Case: Diversity Competency

Allstate Insurance Company

In today's competitive environment, companies continue to look for ways to improve their performance and achieve corporate goals. The task is not easy, but the team of human resource (HR) executives at Allstate Corporation has found that its diversity strategy has become one of the company's most important competitive weapons. It has long been Allstate's position that diversity is about neither political mandates nor legal obligation. Rather, the company's vision is stated this way: "Diversity is Allstate's strategy for leveraging differences in order to create a competitive advantage." This strategy has two major points: one internally focused and the other externally focused. According to James DeVries, senior vice president of human resources, the internal diversity focus is about "unlocking the potential for excellence in all workers by providing them the tools, resources, and opportunities to succeed." The external focus of diversity is about making certain that the workforce matches the experiences, backgrounds, and sensitivities of the markets it serves. In this context, Allstate managers view diversity not as a goal but as a process that is integrated into the daily life of the company.

Allstate launched its first affirmative action program back in 1969. In the early days, its commitment to diversity didn't always link recruitment, development, and retention strategies to business performance. The company focused more on affirmative action and diversity awareness through education and training. Although these initiatives were considered innovative in their day, they were not linked to Allstate's business strategy. The director of diversity management notes that the key question has become "How do you take this workforce of differences and bring them together in a more powerful way so that it can impact business results?" Allstate has taken four specific steps:

Step One: Succession Programming. A diverse slate of candidates is identified and developed for each key position. Allstate's management information system enables it to track and measure key drivers of career development and career opportunities for all of its more than 36,000 employees, ensuring that the company's future workforce will be diverse at all levels. Allstate's succession programming has made a difference that is easy to measure. Employment of women and minorities has grown at a rate far surpassing national averages. Today, 50 percent of Allstate's more than 5,300 executives and managers are women, and of that percentage, 25 percent are Hispanics or people of color. Languages other than English, a total of 62, are spoken in more than 3,200 Allstate agencies. The company has a minority recruitment program that focuses on colleges and universities with the most diverse enrollments.

Step Two: Development. Through the company's employee development process, all employees receive an assessment of their current job skills and a road map for developing the critical skills necessary for advancement. Options include education, coaching and mentoring, and classroom training. Leaders are provided employee feedback on which they can base future development programs. In addition, all of Allstate's nonagent employees with service of more than one year have completed mandatory diversity training courses.

Step Three: Measurement. Twice a year the company takes a snapshot of all 36,000 employees through a survey called the Diversity Index. As a part of a larger online employee survey and feedback process called the Quarterly Leadership Measurement System (QLMS), the Diversity Index asks the following questions:

1. To what extent does our company deliver quality service to customers regardless of their ethnic background, gender, age, and so on?

2. To what extent are you treated with respect and dignity at work? To what extent does your immediate manager/ team leader seek out and utilize the different backgrounds and perspectives of all employees in your work group?

3. How often do you observe insensitive behavior at work, for example, inappropriate comments or jokes about ethnic background, gender, age, and so on?

4. To what extent do you work in an environment of trust where employees/agents are free to offer different opinions?

Management communicates the results of this survey via its intranet and actively solicits feedback from employees on creating action programs to solve problems and improve work processes.

Step Four: Accountability and Reward. To link compensation to the company's diversity goals, 25 percent of each manager's merit pay is based on the Diversity Index and the QLMS. DeVries believes that this sharpens the focus on the initiative. "What you measure is what people focus on. This really sends a clear signal that management of people and doing that well are really important."

To help employees maintain a balance between work and personal life, Allstate has a number of programs in place. For example, it has an on-site child-care center at its headquarters in Northbrook, Illinois, and three near-site child-care centers, all of which offer parents discount programs. It also has on-site dry cleaning, oil change, and postal and catering services and allows for flexible work arrangements for its employees. The Allstate Center for Assistive Technology (ACAT) helps employees with disabilities that include carpal tunnel syndrome, mobility impairments, and multiple sclerosis. For example, when one information technology employee began experiencing hearing problems, the ACAT team was deployed to fit him with a special home phone for use when he was on night call.

Questions

1. Using the model found on page 194, evaluate Allstate's goal-setting process. How does it work?

2. On pages 202-203, we list some of the dimensions of an effective goal-setting program. Does Allstate meet these criteria?

3. What type of high-performance reward system should Allstate choose to motivate its employees to reach its diversity goals?