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Designing and Administering The Benefits by Mahnoor

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Its all about how to design the benefits for the employees , what strategies can be made for designing the benefits ,the role of administration in administering the benefits and introducing different benefits package ...

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Designing and Administering The Benefits by Mahnoor

  1. 1. Designing And Administering Benefits Benefits
  2. 2. AN OVERVIEW OF BENEFITS :-  Employee benefits are group membership rewards that provide security for employees and their family members. They are sometimes called indirect compensation because they are given to employees in the form of a plan.  The benefits package offered by a firm can support management’s effort to attract employees . Benefits that are designed to increase in value over time encourage employees to remain with their employer .
  3. 3. Types Of Benefits Types Of Benefits
  4. 4. 1. Legally Required Benefits :- This requires employers to give four benefits to all employees ,with only a few exceptions: i. Social Security ii. Worker’s Compensation iii. Unemployment Insurance iv. Family And Medical Leave
  5. 5. 2. Health Insurance :-  Health insurance covers hospital costs, physician charges and the cost of other medical services .
  6. 6. 3. Retirement :- Retirement benefits provide income to employees after they retire .
  7. 7. 4. Insurance :-  Insurance plans protect employees or their dependents from financial difficulties that can arise as a result of disability or death .
  8. 8. 5. Paid Time Off :-  Time-off plans give employees time off with or without pay, depending on the plan .
  9. 9. 6. Employee Services :- Employee services are tax-free or tax-preferred services that enhance the quality of employees’ work or personal life .
  10. 10. Designing The Benefits/The benefits Strategy :-  To design an effective benefits package ,a company needs to align its benefits strategy with its overall compensation strategy .The benefits strategy requires making choices in three areas : i. Benefits Mix ii. Benefits Amount iii. Flexibility of Benefits
  11. 11.  The benefits mix is the complete package of benefits that a company offers its employees. At least three issues should be considered when making decisions about the benefits mix: 1. Total Compensation Strategy 2. Organizational Objectives 3. Characteristics of the Workforce
  12. 12. 1. TOTAL COMPENSATION STRATEGY :- Total Compensation Strategy issue corresponds to the “below market versus above-market compensation” . The company must provide a benefits package attractive to the people.
  13. 13. The Organization’s Objectives also influence the benefits mix . For instance if the company philosophy is to minimize differences between low-level employees and and top management, the benefits mix should be the same for all employees .
  14. 14. 3. Characteristics Of The Work Force :- If the firm’s work force consists largely of parents with young children, it is likely that child-care and other family-friendly benefits will be important .
  15. 15.  Once management determines the amount of money available for all benefits, it can establish a benefits budget and decide on the level of funding for each part of the benefits program.
  16. 16. FLEXIBILITY OF BENEFITS :-  The flexibility of benefits choice concerns the degree of freedom employees have to tailor the benefits package to their personal needs. Some organizations have a relatively standardized benefits package that gives employees few options. In these firms, a standardized benefits package can be designed for a “typical” employee.
  17. 17. Administering Benefits :-  The HR department usually takes the lead in administering benefits, but managers need to help communicate options to employees , provide advice occasionally , keep records(vacation time , sick days), and be prepared to call on the HR department if disputes arise .
  18. 18. Flexible Benefits :-  Employees have different benefits needs , depending their martial status and the presence and ages of children in the house hold .A flexible benefits program allows employees to choose from a selection of employer-provided benefits such as vision care , dental care , health insurance coverage for dependants, child care, legal services and contributions to a retirement plan .
  19. 19.  The most popular flexible benefits plans are :- 1. Modular Plans 2. Core-Plus Options Plan
  20. 20. 1. Modular Plans :-  Consist of a series of different bundles of benefits or different levels of benefits coverage designed for different employee groups.
  21. 21.  Consists of a wide array of other benefits options that employees can add to the core. The core is designed to provide minimum economic security for employees, and usually includes basic health insurance , retirement benefits and vacation days . Core-plus options plans give employees “benefits credits” that entitle them to “purchase” the additional benefits that they want .
  22. 22. Challenges With Flexible Benefits :-  Flexible benefits offer employees the opportunity to tailor a benefits package that is meaningful to them at a reasonable cost to the company . However they do pose some challenges to benefits administrators .
  23. 23. Adverse Selection Employee who make poor choices
  24. 24. Benefits Communication :-  Benefits communication is a critical part of administering an employee benefits program. Many employees in companies with excellent benefits packages have never been informed of the value of these benefits and are therefore likely to underestimate their worth .Traditionally, benefits have been communicated via a group meeting during new employee orientation or a benefits handbook that describes each benefit and its level of coverage .In today’s dynamic world of employee benefits , however , more sophisticated communication media (such as videotape presentations and computer software that generates personalized benefits status reports for each employee) are needed

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