1. Benefits and Services Chapter 13

2. Basic Factors  Employee compensation –All forms of pay or rewards going to employees and arising from their employment.  Direct financial payments –Pay in the form of wages, salaries, incentives, commissions, and bonuses. –Pay for performance programmes  Indirect financial payments –Pay in the form of financial benefits such as insurance.

3. Benefits  Benefits –Indirect financial and nonfinancial payments employees receive for continuing their employment with the company.  Examples??????

4. The Benefits Picture Today  Most full-time employees in Bangladesh receive benefits.  Benefits are a major expense (about one- third of wages and salaries) for employers.

5. Private-Sector Employer Compensation Costs

6. 13–6 Types of Employee Benefits  Supplementary benefits  Insurance benefits  Retirement benefits  Services

7. Supplementary Benefits  Benefits for time not worked  The most costly benefit  Large amount of time off that most employees receive

8. Supplementary Benefits (cont.)  Vacations and holidays –Number of paid vacation days varies by employer. –Number of holidays varies by employer. –Premium pay for work on holidays. –10 days in Japan, 25 days in Sweden, 25 in France 33 in Denmark. –What about your research organization?

9. Supplementary Benefits (cont.)  Sick leave –Provides pay to an employee when he or she is out of work because of illness. Usually up to 12 days per year Some people misuse of sick leave Research reveals that illness accounted for only 45% on unscheduled sick absences, family issues (27%), personal needs (13%), and a mentality of entitlement (9%). Research also reveals that the average cost of absenteeism per employee per year was $789

10. Supplementary Benefits (cont.)  Leave Cost Reduction Tactics -Repurchase unused sick leave at the end of the year by paying their employees a sum for each sick leave day not used -Holding monthly lotteries in which employees with perfect attendance are eligible for a cash prize

11. Supplementary Benefits (cont.)  Parental leave Parental leave is granted for family purpose Women workers are eligible for parental leave during the period of pregnancy Furthermore, women and men who have single-parent households often tend to enjoy the parental benefit Up to 12 weeks of unpaid leave within a one-year period Employees must take unused paid leave first. Employees on leave retain their health benefits. Employees have the right to return to their job or equivalent position.

12. Supplementary Benefits (cont.)  Severance pay –A one-time payment when terminating an employee. –Reasons for granting severance pay: Acts as a humanitarian gesture and good public relations. Mirrors employee’s two week quit notice. Avoids litigation from disgruntled former employees.

13. Insurance Benefits  Workers’ compensation –Provides income and medical benefits to work- related accident victims or their dependents, regardless of fault. Death or disability: a cash benefit based on earnings per week of employment. Specific loss injuries: statutory list of losses

14. Insurance Benefits  Controlling worker compensation costs Screen out accident-prone workers. Train up people. Make the workplace safer. Thoroughly investigate accident claims.

15. Insurance Benefits (cont.)  Hospitalization, health, and disability insurance –Health insurance looms large in many people’s choice of employer, because it is so expensive. –75% of the employees in one recent survey called it their most important benefit –Provide for loss of income protection and group- rate coverage of basic and major medical expenses for off-the-job accidents and illnesses. Accidental death and dismemberment Disability insurance

16. Retirement Benefits (cont.)  Pension plans – They are financial programs that provide income to individual employees in their retirement  Types –Contributory: employees contribute to the plan. –Noncontributory plans: employer makes all contributions to the plan. –Qualified plans: plans that meet requirements for tax benefits for employer contributions. –Nonqualified plans: plans not meeting requirements for favorable tax treatment.

17. Personal Services  Credit unions –Separate businesses established with the employer’s assistance to help employees with their borrowing and saving needs. –Employees usually become a member by buying a share of the trade union’s stock for a small fee –Members can then deposit savings that accurate interest at a rate determined by the credit union’s directors –Loan eligibility and loan’s rate of interest are usually more favorable than banks and financial companies

18. Personal Services  Employee assistance programs (EAPs) –Provide counseling and advisory services: Personal legal and financial services Child and elder care referrals Adoption assistance Mental health counseling Life event planning

19. Family-Friendly (Work-Life) Benefits  Subsidized Child Care -Most working people make private provisions to take care of their children - Employers who want to reduce the distraction associated with finding reliable child care can help various ways - Company sponsored and subsidized day care facilities can attract employees, reduce absenteeism, reduce turnover rate and increase productivity of the employees.

20. Family-Friendly (Work-Life) Benefits  Sick Child benefits -What would you do when your children are sick and you need to get to work? -You are less likely to turn up. If you turn up, you performance level might not meet the requirements -Study shows that unexpected absences climbed to about 2.4% and children sickness is one of the major reasons -Today, more organizations are offering sick children benefits along with regular children benefits

21. Family-Friendly (Work-Life) Benefits  Elder Care -The responsibility for caring an aging relative can effect employees’ performance at work -Study shows to care for an older relative, 64% of the employees took sick leave or vacation time, 33% decreased work hours, 22% took leaves of absence, 22% changed their job status from full- to part-time, 16% quit their jobs and 13% retired jobs -So, it is strategic imperative that employers provide elder care services

22. Thank you!