Human Resource Management Study Set 17
Quiz 13 :
Employee Benefits and Services
Benefits are the tangible indirect rewards provided to an employee or group of employees by the organization. It includes retirement plans, healthcare plans, paid time off, vacation etc. These are provided not only on the basis of performance rather they can also be provided to all the employees meeting certain eligibility criteria. These benefits helps organization to motivate their employees, make them more productive and engaged by strategically linking them with the organizations goals and strategy. These benefits also act as a tax saving component for the employee which makes it more desirable. They help providing security to the employees. Motivates, engage and increases productivity. Recent changes, recession in the economy has lead to the increased contribution of employees share for these benefits which makes their take home salary decrease. If a company follows fixed benefits which might not interest a group of employees can be de-motivating as well.
Providing benefits to the employees are strategically important to the employers for many reasons that are as follows: • The primary reason is that the benefits are non-taxable and acts as additional compensation to the employees. • This can motivate the employees and the employers can achieve effective organizational performance. Some of the other factors which can make the benefit important are the competition of the workforce, its influence over organizational life cycle, and other corporate strategic approaches. Some of the key strategic considerations of benefits include the following: • Achievement of competitive advantage. • Attracting more work forces and the reduction of the attrition rate. • A healthy organic culture. • Enables effective communications among the departments.
In the U.S, the medical costs and health care costs have increased over a period of time. This increase in the health care cost has forced the management of various organizations to manage the health benefit plans efficiently so that it does not affect the organization as well as employees. This has given rise to many conflicts between the employee and the employer. Many employers in U.S claim that the health care benefits are time consuming and expensive. The employers claim that the uninsured workers and the retired individuals are responsible for increasing the costs of the health care benefit costs as they take this benefit for granted. Some of the strategic measures taken by the employers control the health care benefit cost include copayment, managed care, preferred provider organization, health maintenance, utilization review etc.