The Primary Reasons for the Growth in Employee Benefits - Essay Example

Employee Benefits Identify the primary reasons for the growth in employee benefits. The growth in employee benefits has come from the need to retain efficient workers in any organization. The lower the attrition rate, the higher the profits, and the long term prospects for the organization. The rising costs of recruiting the right staff are another reason for the growth in employee benefits. (The Basics of Employee Benefits) 2. Discuss the major issues affecting benefit planning, design, and administration. The major issues that affect benefit planning, design, and administration are the laws governing employee benefits, issues related to income tax laws, the rising cost of health benefits, retirement benefit issues, profit sharing issues, and the manner in which flexibility plans that benefit both the employer, and the employee can be developed and introduced. (EMPLOYEES BENEFIT/EXECUTIVE COMPENSATION (ERISA). 3. Discuss the advantages of flexible benefit programs in terms of employee satisfaction and cost containment. The flexible benefit programs reduce the taxable income of an employee, as health insurance premiums are deducted from the paycheck before calculations of taxes. This gives the employee the benefit of a higher income for spending, and reduces the burden of the employer in making provisions for a higher income for spending. (FLEXIBLE BENEFITS. OVERVIEW). 4. Explain the key factors affecting the choice of benefits, from both an employer and employee perspective. The key factors affecting the choice of benefits from an employee’s perspective are the choice that is offered in benefits, and the possibility of exchanging one benefit for another. From the employers’ point of view, the choice of benefits enables goodwill and motivation in an employee, and reduction in total employee benefit costs. 5. Outline the key role of communications in increasing the perceived value of benefits.(Smith, I. 2000. Benefits). The key role that communications plays in increasing the perceived value of benefits is that emphasis of the benefits accruing to the employee provides a feeling of caring among the employees, and this acts as a motivating factor that works both in terms of retention as well as productivity. (Glasscock, S. & Gram, K. 1999. WORKPLACE RECOGNITION). 6. Identify the two characteristics that distinguish special groups. Gender is one characteristic that distinguishes special groups, and women form the special group in this category. Minority groups make up the second category of special groups, and may be distinguished, by several factors, which include color, caste, creed and ethnicity. (Griffith, W.R. and Hom, W.P. 2001. RETAINING VALUED EMPLOYEES). 7. Explain the key factors to be considered in designing a compensation strategy for each of the special groups. The key factors that need to be taken into consideration when designing a compensation strategy for special groups is that they not be discriminated against on the basis of their grouping, and that they be treated as individual employees with no emphasis on their gender, color, caste, creed, and ethnicity. (Griffith, W.R. and Hom, W.P. 2001. RETAINING VALUED EMPLOYEES). 9. Discuss the issue of executive pay and explanations of why executive pay may be justified. The executive pays have always been on the higher side with benefits constituting almost forty-five percent of it. The high pays that executives receive have at times been the cause of rancor among employees. The justification of the high salaries lies in the much higher responsibilities, and accountability for executives. (Smith, I. 2000. Benefits). 10. Explain the special compensation problems faced by professional (scientists and engineers) employees. The special compensation problems that professional employees like scientists and engineers bring with them is the knowledge and skills that they possess, and therefore need to be compensated for it. Equal work equal pay norms do not suit this category, and job evaluation needs to be done for their compensation. (Hastings, S. 2000. Grading Systems and estimating value). 11. Identify and describe the seven factors that influence the design of a sales compensation plan. The seven factors that influence the design of the sales compensation plan are the basic pay that needs to be provided, that enable the maintaining of existing lifestyle, conveyance costs, travel costs, overnight stay costs, entertainment costs, other miscellaneous costs, and the sales incentives. (Thompson, M. 2001. Salary progression systems). 12. Assume your company has created a two-track career path for engineers. On one path, senior engineers serve as managers who also specialize in client relations. How might this change the nature of your argument about wages? The role of the senior engineers as managers specializing in client relations does not in any way change the logic of higher wages, because of the knowledge and skill content of their job functions. In client relations’ higher value is placed by the client on advice from an engineer manager, because of this knowledge content. 