This document discusses benefits and other forms of compensation beyond direct pay. It begins by defining benefits as indirect financial compensation and outlines the objectives of covering mandated, voluntary, and discretionary benefits. Mandated benefits include social security, unemployment compensation, workers' compensation, and family medical leave. Voluntary benefits include health care, life insurance, retirement plans, and stock options. Discretionary benefits also incorporate premium pay, flexible work arrangements, and non-financial rewards like interesting job duties. The document explores various benefit categories and flexibility options in further detail.

1. BENEFITS AND OTHER
COMPENSATION ISSUES
1

2. Chapter Objectives
• Define benefits as indirect financial compensation.
• Describe mandated (legally required) benefits.
• Describe the basic categories of voluntary benefits.
• Describe the range of employee discretionary
benefits.
• Explain factors involved in non-financial
compensation.
• Explain factors that are involved in workplace
flexibility.
• Discuss workplace flexibility
2

3. Benefits
Include all financial rewards provide to
employees for being employed for the
organization
3

4. Benefits in a Total Compensation Program External
Environment
Internal Environment
4
Compensation
Indirect (Benefits)
Legally Required Benefits
Social Security
Unemployment Compensation Workers’
Compensation
Family & Medical Leave
Voluntary Benefits
Payment for Time Not Worked
Health Care
Life Insurance
Retirement Plans
Employee Stock Option Plans
Supplemental Unemployment Benefits
Employee Services
Premium Pay
Unique Benefits
Financial Non-Financial
The Job Job Environment
Direct

5. Mandated Benefits
(Legally Required)
• Social security
• Unemployment
compensation
• Worker’s compensation
• Family and Medical Leave
Act of 1993 (FMLA)
5

6. Discretionary Benefits (Voluntary)
• Payment for time not worked
• Health care
• Life Insurance
• Retirement plans
• Employee Stock Option Plans (ESOP)
• Supplemental Unemployment Benefits (SUB)
• Employee services
• Distinctive benefits
• Premium pay
• Part-time employee benefits
10

7. Payment for Time Not Worked
“PTO”
• Paid vacations
• Sick pay
• Jury duty
• Sabbaticals
• National guard or other
military reserve duty
• Voting time
• Bereavement time
11

8. Health Care
• Health maintenance organizations (HMO) – cover
services for fixed fee, but control exercised over
doctors and health facilities
• Preferred provider organizations (PPO) – incentives
to use services within system, may use outside
providers at greater costs
• Point-of-service – requires primary physician and
referrals to see specialists
12

9. Health Care (Continued)
• Defined-contribution health-care system –
employee gets set amount of money annually
to purchase health-care coverage
• Medical saving accounts – employees set
aside pretax money to pay for medical bills
that are not covered, including deductibles
and co-payments
• Dental and vision care
13

10. Employee Services
• Relocation benefits
• Child care
• Educational assistance
• Food service/subsidized
cafeterias
• Legal benefits
17

11. Premium Pay
• Compensation paid to employees for
working long periods of time or working
under dangerous or undesirable conditions
• Hazard Pay - Pay provided to employees
who work under extremely dangerous
conditions
• Shift Differentials - Paid to employees for
the inconvenience of working less desirable
hours
18

12. Nonfinancial Compensation
Very powerful factor
in compensation
equation
19

13. The Job as a Total Compensation Factor
• Skill Variety
• Task Identity
• Task Significance
• Autonomy
• Feedback
20

14. Workplace Flexibility
• Flextime
• Compressed workweek
• Job sharing
• Flexible compensation (cafeteria
compensation)
• Telecommuting
• Part-time work
• Modified retirement
21

15. Illustration of Flextime
23
Flexible Time Core Time
Flexible
Time
(Lunch)
Core Time Flexible Time
6 a.m. 9 a.m. 6 p.m.
3 p.m.
Noon
Bandwidth

16. Advantages of Telecommuting
29
Aids recruitment and
retention
Broadens labor market
(worker location not a
factor; caters to
employees with
disabilities
Reduces sick time and
absenteeism
Improves job
satisfaction and
productivity
Saves costs for office
space and utilities
Provides work/life
flexibility
Reduces transportation
and clothing costs
Reduces stress of
travel
Caters to most
productive hours for
both “early birds” and
“night owls
Decreases traffic
congestion
Conserves energy and
reduces pollution
Relieves public
transportation of “rush
hour” problems
Reduces peak-time
congestion for many
service organizations
(e.g., retail and health
care)
For the Company For the Employee For the Community

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