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Copyright © 2015 Pearson Education, Inc.
13 Benefits and Services This chapter discusses the benefits and services that companies might offer to employees. These benefits and services are offered to attract employees, retain employees, and to help make employees more productive during their service. Often benefits address employee needs, such as security in old age. Though direct compensation (salary) is important, a company’s indirect compensation (benefits) is often the “tipping point” in a decision to accept or reject an employer’s job offer. It is interesting to reflect about the relative merits of increased pay as opposed to increased quality of life. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Learning Objectives Name and define each of the main pay for time not worked benefits. Describe each of the main insurance benefits. Discuss the main retirement benefits. Outline the main employees’ services benefits. Explain the main flexible benefit programs. After studying this chapter, you will be able to: 1. Name and define each of the main pay for time not worked benefits. 2. Describe each of the main insurance benefits. 3. Discuss the main retirement benefits. 4. Outline the main employees’ services benefits. 5. Explain the main flexible benefit programs. Copyright © 2015 Pearson Education, Inc.
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Introduction: The Benefits Picture Today
Policy Issues What Who New employees Money Communication The list of policy issues includes what benefits to offer and who receives coverage. Decisions also must be made regarding whether to include retirees in the plan and whether to deny benefits to employees during initial “probationary” periods. Employers must plan for how to finance benefits, cost-containment procedures, and how to communicate benefits options to employees. Benefits can be classified by pay for time not worked; insurance benefits; retirement benefits; and services. Some benefits are required by law, while others are discretionary. Let’s spend some time going through the variety, uses, and issues surrounding the benefits picture today. See TABLE 13-1 Some Required and Discretionary Benefits. Copyright © 2015 Pearson Education, Inc.
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Name and define each of the main pay for time not worked benefits.
Pay for time not worked—also called supplemental pay benefits—is the most costly benefit, because of the large amount of time off that most employees receive. Let’s discuss the various pay for time not worked benefits. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Pay for Time Not Worked Unemployment insurance Vacations and holidays Legal aspects Sick leave Cost-reduction tactics Tracking sick leave All states have unemployment insurance or compensation acts (that follow federal guidelines), which provide for weekly benefits if a person is unable to work through no fault of their own. The benefits derive from an unemployment tax on employers that can range from 0.1% to 5% of taxable payroll in most states. An employer’s unemployment tax rate reflects its rate of personnel terminations. The number of paid employee vacation days and holidays varies considerably from employer to employer. Firms have to address several holiday- and vacation-related policy issues. Although federal law does not require vacation benefits, the employer must still formulate vacation policy with care. Sick leave provides pay to employees when they’re out of work due to illness. Most sick leave policies grant full pay for a specified number of permissible sick days. Some employers save expenses associated with employees using sick days to extend their vacations. They repurchase unused sick leave at the end of the year by paying their employees a daily equivalent sum for each sick leave day not used. Unfortunately, most employers do not know what sick leave costs the company. Before making changes, a company should monitor and track sick leave costs. See TABLE 13-2 An Unemployment Insurance Cost-Control Checklist. Copyright © 2015 Pearson Education, Inc.
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IMPROVING PERFORMANCE: Copyright © 2015 Pearson Education, Inc.
