(a) Fitzgerald and Moon’s Building Block Model for Service Industries:
Fitzgerald and Moon’s building block model is used to evaluate and improve performance management systems in service-based companies. It is based on three essential building blocks:

1. Dimensions of Performance: These include:
   • Financial Performance: Examines profitability and cost control.
   • Competitiveness: Analyzes market position and market share.
   • Flexibility: Assesses the organization’s ability to adapt to changes.
   • Resource Utilization: Evaluates how efficiently resources are used.
   • Quality of Service: Measures customer satisfaction and service quality.
   • Innovation: Looks at the company’s ability to innovate and stay ahead of competitors.
2. Standards: Performance is evaluated against established benchmarks. These standards should be achievable, measurable, and aligned with the company’s goals.
3. Rewards: Motivating staff to achieve targets is essential. Rewards should include:
   • Clarity: The criteria for achieving rewards should be clear to all employees.
   • Controllability: Rewards should be linked to performance areas employees can control.
   • Motivation: Rewards should be significant enough to motivate staff to strive for excellence.

(b) Application of the Fitzgerald and Moon Model to Premier Insurance Plc:
Using the building block model, the following dimensions of Premier Insurance Plc.’s strategic performance can be evaluated:

1. Financial Performance:
   • In the early years, Premier Insurance enjoyed steady premium and investment income growth. However, by 2010, the company’s profits plummeted due to the global economic downturn, reduced investment by technical partners, and the loss of government contracts. The financial performance dimension shows a sharp decline.
2. Competitiveness:
   • Premier Insurance was highly competitive when it had the backing of foreign technical partners and government contracts. However, the exit of key stakeholders and market changes reduced the company’s competitiveness significantly.
3. Flexibility:
   • Premier Insurance lacked flexibility in adapting to the global economic changes, resulting in a sharp decline in revenues and profitability. The company did not diversify its customer base and relied heavily on government contracts and real estate investments.
4. Resource Utilization:
   • The company had well-paid staff but lacked productivity. There were no targets or incentives to enhance employee performance. The inefficient use of human resources contributed to slow response times and unsatisfactory customer service.
5. Quality of Service:
   • Premier Insurance’s service quality suffered as it focused more on obtaining large accounts through connections rather than delivering superior service. Claims settlement was slow, and the company’s reputation for customer service was tarnished.
6. Innovation:
   • The company did not show significant innovation in its business model or offerings. Most of its revenue was generated from traditional insurance services and real estate investments. There was little focus on developing new products or services to stay competitive in a changing market.

Standards:
Premier Insurance lacked clear performance standards. There were no specific targets for staff, and there was no structured performance evaluation system. This resulted in a lack of accountability and poor overall performance.

Rewards:
The company did not offer productivity bonuses or performance incentives. The compensation structure was heavily dependent on fixed salaries, leading to low employee motivation and poor productivity.

(c) Summary of Evaluation and Strategic Recommendations:
The evaluation reveals that Premier Insurance Plc.’s performance management system was weak across all the key dimensions of Fitzgerald and Moon’s building block model. The lack of flexibility, poor resource utilization, and inadequate quality of service led to its decline. To address these issues, the following strategic elements are recommended:

1. Establish Clear Performance Standards:
   The company should set clear, measurable performance targets for staff at all levels, particularly in customer service and claims management.
2. Introduce Performance-Based Rewards:
   Implement a reward system that motivates employees to achieve specific performance targets. This could include productivity bonuses and commissions for business development staff.
3. Diversify Revenue Streams:
   To improve financial performance, Premier Insurance should reduce its reliance on government contracts and real estate investments. It should focus on developing new insurance products tailored to current market needs and explore partnerships with multinational firms.
4. Improve Service Quality and Innovation:
   Enhance customer service by setting response time targets and investing in staff training. Premier Insurance should also invest in technology and innovation to offer competitive, modern insurance solutions.
5. Strengthen Leadership and Accountability:
   The new management team, led by Mr. Dede, should focus on accountability, creating a culture of responsibility and continuous performance improvement.