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MGT 431 Incentive Plans paper week 4 individual .assignment

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Incentive Plans for Farm Bureau Insurance
Incentive Plans for Farm Bureau Insurance
NAME
MGT 431 Human Resources Management
DATE
1

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Incentive Plans for Farm Bureau Insurance
Incentive Plans for WHATEVER COMPANY YOU CHOOSE
Farm Bureau Insurance offers two incentives to employees. The incentives
include a yearly bonus and a company vehicle included with 6,000 personal miles a year.
The incentive plans of Farm Bureau Insurance relate to the organization’s needs and
objectives by keeping premiums as low as possible while maintaining a profit margin to
gain revenue. At the end of each fiscal year the loss to gain ratio is evaluated. The
outcome of this ratio determines rather or not employees receive a bonus. The incentive
plans rely solely on how much premiums are brought in compared to loss ratios. For
example, if Farm Bureau were to bring in $100,000 in premiums and had only $30,000 in
losses, bonuses would be a definite for all employees that year.
With Farm Bureau being an insurance organization, incentives rely on the number
of customers, amount of premiums, and amount of losses in a year. If Farm Bureau were
to be faced with many tragic storms in many areas losses would be sky high. Although
premiums are being paid, the amount of losses could be too high to pay out bonuses to
employees. Farm Bureau thrives to project the best case scenario with premiums and
losses. Farm Bureau advertises to increase customer level and makes sure to provide the
right amount of coverage for each individual with all of their valuable property. Farm
equipment is a big factor with a lot of Farm Bureau customers. Farm equipment is some
of the most expensive business tools in the world. For example, a combine tractor can run
in the hundreds of thousands of dollars and is much needed to harvest crops. An auger is
used to move the grain out of a bin into a truck and usually costs around $50, 000.
Farmers must make sure to protect this equipment because it brings in their income and
feeds their family. Farmers paying a small premium offer peace of mind protecting them
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