1. DeCenzo and Robbins HRM 7th Edition
CHAPTER 12
Employee Benefits
DeCenzo and Robbins HRM 7th Edition

2. DeCenzo and Robbins HRM 7th Edition
CHAPTER 12 TOPICS:
1: Goals of employee benefits
2: Legally required benefits
3: Health insurance options
4: ERISA
5: Retirement programs
6: Vacation benefits
7: Disability insurance
8: Family-friendly benefits
9: Flexible benefits
DeCenzo and Robbins HRM 7th Edition

3. 1: WHY EMPLOYEE BENEFITS??
Necessary part of compensation program
Attract and retain workers
Don’t affect performance
Workforce demographics
DeCenzo and Robbins HRM 7th Edition

4. 1: COSTS OF PROVIDING EMPLOYEE BENEFITS
40% more for payroll
Most increases due to health insurance premiums
Flexible
Negotiable when hired
DeCenzo and Robbins HRM 7th Edition

5. 1: WHAT DID YOU FIND IN YOUR SURVEY?
What benefits were chosen?
Is there a difference by age group?
Can you explain the differences?
Are these current benefits issues in your text?
DeCenzo and Robbins HRM 7th Edition

6. 1: CURRENT BENEFITS ISSUES
Domestic partner benefits
Dual career families
Something of value for everyone
Legally required
Differentiate workplace for desired employees
DeCenzo and Robbins HRM 7th Edition

7. 2: LEGALLY REQUIRED BENEFITS
Social Security
Unemployment Compensation
Worker’s Compensation
Family and Medical Leave Act
DeCenzo and Robbins HRM 7th Edition

8. DeCenzo and Robbins HRM 7th Edition
2: SOCIAL SECURITY
Retirement, disability, survivor
Paid by government
Health insurance through Medicare
Payroll deduction (12.4%)
AND….
DeCenzo and Robbins HRM 7th Edition

9. DeCenzo and Robbins HRM 7th Edition
2: SOCIAL SECURITY
Eligibility after 40 quarters
Age 65 >
Bankrupt by 2037???
DeCenzo and Robbins HRM 7th Edition

10. 2: UNEMPLOYMENT COMPENSATION
Without a job
Registered for available work
Worked a minimum number of weeks
Purpose - no fault (layoff, plant closing)
AND….
DeCenzo and Robbins HRM 7th Edition

11. 2: UNEMPLOYMENT COMPENSATION
Funds from state and federal tax
$56 per employee with guidelines
26 weeks
DeCenzo and Robbins HRM 7th Edition

12. 2: WORKER’S COMPENSATION
Job-related endeavors
Comprehensive disability coverage
Liability with company
Cost born by organization
Medical costs
DeCenzo and Robbins HRM 7th Edition

13. DeCenzo and Robbins HRM 7th Edition
3: HEALTH INSURANCE
Traditional Health Insurance
Health Maintenance Organization
Preferred Provider Organizations
Employee-Operated Coverage
COBRA
DeCenzo and Robbins HRM 7th Edition

14. 3: TRADITIONAL HEALTH INSURANCE
Expensive
Most flexible
Comprehensive
Blue Cross - hospital
Blue Shield - provider
DeCenzo and Robbins HRM 7th Edition

15. 3: HEALTH MAINTENANCE ORGANIZATION
Preventive care
Controlled costs
Care limited to designated service center
Choices limited
DeCenzo and Robbins HRM 7th Edition

16. 3: PREFERRED PROVIDER ORGANIZATION
Gatekeeper for utilization review
Referral required
Cost controlled
Choices constrained
DeCenzo and Robbins HRM 7th Edition

17. 3: EMPLOYER OPERATED COVERAGE
Third party administrator (TPA)
Voluntary employees’ beneficiary association (VEBA)
Employer established trust fund
Reduces health insurance costs
DeCenzo and Robbins HRM 7th Edition

18. DeCenzo and Robbins HRM 7th Edition
3: COBRA
Consolidated Omnibus Budget Reconciliation Act
Provides insurance after employment ends for 18 months
DeCenzo and Robbins HRM 7th Edition

19. DeCenzo and Robbins HRM 7th Edition
4: ERISA
Employment Retirement Income Security Act
Protect employee benefits programs
Vesting rights
Pension Benefits Guaranty Corporation
Summary Plan Description
DeCenzo and Robbins HRM 7th Edition

20. DeCenzo and Robbins HRM 7th Edition
5: RETIREMENT PROGRAMS
Defined Benefits Plan
Defined Contribution Plans
Money Purchase Pension Plan
Profit-Sharing Plan
Individual Retirement Account
Roth IRA
AND….
DeCenzo and Robbins HRM 7th Edition

