You are the benefits manager in a firm metaphorically described as part of the rust belt, in Syracuse, NY. The average age of your 600-person workforce is 43. Eighty-eight percent of your workforce is male, and there is hardly any turnover. Not much is happening on the job front. How do these facts influence your decisions about designing an employee benefit program? Describe how a benefits program might increase worker attraction, retention, and motivation.
The fact that turnover is minimal indicates to me that employees are currently satisfied with the benefits that the company offers or that they are competitive enough in the rust belt where jobs aren’t readily available, the benefits are keeping employees there/from moving. However, there are several factors in this scenario that would influence my decision about designing an employee benefits program. The first factor is that the workforce is 43 and it indicates a lot. The first point is that the employees are going to be retiring “soon”. This means that their healthcare costs could rise/keep rising and the company would have to factor in retirement pension or otherwise, as well. The average age also signals that while a lot of employees will be retiring soon with new and younger employees possibly taking their places, this gives an opportunity for the company to restructure its benefit program. For example, a recent trend is that employees would like cafeteria style choices so that they can pick and choose the benefits that they want to pay for (Milkovich, Newman, Gerhart, 2014). Redesigning the benefits program after or even before (with grandfathering in the older employees who have been with the company certain number of years), could possibly cut costs.
Additionally, Milkovich, Gerhart, and Newman (2014) stated that benefits programs may increase attraction, retention, and motivation if the benefits such as healthcare and pensions are competitive (p.439). Another way to redesign the benefits program and also attract, keep, and motivate employees is that of offering other lower cost items. According to Jones (2017), “after health insurance, employees place the highest value on benefits that are relatively low-cost to employers, such as flexible hours, more paid vacation time, and work-from-home options” (p.1). This could be a good way to attract new talent since the company will eventually ‘see’ a lot of retirements and will be hiring younger employees who want these features in a company.
References:
Jones, K. (2017). The most desirable employee benefits. Harvard Business Review, Retrieved from https://hbr.org/2017/02/the-most-desirable-employee-benefits?autocomplete=true.
Milkovich, G., Newman, J., & Gerhart, B. (2014). Compensation (11th ed.). New York, NY: McGraw Hill.
STUDENT 2
Discuss the concept of experience rating using examples from unemployment insurance. Would the same concept apply to workers’ compensation? How does experience rating play a role in insurance coverage?
Performance management can lead to higher employee motivation and satisfaction that can cover
employee performance (Milkovich et al., 2014). Many managers rate their employees, making relative comparisons of job performance difficult to implement throughout the organization.
According to experts analysis, workers compensation is insurance coverage businesses are required to obtain that covers employees who are injured on the job. Coverage will provide medical treatment, rehab and lost wages for the injured employee. State Unemployment is a payroll tax employers pay. Payroll Experts calculates, collects, and pays this tax on your behalf to the State’s Unemployment Division. This tax then funds unemployment benefits that are paid out to terminated or unemployed people (Mark Ward, 2017). Hence what I would like to say is that most legal insurance premiums are paid by the employee, not the employer. Technically, then, this does not qualify as a traditional employee benefit. In the majority of states, unemployment compensation paid out to eligible workers is financed exclusively by employers that pay federal and state unemployment insurance tax.
Lets talk about some cases: regarding to study, in USA, the federal tax amounts to 6.2 percent of the first $7,000 earned by each worker. In addition, states impose a tax above the $7,000 figure. The extra amount a company pays depends on its experience rating—lower percentages are charged to employers who have terminated fewer employees. The tax rate may fall to almost 0 percent in some states for employers that have had no recent experience (hence the term “experience rating”) with downsizing and may rise to 10 percent for organizations with large numbers of layoffs (worldatwork.org).
Insurance companies use the technique of experience rating to determine the correct price of a policy premium, by analyzing the past losses of others in the insured group to project future losses. The insurer sets a high premium to cover the potential claims of these high-risk activities and still earn profits.
Furthermore, for instance, Bank of America has a more secure, and convenient unemployment insurance payments covering get cash back with purchase at many grocery stores, use everywhere Mastercard® debit cards are accepted as well as an access cash at ATMS and tellers that accept Mastercard. If Bank of America changes its compensation strategy to include more subjective assessments of performance, employees’ compensations will be based on their personal qualities such as their, attitudes, communication skills, etc. rather than their technical performance (bankofamerica.com). It means a financial services organization, it’s pay objectives are straightforward to attract, motivate, and retain the best talent. It relies heavily on the human capital of its employees to compete including unemployment insurance.