Benefits

1
Benefits

• OS352 HRM
• Fisher
• April 11, 2005

2
Agenda

• Distribute final essay questions
• Current state of benefits
• Trends in benefits

3
Final essay questions

• Due April 25 at 500
• Submit electronically via Turnitin.com
• Class ID 1282195
• Password selection
• Choose 2 of 4 questions
• Use at least three external sources in each
  answer
• Individual assignment
• Let me know if you have questions

4
Other schedule notes

• No office hours on Wednesday, April 20
• Will have office hours on Thursday, April 21 from
  10-12
• Also available by appointment and email to
  discuss essay questions

5
Legally Required Benefits

• Social Security
• Retirement Income
• Disability Income
• Medicare
• Survivor Benefits
• Workers Compensation
• Unemployment Insurance
• Unpaid Leave
• Adds up to approximately 24 of salary

6
Voluntary Benefits

• Employers do not have to offer
• Health Insurance
• Retirement
• Paid vacation, holidays
• Can add up to an additional 20 of salary
• Highest in manufacturing
• Lowest in retail
• Most employers do offer these benefits. Why?

7
Retirement Benefits

• Defined benefit vs. defined contribution
• Some companies offer both
• 401(k) is most common defined contribution plan
• Cash balance plans
• 401(k) plans usually come with employer match
  benefits
• Average match was 2.5 of payroll in 2001
  (www.workforce.com)
• Down from 3.3 in 1997
• May vary based on seniority

8
Health Benefits

• 43 million Americans uninsured (www.factcheck.org)
  
• Costs rising for everyone (11 in 2003)
• Balancing costs of monthly premiums, co-pays,
  benefit caps, deductibles, prescription coverage
• Some companies focusing on wellness benefits to
  reduce costs
• 114 for normal weight employees
• 573 for overweight employees
• Dallas city employees (www.workforce .com)

9
Current health benefit costs
10
Health Benefits in Retirement
11
Personal Services Benefits

• Examples include
• Organization-sponsored sports teams (32)
• Food services/subsidized cafeteria (26)
• Legal assistance/services (25)
• Travel planning (20)
• Dry cleaning (13)
• Massage therapy (11)
• Concierge services (2)
• Pros and cons of offering these kinds of
  benefits?

Data Source SHRM Foundation 2003 Benefits Survey
12
Who is covered by employee benefits?

• Traditionally, employee, spouse, and children
• Married couples with kids now only 25 of
  households
• Part-time employees often not covered
• Domestic partner benefits
• Opposite sex
• Same sex
• Extended family benefits

13
Flexible vs. Fixed Benefits Programs

• Flexible (Cafeteria)
• Employees select the benefits they want.
• May be less costly.
• Supports corporate diversity strategy.
• Increased fairness perceptions.
• But, administratively complex.

• Fixed
• All employees receive the same benefits.
• Simple administration.
• But, one-size-fits-all approach may not meet
  employees needs.

14
For next class

• Topic Labor relations
• Read Chapter 14
• How does the presence of labor unions affect an
  organizations approach to HR?
• Bring article about union strike or organizing
  drive from scavenger hunt.