1. 13-1

2. P A R T P A R T Compensating Human Resources Establishing a Pay Structure Recognizing Employee Contributions with Pay Providing Employee Benefits 4

3. 13-3 The Role of Employee Benefits Benefits Required by Law Optional Benefits Programs Selecting Employee Benefits Legal Requirements for Employee Benefits Communicating Benefits to Employees Providing Employee Benefits PA E TR HC 13

4. 13-4 Ch. 13 Learning Objectives 1. Discuss the importance of benefits as a part of employee compensation. 2. Summarize the types of employee benefits required by law. 3. Describe the most common forms of paid leave. 4. Identify the kinds of insurance benefits offered by employers. 5. Define the types of retirement plans offered by employers.

5. 13-5 Ch. 13 Learning Objectives 6. Describe how organizations use other benefits to match employees’ wants and needs. 7. Explain how to choose the contents of an employee benefits package. 8. Summarize the regulations affecting how employers design and administer benefits programs. 9. Discuss the importance of effectively communicating the nature and value of benefits to employee.

6. 13-6 The Role of Employee Benefits  How are benefits different from compensation?  Why do companies offer benefits?

7. 13-7 Benefits as a Percentage of Total Compensation Figure 13.1

8. 13-8  Social Security Act of 1935  Established a system providing old age, survivor’s, disability, and retirement benefits.  Federal payroll tax on both the employer and the employee.  Benefit payments are based on employee’s lifetime earnings. Benefits Required by Law

9. 13-9 Benefits Required by Law  Unemployment Compensation  A Federal/state payroll tax that funds state unemployment systems.  Involuntary unemployment and actively seeking work is required for persons to claim benefit.  Employers pay based on their experience rating  Worker’s Compensation  Benefits provided to persons injured on the job.  No-fault liability – protects employers from lawsuits  Employees are covered unless injury is self-inflicted or caused by a “willful disregard of safety rules”.

10. 13-10 Family Medical Leave Act (FMLA)  Coverage  Employers with 50 or more employees within a 75-mile radius  Requirements  Employers must allow eligible employees to take up to a total of 12 weeks of unpaid leave to attend to a family or serious medical condition in any within a 12-month period.  Employees have the right to continued health benefits and the right to return to their job. Benefits Required by Law

11. 13-11 Optional Benefits Figure 13.2

12. 13-12  XYZ company has determined that they will have to reduce their benefits costs to stay competitive. Which of the following solutions is not a choice for XYZ? a. Eliminate health coverage b. Reduce the percentage of employees’ Social Security insurance they pay. c. Reduce their unemployment insurance costs by managing their workforce to avoid layoffs. d. Institute a safety program to minimize worker’s compensation costs. Test Your Knowledge

13. 13-13 Retirement Plans  Retirement Plans offered by employers are optional  Contributory plan vs. non- contributory  Defined benefit plan vs. defined contribution  What are the pros and cons of these plans from the employee’s and employer’s perspective?

14. 13-14 Retirement Plans  With the growth of defined- contribution plans, employees need to understand how to wisely invest their money to plan for retirement.

15. 13-15  Jakar does not know a lot about investing and wants to ensure he has some retirement income when he is old enough to retire. Agnes plans on changing employers every few years and is interested in investing her own money. Which plan would be best for Jakar and Agnes, respectively? a. Defined contribution; defined benefit b. Contributory; defined benefit c. Defined benefit; defined contribution d. Defined contribution; non-contributory Test Your Knowledge

16. 13-16 Family Friendly Benefits  Family Friendly Benefits serve two purposes  Assist employees manage work and family roles  Increases loyalty to companies who show they care  Family leave – paid time off for newborn or adopted children

17. 13-17  Child Care Family Friendly Benefits

18. 13-18  Decisions about which benefits to include should take into account:  The organization’s goals  The organization’s budget  The needs and expectations of the current and future employees Selecting Employee Benefits

19. 13-19 Selecting Employee Benefits  Cafeteria-style plan  Offers employees a set of alternatives from which they can choose the types and amounts of benefits they want  What are the advantages and disadvantages of these plans?

20. 13-20 Communicating Benefits to Employees

21. 13-21 Video – Working While Sick 1. Should employees have to go to work when they are sick? How can employers get away with such actions? 2. What types of benefits can an organization offer that may be of value to the employees, creates loyalty, and yet they are not wasted or cost unnecessarily? Explain.

22. 13-22 Video - SAS 1. SAS is dedicated to providing its employees what brings them the most employment satisfaction. Discuss the impact the employee benefits package offered by the company has on the entire organization. 2. After viewing the video, does employment with an organization like SAS appeal to you? Explain why or why not. Would you find a working environment like SAS to be challenging? Rewarding? Explain.

23. 13-23 Video - SAS 3. Discuss the effects that concentrated and well structured benefits management produces on organizational costs and the quality of the workforce. 4. How important are receiving benefits at work to you? Would you be willing to sacrifice certain benefits, such as health insurance, for increased pay? Explain your reasoning.