Matakuliah
Tahun
: J0124 – Manajemen Sumber Daya Manusia
: 2010
Employee Benefits &
Non Financial Compensation
20
Learning Outcomes
After studying this chapter, the students should be able to :
• Define employee benefit
• Describe the characteristics of a sound benefits program
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Requirements for a Sound Benefits Program
Strategic
Benefits
Planning
Communicating
Employee Benefits
Information
Providing
for
Flexibility
Allowing for
Employee
Involvement
Benefits for a
Diverse
Workforce
The Chief Objectives of Benefits Programs
• Improve employee work satisfaction
• Meet employee health and security
requirements
• Attract and motivate employees
• Reduce turnover
• Maintain a favorable competitive position
Providing for Flexibility
• Flexible Benefits Plans (Cafeteria Plans)
 Benefit plans that enable individual employees to
choose the benefits that are best suited to their
particular needs.

A basic or core benefits package of life and health insurance,
sick leave, and vacation ensures that employees have a
minimum level of coverage.

Employees use “credits” to “buy” whatever other benefits
they need.
Flexible Benefits Plans: Advantages and Disadvantages
ADVANTAGES
• Employees select benefits to match their individual needs.
• Benefit selections adapt to a constantly changing (diversified) workforce.
• Employees gain greater understanding of the benefits offered to them and the costs
incurred.
• Employers maximize the psychological value of their benefits program by paying only
for highly desired benefits.
• Employers limit benefit costs by allowing employees to “buy” benefits only up to a
maximum (defined) amount.
• Employers gain a competitive advantage in the recruiting and retention of employees.
DISADVANTAGES
• Poor employee benefits selection results in unwanted financial costs.
• There are certain added costs to establishing and maintaining the flexible plan.
• Employees may choose benefits of high use to them that increase employer
premium costs.
Benefits Issues
Concerns of Management
Union demands for additional benefits
Benefits offered by other employees
Tax consequences of benefits
Rising costs of providing benefits
Types of Employee Benefits
Required By Law
Discretionary
Social Security
Health care
Unemployment Insurance
Payment for time not worked
Workers’ Compensation
Supplemental
Unemployment Benefits
Unpaid leave (FMLA)
Life and LT care insurance
Retirements and pensions
Workers’ Compensation Insurance
Injury is a cost of doing business
Covers Employers
Covers Employees
Assumed employment risk
Cost of injury
Negligent co-workers
Temporary, Permanent,
Partial or Total Disability
Contributory negligence
Survivor’s Insurance
Payment for Time Not Worked
Vacations with pay
Severance pay
Time Not
Worked
Sick leave
Paid holidays
Other Discretionary Benefits
• Supplemental Unemployment Benefits (SUBs)
 A plan that enables an employee who is laid off to
draw, in addition to unemployment compensation,
weekly benefits from the employer that are paid
from a fund created for this purpose.
 SUB benefits are considered deferred compensation
and not current earnings.
 The fund is derived from employer contributions
based on the total hours of work performed by
employees.
Retirement Programs
• Silver Handshake
 An early-retirement incentive in the form of
increased pension benefits for several years or a
cash bonus.
• Preretirement Programs
 Counseling
 Seminars
 Workshops
 Retirement tryouts
Types of Pension Plans
• Contributory plan
 Contributions to a
plan are made jointly
by employees and
employers.
• Noncontributory plan
 Contributions to a
plan are made solely
by the employer.
• Defined-benefit plan
 The amount an
employee is to receive
upon retirement is
specifically set forth.
• Defined-contribution
plan
 The basis (amount) an
employer contributes
to the pension fund is
specified.
Employee Services
• Employee Assistance Programs (EAPs)
 Services provided by employers to help workers
cope with a wide variety of problems that interfere
with the way they perform their jobs.

Typically provide diagnosis, counseling, and referral for
advice or treatment for problems related to alcohol or drug
abuse, emotional difficulties, and financial or family
difficulties.
• Child and Elder Care
 Care provided to a child or an elderly relative by an
employee who remains actively at work.
Other Benefits and Services
Awards
Recreational and
Social
Food Services
On-Site Health
Services
Credit Unions
Legal Services
Purchasing
Assistance
Transportation
Pooling
Financial
Planning
Housing and
Moving
Non Financial Compensation
•The job
•Job environment
•Workplace flexibility
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