Indirect Compensation: Employee Benefit Plans - Assignment Example

Indirect Compensation: Employee Benefit Plans 12 What should a company do over the short and long term to maximize the use and value of its benefits choices to employees? First of all, maximization of use and value of benefit choices to employees mean that the company should determine the mix of options and alternatives which would give them more income and least cost that would make their employees motivated to do the tasks required of them. Benefits represent substantial annual expenditures for a company. The design for the appropriate benefits program in the short and long term should account for the following factors: the long-term plans of a business, its stage of development, its projected rate of growth or downsizing, characteristics of its workforce, legal requirements, the competitiveness of its overall benefits "package," and its total compensation strategy. Therefore, a company should always monitor changes in any or all of the abovementioned factors, both in the short and long term, to determine if changes need to be done in their benefits packages. 12-2. The new world of employee benefits is best described as "sharing costs, sharing risks." Discuss the impact of that philosophy on the broad areas of health care and pensions. As a result of the fundamental change in benefits philosophy in contemporary times, employees were given the option to take active participation in managing their benefits through cost sharing (and risks sharing). The impact of this philosophy on health care and pensions are as follows: (1) lesser dollar amounts to be shouldered by companies and employees on health care and pensions as these would be determined depending on the needs of the employees; (2) more competitive benefits and packages to be offered by health care and pension institutions to attract companies and employees; and (3) streamlining in products and services offered by health care and pension institutions to address the changing needs of the employers and the employees in their benefits choices. 12-3. In terms of the "attract-retain-motivate" philosophy, how do benefits affect employee behavior? Every organization wants to “attract-retain-motivate” the most efficient pool of employees to accomplish organizational goals. The pay and benefits a worker receives are a yardstick of how adequately his needs, even including some non-material ones, are met, either directly or indirectly, by the organization he works for. An appropriately designed benefits package will either motivate or demotivate an employee towards expected or exemplary performance. A very significant factor in the efficient performance and retention of workers is their motivation and its strength. Management should be aware of and recognize their motives in order to guide, lead and direct them properly. The dynamics of behavior is indeed a very challenging area to unravel and, if properly handled, assists in morale building and development among employees and which, in turn, results in job satisfaction and high productivity. 12-4. What can large firms do to control health care costs? What about small firms? The Society for Human Resource Management found that across organizations of all sizes in a variety of industries, the average percentage of salary reflecting the cost of mandatory benefits was 20 percent and voluntary benefits 22 percent. (470-471) Since costs decrease the dollar amount of net income in an organization, both small and large firms aim to control costs. Large firms have the capacity to give more mandatory and voluntary benefits with the objective of motivating their employees to increase satisfaction and productivity. On the other hand, small firms restrain both mandatory and voluntary benefits to its minimum (say, 17 and 18 percent, respectively) to enable them to sustain day-to-day operations. 12-5. Your company has just developed a new, company-sponsored savings plan for employees. Develop a strategy to publicize the program and to encourage employees to participate in it. Company sponsored savings plan is “a type of benefit plan that an employer offers for the benefit of his/her employees at no or a relatively low cost to the employees. If employees participate in the plan, they will benefit from its low-cost method of obtaining discounted services. The benefit to the employer is that initiating these plans usually has some tax-deductible component, and sponsoring benefits is generally a good method of retaining valuable employees.” (Investopedia, 2009, par. 1) The plan, “an employer-sponsored retirement savings plan” would initially be publicized in a group meeting composed of department heads of the organization. Subseqently, it will be communicated through formal correspondences addressed to department heads explaining the benefits of the plan. “Employer-sponsored retirement savings plans are useful for the employees because it presents them with an automatic savings device, provides tax breaks and, in some cases, offers free money in terms of employers matching the employees contributions. Some examples of retirement employer-sponsored savings plans are 401(k)s and the some forms of IRAs.” (Investopedia, 2009, par. 2) By highlighting the incentives of the plan, employees would be encouraged to participate in it. Works Cited Investopedia ULC. Employee-Sponsored Plan. 2009. Web. 01 Nov. 2009. Diversity at Work 4-1. In your opinion, what are some key business reasons for emphasizing the effective management of a diverse workforce? As defined, “managing diversity means establishing a heterogeneous workforce (including white men) to perform to its potential in an equitable work environment where no member or group of members has an advantage or a disadvantage?” (119) Some of the key business reasons for emphasizing effective management of a diverse workforce are as follows: (1) organizations’ businesses are extending into global markets; (2) diversity has been found to help build brand equity and increase consumer purchasing; (3) diversity retains top talents and reduces attrition rate; (4) management and employers in support of diversity attracts qualified and highly interested diverse employees who are able to work in teams; (5) through diversity, management designs work structures and processes which do not discriminate against factors such as gender, race, age, color, sex, religion, disability; are work conducive; are amendable to flexible hours and schedules; and consider child care assistance benefits and policies which are work-life in nature; and (6) the shift from a manufacturing economy to a service economy necessitated managing a diverse workforce. 