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Objectives
Objectives
(contd)
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Reduce turnover
Maintain a favourable competitive position
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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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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.
Figure 11.1
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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.
Figure 11.1
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Bulletin boards
Payroll inserts/pay stub messages Specialty brochures Employee self-service systems (ESS)
Copyright 2008 by Nelson, a division of Thomson Canada Ltd. 119
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 as PowerPoint or Lotus Freelance to present information to groups of employees. Highlights 11.1 Maintain a benefits hotline to answer employee questions.
Copyright 2008 by Nelson, a division of Thomson Canada Ltd. 1110
Benefits Issues
Concerns of Management
Union demands for additional benefits Benefits offered by other employees
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Discretionary
Health care Payment for time not worked
Severance Pay
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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.
1114
The risk of injury or illness for an industry. The companys frequency and severity of employee injuries (the companys experience rating).
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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.
Figure 11.3
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Severance pay
Paid holidays
Sick leave
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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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Defined-benefit plan
The amount an employee is to receive upon retirement is specifically set forth.
Noncontributory plan
Contributions to a plan are made solely by the employer.
Defined-contribution plan
The basis (amount) an employer contributes to the pension fund is specified.
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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 employers pension plan.
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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.
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Child care/elder care referral services Time off for childrens school activities Employer-paid onsite or near-site child care facilities
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Key Terms
contributory plan defined-benefit plan defined-contribution plan elder care employee assistance programs (EAPs) flexible benefits plans (cafeteria plans) noncontributory plan severance pay silver handshake vesting workers compensation insurance
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