HR as a Profit Center Sick leave often gets out of control because it’s not measured After a new plan employees could swap work shifts, and had a guaranteed leave day By 2010, the sickness absence rate was down and productivity was up, for multi-year savings of about $48 million Controlling Sick Leave In one survey, only 57% of employers formally tracked sick days for their exempt employees. Three-fourths of the employers couldn’t provide an estimate of what sick pay was costing them. Therefore, the employer should first have a system in place for monitoring sick leaves and for measuring their financial impact. Effective HR practices can then help reduce absence problems. When she became director of the United Kingdom’s Driver and Vehicle Licensing Agency, the new director knew steps were needed to address its absence rate. The rate had peaked at 14 days out per employee in 2005, at a cost of about $20 million per year (£10.3 million). The new director organized a human resource absence initiative. The agency set a goal of reducing absences by 30% by Agency directors received absence-reduction goals, and their progress was tracked. The agency introduced new policies on special leave, rehabilitation support, and monitoring absentees. They made it easier for employees to swap work shifts, and introduced a guaranteed leave day policy. By 2010, the sickness absence rate was down to 7.5 days per employee and productivity was up, for multi-year savings of about $48 million dollars (£24.4 million). Discussion Question 13-1: A note on this agency in Wikipedia refers to “amazingly high” levels of sick leave among staff at the DVLA [around 2007], with employees having an average of three weeks a year sick leave.” What sorts of inaction on the part of previous managers could help explain such poor attendance? Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Pay for Time Not Worked Parental leave and the Family and Medical Leave Act (FMLA) FMLA guidelines Severance pay Guidelines Supplemental unemployment benefits See FIGURE 13-2 Your Rights under the Family and Medical Leave Act of 1993. Parental leave and the Family Medical Leave Act provide equitable arrangements for employees who have legitimate needs to attend to family medical issues. Employers who have 50 or more employees must provide up to 12 weeks of unpaid leave for personal and family medical issues. To help protect employers, employees may be required to take any unused paid sick leave as part of the 12-week leave period. Employees taking leave are entitled to receive health benefits while they are on unpaid leave. In fact, for most health plans, taking individuals out of the group coverage then reestablishing them in the plan is either not allowed or extremely difficult and costly. Finally, employers must guarantee employees the right to return to their previous or equivalent position with no loss of benefits. As a one-time payment when terminating an employee, severance is considered a humanitarian gesture and good public relations. Most managers expect employees to give them at least one or two weeks’ notice if they plan to quit; it therefore seems appropriate to provide at least one or two weeks’ severance if an employee is being dismissed. Supplemental Unemployment Benefits supplement the employee’s unemployment compensation and help the person maintain his or her standard of living for a time. They are becoming more prevalent in union agreements. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Review Unemployment insurance Supplemental unemployment benefits Vacations and holidays Tracking FMLA Severance Unfortunately, layoffs, downsizing, terminations, early retirement, and the like are a fact of life for many businesses. As a result, unemployment insurance, provided by the federal government and administered by each state helps ease the burden on the unemployed while they seek work. Supplemental unemployment insurance is also offered by some employers and is common in union contracts. Vacations and holidays provide opportunities for employees to balance their work and home lives but come at a cost to the employer. And, while some employers do not formally track sick leave and other time away from work, it is generally considered a good idea to do so. This enables the employer to manage their HR policies with respect to time off more effectively and efficiently. The Family Medical Leave Act (FMLA) is a welcome relief to those employees who are dealing with substantial medical issues for themselves or close family members. Through, FMLA, employees who must can take up to 12 weeks of unpaid medically related leave and still have their jobs and benefits protected. While there are no laws requiring severance be given to terminated or laid off employees, it is generally considered to be a good policy to provide such benefits. This can contribute to making the former employee whole while being good for public relations. Copyright © 2015 Pearson Education, Inc.
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Describe each of the main insurance benefits.
Most employers also provide a number of required or voluntary insurance benefits, such as workers’ compensation and health insurance. We’ll discuss these next. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Insurance Benefits (1) Workers’ compensation Determining benefits Controlling costs Hospitalization, health, and disability insurance Coverage HMOs PPOs Workers’ compensation refers to the income and medical benefits provided in work-related accidents to the victims or their dependents, regardless of fault. Workers’ compensation can be monetary or medical or a combination. Monetary awards are based on a formula regarding the disability involved and the worker’s average weekly wages. The costs of insurance premiums depend on the number and dollar amount of claims, thus minimizing such claims is important. Some ways to reduce such claims is to screen out accident-prone workers, reduce accident-causing conditions, and institute effective safety and health programs. Many firms institute rehabilitation programs to get injured employees back on the job as fast as possible. Hospitalization, health, and disability insurance benefits are aimed at providing protection against hospitalization costs and loss of income arising from accidents or illness occurring from off-the-job causes. They are offered by most employers because medical care and insurance are so expensive. Accidental death and dismemberment coverage provides a lump-sum benefit while disability insurance provides income protection for loss of salary due to illness or accident. A health maintenance organization (HMO) is a medical organization consisting of several specialists operating out of a community-based health care center. Preferred provider organizations (PPOs), a cross between HMOs and the traditional doctor/patient arrangement, are groups of health care providers that contract to provide medical care services at a reduced fee. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Insurance Benefits (2) Mental health benefits The legal side of health benefits Patient Protection and Affordable Care Act of 2010 COBRA Other laws The costs of mental health treatment are rising because of widespread drug and alcohol problems. More states are requiring employers to offer a minimum package of mental health benefits. The Mental Health Parity Act of 1996 sets minimum mental health care benefits at the national level. Various laws affect employee benefits. Signed into law by President Obama in 2010, employers will face a number of deadlines under the new Patient Protection and Affordable Care Act, unless Congress changes the law. For example, in 2018 a 40% excise tax on high-cost health insurance plans goes into effect. COBRA (Comprehensive Omnibus Budget Reconciliation Act) requires most private employers to make continued health benefits available to terminated or retired employees and their families. The coverage is for the group program offered by the former employer but at a higher cost. That is, the terminated or retired employee may pay up to 102% of the total cost for benefits. The total cost is what the former employee and employer both paid plus up to 2% additional for administrative fees. The coverage is good for a period of time, generally 18 months. Another law, the Employee Retirement Income Security Act (ERISA) sets minimum standards for health and pension plans. Employers who provide health care services must follow the privacy rules of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Copyright © 2015 Pearson Education, Inc.
