Chapter 13 Presentation Final Ok

8/6/2019 Chapter 13 Presentation Final Ok

http://slidepdf.com/reader/full/chapter-13-presentation-final-ok 1/65

Chapter no. 13BENEFITS AND SERVICES



1.Hassan Abbas2.Islam Aslam

3.Muhammad Saad4.Adil Naeem5.Muhammad Suleman

Group members



Where from this word isderived ?



Compensation

D irect co m p en sa tio n In d ire ct co m p e n sa tion



Direct compensation refers tomonetary benefits offered andprovided to employees in return of the services they provide to theorganization. The monetary benefitsinclude basic salary, house rent

allowance, Car policy , medicalreimbursements,

Direct Compensation







1)Some employers provide these programs for labor market reasons.

2) Some want to keep a union out, or the unionwon them through negotiations.3) Some feel that providing benefits and services

increases employees performance.

Why Offer Benefits andServices?



Benefits

Supplementalpay Executive servicesInsurance benefits Retirement benefits

Types of Employee Benefits



• Supplemental pay benefits provide pay for time not worked including,

• unemployment insurance,• vacation and holiday pay, etc.• It Also known as(Pay for Time Not

Worked).

upplemental Pay



Insurance benefits fall into 3categories

• Worker’s compensation• Hospitalization, health, and disability• Life insurance

nsurance Benefi ts



• The retirement benefits are those,which provide to employees afterretirement and at the time of retirement these are included.

• Employee stock ownership.• Old age benefits.• House benefits.• Life insurance plans.

•

et irement Benefi ts



• Many employers provide the sorts of personal services that employees needat one time or another.

• Provide credit.• Cafeteria Approach.

• Child and elder care referrals

• social and recreational opportunities.

xecutive services

http://www.google.com.pk/imgres?imgurl=http://www.personnel-hr.com/_borders/phrc_theme_pic_soft.jpg&imgrefurl=http://www.personnel-hr.com/&usg=__UemFnXARQfsCClxi8UBwj5VzJXY=&h=304&w=420&sz=18&hl=en&start=10&zoom=1&tbnid=Sd3MPL_83cfm2M:&tbnh=90&tbnw=125&ei=cX_XTe7jOtDZsgb05_T3Ag&prev=/search?q=personal+services+hrm&num=10&um=1&hl=en&lr=lang_en&sa=N&tbm=isch&um=1&itbs=1



–IGURE 13 2 - ,Private Sector Employer Benefits Costs by Category March2009





MUHAMMAD SAAD



Pay For Time Not WorkedWhat this mean??



• It means that employees usually getbenefits when they don’t have towork.

• It is one of the most costly benefitsreceive by the employers.

• Another name for this is “ Supplemental Pay

Benefits”

Pay For Time Not Worked



Pay For Time Not Worked

Vacations and holidays

Parental leave

Supplemental unemployment benefi

upplemental Pay Benefits

Unemployment insurance

Sick leave

Severance pay

:t includes



• Unemployment Insurance – Provides for benefits if a person is

unable to work throughno fault of his or her own.

– Is an employer payroll tax that isdetermined by an employer’s rateof personnel terminations.

– Tax is collected and administered bythe state. –

Pay for Time Not Worked



,No unemployment benefit should be given to only those who are unable

to do any job due to no fault of.their own

Should companies give benefits to those who are dismiss from their

job ?



Pay for Time Not Worked

• Vacations and Holidays – Number of paid leave days and

holidays varies by employer.

– Qualification for and calculation of holiday and leave pay varies byemployer.

– Premium pay for those who work

on holidays.



Pay for Time Not Worked(cont’d)

• Sick Leave – Provides pay to an employee when he

or she is out of work because of

illness.• Costs for misuse of sick leave• Pooled paid leave plans




• Personal illness is 45% of unscheduledsick leave

• Family issues 27%• Personal needs 13%• Mentality of entitlement 9%• Stress 6%



–IGURE 13 4 Online Request

for Leave Form




• Parental Leave – The Family Medical Leave Act of 1993

(FMLA)• Up to 12 weeks of unpaid leave within

a one-year period.• Employees must take unused paid

leave first.

• Employees on leave retain their healthbenefits.

• Employees have right to return to jobor equivalent position.



–IGURE 13 3 Your Rights Under

the Family and Medical Leave Act

of 1993




• Severance Pay – A one-time payment when terminating

an employee.• Reasons for granting severance pay:

– Acts as a humanitarian gesture and goodpublic relations.

