The-Management-of-Employee-Benefits-and-Services.pptx

THE MANAGEMENT OF
EMPLOYEE BENEFITS
AND SERVICES

Fringe Benefits are non-
monetary compensation that is
not covered by regular
salaries, wages, bonuses and
other types of cash
compensation. It is anything
that contributes to the
improvement of the conditions
of work, and that motivates the
employees to do good work.
They are additional
compensations that the
employees receive regularly at
an interval stipulated in the
company policies and
guidelines.

The Beginning of the Fringe Benefit Concept
The granting of employee
benefits started as welfare aid
by employers for their
employees and the
employees' families.
Management learned that
giving these benefits helps to
gain employees' loyalty,
cooperation, and goodwill,
inspiring them to work
efficiently.

The Concept of Benefits
Benefits are anything that is not covered by
regular salaries and wages. It is anything that
contributes to the improvement of the
conditions of work, and that motivates the
employees to do good work. Benefits are
additional compensations that the employees
receive regularly at an interval stipulated in the
company policies and guidelines.

Objectives in Granting Fringe Benefits:
1. To provide additional protection and comfort to their employees and their families as they
consider them as members of the team.
2. To maintain and develop employees as an effective work force duly committed to their
corporate mission and vision.
3. To develop productive and happy employees and develop greater loyalty and commitment
to motivate them to remain in the employment of the company.
4. To develop greater partnership in the development of quality products and services to
their customers and clients.
5. To develop satisfied employees and more concerned workers to avoid activism in the
workplace that will interfere with company production.
6. To develop partnership with labor unions and employees' associations.

The Governing Philosophy in Granting Fringe Benefits
 Company benefits are additional costs in the company operations.
 They should be administered appropriately and be based on a
sound company philosophy in granting additional benefits.
 Such philosophy must consider the company's ability to pay and
contributions to the profitability of the organization.
 It must also be mutual benefit to the giver and the receiver of
benefits.
 Along these lines, the company benefits should focus along the
following principles:

1.Company benefits should be based on the financial conditions
and the capability of management to pay additional cost of
operations, as benefits granted cannot withdrawn when
already granted.
Benefits are humanitarian grants of management and the
capability to pay must be carefully studied. Additional cost may
mean additional financial loses to the company that may lead
to company bankruptcy. Employees should not expect much at
a time of financial crisis.

2. Benefits granted should not interfere with company
operation and management has the prerogative to control the
same.
Example:
Additional leave credits cannot be availed of without proper
management approval, especially if it will interfere with
production schedules.
Shifting schedules are controlled by management to take
care of continuous company operation.

3. Benefits should be fair to all employees of equal rank and position,
and should be capable of uniform implementation.
Example:
If rank and file employees entitled to a rice allowance of one sack per
month, then all must be given the same.
If all senior managers are given car allowances then all the others
must enjoy the same benefits. Equal treatment will avoid jealousy
among managers thereby greater cooperation is maintained. Equal
ranks must get the same benefits.

4. The benefits must have mutual value to both employers and the
employees concerned.
Example:
• Car plans are given by companies to managerial employees to gain
representation for the company and for them to go to the office in
convenience but it should not be abused by the employees
concerned for coming late or going home early. Managers usually
enjoy flexible time schedules but they are not paid overtime work.

5. The employee must understand the costs benefit
implementation and they should work hard so that the
company will maintain its ability to pay the added fringes.
• In time of financial crisis and the company is in the point of
reversals, the employee should not expect the company to
be benevolent to implement some of those that are not
usually given like company outing and Christmas bonanzas.

• To ensure the company's ability to continue providing these
benefits, employees are encouraged to work diligently and
contribute their best efforts. By being productive and
efficient in their work, employees contribute to the
company's overall success and financial stability.
• As an HR, our company unions and various organizations
must understand that one cannot give what one does not
have enough to spare.

6. Benefits must be measured in terms of employees' services to the
company. While benefits should be uniformly implemented, there must be
a measurement in the policy guidelines on those who should receive the
benefits in terms of the following criteria:
a. Length of service - (company guidelines may be of help in the granting of
leave credits)
b. Retirement Benefits –SSS, participatory or non- participatory pension
plans
c. Other Benefit Programs - company insurance plans covering the
employees and their dependents may be given depending on the
services of the employees.

7. Benefit programs should be a cooperative effort of top
management and employees.
Recreational programs and athletic activities are fringe benefits of
the Company.Planning the program and assignment of the
chairman and committee members should be handled by the
Human Resources Department. Consultations with the different
heads and those with the talent and expertise in all these activities
should be top priority for the success of the program. Example:
Organization’s uniform, athletic and recreational programs

The Classification of Benefits
Benefits could be classified under the following:
1. Statutory Benefits - are benefits mandated by law such as:
a. 13th month pay given half in June and half in December
b. Five-day incentive leave
c. Birthday leave
d. Maternity leave with pay for married women
e. Paternity leave with pay when husband's wife gives birth
f. Pag-ibig Fund - housing loans through employer-employee
contributions

g. Medicare Fund - for medical expenses of employees and
dependents
h. Social Security Benefits - retirement, pension, death,
burial, disability, sickness, medical rehabilitation, employee
compensation in case of accident in the performance of work
i. Cost of living allowance

