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Well Furry Healthcare (WFH) is an Australian pet insurance company. It has 50 claims examiners in the Sydney division, who are each paid a fixed
Well Furry Healthcare (WFH) is an Australian pet insurance company. It has 50 claims examiners in the Sydney division, who are each paid a fixed annual salary of $65,000 to process claims. Currently 4,000 new claims are processed each day on average, but 10% are processed incorrectly. Incorrectly processed claims have to be reassessed, which is costly and time consuming. Cat Brown, the state manager, is not satisfied with the current volume of claims processed. She has instructed Sam Tweat, the Sydney division manager, to devise a compensation scheme to motivate the claims examiners to work faster. However, Sam is concerned that the examiners would make more errors by working faster - part of her own compensation is currently based on keeping divisional costs down! Required: A. Suggest an incentive scheme for the claims examiners that will address both Cat's and Sam's concerns. Use principles of agency, goal setting, and expectancy theories to inform your answer (note: you do not need to refer to every part of every theory). B. Provide one (1) efficiency and one (1) effectiveness measure that you would use to help you assess how well the plan you suggested in (A) works, and explain why you have chosen them
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