This document discusses different types of employee benefits that organizations provide, including: 1) Pay for time not worked such as vacations, holidays, sick leave and severance pay. 2) Insurance benefits like workers' compensation and health insurance. Trends in health care cost control are also examined. 3) Retirement benefits including defined benefit plans, defined contribution plans, and types of pension plans. 4) Employee services like employee assistance programs, and flexible benefits programs that allow employees choices.

1. © 2008 Prentice Hall, Inc.© 2008 Prentice Hall, Inc.
All rights reserved.All rights reserved.
PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook
The University of West AlabamaThe University of West Alabama
1
Human ResourceHuman Resource
ManagementManagement
ELEVENTH EDITIONELEVENTH EDITION
G A R Y D E S S L E RG A R Y D E S S L E R
Benefits and ServicesBenefits and Services
ChapterChapter
1313
Part 4 | CompensationPart 4 | Compensation

2. © 2008 Prentice Hall, Inc. All
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After studying this chapter, you should be able to:
1.1. Name and define each of the main pay for time notName 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.

3. © 2008 Prentice Hall, Inc. All
rights reserved. 13–3
BenefitsBenefits
Supplemental
Pay
Employee
Services
Insurance
Benefits
Retirement
Benefits
Types of Employee
Benefits

4. © 2008 Prentice Hall, Inc. All
rights reserved. 13–4
Policy Issues in Designing Benefit PackagesPolicy Issues in Designing Benefit Packages
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

5. © 2008 Prentice Hall, Inc. All
rights reserved. 13–5
Pay For Time Not WorkedPay For Time Not Worked
Vacations and
Holidays
Parental
Leave
Supplemental
Unemployment
Benefits
Supplementa
l Pay
Benefits
Unemployment
Insurance
Sick
Leave
Severance
Pay

6. © 2008 Prentice Hall, Inc. All
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Insurance BenefitsInsurance Benefits
• Workers’ CompensationWorkers’ Compensation
 Provides income and medical benefits to work-Provides income and medical benefits to work-
related accident victims or their dependents,related accident victims or their dependents,
regardless of fault.regardless of fault.
 Death or disability: a cash benefit based on earnings perDeath or disability: a cash benefit based on earnings per
week of employment.week of employment.
 Specific loss injuries: statutory list of lossesSpecific loss injuries: statutory list of losses
 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 workUse case management to return injured employees to work
as soon as possible.as soon as possible.

7. © 2008 Prentice Hall, Inc. All
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Trends in Health Care Cost ControlsTrends in Health Care Cost Controls
Communication,
Involvement, and
Empowerment
Health Savings
Accounts
Premiums and
Co-Pays
Cost-Control
Trends
Prevention
Programs
Claim
Audits

8. © 2008 Prentice Hall, Inc. All
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Other Cost-Control OptionsOther Cost-Control Options
Automating health care
plan administration
Defined contribution
health care plans
Eliminating retiree
health care coverage
Benefits purchasing
alliances
Controlling Health
Care Costs
Outsourcing health care
plan administration

9. © 2008 Prentice Hall, Inc. All
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Retirement Benefits (cont’d)Retirement Benefits (cont’d)
Membership
Requirements
Vesting
Benefit
Formula
Plan
Funding
Policy Issues In
Pension Planning

10. © 2008 Prentice Hall, Inc. All
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Retirement Benefits (cont’d)Retirement Benefits (cont’d)
Defined Benefits Plans
Defined Contribution Plans
Qualified Plans
Nonqualified Plans
Types of Pension
Plans

11. © 2008 Prentice Hall, Inc. All
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Retirement Benefits (cont’d)Retirement Benefits (cont’d)
401(k)
Plans
Employee
Stock
Ownership
Plans
(ESOPs)
Savings and
Thrift Plans
Types of Defined
Contribution
Plans
Deferred
Profit-Sharing
Plans
Cash Balance
Pension Plans

12. © 2008 Prentice Hall, Inc. All
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Personal Services (cont’d)Personal Services (cont’d)
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

13. © 2008 Prentice Hall, Inc. All
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Flexible Benefits ProgramsFlexible Benefits Programs
• Cafeteria (Flexible Benefits) ApproachCafeteria (Flexible Benefits) Approach
 Each employee is given a limited benefits fundEach employee is given a limited benefits fund
budget to spend on preferred benefits.budget to spend on preferred benefits.
 Types of plansTypes of plans
 Flexible spending accountsFlexible spending accounts
 Core plus option plansCore plus option plans
• Flexible Work ArrangementsFlexible Work Arrangements
 Flextime schedulesFlextime schedules
 Compressed workweek schedulesCompressed workweek schedules
 Job sharingJob sharing
 Work sharingWork sharing
 TelecommutingTelecommuting

14. © 2008 Prentice Hall, Inc. All
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K E Y T E R M S
benefitsbenefits
supplemental pay benefitssupplemental pay benefits
unemployment insuranceunemployment insurance
sick leavesick leave
severance payseverance pay
supplemental unemployment benefitssupplemental unemployment benefits
workers’ compensationworkers’ compensation
case managementcase management
health maintenance organization (HMO)health maintenance organization (HMO)
preferred provider organizations (PPOs)preferred provider organizations (PPOs)
group life insurancegroup life insurance
Social SecuritySocial Security
pension planspension plans
defined benefit pension plandefined benefit pension plan
defined contribution pension plandefined contribution pension plan
portabilityportability
401(k) plan401(k) plan
savings and thrift plansavings and thrift plan
deferred profit-sharing plandeferred profit-sharing plan
employee stock ownership plan (ESOP)employee stock ownership plan (ESOP)
cash balance planscash balance plans
Employee Retirement Income Security ActEmployee Retirement Income Security Act
(ERISA)(ERISA)
Pension Benefits Guarantee CorporationPension Benefits Guarantee Corporation
(PBGC)(PBGC)
vested fundsvested funds
early retirement windowearly retirement window
employee assistance programemployee assistance program
family-friendly benefitsfamily-friendly benefits
flexible benefits plan/cafeteria benefits planflexible benefits plan/cafeteria benefits plan
flextimeflextime
compressed work weekcompressed work week
job sharingjob sharing
work sharingwork sharing
telecommutingtelecommuting