HRM 5th chapter 11 employee benefits

Employee Benefits

Managing Human Resources
Belcourt * Bohlander * Snell

Copyright © 2008 by Nelson, a division of Thomson
Canada Limited.
All rights reserved.

5th Canadian edition

PowerPoint Presentation by
Monica Belcourt, York University and
Charlie Cook, The University of West Alabama


Objectives

After studying this chapter, you should be able to:
1. Describe the characteristics of a sound benefits
program.
2. Indicate management concerns about the costs of
employee benefits and discuss ways to control
those costs.
3. Identify and explain the employee benefits required
by law.
4. Discuss suggested ways to control the costs of
healthcare programs.
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2008
by Nelson,

5. Describe
benefits
thatainvolve payment for time not
division
of Thomson Canada
worked.
Ltd.
11–2


Objectives

(cont’d)
After studying this chapter, you should be able to:
6. Discuss the recent trends in retirement policies and
programs.
7. Indicate the major factors involved in the
management of pension plans.
8. Describe the types of work/life benefits that
employers may provide.

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division of Thomson Canada
Ltd.

11–3


The Chief Objectives of Benefits Programs
• Improve employee work satisfaction

• Meet employee health and security requirements
• Attract and motivate employees
• Reduce turnover
• Maintain a favourable competitive position

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11–4


Requirements for a Sound Benefits
Program
Strategic
Benefits
Planning

Communicating
Employee Benefits
Information

Providing
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for by Nelson,
Flexibility Canada
division of Thomson

Ltd.

Allowing for
Employee
Involvement

a

Benefits for a
Diverse
Workforce

11–5


Providing for Flexibility
• Flexible Benefits Plans (Cafeteria Plans)
 Benefit plans that enable individual employees to
choose the benefits that are best suited to their
particular needs.


A basic or core benefits package of life and health
insurance, sick leave, and vacation ensures that
employees have a minimum level of coverage.



Employees use “credits” to “buy” whatever other
benefits they need.

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division of Thomson Canada
Ltd.

11–6


Flexible Benefits Plans: Advantages and Disadvantages

ADVANTAGES
• Employees select benefits to match their individual needs.
• Benefit selections adapt to a constantly changing (diversified)
workforce.
• Employees gain greater understanding of the benefits offered
to them and the costs incurred.
• Employers maximize the psychological value of their benefits
program by paying only for highly desired benefits.
• Employers limit benefit costs by allowing employees to “buy”
benefits only up to a maximum (defined) amount.
• Employers gain competitive advantage in the recruiting and
retention of employees.

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division of Thomson Canada
Ltd.

Figure 11.1

11–7

Flexible Benefits Plans: Advantages and Disadvantages (cont’d)

DISADVANTAGES
• Poor employee benefits selection results in unwanted financial
costs.
• There are certain added costs to establishing and maintaining
the flexible plan.
• Employees may choose benefits of high use to them that
increase employer premium costs.

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division of Thomson Canada
Ltd.

Figure 11.1

11–8


Communicating Benefits Information
• In-house publications (employee handbooks and
organizational newsletters)
• Group meeting and training classes
• Audiocassettes/videotapes
• Bulletin boards
• Payroll inserts/pay stub messages
• Specialty brochures
• Employee self-service systems (ESS)

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division of Thomson Canada
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11–9


Highlights in HRM
Crafting an Effective Benefits Communication Program
In building an identity:
• Design materials that are eye-catching and of high interest to employees.
• Develop a graphic logo for all material.
• Identify a theme for the benefits program.
In writing benefits materials:
• Avoid complex language when describing benefits. Clear, concise, and
understandable language is a must.
• Provide numerous examples to illustrate benefit specifics.
• Explain all benefits in an open and honest manner. Do not attempt to conceal
unpleasant news.
• Explain the purpose behind the benefit and the value of the benefit to employees.
In publicizing benefits information:
• Use all popular employee communication techniques.
• Maintain employee self-service (ESS) technology to disseminate benefits
information and to update employee benefits selections.
• Use voice mail to send benefits information.
• Employ presentation
software
such aas PowerPoint or Lotus Freelance to present
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2008 by
Nelson,

information to groups of employees.
Highlights 11.1
division
ofaThomson
Canada
• Maintain
benefits hotline
to answer employee questions.

Ltd.

11–10


Benefits Issues
Concerns
Concernsof
ofManagement
Management
Union
Uniondemands
demandsfor
foradditional
additionalbenefits
benefits
Benefits
Benefitsoffered
offeredby
byother
otheremployees

employees
Tax
Taxconsequences
consequencesof
ofbenefits
benefits
Rising
Risingcosts
costsof
ofproviding
providingbenefits
benefits
Benefits
coverage
Benefits
coverage
fordomestic
domesticpartners
partners
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by Nelson,
a for
division of Thomson Canada
Ltd.
11–11


Types of Employee Benefits
Required
Required By

By Law
Law

Discretionary
Discretionary

Canada
Canada/Quebec
/QuebecPension
PensionPlans
Plans

Health
Healthcare
care

Employment
EmploymentInsurance
Insurance

Payment
Paymentfor
fortime
timenot
notworked
worked

Workers’
Workers’Compensation
Compensation

Provincial
ProvincialHospital
Hospitaland
andMedical
Medical
Services
Services

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division of Thomson Canada
Ltd.

