Dessler Hrm12ge Ppt 13

8/12/2019 Dessler Hrm12ge Ppt 13

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GARY DESSLER

HUMAN RESOURCE MANAGEMENT

12thEdition

Part 4 - Compensation

Chapter 13

Benefits and

Services


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134

Indirect financial and nonfinancial paymentsemployees receive for continuing their employment

with the company.

Benefits


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135

Benefits

Supplemental

pay

Executive

services

Insurance

benefits

Retirement

benefits

Types of Employee

Benefits


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136

Benefits

Types of employee benefit plans

Health and Insurance: workers compensation

Retirement: Pensions

Time off with pay: sick leave and vacation pay

Employee services: child-care facilities


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The Benefits Picture Today

Most full-time employees in the United States

receive benefits.

Virtually all employers99%offer some health

insurance coverage.

Benefits are a major expense (about one-third of

wages and salaries) for employers.

Employees do seem to understand the value of

health benefits.


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FIGURE 132 Private-Sector Employer Benefits Costs by Category, March 2009


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TABLE 131 Some Required and Discretionary Benefits

* While not required under federal law, all these benefits are regulated in

some way by federal law

Benefits Required by Federal

or Most State Law

Benefits Discretionary

on Part of Employer*

Social Security

Unemployment Insurance

Workers CompensationLeaves under the Family Medical

Leave Act

Disability, Health, and Life Insurance

Pensions

Paid Time Off for Vacations, Holidays, SickLeave, Personal Leave, Jury Duty, etc.

Employee Assistance and Counseling

Programs

Family Friendly benefits for Child Care,

Elder Care, Flexible Work Schedules, etc.

Executive Perquisites


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Policy Issues in Designing Benefit Packages

PolicyIssues

Who will be covered

Coverage during

probation

Degree of employee

choice

Which benefits to offer

Whether to include

retirees

How to finance benefits

Cost containmentprocedures

Communicatingbenefits options


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Pay For Time Not Worked

Vacations and

holidays

Parental leave

Supplemental

unemployment

benefits

SupplementalPay Benefits

Unemployment

insurance

Sick leave

Severance pay


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Supplemental pay

Wages paid by an employer that are not paid at a regular

hourly rate or in a predetermined fixed amount.

Supplemental pay include, but are not limited to:

bonuses, commissions, overtime pay, payments for

accumulated sick leave, severance pay, awards, prizes, back

pay, retroactive pay increases, and payments fornondeductible moving expenses and noncash fringe benefits.

An employer may choose to report tips and overtime pay as

either regular wages or supplemental wages.

Noncash fringe benefits may include company vehicle,parking permits, country club memberships , physical

exams, gifts, gift cards, tickets, electronics, computers,

tablets, mobile phones etc.

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Pay for Time Not Worked

Unemployment Insurance

Provides for benefits if a person is unable to work through

no fault of his or her own.

Is an employer payroll tax that is determined by an

employers rate of personnel terminations.

Tax is collected and administered by the state.

Vacations and Holidays

Number of paid leave days and holidays varies by

employer.

Qualification for and calculation of holiday and leave pay

varies by employer.

Premium pay for those who work on holidays.


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Pay for Time Not Worked (contd)

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

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 health benefits.

Employees have right to return to job or equivalent

position.


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Severance Pay

A one-time payment when terminating an employee.

Reasons for granting severance pay:

Acts as a humanitarian gesture and good public relations.

Mirrors employees two-week quit notice.

Avoids litigation from disgruntled former employees.

Reassures employees who stay on after the employer

downsizes its workforce of employers good intentions.


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Supplemental Unemployment Benefits (SUB)

Payments that supplement the laid-off or furloughed

employees unemployment compensation.

The employer makes contributions to a SUB reserve fund.

SUB payments are made to employees for the time theemployee is out of work due to layoffs, reduced workweeks,

or relocations.

SUB payments are considered previously earned

compensation for unemployment calculation purposes.


