Hrm Week 12

Front 1

Types of Employee Benefits and Services

Back 1

Mandatory benefits

Retirement income

Health benefits

Pay for time not worked

Employee services

Miscellaneous benefits

Front 2

Mandatory benefits:

Back 2

- government-provided employee benefits, such as pensions and employment insurance, to which employers must contribute on behalf on their behalf

- The federal and provincial governments require employers to contribute toward a number of
government-provided employee benefits

Front 3

Employers have no option but to participate in the following mandatory benefits on behalf of their employees:

Back 3

- The Canada/Quebec Pension Plan (CPP/QPP)

- Employment Insurance

- Workers’ Compensation (which covers treatment expenses and other costs for workers who are injured on the job)

Front 4

Defined benefit plans:

Back 4

provide retirement income based on a proportion of the employee’s pay at the time of retirement.

- traditional

- things of the past

Front 5

Defined contribution plans:

Back 5

provide retirement income based on the accrued value of employer and employee contributions to the plan.

Front 6

Hybrid pension plans

Back 6

- combine elements of the defined benefit and defined contribution plans.

- For example, some firms have a defined benefit plan
- but also allow employees to contribute to a defined contribution plan.

- Some firms match employee contributions to a certain maximum level.

Front 7

Experience with Pension Plans

Back 7

- Researchers have identified several important effects of pensions. For example, firms with pensions have lower employee turnover, and their employees retire earlier than those at firms without pension plans

Front 8

types of health benefits

Back 8

Supplemental health insurance

Dental insurance

Disability insurance

Life and accident insurance

Health care spending accounts:

Front 9

Health care spending accounts:

Back 9

a tax-favoured employee benefit that allows employees to use employer-provided health care spending credits to purchase a wide variety of health care services.

Front 10

Supplemental health insurance:

Back 10

- Canadians enjoy a large number of government-sponsored medical benefits under the system generally known as “medicare.”

- In the United States, where government-sponsored universal medical coverage does not exist, employers are expected to bear the cost of medical insurance.

- This cost can be staggering in the United States.

Front 11

Disability insurance:

Back 11

Many employers purchase long-term disability insurance for their employees to cover disabilities arising from non-work-related causes.

Front 12

Life and accident insurance:

Back 12

One item included in almost all benefits plans is term life and accident insurance.

This coverage is usually expressed in terms of a multiple of annual salary (e.g., two times annual salary).

Front 13

Dental care insurance:

Back 13

- has expanded rapidly in the past few years

- It has become popular because dental coverage is not provided under medicare and can be a major expense (especially when it comes to orthodontic services for dependent children).

- It is also a highly tax-favoured benefit.

Front 14

Pay for Time Not Worked:

Back 14

an employee benefit that covers a wide array of different types of employee absences from work.

Front 15

types of pay for time not worked

Back 15

Vacations, holidays, breaks

Sickness, compassionate absences

Supplemental Unemployment Benefits

Parental leaves

Educational/sabbatical leaves

Severance pay

Front 16

Supplemental Unemployment Benefits:

Back 16

an employer-provided benefit that extends government-provided unemployment benefits

Front 17

Employee assistance programs:

Back 17

employer-provided programs to help employees deal with a variety of personal problems.

Front 18

Types of Employee Services

Back 18

Employee assistance programs:

Wellness and recreational

Child care/elder care

Work-life balance

Financial/legal services

Food services

Outplacement services

Front 19

three main reasons for wellness and recreational programs

Back 19

- individual health practices (ie smoking)

- organizational health issues (ie job satisfaction and stress)

- physical work environment (ie. ergonomics)

Front 20

types of benefits systems

Back 20

fixed benefit system

Semi-flexible benefit systems

Flexible benefit systems

Front 21

fixed benefit systems

Back 21

- which have been the norm, all employees are covered by a standard package of benefits.

- The advantages of this approach include simplicity, economies of scale in purchasing the benefits, relatively low administrative costs, and ease in communicating the plan to employees.

Front 22

Semi-flexible benefit systems:

Back 22

- Most benefits systems are not entirely fixed. When they are not fixed but don’t meet the criteria to be considered a flexible benefit system, they are known as “semi-flexible benefit systems” or “simplified flex plans.”

There are a variety of ways to make fixed systems
more flexible.

The most common approach starts with a “core” set of benefits, to which employees “add on” additional levels of coverage or additional benefit options at their own expense, using after-tax dollars.

Front 23

The distinguishing feature of a flexible benefit system

Back 23

- is employee control over the disposition of benefits funds provided by the employer, in addition to any funds that employees themselves provide.

- In a fully flexible approach, there is no “core” or “standard” benefits package.

Instead, employees receive a set of “flexible credits” that they can use to “purchase” the combination of benefits that best suits them.

Front 24

Designing the Benefit System

Back 24

1. Determine the role of indirect pay

2. Choose the process for plan design

3. Identify the benefits system and benefits to be included

4. Determine the structure of each benefit (coverage, funding, eligibility, flexibility)

5. Develop procedures for administering, communicating and evaluating