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Trends in Employer Health Care Cost Control
Communication and empowerment Wellness programs Claim audits Limited plans Outsourcing Other cost-control options Employers are endeavoring to rein in health care costs. Many retain cost-containment specialists to help reduce such costs. And most negotiate more aggressively with their health care insurance providers. Many employers are changing their medical plans and using cost-containment specialists to reduce health care costs. Consumer education is among the most important initiatives in health administration in that it can help control costs. Most importantly, empower employees by making sure they know the costs of their medical benefits. As one expert said, “the biggest criticism of managed care is that the health care consumer has little financial stake in treatment decisions.” If employees know the costs of health care choices, they are likely to make better, more cost-effective decisions. Another approach used to ease the burden of rising health care costs involves employees paying higher premiums and co-payments. Wellness (prevention) programs are also strongly encouraged and include mammograms, immunizations, and routine checkups. Setting standards for errors and then aggressively auditing all claims may be the most direct way to reduce employer health care expenses. Some employers are offering limited-benefit health care insurance plans. Instead of a lifetime limit of $1 million, they offer annual caps up to $10,000. This, of course, permits lower premiums. Benefits management ranks high on the list of HR activities that employers outsource. Since an outside firm could administer the healthcare programs for many employers, they can be more efficient, thus reducing costs. Another cost-control option involves using defined contribution health care plans. Here each employee gets a specific dollar amount allotment to use for co-payments or discretionary medical costs. This replaces the specified health care benefits package with open-ended costs. Copyright © 2015 Pearson Education, Inc.
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IMPROVING PERFORMANCE: Copyright © 2015 Pearson Education, Inc.
HR as a Profit Center Rent A Center was looking for a way to get its 12,000 employees medical advice and reduce health plan costs. The company signed an agreement with Teladoc, Inc. Doctors provide medical consultations over the phone. The Doctor Is on the Phone The program seems to be win-win. The Teladoc consultation is free to employees, compared to a $20 office co-payment, and the doctors are available 24 hours per day, usually within 30 minutes. If necessary, they call in antibiotics prescriptions. And for Rent A Center, there’s that extra $770,000 in their bottom line. Discussion Question 13-2: Would you recommend this program to your employer? Why? Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Insurance Benefits (3) Long-term care Life insurance Benefits for part- time and contingent workers Long-term care is a new benefit aimed at supporting people in their old age. The Health Insurance Portability and Accountability Act (HIPAA) was enacted in It lets employers and employees deduct the cost of long-term care insurance premiums from their annual income taxes. Most employers provide group life insurance plans, which usually accept all employees, regardless of health or physical condition. Finally, some firms provide holiday, sick leave, vacation, and health care benefits for employees who work fewer than 35 hours a week. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
IMPROVING PERFORMANCE: HR Practices Around the Globe With employees in several countries licensing issues prevent the employer from using one company Using locally licensed insurance carriers in each country for medical and other insurance increases costs Global employers can use an insurance pool Multinational Insurance Benefits Risk Pooling The solution, for many global employers, is an insurance pool. Basically, the employer places its insurance business with a vendor that has affiliates (an “insurance network”) in the countries where the employer has employees. By doing so, the vendor may be able to “pool” the employer’s and employees’ risks together, producing a dividend that can reduce the global employer’s health and other employee insurance costs. Discussion Question 13-3: Google search multinational insurance licensing laws, check a few sites, and make a list of four specific ways insurance licensing laws differ among countries. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Review Workers’ compensation Insurance programs Legal issues Trends Long-term care Part-time and contingent workers We have discussed worker’s compensation issues from the employees and employers points of view. Providing protection for employees from work-related accidents is not only good sense but also good business practice. Hospitalization, health, and disability insurance benefits are aimed at providing protection against hospitalization costs and loss of income arising from accidents or illness occurring from off-the-job causes. And life insurance is offered by most employers providing a bit of a security blanket for employees. Trends include outsourcing routine practices such as insurance claims and hiring specialists who can help control costs. Wellness programs and more limited healthcare insurance programs are also ways to help control costs. Insurance is often available through employers for long-term care. Some employers are providing selected benefits for part-time employees as well. Some of the laws we discussed included the Patient Protection and Affordable Care Act, COBRA, the Employee Retirement Income Security Act, and the Health Insurance Portability and Accountability Act. All have an impact on costs, cost containment, and protection for employees and employers. Copyright © 2015 Pearson Education, Inc.
