Compensation Management 6th Chapter 1. Employee Benefit EB can be the term non-cash compensation provide by the employer. These benefits are given the employee apart from the salary & wages. Employee benefits and benefits in kind include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. Instances where an employee exchanges wages for some other form of benefit is generally referred to as a "salary packaging" or "salary exchange" arrangement. 2. Characteristic of employee benefits i. ii. iii. iv. v. vi. Employee benefits are those payments which are paid to him in addition to the wages and salary he receives. These benefits are not given to the worker for any specific performance of the jobs but they offered boosting his interests in work and make the job more productive for him. Employee benefits represent labour cost. Whatever benefits are offered to the employees in kind or in money terms account for cost. These benefits are offered to employees irrespective of their merit. Merit or non-merit is not the criterion for these benefits. Benefit given by the employer is meant for all the employees and not a specific group of employees. This is a positive cost incurred by an employer to finance employee benefit. 3. Objectives of Employee Benefits i. ii. iii. iv. v. vi. vii. To attract and retain the best employees in the organization. To fulfill the needs of the employees which he himself cannot provide such as protection against accidents and hazards? To provide employees with such benefits which are prevailing in similar organizations. Special privileges are provided to the employees for holding a special position in the organization. Some benefits are provided at the behest of the unions first to maintain good harmonious industrial relations. The benefit by way of spending on the training and development of the employees and for improving the working conditions are provided. Special allowances are given to supplement their regular income so that they can participate in social and cultural activities. 4. Types of employee benefits i. ii. iii. iv. v. vi. vii. Life insurance: The principal purpose of life insurance is to protect the employee’s family if he dies. All the benefits get transferred directly to the Life insurance policy beneficiary or beneficiaries. Paid leave, sick leaves, and vacation days: PTO – Part Time Off is given to the employees in the middle of working. It can come up in the form of vacations, sick leave, and holidays. Based on the working hours committed and the performances, employees earn the paid vacation leaves from the company’s side. Fringe Benefits: Fringe Benefits are a bulk of benefits given to the employees in the non-cash payments. Also, it includes child care benefits, bonuses indirectly related to productivity, tuition assistance, child care spending accounts. Medical Insurance Benefit: Medical Insurance covers all the medical fees, medication fees, hospital bed fees, surgeon fees, as well as prescription fees. It also includes the dental and optical care benefits as a whole. Retirement Benefits: Retirement Benefits are generally provided to the employees in monthly pensions or income after they end their careers. It typically falls into two categories Defined Contribution Plans: Under this, an employee’s benefit is directly linked to the returns from the investment, which most in various cases isn’t assured. However, the employers’ and the employees’ contributions are specified. Defined Benefit Plans or Pension Plans: In this case, all investment-related risks are borne by the employer. Under this, the benefit amount providing to the employees is predefined. The amount is based on the salary drawn by the employee in his previous years as well as the total number of experiences he holds. 5. What is employee benefit plan? The employee benefit plan is the benefits plan termed as ‘premium benefits’ or ‘perquisites. Employee Benefit plans are the non-fiscal benefits that are offered by the employer to the employees apart from their salaries. At some places, the employee benefit plans can be mandated by laws at or can be provided voluntarily by the employers. 6. Bangladesh employee benefit program i. ii. iii. iv. v. Paid vacations, Health insurance Life insurance, Retirement benefits, Gratuity, 7. How to design your employee benefit program i. ii. iii. iv. v. Identifying the objectives of the benefits Employee benefit expenses Conducting a survey Choosing the right benefits plan Evaluate periodically 8. Discretionary benefits Discretionary benefits are employment benefits that are not mandated by law. They can include a range of employee benefits, such as health insurance, sick leave, maternity leave, vacation leave, pension plans, life insurance, and prescription drug insurance. It’s completely up to HR professionals to decide which company benefits will be available as part of their employee benefits scheme. 9. Types of discretionary benefits i. ii. iii. iv. v. vi. vii. viii. Paid Time Off. Paid time off can come in many forms, including vacation time, holidays, personal time and sick leave. Paid parental leave is another important benefit, and one that many people have been pushing for. Remote Work. The pandemic started a remote work trend, and there may be no going back. Employees have different reasons for wanting to work from home. Supplemental Health Benefits. Depending on the size of the company and whether it’s subject to the requirements of the ACA, health insurance may or may not be required. Regardless, offering it can be a good way to attract employees. Retirement Plans. Many workers are behind on their retirement savings. A solid retirement plan can be an effective way to help them achieve their goals while earning their loyalty. Life Insurance. Life insurance is a popular benefit. Employees with young children may be especially interested in this offering. Disability Insurance. Like life insurance, disability insurance is another product that can give employees and their families peace of mind. Mental Health. During the pandemic, mental health issues have been in the spotlight, and many employers are responding with additional mental health benefits. According to Employee Benefit News, offerings have included free therapy, courses, app subscriptions and more. Memberships, Discounts and Subscriptions. Employers can also offer perks like gym memberships, app subscriptions and discounts with various other companies.
