GARY DESSLER HUMAN RESOURCE MANAGEMENT Global Edition 12e Chapter 13 Benefits and Services...
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Transcript of GARY DESSLER HUMAN RESOURCE MANAGEMENT Global Edition 12e Chapter 13 Benefits and Services...
GARY DESSLER
HUMAN RESOURCE MANAGEMENT Global Edition 12e
Chapter 13
Benefits and Services
PowerPoint Presentation by Charlie CookThe University of West AlabamaCopyright © 2011 Pearson Education
Part 4 Compensation
Copyright © 2011 Pearson Education 13–2
WHERE WE ARE NOW…WHERE WE ARE NOW…
Copyright © 2011 Pearson Education 13–3
1.1. Name and define each of the main pay for time not Name and define each of the main pay for time not worked benefits.worked benefits.
2.2. Describe each of the main insurance benefits.Describe each of the main insurance benefits.
3.3. Discuss the main retirement benefits.Discuss the main retirement benefits.
4.4. Outline the main employees’ services benefits.Outline the main employees’ services benefits.
5.5. Explain the main flexible benefit programs.Explain the main flexible benefit programs.
LEARNING OUTCOMESLEARNING OUTCOMES
Copyright © 2011 Pearson Education 13–4
BenefitsBenefits
Supplemental
pay
Executive services
Insurance benefits
Retirement benefits
Types of Employee Benefits
Copyright © 2011 Pearson Education 13–5
FIGURE 13–1 U.S. Health Care Cost Increases*
Total Spending on Health Care 2004 2009 2015
Dollars $1.9 trillion $2.9 trillion $4 trillion
% of GNP 16% 18% 20%
*Note: Figures for 2009 and 2015 estimated. Health care costs rose 7.9% in 2004, about twice the rate of inflation, and are expected to rise at that rate through 2015.
Copyright © 2011 Pearson Education 13–6
FIGURE 13–2 Private-Sector Employer Benefits Costs by Category, March 2009
Copyright © 2011 Pearson Education 13–7
TABLE 13–1 Some Required and Discretionary Benefits
* While not required under federal law, all these benefits are regulated in some way by federal law, as explained in this chapter.
Benefits Required by Federal or Most State Law
Benefits Discretionary on Part of Employer*
Social Security
Unemployment Insurance
Workers’ Compensation
Leaves under the Family Medical Leave Act
Disability, Health, and Life Insurance
Pensions
Paid Time Off for Vacations, Holidays, Sick Leave, Personal Leave, Jury Duty, etc.
Employee Assistance and Counseling Programs
“Family Friendly” benefits for Child Care, Elder Care, Flexible Work Schedules, etc.
Executive Perquisites
Copyright © 2011 Pearson Education 13–8
Policy Issues in Designing Benefit Policy Issues in Designing Benefit PackagesPackages
Policy Issues
Who will be covered
Coverage during probation
Degree of employee choice
Which benefits to offer
Whether to include retirees
How to finance benefits
Cost containment procedures
Communicating benefits options
Copyright © 2011 Pearson Education 13–9
Pay For Time Not WorkedPay For Time Not Worked
Vacations and holidays
Parental leave
Supplemental unemployment
benefits
Supplemental Pay Benefits
Unemployment insurance
Sick leave
Severance pay
Copyright © 2011 Pearson Education 13–10
Pay for Time Not WorkedPay for Time Not Worked• Unemployment InsuranceUnemployment Insurance
Provides for benefits if a person is unable to work through Provides for benefits if a person is unable to work through no fault of his or her own.no fault of his or her own.
Is an employer payroll tax that is determined by an Is an employer payroll tax that is determined by an employer’s rate of personnel terminations.employer’s rate of personnel terminations.
Tax is collected and administered by the state.Tax is collected and administered by the state.
• Vacations and HolidaysVacations and Holidays Number of paid leave days and holidays varies by employer.Number of paid leave days and holidays varies by employer.
Qualification for and calculation of holiday and leave pay Qualification for and calculation of holiday and leave pay varies by employer.varies by employer.
Premium pay for those who work on holidays.Premium pay for those who work on holidays.