Benefits could be classified under the following:
2. Company Benefits - These are benefits granted by the company
outside of those mandated by law. These benefits could be through a
collective bargaining agreement and those that are given unilaterally
by management.
a. Vacation leave with pay this varies from company to company
b. Sick Leave with pay
c. Bereavement leave
d. Hospitalization plan

e. Sickness and accident insurance plan
f. Life insurance and pension plans g. Christmas and mid-year
bonus
h. Housing equity assistance
i. Educational plan
j. Recreational and fitness facilities
k. Legal aid
l. Car plan
m. Company Service and transportation

n. Stock option plan
o. Management Bonus
p. Emergency leave
q. Personal leave
r. Union leave
s. Production sharing plan
t. Profit-sharing

Profit-Sharing Plans
Profit-sharing is an incentive plan under which an employer
agrees to share with his personnel a specified portion of the
net profits of his business at the end of each fiscal period or
over a given period.

Purpose of Profit-Sharing
1. It is believed that employees would feel they have stake in
the company if they get a direct share in the profits of the
enterprise in which they work.
2. It aims to modify employees' attitudes to achieve greater
employee efficiency, productivity and loyalty to the firm and
keener interest in its welfare.
3. Employers who subscribe to the concept of profit-sharing
look upon their workers as partners or co-workers of the
enterprise.

Types of Plans
1. The Cash Plan- also known as the Current Distribution Plan. This
provides for payment of the employee's share in the profit in cash
based on his salary or wage. Shares under this agreement are
generally paid quarterly, semi-annually or annually.
2. The Deferred Distribution Plan - this program establishes a trust
fund to provide employees with future payment. The distribution
of profits is withheld until the employees' retirement, death or
disability.

Types of Plans
3. The Purchase Plan - Under this plan, participating
employees are to purchase often through payroll deductions,
shares of company stock, either or less than the prevailing
market price or at par value.

Managing Benefits: Planning and Administration
• Managing a fringe benefits program is an administrative and a
financial problem to the employer.
• It should be both beneficial to the employer and the employee as
well.
• The basic necessities of the labor force must be met first before
any benefit program is to be implemented.
• Employees will only appreciate benefits if the basic requirements
of wages and working conditions are met by the management.

Strategic Benefit Implementation
Since benefits are expenses and the results are not usually
immediately appreciated, a strategic management in its
implementation must be considered:
1. Benefit Survey and Benchmarking- benefits should be within
the level of the industry in the community and those of the
competitors in business as any added cost should affect
product-pricing strategy.

2. Cost Control Strategy- efforts to contain costs can only be
effective if the employer has significant control and flexibility
in deciding how much to spend on benefits. It's also
important to consider how the cost of a benefit may grow
over time, as it could become difficult to manage and control
expenses in the future.

3. Staffing Cost Strategy - employers may change staffing practices
to control benefit costs, such as:
• Employees working overtime
• Hiring of contractual/Temporary Employees
• Job Contractors (Manpower/Employment Agency)
4. The Demographic Composition Cost Strategy- employer must
also consider the demographic factors such as age, sex and status
of their work force.

The benefits must be designed along thee demographic need of the
human resources to be more relevant and appreciated. Example:
• Younger workers would prefer higher wages and more overtime
work to augment their take home pay to pay their needs and other
comforts.
• Married women will need more disability benefits and childcare
protection
• Older work force will need more retirement programs and pension
plans.

5. Organizations of employee associations' cooperatives- will greatly
help unburden management of employees' loans and cash advances.
This will also help employees save part of their income and generate
dividends as added incentives. Credit unions are developed as self-
help organizations to help solve some of their personal financial
problems through loans at very minimal interest plus incentive
refunds.

6. Communicating Benefits to Employees
• Any strategic implementation of any program cannot take root on
employees' morale without their understanding fully the concepts
and program of management in the granting of such benevolent
gestures for their welfare (orientation program).
• Benefits are investments in the greater job satisfaction and increased
commitment for better performance on the job.
• Research findings have shown that employees' job satisfaction and
performance show very little correction between company benefits
programs.

Corporate Policy Guidelines on Benefits
Corporate policy must follow the following guidelines:
1. It must specify are covered by the policy.
2. It must relate to the family and individual assistance to levels of need.
3. It must make the cost of work-related benefits as part of cost production.
4. It must provide security in such forms as compensation during work-related
illness and retirement benefits.
5. It must promote healthy and safe work environment.
6. It must provide morale-building programs and develop employees' esprit de
corps.
7. It must be of mutual benefit to both the employees and the employer.

Benefits Program Evaluation
A continuing research program should be done by the Human
Resources Department to evaluate not only the cost impact of
benefit programs but also its effects on employees' performance
and morale.

THANK YOU
JANNA V.CLAVECILLA
JANINA ALYN COLIPANO
DOMINIC CORANES

The-Management-of-Employee-Benefits-and-Services.pptx

More Related Content

What's hot

Similar to The-Management-of-Employee-Benefits-and-Services.pptx

Recently uploaded

The-Management-of-Employee-Benefits-and-Services.pptx