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Lecture

MHR Chapter 10.docx

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Department
Human Resources
Course
MHR 523
Professor
Al- Karim Samnani
Semester
Winter

Description
March 28, 2013 Chapter 10: Employee Benefits and Services Total Compensation Direct Compensation • Pay • Based on critical job factors or performance • Base salary, pay for performance Indirect Compensation • Benefits and services extended as a condition of employment • Not related to performance or job roles (except for executives who get stock options, coverage for medical and dental) • Slowly approaching 50% of annual payroll expenses (ie you make $60,000, it costs the company $120,000 after benefits are paid for) Indirect Compensation Objectives Societal  To solve social problems and provide security for wage earners  Financial security against illness, disability, and retirement  Prior to employment insurance people did not have security for income if job was lost  Trouble for people with only one bread winner in the house  Government and company contribution Organizational  Reduce fatigue  Discourage labour unrest  Aid recruitment and reduce turnover  Labour Unrest: people fighting for benefits, higher wages, strike  Satisfy employee objectives o Employee wanting MBA, company will pay for education  Aid Recruitment o Get talented employees o Reduce number of people leaving company Employee  Lower costs i.e. company benefits are usually less expensive  Availability i.e. to obtain benefits and services  Company covers dental, medical etc. organization will spend less than employee would individually  Group plans that include spouse and children Emerging Services and Trends  Increased Medical o Organizations will cover more and more things covered under employee plans  Increased Vacations o More days off  Pension Coverage o CPP is not enough  Pension Liability o Work for a single organization until retirement you get more pension than if you moved around o Benefit to thouse who worked for less organizations  Pension Portability o Pensions are now transferable to another company if employee chooses to leave  Paid Leaves o education  Child & Elder Care o Daycare on site at company  Same-sex Provisions o Allow rights of benefits to same sex partners  Benefits for Part-time Current Trends • Indirect compensation will form a greater proportion of total compensation offered • Employer share of contributions will rise • Employees may be able to make choices • Flexible benefit plans • Choose which benefits you want • Need to adopt a total compensation approach • Changes in the labour force will impact workforce demands • Old people will want pension benefits • Young people will want tuition reimbursed • Increase in women in workforce, will want child benefits Management of Voluntary Programs • Problems in Administration – Lack of employee involvement • People don’t know about what benefits are included until you need one – Failing to recognize individual differences and wishes
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