Severance
SeverancePay
Pay
Life
Lifeand
andLT
LTcare
careinsurance
insurance
Retirements
Retirementsand
andpensions
pensions

11–12


Canada and Quebec Pension Plans

• Covers all employees between ages of 18 and
70.
• Used to pay retirement pensions, disability
benefits and survivor benefits.
• All contributions come from employers and
employees

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division of Thomson Canada
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11–13


Employment Insurance
• Benefits paid to claimants who are unemployed
and actively seeking employee.
• Amount paid is determined by the number of
hours of employment in the past year, and the
regional unemployment rate.
• Additional benefits may be extended for
situations involving illness, injury, quarantine,
and for maternity, paternity or adoption leave.
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division of Thomson Canada
Ltd.

11–14

Workers’ Compensation Insurance
• Workers’ Compensation Insurance
 Provincial and territorial insurance (funded by an
employer payroll tax) provided to workers to defray
the loss of income and cost of treatment due to workrelated injuries or illness.
 Factors influencing the employer’s insurance rate:


The risk of injury or illness for an industry.



The company’s frequency and severity of employee
injuries (the company’s experience rating).

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11–15


Reducing Workers’ Compensation Costs: Key Areas
1. Perform an audit to assess high-risk areas within a
workplace.
2. Prevent injuries by proper ergonomic design of the job and
effective assessment of job candidates.
3. Provide quality medical care to injured employees by
physicians with experience and preferably with training in
occupational health.

4. Reduce litigation by effective communication between the
employer and the injured worker.
5. Manage the care of an injured worker from the injury until
return to work.
6. Provide extensive worker training in all related health and
safety areas.

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division of Thomson Canada
Ltd.

Figure 11.3

11–16


Provincial Hospital and Medical Services
• Many employers offer
third party benefit
coverage for additional
benefits, beyond
provincial health care.

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division of Thomson Canada
Ltd.

11–17

Discretionary Major Employee Benefits
• Health care benefits
• Payment for time not worked
• Severance pay
• Life insurance
• Retirement programs

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division of Thomson Canada
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11–18


Payment for Time Not Worked
Vacations
Vacationswith
withpay
pay

Severance
Severancepay
pay

Time Not
Worked

Paid
Paidholidays
holidays

Sick
Sickleave
leave

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division of Thomson Canada
Ltd.

11–19


Retirement Programs
• Silver Handshake
 An early-retirement incentive in the form of increased
pension benefits for several years or a cash bonus.

• Preretirement Programs
 Counseling
 Seminars
 Workshops
 Retirement tryouts

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division of Thomson Canada
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11–20

Types of Pension Plans
• Contributory plan
 Contributions to a plan
are made jointly by
employees and
employers.

• Noncontributory plan
 Contributions to a plan
are made solely by the
employer.
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division of Thomson Canada
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• Defined-benefit plan
 The amount an
employee is to receive
upon retirement is
specifically set forth.

• Defined-contribution
plan
 The basis (amount) an
employer contributes
to the pension fund is
specified.
11–21

Federal Regulation of Pension Plans
• Vesting
 A guarantee of accrued benefits to participants at
retirement age, regardless of their employment status
at that time.

• Pension Portablity
 Employees who leave an organization can leave their
funds in their current plan or transfer those funds to a
locked-in RRSP or into their new employer’s pension
plan.
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11–22


Employee Services: Creating a Work/Life
Setting
• Employee Assistance Programs (EAPs)
 Services provided by employers to help workers cope
with a wide variety of problems that interfere with the
way they perform their jobs.


Typically provide diagnosis, counseling, and referral for
advice or treatment for problems related to alcohol or
drug abuse, emotional difficulties, and financial or family
difficulties.

• Child and Elder Care
 Care provided to a child or an elderly relative by an
employee
remains
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11–23


Family-Friendly Benefits: Balancing Work and Home Needs

• Child care/elder care referral services
• Time off for children’s school activities
• Employer-paid onsite or near-site child care facilities
• Flexible work hours scheduling
• Employer-accumulated leave days for dependent care
• Subsidized temporary or emergency dependent care
• Extended leave policies for child/elder care
• Sick-child programs (caregiver on call)
• Work-at-home arrangements/telecommuting
• Partial funding of child care costs
• Customized career paths

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Figure 11.5

11–24


Other Benefits and Services
Awards
Awards
Recreational
Recreationaland
and
Social
Social

Food
FoodServices
Services
On-Site
On-SiteHealth
Health
Services
Services

Credit
CreditUnions
Unions

Legal
LegalServices
Services

Purchasing
Purchasing
Assistance
Assistance
Transportation
Transportation
2008Pooling
by Nelson,
Pooling

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a
division of Thomson Canada
Ltd.

Financial
Financial
Planning
Planning
Housing
Housingand
and
Moving
Moving

11–25