Managing Human Resources - Unit 11 Employee Benefits Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Managing Human Resources - Unit 11 Learning Outcomes After studying this chapter, you should be able to: Describe the characteristics of a sound benefits program. Indicate management concerns about the costs of employee benefits, and discuss ways to control those costs. Identify and explain the employee benefits required by law. Discuss suggested ways to control the costs of health care programs. Describe benefits that involve payment for time not worked. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Learning Outcomes (Cont’d) Managing Human Resources - Unit 11 Learning Outcomes (Cont’d) After studying this chapter, you should be able to: Discuss the recent trends in retirement policies and programs. Indicate the major factors involved in managing pension plans. Describe the types of work/life benefits that employers can provide. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

The Chief Objectives of Benefits Programs Managing Human Resources - Unit 11 The Chief Objectives of Benefits Programs Improve employee work satisfaction Meet employee health and security requirements Attract and motivate employees Reduce turnover Maintain a favourable competitive position Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Requirements for a Sound Benefits Program Managing Human Resources - Unit 11 Requirements for a Sound Benefits Program Strategic Benefits Planning Allowing for Employee Involvement Benefits for a Diverse Workforce Providing for Flexibility Communicating Employee Benefits Information Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Providing for Flexibility Managing Human Resources - Unit 11 Providing for Flexibility Flexible Benefits Plans (Cafeteria Plans) Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Figure 11–1 Flexible Benefits Plans: Advantages and Disadvantages Managing Human Resources - Unit 11 Figure 11–1 Flexible Benefits Plans: Advantages and Disadvantages ADVANTAGES Employees select benefits to match their individual needs. Benefit selections adapt to a constantly changing (diversified) workforce. Employees gain greater understanding of the benefits offered to them and the costs incurred. Employers maximize the psychological value of their benefits program by paying only for highly desired benefits. Employers limit benefit costs by allowing employees to “buy” benefits only up to a maximum (defined) amount. Employers gain competitive advantage in the recruiting and retention of employees. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Managing Human Resources - Unit 11 Figure 11–1 Flexible Benefits Plans: Advantages and Disadvantages (cont’d) DISADVANTAGES Poor employee benefits selection results in unwanted financial costs. There are certain added costs to establishing and maintaining the flexible plan. Employees may choose benefits of high use to them that increase employer premium costs. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Communicating Benefits Information Managing Human Resources - Unit 11 Communicating Benefits Information In-house publications (employee handbooks and organizational newsletters) Group meeting and training classes Audiocassettes/videotapes Bulletin boards Payroll inserts/pay stub messages Specialty brochures Employee self-service systems (ESS) Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Managing Human Resources - Unit 11 Management Concerns Concerns of Management Union demands for additional benefits Benefits offered by other employees Tax consequences of benefits Rising costs of providing benefits Benefits coverage for domestic partners Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Benefits Mandated By Law Managing Human Resources - Unit 11 Benefits Mandated By Law Required By Law Discretionary Canada /Quebec Pension Plans Health care Employment Insurance Payment for time not worked Workers’ Compensation Severance Pay Provincial Hospital and Medical Services Life and LT care insurance Retirements and pensions Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd. 6

Canada and Quebec Pension Plans Covers all employees between ages of 18 and 70. Used to pay retirement pensions, disability benefits and survivor benfits. All contributions come from employers and employees Copyright © 2011 by Nelson Education Ltd.

Employment Insurance Benefits paid to claimants who are unemployed and actively seeking employment. Copyright © 2011 by Nelson Education Ltd.

Workers’ Compensation Insurance Managing Human Resources - Unit 11 Workers’ Compensation Insurance Workers’ Compensation Insurance Provincial and territorial insurance (funded by an employer payroll tax) provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Figure 11–3 Reducing Workers’ Compensation Costs: Key Areas Managing Human Resources - Unit 11 Figure 11–3 Reducing Workers’ Compensation Costs: Key Areas Perform an audit to assess high-risk areas within a workplace. Prevent injuries by proper ergonomic design of the job and effective assessment of job candidates. Provide quality medical care to injured employees by physicians with experience and preferably with training in occupational health. Reduce litigation by effective communication between the employer and the injured worker. Manage the care of an injured worker from the time of injury until return to work. Keep a partially recovered employee at the work site. Provide extensive worker training in all related health and safety areas. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Provincial Hospital and Medical Services Many employers offer third party benefit coverage for additional benefits, beyond provincial health care. Copyright © 2011 by Nelson Education Ltd.

Discretionary Major Employee Benefits Health care benefits Payment for time not worked Severance pay Life insurance Retirement programs Copyright © 2011 by Nelson Education Ltd.

Health care benefits Health care benefits which include the costs of hospitalization, prescription drugs, dental care, optical care, and mental health benefits. Cost containment. Copyright © 2011 by Nelson Education Ltd.

Payment for Time Not Worked Managing Human Resources - Unit 11 Payment for Time Not Worked Sick leave Severance pay Paid holidays Vacations with pay Time Not Worked Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Managing Human Resources - Unit 11 Retirement Programs Silver Handshake Preretirement Programs Retirement Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Types of Pension Plans Contributory plan Defined-benefit plan Contributions to a plan are made jointly by employees and employers. Defined-benefit plan The amount an employee is to receive upon retirement is specifically set forth. Noncontributory plan Contributions to a plan are made solely by the employer. Defined-contribution plan The basis (amount) an employer contributes to the pension fund is specified. Copyright © 2011 by Nelson Education Ltd.

Federal Regulation of Pension Plans Managing Human Resources - Unit 11 Federal Regulation of Pension Plans Vesting Pension Portablity Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Employee Services: Creating a Work/Life Setting Managing Human Resources - Unit 11 Employee Services: Creating a Work/Life Setting Employee Assistance Programs (EAPs) Child and Elder Care Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Benefits Educational assistance plans Copyright © 2011 by Nelson Education Ltd.

Figure 11–5 Family-Friendly Benefits: Balancing Work and Home Needs Managing Human Resources - Unit 11 Figure 11–5 Family-Friendly Benefits: Balancing Work and Home Needs Child care/elder care referral services Time off for children’s school activities Employer-paid onsite or near-site child care facilities Flexible work hours scheduling Employer-accumulated leave days for dependant care Subsidized temporary or emergency dependant care Extended leave policies for child/elder care Sick-child programs (caregiver on call) Work-at-home arrangements/telecommuting Partial funding of child care costs Customized career paths Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Other Benefits and Services Managing Human Resources - Unit 11 Other Benefits and Services Awards Food Services Recreational and Social On-Site Health Services Credit Unions Legal Services Purchasing Assistance Financial Planning Transportation Pooling Housing and Moving Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd. 8