Aig Case Study Answers

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1. What types of work behaviors did AIG intend to encourage through its retention bonus plan? Firstly, the retention bonus plan may have been devised by AIG to incentivize its employees to stay loyal to the firm and stick with it during the unwinding process. Many of the accounts were highly complex and bespoke in nature ,therefore, it was important for AIG to retain the best and brightest employees who had the knowledge and expertise to close those accounts. The company may have also expected to elicit behaviour in its employees exemplified by Douglas Poling through the retention bonus plan. Secondly, AIG may have attempted to prevent further destabilisation by rolling out the retention bonus plan. In the absence of an incentive to stay with the firm, many employees may have left leading to low morale and high turnover rate. Finding new staff in the midst of a financial crisis could have proved to be highly disruptive for the unwinding of the financial products unit. 1. Which needs seem to be important to the employees of AIG’s Financial Products unit? With respect to two factor theory, it may be argued that AIG employees have needs that fall under the umbrella of hygiene factors and motivation factors. Many employees stayed with the firm after signing the retention bonus contract which was intended to address motivation factors by the AIG. However, many employees chose to left the firm despite the retention bonus which points towards lack of attention to hygiene factors. The financial crisis and the looming possibility of inevitably losing their jobs may have caused dissatisfaction among those employees. In addition, by analysing the behaviour of AIG employees after receiving the retention bonus many of their needs can be conceptualized in the context of the need hierarchy. Many of the employees feared strong response from the public if
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