Employee Benefits Essay, Research Paper
Benefits that will come with a job might not make you take the job just because of that. But It could have major influence over your decision. “Flexible scheduling, paid time off, and child care were singled out as key programs that impress job candidates.” (http://www.amcity.com/)3 Employee benefits are becoming a major part of what employees are looking for from their companies. And in return companies are looking at their benefit packages trying to trim benefits that are not benefiting anyone. Or basically trying to get the most for their buck without upsetting their employees.
Benefits also can be a way to motivate employees into better enjoying their jobs. By employers surveying their employees to see what kind of needs they have, they can better suit the benefits for their employees. “Surveying is a primary tool for better understanding employees’ desires, and the migration of those desires.”1(http://www.amcity.com/) And it is a good way of getting rid of unwanted benefits without upsetting the employees as much, because this is what they wanted.
This paper will cover the topic of employee benefits, How they have evolved through time?, What types of benefits are being offered now?, and What benefits are required by law and which are not?
EVOLUTION OF BENEFITS
Employee benefits, once known as fringe benefits, use to be only given to a select few employees. During World War II, there was a pay freeze in effect. Employers wanting to pay more to attract employees couldn’t, so the stepped up the benefits offered to the employees. It was at this time that employee benefits started to grow and bring us to where we are today with all kinds of benefits.
DIFFERENT TYPES OF BENEFITS
Over time there has been a large increase in the different types of benefits introduced into the workplace. With benefits initially introduced to attract potential employees, there have been some very good ideas and some very bad ones. To start out lets first list the benefits that are out there.
Retirement and Savings Plans
Life Insurance and Death Benefits
Paid Vacations and Holidays
Personnel Time/Flex Time
Employee Assistance Programs
Most companies have some type of retirement plan set up. It could be in the form of a savings plan, 401k, pension plan or whatever they call it. There are two category types of pension plans. They are 1) contributions from the employer and 2) amount of pension benefits to be paid. Under these different types there are four different types of plans. They are:
Contributory Plan- “A pension plan where contributions are made jointly by employees and employers”
Noncontributory Plan- “A pension plan where contributions are made solely by the employer”
Defined-Benefit Plan- “A pension plan in which the amount on employee is to receive upon retirement is specifically set forth”
Defined-Contribution Plan- “A pension plan that establishes the basis on which an employer will contribute to the pension fund”2
A spinoff of the pension plan is the 401k plan, which is named after the section in the Internal Revenue Code. This plan is becoming more popular since its introduction because it is tax deferred and it is taken out by payroll deductions.
Since the 1992 Presidential election, health care has been on the hot seat for a lot of companies. There are usually two different types of health care available for employees. Health maintenance organizations(HMOs) which are ” organizations of physicians and health care professionals that provide a wide range of services to subscribers and dependents on a prepaid basis.” And Preferred provider organization (PPO) which is ” a hospital or group of physicians who establish an organization that guarantees lower health care costs the employer.”2
And since health care costs are on the rise companies are finding ways to combat this. Their result are wellness programs. “Studies show employee absenteeism is reduced when wellness programs are implemented. In a study at Prudential Insurance, disability days were 20 percent lower and disability-per-capita costs were 32 percent lower after implementing a wellness program. In addition, annual medical costs fell by 46 percent.”(http://www.amcity.com/)4 The whole reasoning behind wellness programs is to lower health costs, but in return they have also reduced absenteeism, on the job injuries, and disability management costs.
Did you know that in the United States that by law, the company you work for doesn’t have to give you vacation time. There is no legal minimum that has to be given compared to other countries like Japan with 19, France with 25, and Sweden with 30. But to stay competitive in today market the average for the United States with 20 days. And even then this is on the low side of the spectrum.
To go with that usually workers can expect to be paid for ten holidays that occur throughout the year. Some of those are Christmas, New Years, Labor Day, Memorial Day, and Thanksgiving. The rest vary from company to company and can usually expect five more smaller holidays.
Sick time or personnel time is usually given to white collar workers to be used at their discretion. They are usually given so many days a year to use. These days are good to cover short illnesses or over time as they accumulate to cover long illnesses. Personnel time can also be used to take days off for personnel events without using vacation time, which usually has to be approved in advance.