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Insurance Benefits

Workers Compensation

Provides income and medical benefits to work-related

accident victims or their dependents, regardless of fault.

Death or disability: a cash benefit based on earnings per

week of employment.

Specific loss injuries: statutory list of losses.

Injured workers are protected by ADA provisions.

Controlling workers compensation costs

Screen out accident-prone workers.

Make the workplace safer.

Thoroughly investigate accident claims.

Use case management to return injured employees to work

as soon as possible.


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Insurance Benefits (contd)

Hospitalization, Health, and Disability

Insurance

Provide for loss of income protection and group-

rate coverage of basic and major medical

expenses for off-the-job accidents and illnesses.

Accidental death and dismemberment

Disability insurance

Mental health benefits


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Health Maintenance Organization (HMO)

A medical organization consisting of specialists operating

out of a health care center.

Provides routine medical services to employees who pay a

nominal fee.

Receives a fixed annual contract fee per employee from the

employer (or employer and employee), regardless of

whether it provides that person with service.


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Preferred Provider Organizations (PPOs)

Groups of health care providers that contract to provide

services at reduced 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 pay

all costs or only costs above the reduced fee structure for

services.


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COBRA (Comprehensive Omnibus Budget

Reconciliation) ActGives employees and their families who lose their

health benefits the option to continue group

health benefits provided by their group health

plan for limited periods of time (usually up to 18

months) under certain circumstances such as

voluntary or involuntary job loss, reduction in the

hours worked, transition between jobs, death,

divorce, and other life events

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New trends in health care cost control: Use of cost-containment specialists

Getting employees more involved and empowered

Automating health care plan administration

Online selection software

Using defined contribution health care plans

Outsourcing health care benefits administration

Reducing or eliminating retiree health care coverage

Joining benefits purchasing alliances


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Trends in Health Care Cost Controls

Premiums and co-pays

Communication and

empowerment

Health savings accounts

Claim audits

Wellness programsCost-Control

Trends


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Other Cost-Control Options

Mandatory online plan

enrollment

Defined contribution health

care plans

Reduced retiree

health care coverage

Benefits purchasing alliances

Outsourced health care plan

administration

Controlling

Health Care Costs


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Other Benefits Issues

Long-Term Care

Insurance for older workers is a growing issue.

Life Insurance

Types

Group life insurance

Accidental death and dismemberment

Personnel policy considerations

Benefits-paid schedule

Supplemental benefits

Financing (employee contribution)

Benefits for Part-Time and Contingent Workers

Leave and health benefits available to part-time workers.

Benefits for long-term independent contractors.


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Retirement Benefits

Social Security

(Federal Old Age and Survivors Insurance)

A federal payroll tax (7.65%) paid by both the employee

and the employer on the employees wages

Retirement benefits at the age of 62 Survivors or death benefits paid

to the employees dependents

Disability payments to disabled employees

and their dependents The Medicare program

Health services to people age 65 or older


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Retirement Benefits (contd)

Defined

benefit

plans

Defined

contribution

plans

Qualified

plans

Types of Pension Plans

Nonqualified

plans


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Types of pension plans

Contributory: employees contribute to the plan.

Noncontributory plans: employer makes all contributions

to the plan.

Qualified plans: plans that meet requirements for tax

benefits for employer contributions.

Nonqualified plans: plans not meeting requirements for

favorable tax treatment.


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Types of pension plans (contd)

Defined contribution: contributions of employees and

employers are specified; plan payouts are not.

Defined benefit plans: plan payouts are specified;

however, contributions must be sufficient to insurepayouts.


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401(k) plans

Savings and thrift plans

Employee stock

ownership plans

Cash balance pension plans

Deferred profit-sharing plansTypes of Defined

Contribution Plans


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401(k) Plans

Defined contribution plans based on section 401(k) of the

Internal Revenue Code.

Plans are funded by pretax payroll deductions.

Contributions are invested in mutual stock funds and

bond funds.

