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Compensating Human Resources
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• Establishing a Pay Structure
• Recognizing Employee Contributions with Pay
• Providing Employee Benefits

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Providing Employee Benefits
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• The Role of Employee Benefits
• Benefits Required by Law
• Optional Benefits Programs
• Selecting Employee Benefits
• Legal Requirements for Employee Benefits
• Communicating Benefits to Employees

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Ch. 13 Learning Objectives

• Discuss the importance of benefits as a part of
  employee compensation.
• Summarize the types of employee benefits required
  by law.
• Describe the most common forms of paid leave.
• Identify the kinds of insurance benefits offered
  by employers.
• Define the types of retirement plans offered by
  employers.

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Ch. 13 Learning Objectives

• Describe how organizations use other benefits to
  match employees wants and needs.
• Explain how to choose the contents of an employee
  benefits package.
• Summarize the regulations affecting how employers
  design and administer benefits programs.
• Discuss the importance of effectively
  communicating the nature and value of benefits to
  employee.

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The Role of Employee Benefits

• How are benefits different from compensation?
• Why do companies offer benefits?

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Benefits as a Percentage of Total Compensation
Figure 13.1
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Benefits Required by Law

• Social Security Act of 1935
• Established a system providing old age,
  survivors, disability, and retirement benefits.
• Federal payroll tax on both the employer and the
  employee.
• Benefit payments are based on employees lifetime
  earnings.

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Benefits Required by Law

• Unemployment Compensation
• A Federal/state payroll tax that funds state
  unemployment systems.
• Involuntary unemployment and actively seeking
  work is required for persons to claim benefit.
• Employers pay based on their experience rating
• Workers Compensation
• Benefits provided to persons injured on the job.
• No-fault liability protects employers from
  lawsuits
• Employees are covered unless injury is
  self-inflicted or caused by a willful disregard
  of safety rules.

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Benefits Required by Law

• Family Medical Leave Act (FMLA)
• Coverage
• Employers with 50 or more employees within a
  75-mile radius
• Requirements
• Employers must allow eligible employees to take
  up to a total of 12 weeks of unpaid leave to
  attend to a family or serious medical condition
  in any within a 12-month period.
• Employees have the right to continued health
  benefits and the right to return to their job.

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Optional Benefits
Figure 13.2
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Test Your Knowledge

• XYZ company has determined that they will have to
  reduce their benefits costs to stay competitive.
  Which of the following solutions is not a choice
  for XYZ?
• Eliminate health coverage
• Reduce the percentage of employees Social
  Security insurance they pay.
• Reduce their unemployment insurance costs by
  managing their workforce to avoid layoffs.
• Institute a safety program to minimize workers
  compensation costs.

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Retirement Plans

• Retirement Plans offered by employers are
  optional
• Contributory plan vs. non-contributory
• Defined benefit plan vs. defined contribution
• What are the pros and cons of these plans from
  the employees and employers perspective?

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Retirement Plans

• With the growth of defined-contribution plans,
  employees need to understand how to wisely invest
  their money to plan for retirement.

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Test Your Knowledge

• Jakar does not know a lot about investing and
  wants to ensure he has some retirement income
  when he is old enough to retire. Agnes plans on
  changing employers every few years and is
  interested in investing her own money. Which
  plan would be best for Jakar and Agnes,
  respectively?
• Defined contribution defined benefit
• Contributory defined benefit
• Defined benefit defined contribution
• Defined contribution non-contributory

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Family Friendly Benefits

• Family Friendly Benefits serve two purposes
• Assist employees manage work and family roles
• Increases loyalty to companies who show they care
• Family leave paid time off for newborn or
  adopted children

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Family Friendly Benefits

• Child Care

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Selecting Employee Benefits

• Decisions about which benefits to include should
  take into account
• The organizations goals
• The organizations budget
• The needs and expectations of the current and
  future employees

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Selecting Employee Benefits

• Cafeteria-style plan
• Offers employees a set of alternatives from which
  they can choose the types and amounts of benefits
  they want
• What are the advantages and disadvantages of
  these plans?

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Communicating Benefits to Employees
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Video Working While Sick

• Should employees have to go to work when they are
  sick? How can employers get away with such
  actions?
• What types of benefits can an organization offer
  that may be of value to the employees, creates
  loyalty, and yet they are not wasted or cost
  unnecessarily? Explain.

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Video - SAS

• SAS is dedicated to providing its employees what
  brings them the most employment satisfaction.
  Discuss the impact the employee benefits package
  offered by the company has on the entire
  organization.
• After viewing the video, does employment with an
  organization like SAS appeal to you? Explain why
  or why not. Would you find a working environment
  like SAS to be challenging? Rewarding? Explain.

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Video - SAS

• Discuss the effects that concentrated and well
  structured benefits management produces on
  organizational costs and the quality of the
  workforce.
• How important are receiving benefits at work to
  you? Would you be willing to sacrifice certain
  benefits, such as health insurance, for increased
  pay? Explain your reasoning.