Flex time is relatively new. Flex time cuts out all of the sick time and personnel time, along with cutting out vacation time, and is all lumped together so one could take more time off at one time. Myself am against flex-time because at where I worked we had the usual paid holidays which totaled seven days and if you worked on that day you received time and a half plus being paid for that day. Vacation I received standard two weeks and six days for sick/personnel time. And then one day for your birthday and a day called family day. This totaled twenty five days for one year. After the switch to flex time it became twenty three days. Now that might not seem like a lot, but that was a benefit that they took away from me. The biggest thing about taking away benefits is this, be careful in taking away benefits that the employees like. This could cause big problems, motivation problems and some employees might quit.
Child care in the 1990’s is on the rise. With more two working families, a big concern among the parents is child care. There are several advantages for this. One is if the employees babysitter can’t take your child that day, and you don’t have a backup, usually you have to stay home from work. Which means lost production. Second it is convenient for them to drop them off at work instead of driving around town to drop them off. And third, during lunch breaks the parents can spend time with their children. In all everyone can win from this benefit.
Also a relatively new benefit is elder care. With more of today baby boomers getting older there is more of a need for this. Elder care is the “care provided to an elderly relative by an employee who remains actively at work.”2 Many experts site that this benefit could be more destructive than good, showing that employees are absent 1.5 times more than employees who don’t have this responsibility.
Discounts could depending on where you work can be a great benefit. Usually after a certain amount of time you usual receive a coupon to receive the discount of merchandise.
And finally there is employee assistance programs. These programs are designed to help employees with school and tuition reimbursement. Usually you take the classes and after the semester and you receive passing grades, they give you back a prorated amount of your tuition.
BENEFITS REQUIRED BY LAW
There are several benefits required by law. Workers’ Compensation Insurance covers workers injured in the line of duty. The injury has to keep the worker out of work for an extended period of time. The worker usually receives a prorated amount of their pay.
The next is social security insurance. Both the employee and employer contribute to the fund. The employer matches what is put into it by the employee. When the employee reaches 65 years of age is when they can start to draw on their social security and receives a prorated amount.
And the last is unemployment insurance. This is when an employee is fired from a job or laid off and have to be covered by the social security act, will receive up to twenty six weeks of unemployment insurance through their unemployment.
EMPLOYEE FEELINGS ABOUT BENEFITS
How employees feel about their benefit packages is just coming into play. Most companies are asking their employees what they would want in their benefit packages. But employers be ware “Surveying employees when no action is likely to be taken, which can engender distrust.”(http://www.amcity.com/)1
Surveying employees of what they want is a great way to communicate and motivate their employees. By employees seeing management listening and communicating will help bust moral in the company. “Surveyed more than 800 employers nationwide representing 7 million workers, and nearly two-thirds of these organizations said the programs have a positive effect on morale, while half say the programs improve attendance and productivity.”(http://www.amcity.com/)3
Along with this survey, “nearly three-fourths (74 percent) of Midwest employers said that flexible work scheduling is the most important issue they have to address.”(http://www.amcity.com/)3 Employers are getting more information than they thought they would from these surveys. This information can better help them improving conditions with employees in a number of different areas, like morale, communication and motivation.
Benefits can be used for many different motives. To boost morale, communicate with their employees on their concerns and needs, and to motivate their employees about their job. There are a lot of different of benefits a employer can offer its employees from health care to dental to child care. And even before a potential employee accepts a job, benefits might weigh heavily in the decision of which job to take.
. Companies see a benefit in seeking employee feedback, Business Times, Douglas Robson. http://www.Amcity.com/sanfrancisco/stories/032497/focus2
2. Managing Human Resources, 1996, Arthur Sherman, Scott Bohlander, Scott Sneel. South-Western College Publishing
3. Programs to balance work, family lift workers morale, March 31, 1997. Http://www.amcity.com
4. Wellness programs are worth every dollar you spend, March 31, 1997. Miriam Sims http://www.amcity.com