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Employee Benefits 3770 Beardshear Hall. Human Resource Services. Employee Compensation and Benefits . Mike Otis SPHR, CEBS Associate Director Human Resource Services. Employee Benefits 3770 Beardshear Hall. Human Resource Services. Agenda. Typical HR Organization Compensation Goals - PowerPoint PPT Presentation
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Employee Compensation and Benefits
Mike Otis SPHR, CEBS Associate Director
Human Resource Services
Employee Benefits3770 Beardshear Hall
Human Resource Services
Agenda• Typical HR Organization• Compensation Goals • Compensation Approaches • Benefits Exercise• Employer Challenges • General Benefit Concepts• Health Benefits• Welfare Benefits• Retirement Benefits• Closing Thoughts
Employee Benefits3770 Beardshear Hall
Human Resource Services
Typical HR Structure
Employee Benefits3770 Beardshear Hall
Human Resource Services
HR
Employee Relations
Equal Opportunity
Diversity
Workers Comp
Leave Programs
Payroll
Benefits
Compensation
Employee Assistance
Recruiting
HRIS
Goals of Compensation PlansWhy do companies care about how much
they pay?
Employee Benefits3770 Beardshear Hall
Human Resource Services
Goals of Compensation Plans• Employers are able to attract and retain employees who will contribute to the organization’s success• Employees feel they are compensated/rewarded fairly/equitably for their efforts and contributions to an organization’s success
Employee Benefits3770 Beardshear Hall
Human Resource Services
Employee Benefits3770 Beardshear Hall
Human Resource Services
Supportive Corporate CultureExecutive Sponsorship
Rewards• Bonus• Salary Increases• Promotions• Equity Offerings• Awards• Recognition• New job assignments
Salary• Pay• Overtime (if in non-
exempt classification)
Benefits• Health Plans• Retirement Plans• Vacation/ time off• Paid Training• Working Hours
Employee Satisfaction
Total Compensation
What Factors Determine Pay• Employer considerations
– Where employers compete for talent – local or national– What talents an employer competes for – the skill/knowledge level– How strongly the employer wants to compete
• Lead the market• Meet the market• Lag the market
Employee Benefits3770 Beardshear Hall
Human Resource Services
What Factors Determine Pay?• What job duties will be performed determines classification as either Exempt or Non-exempt (Governed by Fair Labor Standards Act (FLSA))
– Non-exempt employees. • Eligible for overtime pay for hours worked in excess of 40 • Employer must have record of time worked
– Exempt employees• Typically executive, professional, or administrative positions • Must meet minimum weekly pay guideline• Not entitled to overtime• Must meet both salary test and duties test
Employee Benefits3770 Beardshear Hall
Human Resource Services
Employee Benefits3770 Beardshear Hall
Human Resource Services
How to Build a Total Compensation “House”
Employee Benefits3770 Beardshear Hall
Human Resource Services
Compensation Structure
Compensation Philosophy
Employee Benefits3770 Beardshear Hall
Human Resource Services
Compensation Structure
Job Classifications
Compensation Philosophy
Employee Benefits3770 Beardshear Hall
Human Resource Services
Compensation Structure
Job Classifications
Rewards/Recognition
Compensation Philosophy
Benefits
Employee Benefits3770 Beardshear Hall
Human Resource Services
Compensation Structure
Job Classifications
Rewards/Recognition
Compensation Philosophy
BenefitsBenefits
Employee Benefits3770 Beardshear Hall
Human Resource Services
Compensation Structure
Job Classifications
Rewards/Recognition
Compensation Philosophy
BenefitsBenefits
Employee Benefits3770 Beardshear Hall
Human Resource Services
Compensation Structure ExampleGrade Minimum Midpoint Maximum
Midpoint Progression
Range Width
12 $93,500 $131,000 N/A 14% N/A
11 $81,800 $114,500 $147,200 14% 80%
10 $71,800 $100,500 $129,200 14% 80%
9 $65,300 $88,200 $111,000 14% 70%
8 $57,200 $77,400 $97,200 14% 70%
7 $52,000 $67,600 $88,400 14% 70%
6 $45,600 $59,300 $73,000 14% 60%
5 $40,000 $52,000 $64,000 10% 60%
4 $37,800 $47,200 $60,500 10% 60%
3 $34,300 $42,900 $51,500 10% 50%
2 $31,200 $39,000 $46,800 8% 50%
1 $28,800 $36,000 $43,200 N/A 50%
New Employee Exercise
“It’s good for the heart!”
