Managing Human Resources Bohlander  Snell  Sherman

1. ManagingHuman ResourcesBohlander Snell Sherman Chapter 11 Employee Benefits

2. Learning Objectives • Describe the characteristics of a sound benefits program. • Recognize management concerns about the costs of employee benefits and discuss ways to control those costs. • Explain the employee benefits required by law. • Discuss suggested ways to control the costs of health care programs.

3. Learning Objectives, cont. • Describe those benefits that involve payment for time not worked. • Discuss the recent trends in retirement policies and programs. • Describe the major factors involved in the management of pension plans. • List the types of service benefits that employers may provide.

4. Modifying Employee Benefits Allowing for Employee Input Providing Flexibility Establishing Specific Objectives Communicating Benefits Information Requirements for a Sound Benefits Program

5. Flexible Benefits Plans (Cafeteria Plans) Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs

6. Presentation Slide 11-2Flexible Employee Benefits Plans

7. Presentation Slide 11-3How Benefit Dollars Were Spent in 1997 (Percent of Total)

8. Benefits Required by Law Old age and survivors insurance (OASI) Unemployment insurance Workers’ compensation Leaves without pay Payment for Time Not Worked Holidays Vacations Sick leave Jury duty, military service, and bereavement leaves Supplemental Unemployment Benefits (SUB) Insurance Group life insurance Long-term Care Health care insurance Dental insurance Legal insurance Retirement Benefits Pre-retirement counseling Pension plans Deferred compensation plans Presentation Slide 11-4Categories of Employee Benefits #1

9. Services Employee assistance program Counseling services Educational assistance plans Child care Elder care Food services Health services Legal services Financial planning Housing and moving expenses Transportation: pooling/parking Purchasing assistance Credit unions Social and recreational services Awards Presentation Slide 11-5Categories of Employee Benefits #2

10. Social Security Unemployment Insurance Workers’ Compensation Leaves Without Pay Employee Benefits Required by Law

11. Workers’ Compensation Insurance Federal- or state-mandated insurance provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness

12. Presentation Slide 11-6Controlling Workers’ Compensation Costs • Assess high-risk areas within the workplace. • Prevent injuries through job design, employee selection, and training. • Utilize physicians with experience in occupational health. • Maintain effective communication with an injured worker. • Manage the care of injured worker until he/she returns to work. • Provide worker training in health and safety areas.

13. Health Care Payment for Time Not Worked Supplementary Unemployment Benefits Life and Long-Term Care Insurance Retirement Programs Pension Plans Discretionary Benefits

14. Health Maintenance Organizations (HMOs) Organizations of physicians and healthcare professionals that provide a wide range of services to subscribers and dependents on a prepaid basis

15. Preferred Provider Organization (PPO) A group of physicians who establish an organization that guarantees lower health care costs to the employer

16. Health Care Payment for Time Not Worked Supplementary Unemployment Benefits Life and Long-Term Care Insurance Retirement Programs Pension Plans Discretionary Benefits

17. Supplemental Unemployment Benefits (SUBs) A plan that enables an employee who is laid off to draw, in addition to state unemployment compensation, weekly benefits from the employer that are paid from a fund created for this purpose

18. Health Care Payment for Time Not Worked Supplementary Unemployment Benefits Life and Long-Term Care Insurance Retirement Programs Pension Plans Discretionary Benefits

19. Silver Handshake An early-retirement incentive in the form of increased pension benefits for several years, or a cash bonus

20. Noncontributory Defined-Benefit Defined-Contribution Contributory Types of Pension Plans

21. Contributory Plan A pension plan where contributions are made jointly by employees and employers

22. Noncontributory Plan A pension plan where contributions are made solely by the employer

23. Defined-Benefit Plan A pension plan in which the amount an employee is to receive upon retirement is specifically set forth

24. Defined-Contribution Plan A pension plan that establishes the basis on which an employer will contribute to the pension fund

25. 401(k) Savings Plans Tax-deferred savings plans Employees save through payroll deductions Employers may match a portion of employee savings Cash-Balance Savings Plans Employer contributes a percentage of employee’s pay each year Account balance also earns interest each year Experts predict it will replace traditional pension plans Contemporary Pension Plan Options

26. Vesting A guarantee of accrued benefits to participants at retirement age, regardless of their employment status at that time

27. Employee Assistance Programs Counseling Services Educational Assistance Child Care Elder Care Employee Services

28. Employee Assistance Programs (EAPs) Services provided by employers to help workers cope with a wide variety of problems that interfere with the way they perform their jobs

29. Elder Care Care provided to an elderly relative by an employee who remains actively at work

30. Other Services Awards Food Services Recreational and Social Services On-Site Health Services Credit Unions Legal Services Purchasing Assistance Financial Planning Transportation Pooling Housing and Moving