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Discuss the main retirement benefits.
The first contingent of baby-boomers turned 65 in 2011, and many didn’t wait until then to retire. This presents two challenges for employers. First, employers are taking steps to entice older workers to keep working in some capacity. Second, retirement funding is a big issue. We’ll focus next on retirement benefits. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Retirement Benefits Social security Pension plans 401(k) plans Other defined contribution plans Cash balance plans Pension planning and the law PBGC Membership requirements Vesting Social Security provides three types of benefits: retirement benefits, survivor’s (death) benefits, and disability payments. Retirement benefits provide an income if you retire at age 62 or thereafter. Survivor’s (death) benefits provide monthly payments to your dependents regardless of your age at death. Disability payments provide monthly payments to employees who become totally disabled. The Social Security system also administers the Medicare program. There are a variety of pension plans. Defined contribution plans specify what contributions the employer will make to the employee’s retirement or savings fund. 401(k) Plans are popular defined contribution plans in which the employee can have pre-tax payments deducted from his or her paycheck and deposited in the account. Other defined contribution plans include a savings thrift plan, a deferred profit sharing plan, and an employee stock ownership plan (ESOP) which is a tax-deductible stock bonus plan. Cash balance pension plans are defined benefit plans for federal tax purposes, but have the portability advantages of defined contribution plans. The Pension Benefit Guarantee Corporation (PBGC) oversees and insures pensions should a plan terminate without sufficient funds. ERISA restricts what companies can, cannot, and must do in regards to pension plans. In developing pension plans, employers must consider: membership requirements, benefit formulas, plan funding, and vesting. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Retirement Benefits Pensions and early retirement BENELOGIC Benefits web sites The company opens up (for a limited time only) the opportunity for employees to retire earlier than usual, with a financial incentive to do so. This allows the employer to realize cost reductions, the ability to hire new employees (perhaps with newer skills at lower salary levels) or both. BENELOGIC is called the “Employee Benefit Electronic Service Tool.” It lets users manage all aspects of benefits administration, including enrollment, plan descriptions, eligibility, and premium reconciliation, via their browsers. Employers everywhere are adding new services to their own benefits Web sites. For example, in addition to offering things like self-enrollment, one insurance company helps employees achieve better work life–balance. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Review Social security Pension plans Pension planning and the law Early retirement Social security is a government program designed to help support those who have worked to retirement age or become disabled or both. It supports individuals who have contributed to the program throughout most or all of their working careers. Pension plans are generally of two types: defined benefit or defined contribution. Defined benefit programs are fading in popularity in part because of long-term costs. Defined contribution plans allow employees and employers the opportunity to contribute to the plan. It is also portable and can move with the employee throughout his or her career. The Pension Benefit Guarantee Corporation (PBGC) oversees and insures pensions while ERISA restricts what companies can, cannot, and must do. Early retirement opportunities give older workers the chance to move into retirement sooner then anticipated while the company may realize some cost savings. Copyright © 2015 Pearson Education, Inc.
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Outline the main employees’ services benefits.
Although time off, insurance, and retirement benefits account for the lion’s share of benefits costs, most employers also provide various services benefits. Let’s discuss these now. Copyright © 2015 Pearson Education, Inc.
