Human resrouce management 12th mathis jacson chapter 0014

PowerPoint Presentation by Charlie CookThe University of West Alabama PowerPoint Presentation by Charlie Cook The University of West Alabama CHAPTER 14 Managing Employee Benefits CHAPTER

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The University of West Alabama

PowerPoint Presentation by Charlie Cook

The University of West Alabama

CHAPTER 14

Managing Employee Benefits

CHAPTER 14

Managing Employee Benefits

S E C T I O N 4 Compensating Human Resources

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Chapter Objectives

■ Define a benefit and identify four strategic benefits considerations.

■ Summarize why benefits management and communications efforts

are important.

■ Distinguish between mandated and voluntary benefits and list three

examples of each.

■ Explain the importance of managing the costs of health benefits

and identify some methods of doing so.

■ Discuss the shift of retirement plans from defined-benefit to

defined-contribution and cash balance programs.

■ Describe the growth of financial, family-oriented, and time-off

After you have read this chapter, you should be able to:

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Provided Benefits

Employer-Absorb social costs for health

care and retirement

Influence employee decisions about employers

Are increasingly seen as entitlements

Average over 40% of total payroll costs

Benefits and HR Strategy

 An indirect reward given to an employee or group of employees for organizational membership

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FIGURE 14-1 Employer Compensation and Benefits Costs per Hour, Private Industry

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FIGURE 14-2

Strategic

Benefits

Considerations

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FIGURE 14-3

Benefits

Management

Components

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Benefits Design

 How much total compensation?

 What part of total compensation should benefits

comprise?

 What expense levels are acceptable for each benefit?

 Which employees should get which benefits?

 What are we getting in return for the benefit?

 How will offering benefits affect turnover, recruiting, and retention of employees?

 How flexible should the benefits package be?

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FIGURE 14-4 Typical Division of HR Responsibilities: Benefits Administration

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HR and Benefits Administration

Benefits Administration Issues

Benefits Measurement (Return vs Costs)

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FIGURE 14-5 Common Benefits Metrics

• Benefits as a percentage of payroll (pattern over a

multi-year period)

• Benefits expenditures per full-time equivalent (FTE)

employee

• Benefits costs by employee group (full-time vs

part-time, union vs nonunion, office, management,

professional, technical, etc.)

• Benefits administration costs (including staff time

multiplied by the staff pay and benefits costs per hour)

• Health-care benefits costs per participating employee

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Source: Based on data summarized from the U.S Department of Labor, Bureau of Labor statistics, National Compensation Survey: Employee Benefits

in Private Industry in the United States, 2006; and Employee Benefits Study, 2006 ed (Washington, D.C.: U.S Chamber of Commerce, 2007).

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FIGURE 14-7 Types of Mandated and Voluntary Benefits

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Severance Pay

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FIGURE 14-8 Private Industry Workers with Health Benefits

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Consumer-Driven Health (CDH) Plans

Health Reimbursement Arrangement (HRA)

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FIGURE 14-10 Overview of Consolidated Omnibus Budget Reconciliation Act

(COBRA) Provisions

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Health-Care Legislation

Act (HIPAA) of 1996

 Allows employees to switch their health insurance

plan from one company to another, regardless of existing health conditions

pre- Requires employers to provide privacy notices to

employees and to not disclose of health information without authorization

 Benefits plans that allow employees to contribute tax dollars to fund certain additional benefits

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pre-Retirement Benefits

 Provides old age, survivor’s, disability,

and retirement benefits

Federal payroll tax (7.65%) on both

the employer and the employee

Medicare taxes are 2.9%

Benefit payments are based on

an employee’s lifetime earnings

 Administered by the Social

Security Administration

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Source: U.S Bureau of Labor Statistics, www.bls.gov.

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Defined-Cash Balance Plan

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FIGURE 14-12

Worker

Participation in

Pension Plans

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Pension Plan Concepts

Pension Plan Formats

Pension Rights

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Individual Retirement Options

Individual Retirement Options

Individual Retirement Account (IRA)

401(k) and Roth IRA

403(b)

Keogh

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Protection of Retirement Benefits

Employee Retirement Security

in 1984)

Qualified Domestic Relations Order (QDRO)

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Retirement Benefits and Legal Requirements

Older Worker Security

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FIGURE 14-13 Common Types of Financial Benefits

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Family Medical Leave Act (FMLA)

 Employers with 50 or more employees

 Employees who have worked at least 12 months and 1,250 hours in the previous year

 Eligible employees can take up to a total of 12 weeks

of unpaid leave in a 12-month period to attend to a

family or serious medical condition

 Employees must exhaust all other forms of leave

 Employees have rights to continued health benefits and to return to their job

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FIGURE 14-14 Percentages of Employees Taking Family or Medical Leave

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Elder-Care Benefits

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Benefits for Domestic Partners

 Unmarried employees who are living with individuals

of the opposite sex

 Gay and lesbian employees who have partners

equivalent.

share responsibility for their common

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Time-Off and Other Benefits

Holiday Pay

Vacation Pay

Leaves of Absence

Miscellaneous Benefits

Off (PTO) Plans

Paid-Time-Time-Off and Other Benefits

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FIGURE 14-15 Percentage of Companies with Various Paid-Time-Off Plans

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