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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EMPLOYEE BENEFITS AND SERVICESCOMMNUNICATION
What to communicate?Especially attractive benefits and services
Benefits and services costs
Eligibility and procedures
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EMPLOYEE BENEFITS AND SERVICESCOMMNUNICATION
Why communicate?To gain higher employee appreciation
To improve employee understanding of the
benefits and
To promote organizations image
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EMPLOYEE BENEFITS AND SERVICESCOMMNUNICATION
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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EMPLOYEE BENEFITS AND SERVICESCOMMNUNICATION
How to communicate?Employees newsletter
Benefits and services manuals
Circulars
Intranet
Monthly and annual income statements
Advertisement and publicity