21. DeCenzo and Robbins HRM 7th Edition
5: RETIREMENT PROGRAMS
More Defined Contribution Plans
401(k)
403(b)
Keough
(PAYSOP
ESOP
TRASOP
See Exhibit 12-4
DeCenzo and Robbins HRM 7th Edition

22. 6: PAID TIME OFF - VACATION
Length of service
Job classification
U.S. average 15 to 20 days
Many industrialized countries 30 days
Sell back to company
Time to recharge and renew
DeCenzo and Robbins HRM 7th Edition

23. 6: PAID TIME OFF - HOLIDAY
US days
About average
Mexico - 19 days
Sick leave - often included with vacation and holiday “bank”
DeCenzo and Robbins HRM 7th Edition

24. 7: PAID TIME OFF - DISABILITY INSURANCE
Short term
Replacement income for time not worked
Sick leave
45% used for illness
Use it or lost it
Well pay
AND….
DeCenzo and Robbins HRM 7th Edition

25. 7 PAID TIME OFF - DISABILITY INSURANCE
Long term
After short term coverage has expired
6 months
Temporary < 24 months
Permanent - unable to work in any occupation
60% income
DeCenzo and Robbins HRM 7th Edition

26. DeCenzo and Robbins HRM 7th Edition
7: SURVIVOR BENEFITS
Group Term Life Insurance
Travel Insurance
DeCenzo and Robbins HRM 7th Edition

27. 8: FAMILY-FRIENDLY BENEFITS
CAFETERIA-STYLE CHOICES, SUCH AS
Flextime
Childcare
Eldercare
Flexible spending accounts
AND…
DeCenzo and Robbins HRM 7th Edition

28. 8: FAMILY-FRIENDLY BENEFITS
Part-time employment
Telecommuting
Adoption benefits
Parental leave
DeCenzo and Robbins HRM 7th Edition

29. 9: FLEXIBLE SPENDING ACCOUNTS
Pre-tax set aside
Specific items, such as
Dental
Childcare
Insurance
$5000
Use it or lose it
DeCenzo and Robbins HRM 7th Edition

30. DeCenzo and Robbins HRM 7th Edition
9: MODULAR PLANS
Fixed option combinations
Choose best for you
DeCenzo and Robbins HRM 7th Edition

31. DeCenzo and Robbins HRM 7th Edition
9: CORE PLUS OPTIONS
Required base (core)
Vacation
40-1(k)
Disability
Choice of additional
Health
Additional vacation
Tuition
Flexible spending accounts
DeCenzo and Robbins HRM 7th Edition

32. DeCenzo and Robbins HRM 7th Edition
REVIEW CHAPTER 12
Name a legally required benefit.
What benefits are you going to ask about before you take a job?
AND….
DeCenzo and Robbins HRM 7th Edition

33. DeCenzo and Robbins HRM 7th Edition
REVIEW CHAPTER 12
Remember these terms?
Vesting
ERISA
COBRA
HMO
PPO
ESOP
DeCenzo and Robbins HRM 7th Edition

34. DeCenzo and Robbins HRM 7th Edition
QUICK: REVIEW CHAPTER 12
ANSWER THESE QUESTIONS ON A SHEET OF PAPER.
1. THE MOST IMPORTANT THING WE DID IN CLASS TODAY _______.
2. I STILL HAVE QUESTIONS ABOUT___.
3. THE BEST THING ABOUT CLASS TODAY WAS _______________.
4. DON’T DO ____________ ANYMORE.
TURN THEM IN, PLEASE. NO NAMES. WE’LL TALK NEXT CLASS SESSION
DeCenzo and Robbins HRM 7th Edition

35. DeCenzo and Robbins HRM 7th Edition
PREVIEW: CHAPTER 13
Find out when your employer had the most recent workplace injury. What was it?
From the news, bring a report about a workplace injury to the next class session.
Write up their responses for 1 extra point on your final grade.
DeCenzo and Robbins HRM 7th Edition

36. DeCenzo and Robbins HRM 7th Edition
Exhibit 12-1: Major Employee Benefits Offered (percent of
employers participating)
DeCenzo and Robbins HRM 7th Edition

37. DeCenzo and Robbins HRM 7th Edition
Exhibit 12-2: Sample Health Maintenance Organization Coverage
DeCenzo and Robbins HRM 7th Edition

38. DeCenzo and Robbins HRM 7th Edition
Exhibit 12-3: Sample Preferred Provider Organization
(Point of Service) Coverage
DeCenzo and Robbins HRM 7th Edition

39. DeCenzo and Robbins HRM 7th Edition
Exhibit 12-4: Other Retirement Plans
DeCenzo and Robbins HRM 7th Edition

40. DeCenzo and Robbins HRM 7th Edition
Exhibit 12-5: Flexible Benefit Programs
DeCenzo and Robbins HRM 7th Edition