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Personal Services and Family-Friendly Benefits
Employee Assistance Programs (EAP) Family-friendly (work–life) benefits Subsidized child care Sick child benefits Elder care The bottom line Personal services include credit unions, legal services, counseling, and social and recreational opportunities. Employee Assistance Programs (EAPs) provide employees with counseling and/or treatment for problems such as alcoholism, gambling, or stress. Such treatment is totally confidential from the company. The company receives only general statistics, such as the number of employees who used the service annually, from the outside EAP firm. There are more families in which both adults work, more one-parent households, more women working, and more people over 55 working. Subsidized child care is an increasingly desirable benefit, which tends to improve recruiting results, lower absenteeism, improve morale, garner favorable publicity, and lower turnover. Unexpected absences due to last-minute child care emergencies can be problematic for employers, who then need to hire temporary help or cope with reduced productivity. Providing sick child benefits can alleviate this problem. Elder care programs are being offered to help employees who must care for the elderly who may need such assistance. Evaluating the effectiveness and profitability of these programs is difficult. However, employers are carefully reviewing these services to see how they are contributing to the organization. Copyright © 2015 Pearson Education, Inc.
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Other Personal Services Benefits
Educational subsidies Domestic partner benefits Executive perquisites Employers often provide subsidized employee transportation, food services, and educational subsidies. The offer of time off as a performance reward, or increased vacation and holiday benefits can help employees with quality of life issues. Also, many companies are extending benefits coverage to same-sex domestic partners. Executive perquisites (perks) include almost anything imaginable from a business perspective. It is thought such perks help maintain loyalty and commitment of top tier executives and managers and they have come to be expected. A partial list includes: management loans, salary guarantees, protection if their firm becomes an acquisition target, financial counseling, relocation benefits, time off with pay, outplacement assistance, company cars, chauffeured limousines, security systems, and many others. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Review Personal services EAPs Family-friendly benefits Educational subsidies Domestic partner benefits Executive perquisites We have discussed some of the personal services and family-friendly benefits being offered by companies. Part of this has to do with maintaining a competitive posture with respect to attracting and retaining top talent. Employee Assistance Programs help employees deal with psychological, emotional or drug or alcohol related addictions in a totally confidential manner. Family-friendly benefits help employees with sick children or elder care. Other benefits include those provided for education, domestic partners and executive perquisites. Copyright © 2015 Pearson Education, Inc.
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Explain the main flexible benefit programs.
It will come as no great surprise that employees prefer choice in their benefits plans. Thirty-five percent of college students and recent graduates chose flexible hours as their most important benefit. Most of the respondents preferred benefits that had to do with lifestyle issues rather than financial ones. Let’s discuss this further. Copyright © 2015 Pearson Education, Inc.
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Flexible Benefits Programs Copyright © 2015 Pearson Education, Inc.
The cafeteria approach Types of plans Benefits and employee leasing A cafeteria benefits plan is generally synonymous with a flexible benefits plan. Each employee is given a benefits fund budget to spend on whichever benefits he/she wants. For example, some may prefer more healthcare benefits while others may prefer more time off. Employers limit the total cost for each benefits package. Many businesses do not have the resources or employee base to support the cost of employee benefits. In such cases, employee leasing firms can come to the rescue and assume all or most of the employer’s human resource needs. The individual is employed by the leasing firm but costs are assumed by the organization that is using the leasing firm. Responsibilities such as performance and liabilities, however, belong to the leasing firm. Copyright © 2015 Pearson Education, Inc.
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Flexible Benefits Programs Copyright © 2015 Pearson Education, Inc.
Flexible work schedules Flextime Compressed workweeks Effectiveness Workplace flexibility Other flexible work arrangements Flexible benefits programs remain popular and continue to grow. Let’s discuss some of the key elements of such programs. Flextime is an arrangement allowing employees to have flexibility in scheduling their workday around core hours. Compressed workweeks may consist of four 10-hour days, three 12-hour days, or other such combinations. However, the effectiveness of flexible work schedule arrangements may be questionable. Reviews indicate that they increase employee satisfaction and productivity. However, some critics are concerned that fatigue and accidents may increase. Ongoing measurement and tracking is the key here. Workplace flexibility means providing employees with technology so work can be accomplished wherever they are located. Other flexible work arrangements include job-sharing, work-sharing, and telecommuting. Job-sharing occurs when two people share one full-time job. Such a program can be useful for retirement-aged employees, allowing the company to retain the experienced employee while allowing him or her to have reduced work hours. Work-sharing results when a group of employees reduce their hours to prevent layoffs. Finally, telecommuters work at home and use phones, computer software, and the Internet to conduct business. Copyright © 2015 Pearson Education, Inc.
