hrm benefits

7/28/2019 hrm Benefits

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EMPLOYEE BENEFITS AND SERVICES(B&S)

Tangible compensation other than wages

and incentives given to employees by therequirement of legislations or on the

employers free will to accomplish some

purposes.


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FOCUS OF EMPLOYEE BENEFITS

Health and Accident

Protection

Future Income

Security


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EMPLOYEE SERVICES

Those compensation components that

contribute to the welfare of the employees

enabling them to enjoy a better lifestyle

or meeting their social or personal

obligations while minimizing their costs


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GENERAL CLASSIFICATION OF B&S


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MANDATORY BENEFITS ANDSERVICES

Those benefits or services which are

legally required or those that an employer

has agreed to provide to the employees as

stipulated in a collective agreement

Examples: EPF, Socso


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VOLUNTARY BENEFITS ANDSERVICES

Those benefits or services which are not

legally required, but being provided to theemployees on the employers own free will

Examples: Housing loans, child care


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FINANCIAL BENEFITS AND SERVICES

Those benefits or services which allow

employees or their dependence to enjoy somefinancial gains

Examples: Pension, gratuity


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NON-FINANCIAL BENEFITS ANDSERVICES

Those benefits or services that do not give

any financial gains to the employees or their

dependence, but may improve their physical

and emotional well being

Examples: Safety gears, cafeteria


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DIRECT BENEFITS AND SERVICES

Those benefits that allow employees or their

dependence to receive some outright payments

Examples: Termination benefits, EPF


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INDIRECT BENEFITS AND SERVICES

Those benefits or services which do not

provide outright payments to employees ,

but allow them to enjoy financial gains inthe form of saving

Examples: Medical benefits, companys

accommodation


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CLASSIFICATION OF BENEFITSDisability income continuationLoss-of-job income continuation

Deferred income

Spouse or family income continuation

Health and accident protection

Perquisites


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PURPOSES OF BENEFIT

1. To facilitate employees to perform their jobtasks

2. To ease employees financial burden

3. To provide security

4. To serve as status symbols

5. To reduce tax effects


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PURPOSES OF BENEFIT (CONT.)

6. To recognize employee loyalty7. To provide flexibility in the compensation

program

8. To improve employees quality of life

9. To fulfill social obligation

10.To provide convenience to employees


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BENEFITS AND SERVICESADMINISTRATION

Planning and Design

Communication


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EMPLOYEE B&S DESIGN ANDPLANNING ISSUES

The extent and magnitude of voluntary benefits and

services

The extent of flexibility of the benefits and servicesprograms

Third party administration of the benefits programs

Employee contributions to the programs (employer

ability to pay)

Monitoring and auditing benefits and services programs

1

2

3

5

4


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BENEFITS AND SERVICES COSTINGWhy do it?

1. To determine the effectiveness of the programs

2. To control the cost of the programs

3. To gather inputs for benefits and services

communication

4. To prepare for collective negotiation


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COSTING METHODS1. Annual cost of benefits and services for all

employees

2. Cost per employee per year

3. Percentage of payroll

4. Cost per employee per hour

5. Cost per department


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FLEXIBLE COMPENSATION

A plan that permits an employee to select

benefits and services within certain limits

(amount and types)

Also known as cafeter ia plans


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ADVANTAGES OF CAFETERIA PLANS1. Plans are tailored to individual needs

2. Employees more aware of benefits and services

and their cost

3. Benefits and services may be re-priced fromyear to year

4. More efficient use of benefits

5. Favorable tax treatment


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DISADVANTAGES OF CAFETERIAPLANS

1. Employees may choose inappropriate

benefits

2. May be more expensive to administer

3. Record keeping becomes more complex

4. May lead adverse selection


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EMPLOYEE BENEFITS AND SERVICESCOMMNUNICATION

To whom to communicate?Affected group of employees

Potential employees


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What to communicate?Especially attractive benefits and services

Benefits and services costs

Eligibility and procedures


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Why communicate?To gain higher employee appreciation

To improve employee understanding of the

benefits and

To promote organizations image


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When to communicate?Approaching collective bargaining

New benefits and services being introduced

There is a sign of dissatisfaction

An employee has just been hired


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How to communicate?Employees newsletter

Benefits and services manuals

Circulars

Intranet

Monthly and annual income statements

Advertisement and publicity

hrm benefits

Documents