Strategy for Human Resource Management Lecture 24

1. Strategy for Human Resource ManagementLecture 24 HRM 765

2. Last Lecture • Group Incentives(dependent work) • Individual Incentives (Independent work) • Paying for Performance • piece-rate plans • Gain-sharing • wage incentive plans • profit sharing • lump sum bonuses • Deferred bonuses (long term stay) • Stock options • Hiring bonuses (in case of lose) • Perks • Golden parachutes (in case of merger) • International Compensation (base salary, difference in cost of living, assistance programs) Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

3. Topic Employee Benefits Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

4. Learning Outcomes After reading this chapter, you will be able to: • Discuss why employers offer benefits to their employees. • Contrast Social Security, Old Age Benefit, and workers’ compensation benefits. • Identify and describe the major types of health insurance options. • Outline and describe major types of retirement programs organizations offer. • Explain the reason companies offer vacation benefits to their employees. • Describe the purpose of disability insurance programs. • List the various types of flexible benefit option programs. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

5. What to do? A B Rs. 45,000 30 leaves /Year Car Free Medical Life Insurance • Rs. 50,000 Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

6. Introduction Employee benefits • Have grown in importance and variety • Typically membership-based rewards offered to attract and keep employees • Do not directly affect a worker’s performance, but inadequate benefits lead to employee dissatisfaction. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

7. Benefits Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

8. Introduction Costs of Providing Employee Benefits • Benefit and service offerings add about 40% to an organization’s payroll cost. • Benefits become the focus of negotiations with employees when large wage and salary increases are not feasible. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

9. Introduction Contemporary Benefits Offerings • Benefits today reflect the diversity of the work force. • Challenge -- designing a benefits package which is attractive to applicants and current workers, and provides all the legally required benefits. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

10. Legally Required Benefits Social Security • Financed by equal employee and employer contributions, based on a percentage of earnings. • Provides income for retirees, disabled workers and surviving dependents. • Provides some health insurance coverage through Medicare. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

11. Legally Required Benefits Old Age Benefit After the retirement a fixed amount of monney to an employee. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

12. Legally Required Benefits Workers’ Compensation • Paid by the organization • Rates based on likelihood of accidents, and the type of industry. • Benefits pay expenses and/or compensate for losses resulting from work-related accidents or illness, regardless of fault. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

13. Legally Required Benefits Family and Medical Leave Vacations Medical leaves Paid leaves Forced leaves Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

14. Voluntary Benefits Traditional health insurance • Typically has the fewest coverage limitations for the employee • Usually the most expensive Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

15. Domestic Partner Benefits Benefits offered to an employee’s living partner. e. g. Wife/Husband Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

16. Voluntary Benefits Preferred Provider Organizations (PPOs) • Member health care providers agree to provide services at a fixed fee • Employees are encouraged by lower rates to use member or “preferred” providers. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

17. Voluntary Benefits Health insurance continuation • The Consolidated Omnibus Budget Reconciliation Act (COBRA) • Provides for continuation of benefits for up to three years after an employee leaves a job. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

18. Voluntary Benefits The HIPAA Requirement • The Health Insurance Portability and Accountability Act. • Imposed on employers and health providers regulations regarding the confidentiality of employee health information. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

19. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins

20. Summary • Employee benefits (Other than pay/wages) • Social security • Old Age Benefit • Domestic Partner Benefits • Health Insurance • Preferred Provider Organizations (Fixed Medical Rate) • The Health Insurance Portability and Accountability Act • Benefits Overview Benefits that are common at large communications companies. Fundamentals of Human Resource Management 8e, DeCenzo and Robbins