Copyright © 2011 Pearson Education 13–11
TABLE 13–2 An Unemployment Insurance Cost-Control Checklist
Do You:
Keep documented history of lateness, absence, and warning notices
Warn chronically late employees before discharging them
Have rule that 3 days’ absence without calling in is reason for automatic discharge
Request doctor’s note on return to work after absence
Make written approval for personal leave mandatory
Stipulate date for return to work from leave
Obtain a signed resignation statement
Mail job abandonment letter if employee fails to return on time
Document all instances of poor performance
Require supervisors to document the steps taken to remedy the situation
Document employee’s refusal of advice and direction
Require all employees to sign a statement acknowledging acceptance of firm’s policies and rules
File the protest against a former employee’s unemployment claim on time (usually within 10 days)
Use proper terminology on claim form and attach documented evidence regarding separation
Attend hearings and appeal unwarranted claims
Check every claim against the individual’s personnel file
Routinely conduct exit interviews to produce information for protesting unemployment claims
Copyright © 2011 Pearson Education 13–12
Pay for Time Not Worked (cont’d)Pay for Time Not Worked (cont’d)• Sick LeaveSick Leave
Provides pay to an employee when he or she is out of work Provides pay to an employee when he or she is out of work because of illness.because of illness. Costs for misuse of sick leaveCosts for misuse of sick leave Pooled paid leave plansPooled paid leave plans
• Parental LeaveParental Leave The Family Medical Leave Act of 1993 (FMLA)The Family Medical Leave Act of 1993 (FMLA)
Up to 12 weeks of unpaid leave within a one-year period.Up to 12 weeks of unpaid leave within a one-year period. Employees must take unused paid leave first.Employees must take unused paid leave first. Employees on leave retain their health benefits.Employees on leave retain their health benefits. Employees have right to return to job or equivalent position.Employees have right to return to job or equivalent position.
Copyright © 2011 Pearson Education 13–13
FIGURE 13–3Your Rights Under the Family and Medical Leave Act of 1993
Copyright © 2011 Pearson Education 13–14
FIGURE 13–4Online Request for Leave Form
Copyright © 2011 Pearson Education 13–15
Pay for Time Not Worked (cont’d)Pay for Time Not Worked (cont’d)• Severance PaySeverance Pay
A one-time payment when terminating an employee.A one-time payment when terminating an employee.
• Reasons for granting severance pay:Reasons for granting severance pay:
Acts as a humanitarian gesture and good public relations.Acts as a humanitarian gesture and good public relations.
Mirrors employee’s two-week quit notice.Mirrors employee’s two-week quit notice.
Avoids litigation from disgruntled former employees.Avoids litigation from disgruntled former employees.
Reassures employees who stay on after the employer Reassures employees who stay on after the employer downsizes its workforce of employer’s good intentions.downsizes its workforce of employer’s good intentions.
Copyright © 2011 Pearson Education 13–16
Pay for Time Not Worked (cont’d)Pay for Time Not Worked (cont’d)• Supplemental Unemployment Benefits (SUB)Supplemental Unemployment Benefits (SUB)
Payments that supplement the laid-off or furloughed employee’s Payments that supplement the laid-off or furloughed employee’s unemployment compensation.unemployment compensation.
The employer makes contributions to a SUB reserve fund.The employer makes contributions to a SUB reserve fund.
SUB payments are made to employees for the time the SUB payments are made to employees for the time the employee is out of work due to layoffs, reduced workweeks, employee is out of work due to layoffs, reduced workweeks, or relocations.or relocations.
SUB payments are considered previously earned SUB payments are considered previously earned compensation for unemployment calculation purposes.compensation for unemployment calculation purposes.
Copyright © 2011 Pearson Education 13–17
Insurance BenefitsInsurance Benefits• Workers’ CompensationWorkers’ Compensation
Provides income and medical benefits to work-related Provides income and medical benefits to work-related accident victims or their dependents, regardless of fault.accident victims or their dependents, regardless of fault.
Death or disability: a cash benefit based on earnings Death or disability: a cash benefit based on earnings per week of employment.per week of employment.
Specific loss injuries: statutory list of losses.Specific loss injuries: statutory list of losses.
Injured workers are protected by ADA provisions.Injured workers are protected by ADA provisions.
Controlling workers’ compensation costsControlling workers’ compensation costs
Screen out accident-prone workers.Screen out accident-prone workers.
