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UNIT 11 - Employee Benefits.docx

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Department
Administrative Studies
Course
ADMS 2600
Professor
Monica Belcourt
Semester
Fall

Description
ADMS 2600 November 18, 2013 UNIT 10 – EMPLOYEE BENEFITS Managing Employee Benefits Programs • Strategic benefits planning – objectives of benefits programs: o Improve employee work satisfaction o Meet employee health and security requirements o Attract and motivate employees o Reduce turnover o Maintain a favourable competitive position • Benefits given because: o Required by law o Unions are pressuring for them • Part of a bargaining strategy. Ex: Instead of 2% raise, give 1% raise + dental care • Based on organizational strategy. What are the objectives? (Ex: attract employees) • Requirements for a sound benefits program o Strategic benefits planning o Allowing for employee involvement o Benefits for a diverse workforce o Providing for flexibility o Communicating employee benefits info • Requirements: o Based on organizational strategy. What are the objectives? (Ex: attract employees)  Match organizational objectives by offering stress reduction to managers, not just anyone to match specific needs of employees o Allow employee input (committees, etc.) o Modify benefits to accommodate changing perceptions of fairness ADMS 2600 November 18, 2013 o Providing flexibility  Flexible Benefits Plans (Cafeteria Plans) • Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs. • A basic or core benefits package of life and health insurance, sick leave, and vacation ensures that employees have a minimum level of coverage. • Employees use “credits” to “buy” whatever other benefits they need • Employee choose the benefits with the optimal motivational value to them • Advantages: higher satisfaction, meet individual needs without increasing cost, employees can choose, flexibility and non- discriminatory, meet demands without increasing costs, employee retainment • Disadvantages: employee needs to be able to identify needs, more work, complex pricing, cost of plan is increased, no impact on motivation o Communicating employee benefits info • Employers are legally bound by the benefits they offer to employees, especially if included in employee handbooks – becomes a legal document. Employers must be cautious about the way benefits are offered and described • Largest cost: healthcare, then time not worked (vacation: 2 weeks with pay – legal minimum) Management Concerns • Concerns: o Union demands for additional benefits o Benefits offered by other employees o Tax consequences o Rising cost – expensive o Benefits coverage for domestic partners ADMS 2600 November 18, 2013 • 42% of payroll is spent on benefits – a hidden cost (employers often overlook this cost and employees are typically oblivious to these costs) • Fixed cost because they cannot be retracted and are mandated by law • C
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