Introduction to Human Resource Management. TextBook: Byars, L. and Rue, L., “Human Resource Management”, 9 th , McGraw Hill, (2008). Employee Benefits.
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TextBook: Byars, L. and Rue, L., “Human Resource Management”, 9th , McGraw Hill, (2008).
Employee Benefits It is sometimes called firnge benefits. It are those rewards that organisations provide to employees for being members of the organisation.
Employee Benefits • Employee benefits can be categorized into five major categories. • Legally required • Retirement related • Insurance related • Payment for time not worked • other
Difference Between Defined benefit pension plan: the employer pledges to provide a benefit determined by a definite formula at the employee’s retirement date. Defined contribution pension plan: it calls for a fixed or known annual contribution instead of a known benefit.
Cash balance plan Are attractive to employees because they allow employees to take their cash balance pension money with them in the form of a lump sum when they leave the organisation.
Health Maintenance Organisation (HMO) HMO’s provide certain basic medical services for an organistions employees for a fixed price. Advantage of HMO’s include an emphasis on prevention of health problems and generally lower costs.
Preferred provider organisation(PPO) A PPO is formed by contracting with a group of doctors and hospitals to provide services at a discounted or otherwise attractive price. Under a PPO, employees are free to go to any doctor or facility on an approved list.
Floating Holiday/Personal days A floating holiday is a holiday observed at the discretion of the employee or the employer. Personal days are paid days that employees can take, usually at their discretion, to attend to personal matters.
Two reasons employee unaware of benefits One reason is that organisations often make little effort to communicate their employee benefits. A second reason is that descriptive material, when provided, is often not easily understood by employees.
Flexible-Benefit Plan Under a flexible benefit plan, individual employees have some choice as to the specific benefits they will actually receive; usually employees select from among several options how they want their direct compensation and benefits to be distributed. Flexible plans are also know as cafeteria plans or benefits.