Strategic Value of Employee Benefits
Introduction
Management of employee benefits is as crucial as it is costly an endeavor for employers. While in some cases, most employers are required to provide compulsory benefits, for example, The Social Security contributions, worker’s compensation and unemployment insurance, most of the other benefits provided to employees are voluntary, and their determination falls under the purview of the employers (Rosenbloom, 2011). Depending on the organization, the benefits program tend to differ significantly, but in most cases, they include the disability insurance, retirement benefits, paid for time off benefits, medical insurance as well as the educational assistance programs. Due to the importance of employee benefits in the recruitment and retention of employees, the process of selecting the benefits needs to be strategic in order to ensure employers that the benefits provided suit the needs of the employees in as much as they suit the abilities of the company (Mazin, 2011). In this regard, this paper shall provide the variable benefits which should be considered when organizations are providing benefits. It will also compare and contrast the income protection program as well as the pay for time not worked programs and expound on how these two elements are similar and whether they are mandatory. Lastly, It shall discuss “other benefits” that should be recommended to the management team of JC Penny to be included in the benefits package and lastly it will develop an employee benefits package for an exempt position or non-exempt position level.
Variable Benefits to Consider When Providing Benefits Program
There are several factors which should be considered when providing the employee’s benefits program. This section shall cover the three most significant variables which are almost always considered, they include the demographics and gender of the workforce, the employee needs as well as the budget of the organizations and benefits objectives.
One of the factors that need to be considered is the benefits objectives and the budget of the organization. This will provide the overall guidance in the establishment of the selection as well as the design for the program. In this case, the strategy of the organization will aid in guiding the development of the objectives of the benefits, since these objectives are instrumental in the achievement of the overall strategic goals. It is prudent to note that the budget of the company is a significant factor in the development of the benefits since an organization is expected to provide benefits that it can sustain. Secondly, the demographics and gender of the workforce are also an important variable. Every organization’s workforce tends to vary where while one organization has an older workforce, another will have a younger workforce. In the former case, the employer should be guided to ensure that the benefits that relate to insurance are addressed since insurance increases with age. Additionally, if the workforce is made up of more women than men, then the benefits are going to include higher premiums since female employees claim more premiums than their male counterparts.
Lastly, it will be prudent to consider the needs of the employees. Research by Willis Towers Watson postulates that employers are progressively becoming aware of the needs to tailor their benefits to the needs of their employees. Understanding the needs of the employees places the organization at a position where it does not provide for benefits that no employee requires which will be a waste of benefits package and would require drafting other needs subject to the claims of the employees. It is prudent to note that with an increase in age, some employee will require health insurance more than they will require education- assistance programs since most of the employees may be done with educating their children.
Income Protection and Pay for Time Not Worked
Income protection insurance works to replace lost income for an employee who is unable to work as a result of illness, an accident or disability of any kind. It is meant to ensure that employees can maintain their living standards even after losing their income. On the other hand, the pay for time not worked is a requirement of the federal law that employees should pay for their workers for the time that is spent under the control of the employer and for the benefit of the employer. Notably, the broad range covered by income protection includes the instances where one is unable to work. However, not every reason can allow one a claim under income protection (Murphy, 2010). The main areas include the inability to work or the significant reduction in the ability to work as a result of injury or illness, mental incapacitation, redundancy which is also optional in some policies, and healthy pregnancies. On the other hand, the pay for time not worked program covers the employees’ wages for on-call time, wages for education and training, wages for travel time, and wages for sleep time (Murphy, 2010). It is prudent to note that the pay for time not worked does not cover the time spent while commuting from home to work.
The similarity between these two types of program includes the fact that they provide employment with salary benefits even at a time when they are not working. It is prudent to note that while the pay for time not worked is mandatory and provided for under federal law, income protection is different under every state, and to this end, only a few states require the employers to provide the income protection coverage (Murphy, 2010). As such, the income protection policy is not a mandatory benefit.
“Other Benefits”
In addition to the benefits which are required by law, there are other benefits which are provided by organizations subject to a sense of social responsibility to their employees and option of offering benefits beyond the level that is required by law. Depending on the organization, the benefits may range from legal insurance, dental insurance, visual insurance, paid leave, child care, and pet insurance (Murphy, 2010). To this effect, the other benefits that will be suggested to the management at JC Penny include the flextime, product or service discounts, education assistance as well as company social events.
Flextime is the ability for employees to work on a flexible schedule. It is prudent to note that during the recruitment of the employees, seeking employees who could multitask at a small pay was a significant concern (Martocchio, 2008). In this case, offering the employees the flexibility of their work schedules allows the employees to balance their work-life and family life. This is a good motivator in employee retention (Murphy, 2010). Additionally, considering that reduced spending was also a significant concern, this form of benefit is a cheap way of rewarding employees. In a research carried out on Accenture, a multinational company dealing in professional services, it was established that apart from compensation and advancement of employees, flexibility was also a primary motivator.
Education benefits are essential for both the employee and the business. In offering educational assistance, employees can further their education which makes them feasible for better delivery of services. It can be offered through tuition reimbursements, and it is one of the benefits that employees highly value (Murphy, 2010). Noting the changing markets, it would be prudent for employees to further their skills in relation to approaching the contemporary market. Lastly, there are company social events. Through the organization of social events where employees can socialize, network and also team building, employees are motivated to deliver on their duties.
Employee Benefits Package for Supervisors
| Benefit | Specifications |
| Health insurance | Supervisors may choose from two traditional PPO plans and two High Deductible PPO plans. Premium contributions of $100 per employee will be remitted through monthly payroll deductions. The health insurance shall cover both inpatient and outpatient healthcare up to a sum to the tune of $100,000. |
| Sick and Emergency Leave | Supervisors will be granted fourteen sick days per year. The full allocation of the sick days will be credited to the employee at the beginning of each Fiscal Year (FY 2019). Sick leave shall cover employees, immediate family, spouse’s parents and siblings. It shall also be granted for necessary medical appointments for the employees or immediate family members upon furnishing Human Resource Manager with requisite medical documentation. Full documentation of ability to resume work will be required upon returning to work. |
| Life Insurance | A life insurance policy of $35,000 as well as $70,000 accidental death or dismemberment policy will be given to supervisors |
| Vacation Days | Supervisors will be granted twenty days for vacation each year, and it may accrue to sixty days. Payment for unused vacation time may be made upon separation at the rate in effect at the time of separation. Vacation days may be carried over two times but any vacation time over the accrual limit shall and forfeited. |
| Retirement Benefits | Employees who retire from the organization having served a minimum of ten consecutive full-time service years shall receive continual employee discounts as well as pensions as per the rates prescribed in their employment contract. |
Conclusion
Employee benefits are one of the tools that can be used to make the employees feel valued, appreciated and also promote loyalty. It is also an essential means of ensuring that employees do not only have job security but that also they are satisfied in their workplace. In providing for the benefits of the employees, it will be prudent to consider the needs of the employees and relate them to the ability of the organization to deliver the same.
References
Martocchio, J. J. (2008). Employee Benefits. United Kingdom: McGraw-Hill Higher Education.
Mazin, R. (2010). The Employee Benefits Answer Book: An Indispensable Guide for Managers and Business Owners. United States: Wiley.
Murphy, T. E. (2010). Benefits and Beyond: A Comprehensive and Strategic Approach to Retirement, Health Care, and More. India: SAGE Publications.
Rosenbloom, J. S. (2011). The Handbook of Employee Benefits: Health and Group Benefits 7/E. Portugal: McGraw-Hill Education.