– Mirrors employee’s two-week quit notice. – Avoids litigation from disgruntled former

employees. – Reassures employees who stay on after

the employer downsizes its workforceof employer’s good intentions.




• Supplemental Unemployment Benefits(SUB) – Payments that supplement the laid-off or

furloughed employee’s unemploymentcompensation.• The employer makes contributions to a

SUB reserve fund.

• SUB payments are made to employees forthe time the employee is out of workdue to layoffs, reduced workweeks, orrelocations.

• SUB payments are considered previously

earned compensation for unemploymentcalculation ur oses.



HASSAN ABBAS



InsuranceBenefits



Insurance Benefits

• Required by Law or Voluntary benefitsprovided by employers to employees

’orkers Compen sa tion ea th Insu ra nce

n su ra nc e B en ef it s



Insurance Benefits (cont’d)

• Workers’ Compensation – Provides income and medical benefits

to work-related accident victims or

their dependents, regardless of fault.

• Law influencing Workers’

Compensation in Pakistan – Workmen’s Compensation Act 1923



Workers’ Compensation

• How benefits are determined – Workmen’s Compensation Act 1923

deals with the calculation of wages

and benefits and percentages of losses.

– Three Schedule 1, 3, and 4 relates tocalculations

• How to get benefits – It must be proved that the worker was

on the job when injury occur

regardless oh his/her fault



Case

• If you are a employer and instructs all the workers to wear safetygoggles in machine room, all

workers wore them but one didn’t,and he gets injured in machineroom.

• Will he get Workers’Compensation Benefits



Worker’s CompensationCosts

• Controlling workers’ compensationcosts – Screen out accident-prone workers. – Make the workplace safer. – Thoroughly investigate accident

claims.

– Rehabilitation programs – Use Case Management to return

injured employees to work as soonas possible.



Case Management

• Treating injured workers on caseto case basis.

• Physicians and medical staff

determine the best plan foreach case.

• One most common cost control

technique in United States



Insurance Benefits(cont’d)

In su ra n ce

-n d g ro u p ra te cove ra g e o f b a sic a n d m a jo r m e d ical ex p e n

rm e n t

, , ,is the act of cutting tearing pulling wrenching or otherwise re

urance provides income protection for salary loss due to illness o



Employers and InsuranceCompanies

• Employers for the purpose of Hospitalization, Health, andDisability Insurance may contractwith – Life Insurance Companies – Health Maintenance Organizations

(HMOs) – Preferred Provider Organization(PPOs)




• Health Maintenance Organization(HMO) – A medical organization consisting of

specialists operating out of a healthcare center.

• Provides routine medical services toemployees who pay a nominal fee.

• Receives a fixed annual contract feeper employee from the employer (oremployer and employee), regardlessof whether it provides that person

with service.




• Preferred Provider Organizations(PPOs) – Groups of health care providers that

contract to provide services atreduced fees.• Employees can select from a list of

preferred individual health providers.• Providers agree to discount services

and to submit to utilization controls.• Employees using non-PPO-listed

providers may payall costs or only costs above the

reduced fee structure for services.



Health Care Cost ControlTrends

1.Getting employees involved andempowered , and making sure that theyknow the cost (medical) of theirdecisions.

2.Getting employees pay more for their sharein medical insurances .

3.Prevention programs- immunizations,routine check-ups

4.Taking Special steps in Recruitment process

5.Outsourcing health care planadministrations to outside companies

6.Conducting audits to reduce frauds in

medical claim



Short term, Just in TimeWorkers

• Benefits may be given by employersaccording to company policy

• May be given by staffing agency• May be outsourced to the

administrative companies



ADIL NAEEM



Retirement Benefits

• Social Security(Federal Old Age and Survivor’sInsurance) – A federal payroll tax (7.65%) paid by

both the employee and the employeron the employee’s wages

• Retirement benefits at the age of 62• Survivor’s or death benefits paid

to the employee’s dependents

• Disability payments to disabledemployeesand their dependents

– The Medicare program• Health services to people age 65 or older



Retirement Benefits(cont’d)

Defined benefit

plans Defined contribution plans Qualified

plans

Types of Pension Plans

Nonqualified plans



Defined benefit plan:A defined benefit pension plan is a

type of pension plan in which an employerpromises a specified monthly benefit onretirement that is predetermined by aformula based on the employee'searnings history, tenure of service andage, rather than depending on investmentreturns.

