states sold standard commercial market lines while the policies of the personal lines were sold in thirty-one states of the thirty-nine states. The corporation enjoys three broad categories of advantage to their competitors. These include the operating structure that the corporation has, supports decision-making locally thus allowing the company to balance discipline and growth. It is committed to the independent insurance of professional agencies which continues to succeed and finally the company has a wide financial base that allows it to fulfill its promises to the clients.
The company has three principal sources of its net income. These are underwriting profit or loss. These comprise the revenues that are earned from insurance policies premiums that are sold or reduced through losses (Vance, 2011). The revenues further reduce through underwriting expenses that come from marketing policies. When the revenues exceed expenditures and losses, then underwriting profit is attained. The other net income source is the investment income. It is generated mainly from the investments of premiums that are collected from the policies of insurance. The investment is done until the losses incurred need to be paid using the money. The other investment categories are the interest incomes that are generated from bonds and dividend earnings. The realized gain on the investment is the other net income source. This normally occurs from depreciation or appreciation of the companys assets. It is usually recognized when the companys invested assets become impaired or sold (Vance, 2011).
The corporation maintains a clear financial strength that places it at an advantageous competitive position at the market environment of their services. The financial strength allows the operations of the corporation to be consistent and predictable thus satisfying most of the customers wants and expectations. The corporation, therefore, employs the use of various ways to maintaining the capital strength. Among these include risk management enterprise and diversification. The company has managed an investment portfolio that is diversified through applied diversification parameters. For instance; the companys $9.460 billion which is a fixed-maturity kind of collection is subjected to diversification to an extent that it exceeds the overall insurance reserve (Gasbarre, Stansell & Tradii, 2014). The value of the portfolio on a fair approach exceeded reserve insurance liabilities by about thirty-five percent. The fixed-maturity portfolio strength enables the corporation to purchase equity securities as one of the potential capital investments (Vance, 2011).
The operating structure of the organization is simple. It operates through channels of distribution done by the independent agencies. The agencies have healthy relationships with their surrounding community members and familiar with the marketplace intelligence. This leads to a lot of loyalty and satisfaction from the clients thus profitable business. A representative of the field marketing coordinates the field team by handling the underwriting of new commercial sectors of activity. According to Gasbarre, Stansell and Tradii (2014) field units are joined by field representatives responsible for personal lines, loss control, premium audit, claims, life insurance and equipment claims among others. The field teams provide most of the services. Some of these services include those specialized in hardware and machinery risks that provide specific recommendations and inspection for the safety of the client or policyholder.
The corporation employs the use of technology in its business processes that aim at; automating the internal processes to allow more time of service for the policyholders, reduction of duplicated efforts thus enhancing efficiency and reduction in cost. The technology approach enables the subscribers to access the corporations system directly and process data directly for the transaction from every place they are situated. The technology use also allow the companys field team and the associates from the headquarters to have a healthy and efficient corporation with the agency. At the same time, it allows the companys agencies to access the classified data and system to save time consumption in a transaction requiring the data in question.
Employee motivation and theory models used in motivating the employees
The effective motivation of workers is considered as one of the challenging duties of the management in the corporation. Motivation, as such, refers to the processes that psychologically stimulate excitements and actions of voluntary persistence that are aimed at individual goals (Chiang, 2015). Motivation is deeply individualized and therefore it is up to the management to employ the use of various techniques to motivate uniformly all the employees. The organization ensures employees satisfaction through the application of two motivational model theories; Maslows Needs Hierarchy Theory and Expectancy theory.
Needs theory identifies the inside factors that lead to eachs motivational behavior. It bases its argument that unfulfilled needs of a person bring motivation to the individual in question (Chiang, 2015). The needs refer to the psychological insufficiencies that lead to a specific behavioral response. According to Maslow, Motivation is a product derived from an individual's effort to satisfy his or her basic needs. The needs are safety, self-actualization, esteem, social, and psychological. The internal pressures created by these needs influence individuals behaviors in particular ways.
The psychological needs are those requirements needed by employees for their survival. These include shelter, sleep, food, clothing, and water. The human resource department of the Cincinnati financial corporation accounts for the employees psychological needs in some ways. These are provision of comfortable conditions of working, creation of breaks for use of bathrooms, drinking and eating and reasonable hours of working standardized at eight man hours per day (Leischnig, & Kasper-Brauer, 2015).
The safety needs refer to the security sense needs and provision of the employees well-being. The areas covered by this kind of need comprises of accident protection, personal safety, financial security, harm from the workplace, and good health. Human resource managers of the Cincinnati financial corporation aims at the safety of the employees by offering secure compensation, providing job security, and provision of soundly safe conditions in the work environments.
The social needs are those that makes a person to have a feeling of acceptance and belonging. The needs satisfaction eliminates the lonely feeling, isolation or depression of the employees. The friendship ties, intimacy and family helps in fulfilling the needs. The managers in the Cincinnati insurance corporation ensure that the employees are familiarized with each other, promoting teamwork and at the same being available and kind to the workers. Jiarakorn et al. (2015) posit that it promotes an excellent balance in work-life thus developing performance among employees.
The esteemed needs are those related to respect among employees and self-esteem. The managers at the corporation ensure that the esteemed needs are met among employees by recognizing and praising the employees whose work are excellent, promotion offering to the deserving employees and allocation of extra responsibility to employees they trust.
The needs of self-actualization describe the reaching of an individuals full potential. This need is very personal since it majorly depends on the person in question. For the managers at the Cincinnati financial corporation to account for the need, they invite employees to have full participation in decision-making process. Also, they provide quite challenging tasks to the workers and at the same time providing them with flexibilities in their various duties.
The other motivation model used by the corporation in ensuring their employees remain motivated, is the Expectancy theory. This theory was first proposed by Vroom H. Victor, who is an expert in international leadership decision making. It suggests that the employs view on the outcome determines his or her motivation level. His theory reveals a multiplicative function of expectancy, instrumentality, and valence (Leischnig, & Kasper-Brauer, 2015). The components of the theory being effected within the corporation include;
Expectancy concept that defines the relationship between the performance and effort. According to Scholl, 2002, based on expectancy theory, the effort a person places in an activity determines the kind of performance that is expected as per the effort. The managers at the corporation try their best to enable the workers believe that their effort will bring improvement to the companys growth. They do this by promoting the workers self-efficacy, simplification of the production goal and allowing the employees adequate amount of control over the expected outcome.
Instrumentality is the other aspect of the model being adequately addressed by the companys managers. This component helps employees in realizing the performance levels they need to have to understand a particular output (Chiang, 2015). An employee will only subject himself to a certain performance level when assured of the outcome expected. This component, therefore, explains that an employee believes in meeting expected performance level when they expect greater rewards. Managers at the corporation, therefore, pay great attention to the performance of individual employees and paying each employee depending on the performance level each applies at work. This motivates the employees who in turn increases their performance level with time.
The final expectancy theory component applied by the organization in employee motivation is the valence. This part dwells on expected satisfaction an employee will receive from specific outcomes (Leischnig, & Kasper-Brauer, 2015). Negative outcomes will demoralize the employees. The managers at the corporation usually learn and understand the outcomes desired by the employees. This enables them to design a system of reward that the employees perceive to be more satisfactory. This has helped place employees at genuine positions for high-performance levels thus development and growth of the corporation.
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