Make the workplace safer.Make the workplace safer.
Thoroughly investigate accident claims.Thoroughly investigate accident claims.
Use case management to return injured employees to Use case management to return injured employees to work as soon as possible.work as soon as possible.
Copyright © 2011 Pearson Education 13–18
Insurance Benefits (cont’d)Insurance Benefits (cont’d)
• Hospitalization, Health, and Disability InsuranceHospitalization, Health, and Disability Insurance Provide for loss of income protection and group-rate Provide for loss of income protection and group-rate
coverage of basic and major medical expenses for coverage of basic and major medical expenses for off-the-job accidents and illnesses. off-the-job accidents and illnesses.
Accidental death and dismembermentAccidental death and dismemberment
Disability insuranceDisability insurance
Mental health benefitsMental health benefits
Copyright © 2011 Pearson Education 13–19
TABLE 13–3 Percentage of Employers Offering Popular Health Benefits—Change Over Time
Yes (%) 2005 Yes (%) 2009
Prescription drug program coverage 97 96
Dental insurance 95 96
Mail order prescription program 90 91
PPO (preferred provider organization) 87 81
Chiropractic coverage 56 80
Mental health insurance 72 80
Vision insurance 80 76
Employee assistance program 73 75
Medical spending account 80 71
Life insurance for dependents 67 58
HMO (health maintenance organization) 53 35
Copyright © 2011 Pearson Education 13–20
Insurance Benefits (cont’d)Insurance Benefits (cont’d)• Health Maintenance Organization (HMO)Health Maintenance Organization (HMO)
A medical organization consisting of specialists A medical organization consisting of specialists operating out of a health care center. operating out of a health care center.
Provides routine medical services to employees Provides routine medical services to employees who pay a nominal fee.who pay a nominal fee.
Receives a fixed annual contract fee per employee Receives a fixed annual contract fee per employee from the employer (or employer and employee), from the employer (or employer and employee), regardless of whether it provides that person with regardless of whether it provides that person with service.service.
Copyright © 2011 Pearson Education 13–21
Insurance Benefits (cont’d)Insurance Benefits (cont’d)• Preferred Provider Organizations (PPOs)Preferred Provider Organizations (PPOs)
Groups of health care providers that contract to provide Groups of health care providers that contract to provide services at reduced fees.services at reduced fees.
Employees can select from a list of preferred individual Employees can select from a list of preferred individual health providers.health providers.
Providers agree to discount services and to submit to Providers agree to discount services and to submit to utilization controls.utilization controls.
Employees using non-PPO-listed providers may pay Employees using non-PPO-listed providers may pay all costs or only costs above the reduced fee structure all costs or only costs above the reduced fee structure for services.for services.
Copyright © 2011 Pearson Education 13–22
Laws Influencing Health Care Laws Influencing Health Care BenefitsBenefits• Health Services and InsuranceHealth Services and Insurance
COBRA notification and insurance continuance requirementsCOBRA notification and insurance continuance requirements Health Insurance Portability and Accountability Act of 1996 Health Insurance Portability and Accountability Act of 1996
(HIPAA)(HIPAA)
• Retirement and Pension PlansRetirement and Pension Plans Employee Retirement Income Security Act of 1974 (ERISA)Employee Retirement Income Security Act of 1974 (ERISA)
• Mental Health BenefitsMental Health Benefits Mental Health Parity Act of 1996Mental Health Parity Act of 1996
• Family LeaveFamily Leave Pregnancy Discrimination ActPregnancy Discrimination Act Family Medical Leave ActFamily Medical Leave Act The Newborn Mother’s Protection Act of 1996The Newborn Mother’s Protection Act of 1996
Copyright © 2011 Pearson Education 13–23
FIGURE 13–5COBRA Record-Keeping Compliance Checklist
Copyright © 2011 Pearson Education 13–24
Trends in Health Care Cost ControlsTrends in Health Care Cost Controls
Premiums and co-pays
Communication and empowerment
Health savings accounts
Claim audits
Wellness programsCost-Control
Trends
Copyright © 2011 Pearson Education 13–25
Other Cost-Control OptionsOther Cost-Control Options
Mandatory online plan enrollment
Defined contribution health care plans
Reduced retiree health care coverage
Benefits purchasing alliances
Outsourced health care plan
administration
Controlling Health Care
Costs
Copyright © 2011 Pearson Education 13–26
Other Benefits IssuesOther Benefits Issues• Long-Term CareLong-Term Care
Insurance for older workers is a growing issue.Insurance for older workers is a growing issue.
