Human Resource Management

Sixteenth Edition, Global Edition

Chapter 13

Benefits and Services

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Learning Objectives (1 of 2)
13.1 Name and define each of the main pay for time not
worked benefits.
13.2 Describe each of the main insurance benefits.
13.3 Discuss the main retirement benefits.

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Learning Objectives (2 of 2)
13.4 Outline the main employees’ services benefits.
13.5 Explain the main flexible benefit programs.
13.6 Explain how to use benefits to improve engagement,
productivity, and performance.

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Introduction: The Benefits Picture
Today
• Benefits
– the indirect financial and nonfinancial payments
employees receive for continuing their employment
with the company and which employers use to attract,
recognize, and retain workers
– Employee benefits account for about 31% of total
compensation

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Learning Objective 13.1: Name and
Define Each of the Main Pay for Time
Not Worked Benefits

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Pay for Time Not Worked
• Supplemental Pay Benefits
• Very Costly
• Include holidays, vacations, jury duty, funeral leave,
military duty, personal days, sick leave, sabbatical leave,
maternity leave, and unemployment insurance payments
for laid-off or terminated employees

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Unemployment Insurance
• Unemployed through no fault of their own
• Unemployment tax rates are rising
• Employers spend thousands unnecessarily

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Vacation and Holidays
• About 90% of full-time workers and 40% of part-timers get
paid holidays
• Average of eight paid holidays off
• Average American worker:
– 9 days vacation after one year
– 14 days vacation after 5 years
– 17 days vacation after 10 years

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Know Your Employment Law (1 of 2)

Some Legal Aspects of Vacations and Holidays

Let’s take a look…

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Sick Leave
• Provides pay to employees when they’re out of work due
to illness
• Cost reduction tactics
– Pooled paid leave plans (“banks”)
– Repurchase unused sick leave at end of year

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Improving Performance: HR as a Profit
Center

Controlling Sick Leave

Let’s talk about it…

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Know Your Employment Law (2 of 2)

Leaves and Family and Medical Leave Act

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FMLA Guidelines
• Give no employee a leave until the reason for the leave is
clear.
• Confirm the legitimacy of any FMLA request.
• Use a standard form to record both the employee’s
expected return date.

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Severance Pay
• A one-time separation payment, when terminating an
employee
– Reducing the chances of litigation
– Comply with ERISA

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Supplemental Unemployment Benefits
• Supplemental unemployment benefits are cash payments
that supplement the employee’s unemployment
compensation, to help the person maintain his or her
standard of living while out of work.

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Learning Objective 13.2: Describe
Each of the Main Insurance Benefits

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Insurance Benefits (1 of 2)
• Workers’ compensation
• Health insurance

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Worker’s Compensation
• The income and medical benefits provided in work-related
accidents to the victims or their dependents, regardless of
fault
– monetary or medical, or a combination.
• Determining benefits
• Controlling costs

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Hospitalization, Health, and Disability
Insurance
• Coverage
– Patient Protection and Affordable Care Act
▪ Health Maintenance Organization (HMO)
▪ Preferred Provider Organization (PPO)
• Mental Health Benefits

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Patient Protection and Affordable Care
Act of 2010 and Other Laws
• Patient Protection and Affordable Care Act of 2010
• The Consolidated Omnibus Budget Reconciliation Act
(COBRA)
• Other laws

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Trends in Employer Health-Care Cost
Control
• Health-care costs control is one big way HR can improve
profits
– Measuring and auditing health care costs
• Other cost-control options
– HSAs
– Make sure employees know the costs
• Wellness programs
– Clinical prevention
– Incentives

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Improving Performance: HR as a Profit
Center

The Doctor Is on the Phone

Let’s talk about it…

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Insurance Benefits (2 of 2)
• Long-term care
– Such as nursing assistance in old age
• Life insurance
– Accidental death and dismemberment coverage
• Benefits for part-time and contingent workers

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Learning Objective 13.3: Discuss
the Main Retirement Benefits

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Retirement Benefits: Social Security
• Three types of benefits:
– Retirement Benefits
– Survivor or Death Benefits
– Disability
• Medicare
– provides health services to people age 65 or older

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Retirement Benefits: Pension Plans
• Provide income to individuals in their retirement, and just
over half of full-time workers participate in some type of
pension plan at work
– Contributory v s Non-Contributory
ersu

– Defined Contribution v s Defined Portability

ersu

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401 (k) and Other Pension Plans
• 401(k) plans
– Employee authorizes the employer to deduct a sum
from his or her paycheck before taxes, and to invest it
in the bundle of investments
– Savings and Thrift
– Cash Balance plans
– Hybrid

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Know Your Employment Law

Pension Planning and the Law

Let’s take a look…

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Pension Planning and the Law
• Pension Benefits Guarantee Corporation (PBGC)
• Membership Requirements
• Vesting
– Cliff vesting
– Graded vesting

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Pensions and Early Retirement
• Early retirement window
– Often age 50+
– For a limited time, the employees can retire early,
generally with a combination of improved or liberalized
pension benefits plus a cash payment.

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Improving Performance Through HRIS:
Online Benefits Management Systems

Benelogic

Let’s take a look..

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Trends Shaping HR: Digital and Social
Media

Communicating Benefits with Employees

Let’s take a look…

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Learning Objective 13.4: Outline the
Main Employees’ Services Benefits

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Personal Services and Family-Friendly
Benefits
• These include
– Personal services (such as legal and personal
counseling),
– “Family-friendly” services (such as child-care facilities)
– Educational subsidies
– Executive perquisites

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Personal Services
• Voluntary benefits
• Employee Assistance Programs (EAPs)
– Provide counseling and advisory services for personal
problems that may adversely affect the employee’s
work life

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Family-Friendly (Work-Life) Benefits
• Child care
– Sick child benefits
• Educational subsidies
• Other personal services benefits

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Diversity Counts

Domestic Partner Benefits

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Improving Performance: The Strategic
Context

Clif Bar

Let’s talk about it…

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Executive Perquisites
• Company planes
• Loans / Stock options
• Financial Counseling
• Relocation

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Learning Objective 13.5: Explain the
Main Flexible Benefit Programs

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Flexible Benefits Programs
Figure 13-4 One Page from Online Survey of Employees’ Benefits
Preferences

Source: Reprinted with permission from GrapeVine solutions.

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The Cafeteria Approach
Types of plans
• Flexible spending
• Core plus options

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Improving Performance: HR Tools for
Line Managers and Small Businesses

Benefits and Employee Leasing

Let’s talk about it…

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Flexible Work Schedules
• Flextime
• Telecommuting
• Compressed Workweek
• Job Share
• Work Share

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Learning Objective 13.6: Explain How to
Use Benefits to Improve Engagement,
Productivity, and Performance

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Employee Engagement Guide for
Managers

Costco’s Compensation Plan

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Chapter 13 Review

What you should now know….

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