Schwind07IM10 - Chapter 10 Employee Benefits and Services 1...

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Chapter 10 Employee Benefits and Services EMPLOYEE BENEFITS AND SERVICES CHAPTER OBJECTIVES After studying this chapter, you should be able to: Describe the objectives of indirect compensation. Explain how government furthers employee security and which major Canadian laws relate to it. Identify policies that minimize benefit costs. Explain the key issues in designing pension plans. Identify the administrative problems of employee benefits and services and suggest improvements. Cite benefits and services that are likely to become more common in the future. POWERPOINT ® SLIDES Canadian Human Resource Management includes a complete set of Microsoft PowerPoint ® files for each chapter. (Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number and hit the Enter or Return key.) 10-1 1
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Motivating and Rewarding Human Resources LECTURE OUTLINE (with PowerPoint ® slides) Employee Benefits and Services Slide 1 Total Compensation Slide 2 Indirect Compensation Objectives Slide 3 EMPLOYEE BENEFITS Direct compensation is the employee’s pay -- Based on critical job factors or performance Indirect compensation consists of benefits and services -- Usually extended as a condition of employment -- Not directly related to performance -- Includes insurance, income security, time off, educational, financial, and social services -- Represents a very significant part of a company’s compensation system—approaching 50% of annual payroll expenses, as compared to about 15% in the early 1950’s -- Significant impact on attracting and retaining employees THE ROLE OF INDIRECT COMPENSATION Societal Objectives -- To solve social problems and provide security for interdependent wage earners governments rely on the support of employees -- Employers can deduct the cost of benefits as a business expense -- Employees can receive most benefits tax-free -- Benefits and services give many employees financial security against illness, disability, and retirement Organizational Objectives -- Must offer some benefits to be able to recruit and retain -- Vacations, holidays, and rest breaks help reduce fatigue and many enhance productivity during hours worked -- Discourage labour unrest -- Satisfy employee objectives -- Aid recruitment -- Reduce turnover -- Minimize overtime costs o Employee Objectives -- Seek employer-provided benefits and services because of lower costs and availability -- Lower income taxes -- Partial protection from inflation e.g. the value of a two-week vacation is not reduced in value by inflation -- Primary objective may be to obtain benefits and services e.g. 10-2
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Schwind07IM10 - Chapter 10 Employee Benefits and Services 1...

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