4-2. Why is there no simple relationship between diversity and business performance? The very essence of diversity is variety. With variety comes different options and alternatives open for an organization in their quest to achieve organizational goals. An appropriate match of the organization’s resources is required to ensure that a maximized level of business performance is achieved. With diversity, there is no simple and fixed relationship with performance. It would always vary and depend on the factors incorporated in managing diversity in the workforce. These factors include man, materials and machine. Diversity in each of the factors would create a multitude of possibilities making a simple relationship virtually impossible. 4-3. How would you respond to someone who has questions or concerns about diversity? When someone has questions or concerns about diversity, the best way to respond is by going through the following steps: : (1) by inquiring and delving into the situation or concern, (2) by showing empathy and putting one’s self in the shoes of others, (3) by educating or informing with the use of facts; (4) by stating ones needs or expectations, and (5) by not polarizing people or groups. (125). 4-4. What would the broad elements of a company policy include if the objective was to emphasize the management of diversity? An organization’s company policy which seeks to incorporate provisions for workforce diversity should include the following elements: (1) a mission and vision statement that emphasizes the commitment to manage workforce diversity; (2) encouragement for diverse candidates at all levels for various positions in the company; (3) overall diversity policy is supported by changes to other organizational policies e.g. recruitment, reward, flexible working and work-life-balance, performance management, career management and retention policies; (4) a supportive work practices and organizational culture; and a (5) built-in monitoring and feedback mechanism to address diversity concerns. 4-5. What are some possible sources of intergenerational friction? How might you deal with that? Intergenerational friction occur when their pool of personnel include people from different generations; thereby, causing difficulties in adapting to generational changes. In this regard, the possible sources of intergenerational friction are: (1) behavioral orientation and differences; (2) changes in lifestyle among generations; (3) technological advancement; (4) communication structures (verbal and nonverbal messages); and (5) diverse views about the future. One managing a diverse workforce must incorporate intergenerational factors in addressing behavioral concerns. One must be adept in acknowledging values, norms, beliefs of one generation to another – as much as one should be aware of theories and concepts surrounding culture and diversity. By being aware of each generation’s way of life, management would be able to address concerns that emerge in their organization. 4-6. Suppose you were asked to enter a debate in which your task was to argue against any special effort to manage workforce diversity. What would you say? Knowing the benefits of managing workforce diversity and reasons why organizations have begun their thrusts to manage a diverse workforce, it would initially be difficult to argue against it. However, with the task assigned, the only arguments that could go against diversity are as follows: (1) an ultra conservative senior management whose traditional views need to be enforced despite changes in the global market; (2) the cost of managing a diverse workforce would be greater than managing a homogeneous group; (3) the management or leadership structure is not yet well equipped with accepting workforce diversity; and (4) there is no immediate plans to expand into global markets. Works Cited Last Name, First Name of Author. Chapter 4: Diversity at Work. Title of the Book. Publisher. Date. The Legal Context of Employment Decisions 3-1. If you were asked to advise a private employer (with no government contracts) of its equal employment opportunity responsibilities, what would you say? First and foremost, the private employer must be advised on what the Equal Employment Opportunity (EEO) laws cover. In this regard, the US EEO Commission clearly stipulates the following: “The federal EEO laws enforced by the EEOC are Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Equal Pay Act (EPA). These laws prohibit covered employers from discriminating on the bases of race, color, sex, national origin, religion, age, and disability.” (EEOC 2003, par. 8) Therefore, all employers must be compliant to these laws to prevent labor Cases that might ensure from unfair practices. 