Employee Benefits3770 Beardshear Hall
Human Resource Services
Utopia Enterprises – Your Employer of Choice!
We provide a “buffet” of benefit choices to meet your individual
needs!!
Employee Benefits3770 Beardshear Hall
Human Resource Services
Employee Benefits3770 Beardshear Hall
Human Resource Services
Benefits OfferedSource: 2005 Iowa Employer Benefits Study, David P.
Lind and Associates
Offered by Employers with 250 or more Employees
Rank
Health Insurance 97.7% 1
Life Insurance 95.4% 2
Retirement Plans 94.4% 3
Paid Holidays 94.1% 4
Pre-Tax deductions for Employee benefit contributions 86.5% 5
Long Term Disability Insurance 84.1% 6
Paid Vacation 83.7% 7
Educational Assistance/Tuition Reimbursement 75.1% 8
Sick Leave 73.8% 9
Employee Assistance Program (EAP) 73.1% 10
Fitness Center or Gym subsidy 36.7% 11
Long Term Care Insurance 32.8% 12
Flextime 32.5% 13
Casual Dress (every day, not just Fridays) 32.2% 14
Retiree Health Insurance (post age 65) 25.6% 15
Telecommuting 18.9% 16
Child Care Assistance (on or off site) 7.4% 17
Subsidized employee meals Not on list 18
Free Coffee/Soda Not on list 19
Pet Insurance Not on list 20
Employer Challenges• Structuring employee benefit packages that meet the needs of a diverse workforce – one size does not fit all• Helping existing employees understanding the “value” of their benefits• Administering benefit programs – costly and time-consuming. Not a profit-making venture!• Continued rising health care costs • Limited budgets – Benefits average 25% - 40% of Payroll in most organizations• Government restrictions/legislation/public policy
Employee Benefits3770 Beardshear Hall
Human Resource Services
General Concepts • Publicly traded companies will tend to structure pay/benefits that incorporate more equity (stock options, savings match in company stock, bonus tied to company performance, etc)• Non-publicly traded companies/organizations will spend more on non-cash incentives• Governmental organizations will on average spend more on benefits in lieu of salary
Employee Benefits3770 Beardshear Hall
Human Resource Services
Core vs. Non-Core Benefits
Employee Benefits3770 Beardshear Hall
Human Resource Services
Core Benefits (Traditional)
Non-core Benefits (Voluntary – Elective)
Health Insurance Dental
Prescription Drugs Vision
Basic Life Insurance Supplement Life, Dependent Life
Vacation Long-term care insurance
Holidays Auto-homeowners insurance
Sick Pay Mortgage services/discounts
Disability On-site daycare
Tuition reimbursement
Yes, even Pet Insurance
Laws Affecting Employee Benefits and Compensation
• Patient Protection and Affordable Care Act (PPACA) (new) • Fair Labor Standards Act (FLSA) • Employee Income Retirement Security Act of 1974 (ERISA)• Age Discrimination and Employment Act (ADEA)• Family Medical Leave Act (FMLA) of 1996• Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001• Health Insurance Portability and Accountability Act of 1996 (HIPAA) (and amendments)• Pension Protection Act of 2006• many, many others
Employee Benefits3770 Beardshear Hall
Human Resource Services
Closing Thoughts
Employee Benefits3770 Beardshear Hall
Human Resource Services
• How employees are “compensated” takes many forms – salary, benefits, working conditions, challenging/stimulating work, co-workers, etc. The right “mix” for each person is different
• Pay policies will differ for every employer – some will focus on cash compensation and some will focus on Total Compensation
• The employer’s main goal is structuring compensation and benefit programs is to be able to attract and retain the right employees needed to help the employer be competitive
Closing Thoughts • Employee benefits have huge budget impacts to employers• Benefits are the “hidden paycheck” for employees• Employees need to understand the “total compensation” an employer provides – not just the “salary.” Employers need to sell Total Compensation – not just salary• Employees need to be “educated consumers” of benefit programs – especially health care and retirement programs
Employee Benefits3770 Beardshear Hall
Human Resource Services