• Life InsuranceLife Insurance TypesTypes
Group life insuranceGroup life insurance Accidental death and dismembermentAccidental death and dismemberment
Personnel policy considerationsPersonnel policy considerations Benefits-paid scheduleBenefits-paid schedule Supplemental benefitsSupplemental benefits Financing (employee contribution)Financing (employee contribution)
• Benefits for Part-Time and Contingent WorkersBenefits for Part-Time and Contingent Workers Leave and health benefits available to part-time workers.Leave and health benefits available to part-time workers. Benefits for long-term independent contractors.Benefits for long-term independent contractors.
Copyright © 2011 Pearson Education 13–27
Retirement BenefitsRetirement Benefits• Social SecuritySocial Security
(Federal Old Age and Survivor’s Insurance)(Federal Old Age and Survivor’s Insurance) A federal payroll tax (7.65%) paid by both the employee A federal payroll tax (7.65%) paid by both the employee
and the employer on the employee’s wagesand the employer on the employee’s wages
Retirement benefits at the age of 62 Retirement benefits at the age of 62
Survivor’s or death benefits paid Survivor’s or death benefits paid to the employee’s dependentsto the employee’s dependents
Disability payments to disabled employees Disability payments to disabled employees and their dependentsand their dependents
The Medicare programThe Medicare program
Health services to people age 65 or olderHealth services to people age 65 or older
Copyright © 2011 Pearson Education 13–28
Retirement Benefits (cont’d)Retirement Benefits (cont’d)
Defined benefit plans
Defined contribution
plans
Qualified plans
Types of Pension Plans
Nonqualified plans
Copyright © 2011 Pearson Education 13–29
Retirement Benefits (cont’d)Retirement Benefits (cont’d)
401(k) plans
Savings and thrift plans
Employee stock ownership plans
Cash balance pension plans
Deferred profit-sharing plans
Types of Defined
Contribution Plans
Copyright © 2011 Pearson Education 13–30
Retirement Benefits (cont’d)Retirement Benefits (cont’d)• Employee Retirement Income Security Act (ERISA) Employee Retirement Income Security Act (ERISA)
of 1974 of 1974 Established guidelines for “qualified” pension plans.Established guidelines for “qualified” pension plans. Requires fiduciary responsibility.Requires fiduciary responsibility.
• Pension Benefits Guarantee Corporation (PBGC) Pension Benefits Guarantee Corporation (PBGC) Insures plans that terminate without sufficient funds Insures plans that terminate without sufficient funds
to meet obligations.to meet obligations. Guarantees only defined benefit plans.Guarantees only defined benefit plans. Pays individual pensions up to $54,000 per year.Pays individual pensions up to $54,000 per year.
Copyright © 2011 Pearson Education 13–31
Pension PlansPension Plans
Membership requirements
Vesting schedule
Benefit formula
Plan funding
Policy Issues in Pension Planning
Copyright © 2011 Pearson Education 13–32
Employees’ Vesting Rights under Employees’ Vesting Rights under ERISAERISA• Cliff Vesting Cliff Vesting
Gives participants full right to the employer’s matching Gives participants full right to the employer’s matching contribution after three years of service.contribution after three years of service.
• Graded Vesting Graded Vesting Gives participants an increasing right to the employer’s Gives participants an increasing right to the employer’s
matching contribution over a six-year schedule of 20% matching contribution over a six-year schedule of 20% after two years of service and 20% for each succeeding after two years of service and 20% for each succeeding year thereafter.year thereafter.
Copyright © 2011 Pearson Education 13–33
Pensions and Early RetirementPensions and Early Retirement• Early Retirement WindowsEarly Retirement Windows
Offer specific employees (often age 50-plus) an incentive Offer specific employees (often age 50-plus) an incentive to voluntarily retire earlier than usual.to voluntarily retire earlier than usual.
Offer a combination of improved or liberalized pension benefits Offer a combination of improved or liberalized pension benefits plus a cash payment.plus a cash payment.
