Transcript Chapter 9. Employee Benefits and Services

Dessler, Cole, Goodman and Sutherland
Fundamentals of Human Resources Management
in Canada
Chapter Nine
Employee Benefits
and Services
© 2004 Pearson Education Canada Inc., Toronto, Ontario
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The Changing Role of
Employee Benefits
–benefits traditionally used to reward loyalty and
tenure
–employee services more important today in postjob security era
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Government-Sponsored Benefits
Employment Insurance (EI)
Canada/Quebec Pension Plan (C/QPP)
Workers’ Compensation
Provincial Health Care Plans
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Government-Sponsored Benefits
Employment Insurance (EI)
–provides income benefits for individuals
unable to work through no fault of their own
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Government-Sponsored Benefits
Canada/Quebec Pension Plan (C/QPP)
–provides retirement income and other
benefits to individuals who contribute to
these plans
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Government-Sponsored Benefits
Workers’ Compensation
–provides income and medical benefits to
victims of work-related accidents and illness,
regardless of fault
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Government-Sponsored Benefits
Provincial Health Care Plans
–pay for basic hospital and medical services
with no direct fee to patients
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Voluntary Company-Sponsored
Benefits
–additional pay for time not worked
–vacations and holidays
–short term disability/sick leave
–long term disability insurance
–leaves of absence
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Insurance Benefits
–Life insurance
–Supplementary health care/medical insurance
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Insurance Benefits
Supplementary Health Care/Medical Insurance
Deductible
–annual amount of health/dental expense paid by
employee before insurance benefits will be paid
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Retirement Plans
Pension Planning Issues
–membership requirements
–benefit formula (defined benefit only)
–retirement age
–funding (contributory or non-contributory)
–vesting
–portability
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Employee Services
Personal Services
–credit unions
–counseling services
–employee assistance programs (EAPs)
–other (social and recreational)
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Employee Services
Job-Related Services
–subsidized childcare
–subsidized employee transportation
–food services
–educational subsidies
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Executive Perquisites
–loans
–golden parachutes
–financial counseling
–company relocation benefits
–limousines
–executive dining room
–concierge service
…
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Flexible Benefit Programs
Advantages
–choose benefits to suit individual needs
–meet changing needs of workforce
–increased employee involvement improves
understanding
–introduction of new benefits less costly
(merely a new option)
–cost containment: firm sets a dollar maximum
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Flexible Benefit Programs
Disadvantages
–employees make bad choices (not covered
for predictable emergencies)
–increased administrative cost
–adverse selection: employees pick only benefits
they will use (subsequent high benefit utilization
increases cost)
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Benefit-Related Issues
Controlling Workers’ Compensation Costs
–reduce accident or illness-causing conditions
–rehabilitation programs for injured/ill
employees
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Benefit-Related Issues
Reducing Health Benefit Costs
–increase the amount paid by employees
–publish a restricted list of drugs covered
–offer health promotion programs
–implement risk assessment programs
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Benefit-Related Issues
Managing Retiree Benefit Costs
-costs growing as boomers retire
-offer limited benefits
-support wellness programs
Lowering Long Term Disability Costs
-disability management programs
Managing the Cost of Stress
-prevention and early intervention programs for
depression and other mental health issues
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Recent Trends
–same-sex benefits
–early retirement windows
–eldercare
–family-friendly benefits
–wellness programs
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Benefits Administration
–increasingly specialized due to legal
requirements and sophisticated users
-trend to outsourcing this function
-benefits communication critical for
flexible benefit plans, and increasingly
important for pensions
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