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IMPROVING PERFORMANCE: HR Tools for Line Managers and Entrepreneurs
Employee leasing firms assume the HR chores Employees are transferred to the leasing firm’s payroll The leasing firm becomes the legal employer and handles recruiting, hiring (with client firms’ supervisors’ approvals) and taxes Insurance and benefits are usually the big attraction. Even group rates for life or health insurance can be quite high when only 20 or 30 employees are involved. That’s where leasing comes in. Remember that the leasing firm is now the legal employer. The employees are thus part of a larger insurable group, along with other employers’ former employees. The small business owner may get insurance it couldn’t otherwise afford. As in dealing with all vendors, the employer should have a detailed negotiated agreement with the employee leasing firm. Define what the services will be; include priorities, responsibilities, and warranties. Understand that if the leasing firm merges into another firm, the new parent may require you to change your systems once the contract period expires. Discussion Question 13-4: Explain how you believe you’d react to having your employer switch you to a leasing firm, and why. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
IMPROVING PERFORMANCE: HR Practices Around the Globe Three-fourths of the workers work from home part of the week No dedicated desks Productivity has increased 20% Employee turnover dropped from 7% in 2009 to “virtually non-existent” in 2010 NES is leasing 40% less office space, saving $100,000 in real estate expenses. The CEO estimates NES’s total savings from instituting this new telecommuting benefit at about $350,000 annually. Discussion Question 13-5: Why do you think some firms, such as NES, like telecommuting, while others, such as Yahoo!, shun it? Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Review Flexible benefits programs The cafeteria approach Benefits and employee leasing Flexible work schedules So far, we have discussed flexible benefits programs that allow employees to have greater work-life balance. One example includes the cafeteria style approach to selecting greater or lesser amounts of specific benefits. Employee leasing allows a given employer to hire some or all of its employees from a leasing firm. The employer benefits by having the work done without potential complications from having to perform all the HR functions needed. The leasing firm maintains control of its leased employees and has responsibility for all traditional HR functions such as payroll, benefits, taxes and the like. Flexible work schedules allow more than one person to share a job or a group of employees to remain employed with reduced wages or hours if they otherwise might have lost their jobs. Telecommuting allows employees to work from home or another location with all or most business transactions, meetings and the like being conducted via phone, the Internet, or teleconferencing. Copyright © 2015 Pearson Education, Inc.
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Translating Strategy into HR Policies and Practices
Because employers typically make benefits available to all employees, they may not have the motivational effects of incentive plans. Given this, list five employee behaviors you believe Hotel Paris could try to improve through an enhanced benefits plan, and explain why you chose them. . Improving Performance at The Hotel Paris - The New Benefits Plan After just less than a year, Lisa and the CFO believe the new program is successful. Their studies suggest that the improved benefits are directly contributing to improved employee morale and commitment, sick days have diminished by 40%, and employee turnover is down 60%. And when they advertise for open positions, over 60% of the applicants cite “family-friendly benefits” as a top reason for applying to work at the Hotel Paris. The new plan’s centerpiece was a proposal for much better family friendly benefits. Because so many of each hotel’s employees were single parents, and because each hotel had to run 24 hours a day, Lisa’s team proposed, and the Board approved, setting aside a room in each hotel for an on-site child-care facility and for hiring a trained professional attendant. They considered instituting a flexible work schedule program, but for most of the jobs, this was impractical, because each front-line employee simply had to be there at his or her appointed hour. However, they did institute a new job-sharing program. Now two people could share one housekeeping or front-desk clerk job, as long as the job was covered. Discussion Question: What is your opinion of the new Hotel Paris benefits plan? Given your answer to question 13-20, explain specifically what other benefits you would recommend the Hotel Paris implement to achieve these behavioral improvements. Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
Hotel Paris Strategy Chapter 13 Hotel Paris Strategy Chapter 13 Copyright © 2015 Pearson Education, Inc.
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Copyright © 2015 Pearson Education, Inc.
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