Require careful program construction to avoid oversubscription Require careful program construction to avoid oversubscription and timely delivery to avoid potential age discrimination claims.and timely delivery to avoid potential age discrimination claims.
• Older Workers’ Benefit Protection Act (OWBPA)Older Workers’ Benefit Protection Act (OWBPA) Imposes limitations on waivers that purport to release a Imposes limitations on waivers that purport to release a
terminating employee’s potential claims against the employer terminating employee’s potential claims against the employer based on age discrimination.based on age discrimination.
Copyright © 2011 Pearson Education 13–34
Personal ServicesPersonal Services• Credit UnionsCredit Unions
Separate businesses established with the employer’s assistance Separate businesses established with the employer’s assistance to help employees with their borrowing and saving needs.to help employees with their borrowing and saving needs.
• Employee Assistance Programs (EAPs)Employee Assistance Programs (EAPs) Provide counseling and advisory services:Provide counseling and advisory services:
Personal legal and financial servicesPersonal legal and financial services
Child and elder care referralsChild and elder care referrals
Adoption assistanceAdoption assistance
Mental health counselingMental health counseling
Life event planningLife event planning
Copyright © 2011 Pearson Education 13–35
Employee Assistance ProgramsEmployee Assistance Programs
1
Be aware of legal issues.
Ensure professional staffing.
Steps for Launching an EAP Program
Develop a policy statement.
Maintain confidential record-keeping systems.
2
3
4
Copyright © 2011 Pearson Education 13–36
Family-Friendly (Work–Life) Family-Friendly (Work–Life) BenefitsBenefits• Subsidized child careSubsidized child care
• Sick child benefitsSick child benefits
• Elder careElder care
• Time offTime off
• Subsidized employee transportationSubsidized employee transportation
• Food servicesFood services
• Educational subsidiesEducational subsidies
• Fitness and medical facilitiesFitness and medical facilities
• Flexible work schedulingFlexible work scheduling
Copyright © 2011 Pearson Education 13–37
Flexible Benefits ProgramsFlexible Benefits Programs• Cafeteria (Flexible Benefits) ApproachCafeteria (Flexible Benefits) Approach
Each employee is given a limited benefits fund budget Each employee is given a limited benefits fund budget to spend on preferred benefits.to spend on preferred benefits.
Types of plansTypes of plans Flexible spending accountsFlexible spending accounts Core plus option plansCore plus option plans
• Employee LeasingEmployee Leasing Professional employer organizations or staff leasing firmsProfessional employer organizations or staff leasing firms Handle human resources functions for leased employees Handle human resources functions for leased employees
of small firmsof small firms Can provide benefits by aggregating employees into Can provide benefits by aggregating employees into
larger insurable groupslarger insurable groups Can raise worker commitment, co-employment, and Can raise worker commitment, co-employment, and
workers’ compensation issuesworkers’ compensation issues
Copyright © 2011 Pearson Education 13–38
FIGURE 13–6Online Survey of Employees’ Benefits
Preferences
Copyright © 2011 Pearson Education 13–39
Flexible Work SchedulesFlexible Work Schedules• FlextimeFlextime
• Compressed workweek schedulesCompressed workweek schedules
• Workplace flexibilityWorkplace flexibility
• Job sharingJob sharing
• Work sharingWork sharing
Copyright © 2011 Pearson Education 13–40
K E Y T E R M S
benefits
supplemental pay benefits
unemployment insurance
sick leave
severance pay
supplemental unemployment benefits
workers’ compensation
health maintenance organization (HMO)
preferred provider organizations (PPOs)
group life insurance
Social Security
pension plans
defined benefit pension plan
defined contribution pension plan
portability
401(k) plan
savings and thrift plan
deferred profit-sharing plan
employee stock ownership plan (ESOP)
cash balance plans
Employee Retirement Income Security Act (ERISA)
Pension Benefits Guarantee Corporation (PBGC)
early retirement window
employee assistance program (EAP)
family-friendly (or work–life) benefits
flexible benefits plan/cafeteria benefits plan
flextime
compressed workweek
workplace flexibility
job sharing
work sharing
Copyright © 2011 Pearson Education 13–41
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Printed in the United States of America.