Study Unit 5 - Benefits & Services 2024 PDF

HRMA 221 PERFORMANCE MANAGEMENT AND REWARDS STUDY UNIT 5 BENEFITS AND SERVICES CHAPTER 13 Outcomes 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...

HRMA 221 PERFORMANCE MANAGEMENT AND REWARDS STUDY UNIT 5 BENEFITS AND SERVICES CHAPTER 13 Outcomes 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.  BENEFITS Indirect financial and non-financial payments employees receive for continuing their employment with the company, a very important part of compensation.  THE BENEFITS PICTURE TODAY ❖ Most full-time employees receive benefits. ❖ Almost all employers +/-99% offer some health insurance coverage. ❖ Benefits are a major expense (about one-third of wages and salaries) for employers. ❖ Employees do seem to understand the value of health benefits.  COST TO COMPANY ❖ Employee receives a monthly basic salary of R15000, a travel allowance of R5000 and the company contributes 7% of the employee’s basic salary to a provident fund and R1000 per month to a medical aid. The employee’s total cost to company is therefore:- ❖ Basic pay: R 15 000 ❖ Travel allowance: R 5 000 ❖ Provident fund: R 1 050 (R 15 000 x 7%) ❖ Medical aid: R 1 000 ❖ Total cost to company: R 22 050 POLICY ISSUES IN DESIGNING BENEFIT PACKAGES Which benefits to offer Communicating benefits Whether to options to employees include retirees Degree of employee How to finance choice benefits Coverage during Cost containment probation procedures to use Who will be covered ISSUES IN DEVELOPING BENEFITS PLANS ▪ Benefits to be offered. ▪ Coverage of retirees in the plan ▪ Denial of benefits to employees during initial “probationary” periods ▪ Financing of benefits. ▪ Benefit choices to give employees. ▪ Cost containment procedures to use. ▪ Communicating benefits options to employees.  LAWS AFFECTING EMPLOYEE BENEFITS Compensation for Occupational Injuries and Diseases Act, No. 130 of 1993 Unemployment Insurance Act, No. 63 of 2001 Unemployment Insurance Contribution Act, No. 4 of 2002 Medical Schemes Act, No. 131 of 1998 Pension Fund Act, No. 24 of 1956  TYPES OF BENEFITS MANDATORY BENEFITS VOLUNTARY BENEFITS Unemployment insurance Paid time off Compensation for injuries and diseases Insurance benefits Retirement benefits Employee services  UNEMPLOYMENT INSURANCE Provides for benefits if a person is unable to work through no fault of his or her own – termination of employment, illness, maternity, adoption & death. The person must be a contributor in the Unemployment Insurance Fund (UIF). Employees – 1% and Employer - 1%. Excluded by the Act: Employees working less than 24 hours a month. Employees in learnership agreements. People coming in the country on contractual service and learnerships (foreign nationals).  COMPENSATION FOR INJURIES AND DISEASES Covers all employees who get injured or contract a disease while carrying out their duties. Employers register and contribute to the compensation fund. Contributions not claimed from employees. What the Act provides for: Free medical attention for up to two years. Excluded from the Act: Anyone receiving military training. Anyone employed by the South African Police Service. Anyone found guilty of wilful misconduct. Employees working outside SA for more than 12 months. Independent contractors. VOLUNTARY BENEFITS PAID TIME OFF INSURANCE RETIREMENT EMPLOYMENT SERVICES  VOLUNTARY BENEFITS Vacations Public holidays Personal absences Sick leave Paid time Maternity leave off Family responsibility  VOLUNTARY BENEFITS CONTINUED….. Medical aid schemes Life insurance Disability insurance Insurance  VOLUNTARY BENEFITS CONTINUED….. Pension plans Provident funds Retirement Retirement annuities benefits  VOLUNTARY BENEFITS CONTINUED….. Child/elder care programmes Food services Education Transportation Housing Employee Employee Assistance services Programme (EAP’s) Work/life benefits Executive perquisites  FLEXIBLE BENEFITS PROGRAMMES – self study Each employee is given a benefits fund budget to spend on the benefits he or she prefers. Cafeteria plan Core plus option plans establish a core set of benefits which are mandatory for all employees. Includes an employee’s current benefits with an option Buffet plan to decrease others in order to qualify for other benefits Predetermined benefit packages aimed at different Alternative diners audiences plan ADVANTAGES OF FLEXIBLE PLANS FAMILY-FRIENDLY BENEFITS On-site or Fitness and subsidized child Elder care medical care facilities Flexible Food work Telecommunicating services scheduling Loan programs Educational Sabbaticals for home office subsidies equipment Stock options Concierge Trauma services Counseling  EXECUTIVE PERQUISITES Management Golden Financial Relocation Sabbaticals loans parachutes Counselling benefits Severance Outplacement Company Chauffeured Security pay assistance cars limousines Systems EXECUTIVE PERQUISITES CONTINUED….. Company Executive Physical planes Legal Tax dining fitness and services assistance rooms programs yachts Expense Club Season Credit Children’s accounts membership tickets cards education  FLEXIBLE WORK ARRANGEMENTS ❑ FLEXTIME ❖ A plan whereby employees’ workdays are built around a core of mid-day hours when all workers are required to be present. ❖ Workers can arrange their own starting and stopping hours before and after the core period. Positive effects on employee productivity, job satisfaction, satisfaction with work schedule, and employee absenteeism. Positive effect on absenteeism was much greater than on productivity.  FLEXIBLE WORK ARRANGEMENTS (CONT’D) ❑ COMPRESSED WORKWEEKS ❖ Increase productivity: Less disruption from shift changes. Longer time-off-work periods. Reduced absenteeism. ❖ Longer workdays; fewer workdays: Four-day workweeks, with four 10-hour days. Two days on, two days off, three days on, then two days off, two days on, and so forth. Three 12-hour shifts, and then off for the next four days.  OTHER FLEXIBLE WORK ARRANGEMENTS Allowing two or more people to share a Job sharing single full-time job. A temporary reduction in work hours by a Work sharing group of employees during economic downturns as a way to prevent layoffs. Employees work at home using telephones and the Internet to transmit letters, data, Telecommunicating and completed work to the home office. QUOTE OF THE DAY…..