HRM 552 Week 1 Performance Analysis Example

Claims Take 23 Days Instead of 14: A Performance Analysis That Asks Whether Training Is the Answer at Bayou Coastal Insurance

[Student Name]

University of Phoenix

HRM/552: Organizational Training and Development

Week 1 Assignment

[Instructor Name]

[Date]

Bayou Coastal Insurance and all performance data are composites written for a model paper.

Bayou Coastal Insurance, a composite property and casualty insurer headquartered in Baton Rouge, writes homeowners and auto policies in Louisiana, Mississippi and Alabama and employs 1,400 people, 380 of them in its claims division. In 2025, it moved claims handling to a new cloud platform, and a hurricane season followed. Average cycle time for homeowners claims, from first notice to payment, rose from 14 to 23 days. Policyholder complaints to the state insurance department rose 40 percent, and adjuster turnover reached 28 percent. The chief claims officer asked HR for a training program on the new system. A request for training is a hypothesis about the cause of a problem, and a performance analysis tests that hypothesis before money is spent on it. This paper reports that analysis.

Defining the Performance Gap

Desired performance is a homeowners claim cycle time of 14 days or less for non-catastrophe claims, a complaint rate below 2 per 1,000 claims and accurate payments verified by audit. Actual performance over the last two quarters is 23 days, 3.4 complaints per 1,000 claims and an audit error rate of 6 percent against a 3 percent target. The gap is 9 days, 1.4 complaints per 1,000 and 3 points of accuracy.

The Cost of the Gap

Longer cycle times cost money. Adjusters spend more time on follow-up calls from frustrated policyholders, outside appraisal and rental car costs rise as claims stay open and complaints draw regulatory attention. Finance estimates the gap costs about $4.8 million a year in added claim expenses and staff time, before counting lost policy renewals.

Models for Locating Causes

Gilbert (1978) proposed that most performance problems have causes in the work environment rather than in workers, and his behavior engineering model checks six factors: information, resources and incentives in the environment and knowledge, capacity and motives in the individual. Rummler and Brache (2013) added that performance must be examined at three levels, the organization, the process and the job, since a well-trained person in a broken process will still perform poorly.

Gathering Data

The analysis drew on interviews with 32 adjusters, 8 supervisors and 6 claims managers, system data on 41,000 claims, observation of 20 adjusters for half a day each, a review of the platform's training materials and audits of 300 closed claims. Combining sources avoided relying on any single group's view of the problem.

Environment: Information

Adjusters receive conflicting priorities. Supervisors tell them to close claims fast, quality auditors flag errors from rushing and a new policyholder service team asks them to return calls within four hours. No one has ranked these goals. Adjusters also get feedback only through monthly reports, too late to correct their work.

Environment: Resources

Caseloads averaged 180 open claims per field adjuster during and after the hurricane season, against an industry guideline the company itself uses of about 120. The new platform routes claims automatically but assigns some adjusters many more complex claims than others. Field adjusters lacked tablets that synced with the new system and entered notes twice. These are resource problems.

Environment: Incentives

The adjuster bonus is based on the number of claims closed. Observation and interviews showed that adjusters close simple claims first and leave complex ones aging, which raises average cycle time. The incentive rewards exactly the behavior that lengthens the hardest claims.

Individual: Knowledge and Skill

Some gaps are real knowledge gaps. Observation showed that about 40 percent of adjusters did not use the platform's document request feature, which automatically reminds policyholders to submit photos and estimates, and instead made manual calls. Others did not know how to reassign claims or set diary reminders. These are skills the platform training covered in a single day before launch, without practice on real claims.

Individual: Capacity and Motives

Adjusters have the capacity to do the work; the strongest performers before the change remain strong. Motivation has suffered, with adjusters describing exhaustion and frustration with conflicting demands, but this appears to follow from workload and incentives rather than causing the gap.

The Process Level

At the process level, handoffs between field adjusters, desk adjusters and the payments team now pass through queues in the new platform. System data show that claims wait an average of 3.5 days in the payments queue for approval when amounts exceed an adjuster's authority, which was lowered after the platform launch. That delay alone accounts for a large share of the 9-day gap.

Sorting the Causes

The analysis attributes roughly 3.5 days of the gap to the approval queue and authority limits, 2.5 days to caseloads, 1.5 days to incentives that delay complex claims and 1.5 days to platform skills such as automated document requests. Training addresses roughly one-sixth of the problem.

Checking the Findings With Adjusters

Before finalizing, the team shared the draft causes with two groups of adjusters and supervisors who had not been interviewed. Both groups confirmed the incentive and approval problems and added one finding: catastrophe claims from the hurricane were still mixed into regular queues, so adjusters were switching between very different types of work several times a day. Separating catastrophe claims into their own team became an added recommendation. Testing findings with the people who do the work catches errors and builds support for the changes.

Feedback as an Intervention

Faster feedback can help but must be designed carefully. Kluger and DeNisi (1996) found in a meta-analysis that feedback improved performance on average, but a sizable minority of the feedback efforts, over a third, actually lowered results, especially when it drew attention to the self rather than the task. Daily dashboards showing each adjuster's aging claims, rather than rankings, will focus on the work.

Recommended Interventions

The paper recommends restoring adjusters' payment authority to pre-launch levels with audit sampling, adding temporary adjusters until caseloads return to 120, changing the bonus to reward cycle time and accuracy across all claims, ranking priorities in writing, providing synced tablets and delivering targeted platform skills training with practice on live claims.

Responding to the Training Request

The chief claims officer asked for training, and training is part of the answer. The analysis shows that training alone would cost about $250,000 and address perhaps 1.5 days of the 9-day gap. Presenting the findings with data allows leadership to fund the broader set of fixes.

Measures and Timeline

Cycle time, complaint rate, audit accuracy, caseload per adjuster, approval queue time and adjuster turnover will be reported monthly. Authority and incentive changes will take effect within 30 days, staffing within 60 days and training within 90 days, with a target cycle time of 16 days in six months and 14 days in a year.

Conclusion

Bayou Coastal's claims gap has causes at every level: a slow approval process, heavy caseloads, misaligned incentives, conflicting priorities, missing tools and some real skill gaps. Gilbert's model and the three performance levels showed that training, the original request, addresses only part. Fixing the environment first and training for real skill gaps gives the best chance of returning to 14 days.

References

Gilbert, T. F. (1978). Human competence: Engineering worthy performance. McGraw-Hill.

Kluger, A. N., & DeNisi, A. (1996). The effects of feedback interventions on performance: A historical review, a meta-analysis, and a preliminary feedback intervention theory. Psychological Bulletin, 119(2), 254-284. https://doi.org/10.1037/0033-2909.119.2.254

Rummler, G. A., & Brache, A. P. (2013). Improving performance: How to manage the white space on the organization chart (3rd ed.). Jossey-Bass.