3-5. Collect two policies on EEO, sexual harassment, or family and medical leave from two different employers in your area. How are they similar (or different)? Which aspects of the policies support the appropriate law? According to Bized.co.uk, the policy of McDonald’s supporting EEO specifically states “high recruitment standards, local sourcing of staff where possible, the skills, talents and performance of staff matter; gender, marital status, disability, race, colour, nationality or ethnic origin do not matter; providing a safe and secure working environment; staff should have opportunities for training and development; jobs with the company should include career opportunities; there should be challenges and rewards; staff pay should reflect performance; there should be good communication with staff; and the education of staff matters.” (2009, par. 1) In an article published by DBTAC Southwest ADA Center (2008) on Best EEOC Policies, Programs and Practices in the Private Sector, it was revealed that “IBM is a culturally diverse organization that introduced practices and policies which encouraged workforce diversity several years before it was required by law. The company is sensitive to the needs of all employees and to the communities in which it operates.” (par. 2) As counted among the top ten companies which adhered to EEOC policies, IBM exemplified a best practice by adhering to the principles of equal employment opportunity and by making sure that barriers affecting this law are appropriately addressed. Both companies support the EEO laws encouraging workforce diversity and not discriminating on gender, marital status, race, color, nationality and disability, among others. Works Cited The US Equal Employment Opportunity (EEO) Commission. The Equal Employment Opportunity Responsibilities of Multinational Employers. 28 Apr. 2003. Web. 01 Nov. 2009. Bized.co.uk. Do they have an equal opportunities policy? 2009. Web. 01 Nov. 2009. DBTAC Southwest ADA Center. Best EEOC Policies, Programs and Practices in the Private Sector. 18 Sept. 2008. Web. 01 Nov. 2009. Procedural Justice and Ethics in Employee Relations 14-1. Discuss the similarities and differences in these concepts: procedural justice, workplace due process, and ethical decisions about behavior. The concept of procedural justice emphasizes fairness in an organization’s policies and procedures before decision-making. The organization must ensure that their policies and procedures equally address all personnel across the board without any bias and based on ethical and moral codes of conduct. In legal cases, workplace due process means employees are accorded due process in terms of any violations in the organization’s code of discipline through the appropriate procedures detailed in their collective bargaining agreement, legislative laws and procedures decided equitably by the organization. Finally, ethical decisions about behavior “concern conformity to moral standards or to the standards of conduct of a given profession or group. Ethical decisions about behavior take account not only of a persons own interests but also equally of the interests of those affected by the decision”. (547) Procedural justice and workplace due process are similar in giving fairness in procedures prior to decision making regarding resolution of conflicts. Procedural justice have similarities with ethical decisions about behavior because procedural justice utilizes accurate information based on moral and ethical standards. 14-4. How can a firm avoid lawsuits for employment-at-will? Employment at will is a “contract of employment that can be terminated either by the employer or the employee at any time and for any reason.” (Business Dictionary 2009) By the definition alone, it is susceptible to lawsuits due to its open ended clause giving both parties the prerogative to terminate the contract of employment at will. However, employers must be aware that there are specific exceptions in the law that can prevent the organization’s utilization of the employment-at-will clause out rightly. These exceptions are: “Exception One: Civil Rights Legislation (employers cannot terminate an employee’s employment because of race, age, disability, national origin or any other lawfully protected class based on such characteristics); Exception Two: Implied Contract (employment cannot be terminated except for good cause)”. (Eckhaus, 2009, 1). In this regard, to safeguard employers, they must take into account the following: (1) the application of employment must explicitly state the “employment-at-will” clause; (2) an offer letter should likewise state the “employment-at-will” clause; (3) an At Will Employment Contract must be used; (4) have an employee handbook ready stipulating both state and federal law, an acknowledgement form, a policy explaining the employment at will clause, no probationary period, and evaluations and disciplines must also contain the employment at will clause; and (5) all company forms must indicate the employment at will clause. (Eckhaus, 2009, 2 - 3) 14-6. In the course of your job, you learn that someone is "cooking the books." Discuss the steps you would take to resolve the issue. Cooking the books means “falsification of accounting records to give a misleading picture of a firms financial position or the results of its operations. Unlike creative accounting, it is an illegal practice.” (Business Dictionary 2009) As an employee who discovers that someone is doing this illegal practice, the following steps should be undertaken: (1) report the incident discreetly to the proper authorities (head of the division or HRM); (2) HRM should investigate on the veracity of the report by making their own investigations concurrent with an external auditor; (3) when the practice is confirmed, send appropriate notice to the person doing the illegal practice to conform with workplace due process; (4) wait for the person’s response; (5) apply appropriate legal action. Works Cited Business Dictionary. Definition of Employment at will. 2009. Web. 01 Nov. 2009. Eckhaus, Jay E. Employment At Will - An Endangered Species? Technorati, Inc. 2009. Web. 01 Nov. 2009. Business Dictionary. Definition of Cooking the Books. 2009. Web. 01 Nov. 2009. Read More