13. Identify the four general factors in the global guide to international compensation and be able to apply the global guide to increase understanding of the variations in international pay practices. The four factors that create distinctive national compensation packages, and provide a better understanding of variations in international pay practices are the discrepancy between desired and received pay, discrepancy between received pay and other comparable referents, discrepancy between received pay and historical parity, and low future expectancy of more pay. (Sparrow, P. 2000. International reward management). 14. Explain how certain key factors in the global guide – social contract, culture, trade unions, ownership and capital markets, managers’ autonomy – impact international pay systems. The impact of the key factors in the global guide on international systems is based on the perception of pay level and organization’s success rate, pay focus and general strategic policy objectives, risk-sharing between organization and employee, pay level and the individual effort. (Sparrow, P. 2000. International reward management). 15. Outline the key strategic differences among the pay systems of Japan, Germany and the U.S. using the total compensation model. In the United Sates of America a noticeable shift to people-based systems from job-based systems is clearly seen. In Germany the key strategy is more wage flexibility to bring down the high taxes, wages and welfare costs that are having a negative impact on the competitiveness of the German Industry. Japan was a role model for human resource management practices, but is now seeing a radical change that gives rise to criticism. In order to lower labor costs many of the benefits enjoyed by the workers like overtime are gradually being withdrawn. (Sparrow, P. 2000. International reward management). 16. Discuss the three general compensation strategies used by companies with worldwide operations. Socially healthy pay is one general compensation package that is in use, which aims at keeping better parity in the pay scales of the different grades of employees. The second system is individual-performance related pay system that rewards individuals on the bases of their performance. The third system is to utilize the local rewards system so as to keep in parity with the national factors like culture and sentiment. (Sparrow, P. 2000. International reward management). 17. Describe the key features of expatriate pay systems. The key features of expatriate pay systems is that calculations of rewards is based on the amount of knowledge and skills that is brought, the essential nature of the job function, and the incentive to stay on in a country away from home and family. (Sparrow, P. 2000. International reward management). 18. Distinguish between the following global workers: expatriates, local nationals, and third-country nationals. Global workers are part of the growing globalization that require employees to be willing to work anywhere in the world, where the business enterprise has an interest in. Expatriates are employees that go to another country in search of better salaries, better working facilities, and better prospects from their country of origin. Local nationals are employees that belong to the nation, where they are employed. Third country nationals is a term normally used for employees that come from undeveloped countries to take up unskilled or semi-skilled jobs. Works Cited 1. “The Basics of Employee Benefits”. 2005. Accessed on March 24, 2006 Retrieved from http://www.entrepreneur.com/article/0,4621,323676,00.html. 2. “EMPLOYEES BENEFIT/EXECUTIVE COMPENSATION (ERISA)”. Accessed on March 24, 2006 Retrieved from http://www.akingump.com/practice.cfm?practice_id=78. 3. “FLEXIBLE BENEFITS. OVERVIEW”. Department of Human Resource Management. Accessed on March 24, 2006 Retrieved from, http://www.dhrm.state.va.us/genlbenefits/flex/overview.html. 4. Smith, I. 2000. “Benefits”. Reward Management. Ed White, G and Drucker, J. Routledge. New York Pp. 152-174. 5. Glasscock, S. & Gram, K. 1999. “WORKPLACE RECOGNITION”. B.T. Batsford Ltd. London. Pp. 65-70. 6. Griffith, W.R. and Hom, W.P. 2001. “RETAINING VALUED EMPLOYEES”. Sage Publications. California. Pp. 180-202. 7. Hastings, S. 2000. “Grading Systems and estimating value”. Reward Management. Ed White, G and Drucker, J. Routledge. New York Pp. 84-82. 8. Thompson, M. 2001. “Salary progression systems”. Reward Management. Ed White, G and Drucker, J. Routledge. New York Pp. 127-148. 9. Sparrow, P. 2000. “International reward management”. Reward Management. Ed White, G and Drucker, J. Routledge. New York Pp.196-211. Read More