Chapter 7 - Recognizing and Rewarding Employees

Person receiving benefits receives specific amount

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Unformatted text preview: n package depend on how much attention is paid to certain basic considerations particular benefit is sometimes provided if other employers are doing it, someone in authority thinks it is a good idea, or due to union pressure Linking Benefits to the Overall Compensation Program • • • • • employee benefits program should be based on specific objectives objectives an organization establishes depends on many factors like size, profitability, location, unionization, industry patterns o must be compatible with organization’s strategic rewards and recognition plan chief objectives of most benefit programs are to o improve employee work satisfaction o meet employee health and security requirements o attract and motivate employees o retain top performing employees o maintain a favourable competitive position many organizations establish committees made up of managers and employees to administer, interpret, and oversee their benefits policies having employees participate in designing benefits programs helps ensure management is satisfying employee wants Cost Concerns • • organizations spend 35- 45% of annual payroll costs on benefits such as group health plans, pension contributions, EI premiums, CPP premiums, and WCB premiums many benefits represent fixed rather than variable cost • • • if organization is forced to discontinue benefit, the negative effects of cutting it may outweigh any positive effects accrued from providing it o minimize negative effects by enlisting cooperation of employees in evaluating importance of particular benefits benefit plan administrators are expected to select benefit service vendors who have most to offer for best cost escalating cost of health- care benefits is a major concern o find balance between offering quality benefits and keeping costs under control Benefits Required by Law • legally required employee benefits cost over 12% of organization’s annual payroll o include employer contributions to Canada/Quebec pension plans, unemployment insurance, workers’ compensation insurance, and sometimes provincial Medicare Canada and Quebec Pension Plans (CPP/QPP) • • • • cover almost all Canadian employees between ages 18 and 70 require employers to match contributions made by employees revenues generated from contributions used to pay three main types of benefits o retirement pensions o disability benefits o survivors’ benefits with Canada’s population again, funds from CPP will not be able to meet needs of retirees unless those currently working and their employers significantly increase contributions Employment Insurance (EI) • • • • income protection to employees who were between jobs employees and employers both contribute to EI fund amount of benefit paid is a formula based on number of hours of employment in the past year and regional unemployment rate economic upheaval changed EI programs (extending benefits) o EI benefits extended 5 weeks for min of 19 weeks and max of 50 weeks o Federal govt. offered to pay for few weeks of severance if companies go bankrupt Provincial Hospital and Medical Services • • Most provinces fund health- care costs from general tax revenue and federal cost sharing o Ontario, newfoundland also levy payroll tax o Alberta and B.C. charge premiums that are payable by resident or agent, usually employer Cost of providing healthcare increasing o Increasing longevity of people and major health problems that occur mean...
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