The Economic Growth and Tax Relief Reconciliation

Act of 2001 (EGTRRA) raised limits on employee

contributions.


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Other types of defined contribution plans

Savings and thrift plans

Employees contribute a portion of their earnings to a fund;

the employer usually matches this contribution in whole or

in part.

Deferred profit-sharing plans Employers contribute a portion of profits to the pension

fund, regardless of the level of employee contribution.

Employee stock ownership plans (ESOPs)

Qualified, tax-deductible stock bonus plans in whichemployers contribute company stock to a trust for eventual

use by employees.


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Pensions and Early Retirement

Early Retirement Windows

Offer specific employees (often age 50-plus) an incentive

to voluntarily retire earlier than usual.

Offer a combination of improved or liberalized pension

benefits plus a cash payment.

Require careful program construction to avoid

oversubscription and timely delivery to avoid potential age

discrimination claims.

Older Workers Benefit Protection Act (OWBPA)

Imposes limitations on waivers that purport to release a

terminating employees potential claims against the

employer based on age discrimination.


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Personal Services

Credit Unions

Separate businesses established with the employers

assistance to help employees with 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


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Employee Assistance Programs

1

Be aware of legal issues.

Ensure professional staffing.

Steps for Launching an EAP Program

Develop a policy statement.

Maintain confidential record-keeping systems.

2

3

4


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Family-Friendly (WorkLife) Benefits

Subsidized child care

Sick child benefits

Elder care

Time offSubsidized employee transportation

Food services

Educational subsidies

Fitness and medical facilities

Flexible work scheduling


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Flexible Benefits Programs

The cafeteria (flexible benefits) approach

Each employee is given a benefits fund budget to spend

on the benefits he or she prefers.

The fund limits the total cost for each benefits package.

Core plus option plans establish a core set of benefitswhich are mandatory for all employees.

Flexible spending accounts

Enable employees to pay for medical and other expenseswith pretax dollars by depositing funds in their accounts

from payroll deductions.


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Flexible Benefits Programs

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 compensation issues


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Flexible Work Arrangements

Flextime

A plan whereby employeesworkdays are built around a

core of mid-day hours when all workers are required to

be present.

Workers can arrange their own starting and stoppinghours before and after the core period.

Positive effects on employee productivity, job satisfaction,

satisfaction with work schedule, and employee

absenteeism.

Positive effect on absenteeism was much greater than on

productivity.


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Flexible Work Arrangements (contd)

Compressed workweeks

Increase productivity

Less disruption from shift changes

Longer time-off-work periods

Reduced absenteeism

Longer workdays; fewer workdays:

Four-day workweeks, with four 10-hour days.

Two days on, two days off, three days on, then two days off,

two days on, and so forth. Three 12-hour shifts, and then off for the next four days.


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Other Flexible Work Arrangements

Job sharing

Allowing two or more people to

share a single full-time job.

Work sharing

A temporary reduction in work

hours by a group of employees

during economic downturns as a

way to prevent layoffs.

Telecommuting

Employees work at home using

telephones and the Internet to

transmit letters, data, and

completed work to the home office.


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K E Y T E R M S

benefits

supplemental pay benefitsunemployment insurance

sick leave

severance pay

supplemental unemployment benefits

workers compensationhealth maintenance organization (HMO)

preferred provider organizations (PPOs)

group life insurance

Social Security

pension plansdefined benefit pension plan

defined contribution pension plan

portability

401(k) plan

savings and thrift plan

deferred profit-sharing planemployee stock ownership plan (ESOP)

cash balance plans

Employee Retirement Income Security Act

(ERISA)

Pension Benefits Guarantee Corporation

(PBGC)

early retirement window

employee assistance program (EAP)

family-friendly (or worklife) benefits

flexible benefits plan/cafeteria benefits plan

flextime

compressed workweek

workplace flexibility

job sharing

work sharing

Documents

Dessler Hrm12ge Ppt 13