3. COMPENSATION
All
form of pay or rewards going to
employees and arising from their
employment.
DIRECT FINANCIAL PAYMENTS
INDIRECT PAYMENTS
4. BENEFITES
Indirect
financial and nonfinancial payments
employees receive for continuing their
employment with the company.
5. Benefits Discretionary on Part
Benefits Required by Federal of Employer
or Most State Law
Social Security Disability, Health, and Life
Unemployment Insurance Insurance
Workers’ Compensation Pensions
Paid Time off for Vacation,
Holidays, Sick Leave,
Personal Leave, Jury Duty,
etc.
Leaves under family Medical Employee Assistance and
leave Act Counseling
6. SUPPLEMENTAL PAY BENEFITS
Benefits for time not worked such as unemployment
insurance, vacation and holiday pay , sick pay.
Supplemental pay benefits is also called “PAY FOR
TIME NOT WORKED”- This is one of an employer’s
most costly benefits , because of the large amount
of time off that many employees receive.
7. SUPPLEMENTAL UNEMPLOYMENT
BENEFITS
Provide for a “guaranteed annual income” in certain
industries where employers must shut down to change
machinery or due to reduced work . These benefits are
paid by the company and supplement unemployment
benefits.
As the name implies ,these supplement the employee’s
unemployment the employee’ s unemployment
compensation, and help the person maintain his or her
standard of living for the time he or she is out of work.
8. UNEMPLOYMENT INSURANCE
Provides benefits if a person is unable to work
through some fault other than his or her own.
The benefits derive from a tax on employers that
can range from 0.1% to 5% of taxable payroll in
most states. An employer’s unemployment tax rate
reflects its rate of personnel terminations.
9. VACATIONS AND HOLIDAYS
The number of paid employee vacation days varies
considerably from employer to employer. In the
United States, the average is about 10 days per
year. A typical U.S. company policy might call for:
1. One week after 6 months to 1 year of service;
2. Two weeks after 1 to 5 year of service;
3. Three weeks after 5 to 10 year of service;
4. Four weeks after 15 to 25 year of service; and
5. Five weeks after 25 year of service.
10. SICK LEAVE
Provides pay to an employee when he or she is out
of work because of illness.
Most sick leave polices grant full pay for a specified
number of sick days – usually up to 12 days per
year . The sick days usually accumulate at the rate
of, say , one day per month service .
11. SEVERANCE PAY
A one – time payment some employers provides
when terminating an employee.
Severance pay makes sense on several grounds. It
is a humanitarian gesture , and good public
relations.
In addition , most managers expect employees to
give them at least one or two weeks’ notice if they
plan to quit; it therefore seems appropriate to
provide at least one or two weeks’ severance pay if
an employee is being dismissed.
12. INSURANCE BENEFITS
Most employers also provide a number of required
or voluntary insurance benefits ,
1. Workers’ Compensation
2. Health Insurance
13. WORKER'S COMPENSATION
Provides income and medical benefits to work –
related accident victims or their dependents
regardless of fault.
Workers’ compensation benefits can be monetary
or medical. In the events of a worker’s death or
disablement, the person’s dependents are paid a
cash benefit based on prior earning – usually one –
half to two –thirds the worker’s average weekly
wage, per week of employment.
14. CONTROLLING WORKERS'
COMPENSATION COSTS
Minimizing the number of workers’ compensation
clams is an important goal for all employers . While
the employer's insurance company usually pays the
claims, the costs of the premiums depend on the
number and dollar amount of claims . Workers’
compensation benefits costs are rising: They
recently grew by 3.5% overall while wages grew by
just 2.4%.
15. HOSPITALIZATION , HEALTH ,AND
DISABILITY INSURANCE
Health and hospitalization insurance looms large in
many people’s choice of employer, because such
insurance is so expensive . Most employers
therefore offer their employees some type of
hospitalization , medical, and disability insurance .
Most health insurance plans provide at least basic
hospitalization and surgical and medical insurance
for all eligible employees at group rates.
16. THERE ARE EMPLOYERS OFFERING
FOLLOWING HEALTH BENEFITS,
Health maintenance organization (HMO)
Preferred provider organizations (PPO)
Mental Health Benefits
The Pregnancy Discrimination Act
Comprehensive Omnibus Budget Reconciliation Act
Long-Term Care
Life Insurance
17. RETIREMENT BENEFITS
Social security
Fedaral program that provides three types of
benefits : retirement income at the age of 62 and
thereafter ;survivor’s or death benefits payable to
the employee’s dependents regardless of age at
time of death: and disability benefits payable to
disabled employees and their dependents . These
benefits are payable only if the employee is insured
under the Social Security Act.
18. PENSION PLANS
• Plans that provide a fixed sum when employee
reach a predetermined retirement age or when they
can no longer work due to disability .
There are following pension plans
Defined benefits pension plan
Defined contribution pension plan
401(k) plan
Economic growth and tax relief reconciliation act
Savings and thrift plan
Deferred profit-sharing plan
Employee stock ownership plan
19. PENSION ALTERNATIVES
EARLY RETIREMENT WINDOWS : A type of
offering by which employee are encouraged to
retire early, the incentive being liberal pension
benefits plus perhaps a cash payment.
CASH BALANCE PLANS : Defined benefits plans
under which the employer contributes a percentage
of employees’ pension plans every year ,and
employees earn interest on this amount.
21. CREDIT UNIONS
Credit unions are usually separate businesses
established with the employer’ assistance to help
employees with borrowing and saving needs.
Employees usually become members by
purchasing a share of the credit union’s stock .
22. EMPLOYEE ASSISTANCE PROGRAMS
A formal employer program for providing employees
with counseling and/or treatment programs for
problems such as alcoholism , gambling ,or stress.
There are following key steps for launching a
successful
EAP program :
1. Develop a policy statement
2. Ensure professional staffing
3. Maintain confidential record- keeping systems
4. Be aware of legal issues
23. FAMILY – FRIENDLY BENEFITS
On – site child care ,fitness and medical facilities
,flexible work scheduling , telecommuting ,
occasional sabbaticals , loan programs for home
computers , stock options , concierge services ,
even insurance for the family pet are all part of the
compensation package in the new workplace.
There are following family – friendly benefits:
1. Effect on performance
2. Subsidized Child Care
3. Elder Care
4. Other Job – Related Benefits
5. Executive Perquisites
24. FLEXIBLE BENEFITS
Individualized plans allowed by employers to
accommodate employee preferences for benefits.
In a survey of working couples , for instance , 83 %
took advantage of flexible hours , 69% took
advantage of the sorts of flexible – style benefits
options packages we’ll discuss next; and 75 % said
that flexible – style benefits plans are the sorts of
plans they would like to see their companies.
