CRM 200 Lecture Notes - Lecture 9: Employee Benefits, Pension, Job Satisfaction
3 May 2018
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Chapter Nine – Employee Benefits
Employee Benefits
• that part of the total compensation package, other than pay for time worked, provided
to employees in whole or in part by employer payments
o Health care
o Wellness program
o Pay vocation
o Tuition fund
o Employee discounts
o Pension plan
o Egg freezing
o Prayer rooms
o Nap rooms
Why the Growth in Employee Benefits? - All the players have own reasons why they want to
provide benefits
• Employers: Why do employers want to give employee benefits?
o Attraction and retain talent
o Remain competitive
o Satisfy EE’s eeds
o Increase productivity
o Reward loyalty
• Employees: Why do eployee’s at eefits?
o Tax benefits
o Cost advantage – rates are cheaper if you sigh up in a group
o Access advantages – easier to get coverage
• Government: Why want to give citizen benefits?
o Provide minimum income upon unemployment or retirement
• Union
o Better total comp package for their membership
Top Attraction Variables
• base salary
• org reputation
• benefits
• type of work
• work life balance
Objectives of Benefits Strategy
• complying with accounting, regulatory, standards
• containing benefits costs
• attracting talent/ maintain competitive position
• retaining talent/ reduce turn over
• increase job satisfaction
• enhancing employee health
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• reduce absenteeism
Key Issues In Benefits Planning, Design and Administration
• Decide the role of benefits and integrate them into the overall compensation package.
• Include strategies for:
o ensuring external competitiveness: Know what your competitors offer. What do
they offer
o adequacy of benefits: there is no magic formula for defining adequacy.
▪ The answer may be a relationship between benefit adequacy and cost
effectiveness.
▪ Are employee benefits cost justified? Is it worth it for the price you have
to pay
▪ What employees really want.
• But they might pick wrong
• Benefits administration:
o Who should be covered?
o How much choice for employees?
o How should benefits be financed? – where is the money to finance these plans
o Ex. Should you cover family? Etc.
• Communication is key
o Tell ppl what they get so the employer gets the most bang out of their bucks
Factors influencing choice of benefit package
Financing Benefits Plans: Alternatives
• Non-contributory
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o employer pays total costs
o Pay 100% of cost
• Contributory
o costs shared between employer and employee
• Employee-financed
o employee pays total costs for some benefits
o Employee pays all
Categorization of Employee Benefits
Legally required:
• 1. Workers’ Copesatio
• 2. Canada/Quebec Pension Plan
• 3. Employment Insurance
• 4. Government-Sponsored Medical
• 5. Pay for time not worked
Employer-sponsored:
• 1. Pensions
• 2. Life Insurance
• 3. Extended Healthcare
• 4. Income Security
• 5. Pay for time not worked
• 6. EAP and other benefits
Legally required:
1. Workers’ Copesatio
• a mandatory, government-sponsored, employer-paid no-fault insurance plan that
provides compensation for injuries and diseases that arise out of, and while in the
course of, employment
o Hurt yourself while doing a task at work. you get paid during this off
period, paid for fixing them up etc.
• regulated by provinces/territories and provides benefits for
o Lost earnings due to temporary/permanent disability
o Health care expenses
o Survivor benefits after fatalities
• compensation varies from 75 to 90 percent of net earnings (two jurisdictions
provide 75 percent of gross earnings)
• cost control is an ongoing concern
• Eployer’s pay ito orker’s op.
o Premium is higher if the situation is higher.
2. Canada/Quebec Pension Plan
• a mandatory, government-sponsored pension plan for all employed Canadians
o Payment you receive when you stop working
o Federal
• funded equally by employers and employees
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