Copyright © 1999 Harcourt Brace & Company Canada, Ltd. Chapter 13 Benefits Falkenberg, Stone, and Meltz Human Resource Management in Canada Fourth Edition

13.1 Chapter Overview n n Growth of employee benefits n n How benefits contribute to organizational effectiveness n n Relation to other HRM functions n n Benefits and the HRM professional n n Categories of benefits and types of protection n n Universal benefits

13.2 Chapter Overview (contd.) n n Statutory benefits n n Discretionary benefits for employee protection n n Holiday and vacation pay n n Employee service benefits n n Flexible benefits n n Controlling benefit costs n n Issues in the benefits area

13.3 How Benefits Contribute to Organizational Effectiveness n n Helping to attract and retain employees n n Controlling costs by making an organizations compensation dollars go further n n Enhancing an organizations image as a caring employer

13.4 Examples of Taxable and Non- Taxable Benefits n n benefits from health and disability plans when employers contribute to plan n n reimbursed parking expense n n free housing, low rent n n tuition fees paid by employer for employees n n tools n medical examinations n uniforms or special clothing n business class travel on business trips n benefits from health plans when employee assumes all the costs n employers contribution to pension plan TAXABLE NON-TAXABLE

13.5 Benefits: Relation to Other HRM Functions Labour Relations Direct Compensation BenefitsOrientation Recruiting Total compensation

13.6 Categories of Benefits and Types of Protection n n Universal benefits n n Mandatory benefits n n Discretionary benefits for employee protection n n Pay for time not worked n n Employee services

13.7 Universal Benefit Programs n n Old Age Security n n Guaranteed Income Supplement (GIS) to OAS n n Provincial supplements n n Provincial hospital and medical plans

13.8 Statutory Benefits n n Canada and Quebec Pension Plan n n Workers Compensation n n Employment Insurance n n Supplementary Coverage

13.9 Discretionary Benefits for Employee Protection n Private pension plans n Group insurance programs - group life insurance - group disability insurance - group health insurance n Profit-sharing plans

13.10 Examples of Flexible Benefit Choices BenefitPotential Options Medical/DentalBuy or sell down using credits LifeAdditional coverage for employee, spouse, or child PensionContributory or noncontributory plans VacationsBuying vacation days WellnessHealth promotion and fitness MortgageApplication of credits for lower interest rates Home/AutoA range of plans through payroll deduction

13.11 Cost Containment Strategies: Suggested Solutions n n Introduce a fee per service, e.g. a per prescription fee n n Reduce/Eliminate spousal/dependent coverage n n Introduce list of drugs (covered formulary) n n Use mail order pharmacy n n Introduce defined contribution program n n Establish preferred provider arrangements n n Communicate the importance of healthy lifestyles n n Introduce a flexible benefits plan n n Engage other stakeholders in discussion and develop new relationships