Defined Contribution plan:In defined contribution plan the

amount of the employer contribution isspecified . In this plan Only employer

contributions to the account are



Qualified plan:Is a retirement account or plan that

meets tax law requirements which permitthe deferment of tax and the tax-freeaccumulation or appreciation of assetsheld within the plan.

Non-qualified plan:A retirement plan that does not

qualify for the federal tax advantagesreceived by qualified plans, but which, inturn, is subject to fewer restrictionsregarding participants and contributionlimits

Retirement Benefits




( )401 k plans

Savings and thrift plans

Employee stock ownership plans

Cash balance pension plans

-Deferred profit sharing plans es of Defined Contribution Plans

Types of Defined



Types of DefinedContribution Plans

401(k)plan:

• A defined contribution plan offered by a corporation toits employees, which allows employees to set aside

tax-deferred income for retirement purposes

Thrift saving plan:

• The thrift savings plan is a defined-contribution plandesigned to give federal employees the sameretirement savings related benefits that workers inthe private sector enjoy with 401(k) plans.




Deferred profit sharing plan:• Type of deferred compensation plan in which

an employee's shares are held in a trust withother accrued benefits until his orher retirement

Employee stock ownership plan:• In employee stock ownership plan contributions

are made by the sponsoring employer, and cangrow tax-deferred But unlike other retirementplans, the contributions must be invested in thecompany's stock. The benefits for the company

include increased cash flows, tax savings, andincreased roductivit from hi hl motivated




Cash balance pension plan:• In a cash balance plan, the benefit

amount is computed based on aformula using contribution andearning credits, and eachparticipant has a hypothetical

account

R ti t B fit




• Employee Retirement Income SecurityAct (ERISA) of 1974 – Established guidelines for “qualified”

pension plans.

– Requires fiduciary responsibility.• Pension Benefits Guarantee

Corporation (PBGC) – Insures plans that terminate without

sufficient fundsto meet obligations.

– Guarantees only defined benefit plans.

– Pays individual pensions up to $54,000



HAFIZ ISLAM ASLAM



Pension Plans

Membership requirements Vesting scheduleBenefit formula Planfunding

Policy Issues in Pension Planning

E l ’ V i Ri h



Employees’ Vesting Rightsunder ERISA

• Cliff Vesting – Gives participants full right to the

employer’s matching contributionafter three years of service.

• Graded Vesting – Gives participants an increasing right

to the employer’s matchingcontribution over a six-yearschedule of 20% after two years of service and 20% for eachsucceeding year thereafter.

P i d E l



Pensions and EarlyRetirement

• Early Retirement Windows – Offer specific employees (often age 50-plus)

an incentiveto voluntarily retire earlier than usual.

– Offer a combination of improved orliberalized pension benefits plus a cashpayment.

– Require careful program construction toavoid oversubscription and timely deliveryto avoid potential age discriminationclaims.

• Older Workers’ Benefit Protection Act(OWBPA)

– Imposes limitations on waivers that purportto release a terminating employee’spotential claims against the employer



Personal Services

• Credit Unions – Separate businesses established with the

employer’s assistance to help employeeswith their borrowing and saving needs.

• Employee Assistance Programs (EAPs) – Provide counseling and advisory services:• Personal legal and financial services• Child and elder care referrals• Adoption assistance

• Mental health counseling• Life event planning

E l A i t



Employee AssistancePrograms

1

.e aware of legal issues

.nsure professional staff ing

Steps for Launching an EAP Program

.evelop a pol icy s ta tement

-aintain conf ident ia l record.eeping systems

2

3

4

F il F i dl (W k Lif )



Family-Friendly (Work–Life)Benefits

• Subsidized child care• Sick child benefits• Elder care• Time off • Subsidized employee transportation• Food services• Educational subsidies

• Fitness and medical facilities• Flexible work scheduling

Flexible Benefits



Flexible BenefitsPrograms

• Cafeteria (Flexible Benefits) Approach – Each employee is given a limited benefitsfund budgetto spend on preferred benefits.

– Types of plans• Flexible spending accounts• Core plus option plans

• Employee Leasing – Professional employer organizations or

staff leasing firms – Handle human resources functions for

leased employees of small firms – Can provide benefits by aggregating

employees into larger insurable groups – Can raise worker commitment, co-

employment, and workers’

–IGURE 13 6



IGURE 13 6 Online Survey of

’Employees Benefits

Preferences



Flexible Work Schedules

• Flextime• Compressed workweek schedules

• Workplace flexibility

• Job sharing

• Work sharing



Questions



Thank you

Documents

Chapter 13 Presentation Final Ok