Benefits/Total Rewards Plan, HR

Benefits/Total Rewards Plan

MPH 548: Human Resource Management:

By Costa Ndayisabye

Professor: Dr. Hollie Pavlica

Submitted: August 2, 2015 

                A well-organized company focuses to both successful recruitment to bring right person to its development and to strive on employees’ retention. The best strategy to retain employees is to have a well-designed benefit plan. Fried & Fottler (2011) stated that healthcare employer should explain to staff the module of “total compensation” which includes salary and other added benefit package (p 214). Attention should be paid to benefits that are mandated by both federal and state governments to avoid any future conflicts. Benefits should therefore be clearly details and written to enable employees to understand what is beneficial to them.

Salary itself does not provide sufficient security to employees unless it is supplemented by benefits to bring vital environment within organization. “Offering a competitive salary combined with benefits and perks can prove to be a win-win combination in promoting improved work habits and reducing employee turnover (Benz, 2014). Employees within organization have different needs, which means there should be different benefit options to enable employees to choose what fit with his or her needs. When designing for employees’ total compensation, I would specify different available benefits and what is included in each package.

Salary is the primary advantage that employee seeks while performing tasks, as it helps to cover human basic needs such as food, clothes and accommodation. Beside salary, benefits are important to secure for emergency needs such abrupt accident that may occur within or outside the organization, also to guarantee at least minimum support when employee does not have both physical and mental capacities to work. Benefits are therefore, securities to reduce turnover within organization and significant tool to promote uncertainty employees’ morale. According to the article “Compensation & Benefits” published by HR Council (2015), “Providing benefits to employees is seen as managing high-risk coverage at low costs and easing the company’s financial burden”.

Health coverage is among the most important benefits that employers should critically plan for. According to Harper (2012) “As work and family life absorb the bulk of an employee’s attention and finances, having medical costs defrayed by a generous benefit package can be both a comfort and an asset”. If I would be a human resource manager and were asked to design employees’ benefits I would focus on the following:

1. Inpatient care: This commitment can be costly to both employee and employer. It is very critical to analyze the cheap insurance market that will require reasonable premium and deductible.
2. Outpatient: This is a great motivation to every employee. It is therefore very important to the employer to insure employees are covered for inpatient care.
3. Eyes and dental care: Costs involved in eye and dental care are high and can put the employee to hard life situation. As a company’s benefit designer, this is not the point to ignore.
4. Drug prescription. With the current economic crisis, drugs are becoming expensive and employee should be supported to get insurance that will cover some percentage of the drug prescription cost.
5. Program to manage chronic illness: This is very important preventive strategy that needs to be included in benefit package. The more employee is healthy the less the number of hospital visits. Furthermore, a healthy employee is more productive than the one with medical condition. According to article published by Economist Intelligence Unit (EIU, 2012) chronic diseases exert a high toll on labor productivity.

The above 5 health benefits are among the ten published on “healthcare.gov” on August 22, 2013 to explicit essential insurance that marketplaces provide. Beside health coverage the employer benefits plan should also incorporate paid vacation, paid holidays, social security and Medicare, unemployment benefits, 401(k) contribution and tuition reimbursement as below benefits allocation table described.

I would allocate $129,358 each year for one employee to ensure the above benefits and rewards are covered while maintaining employee’s annual salary of $100,000.

With above computed benefits, if I had to cut benefit budget by 20% ($29,358*0.2=$5871.6) I would reduce the size of the following benefits.

As detailed discussed in this paper, employees’ benefits are pillars to the development of the organization. It is very important to the employer to design systematic benefit plan that enhance employees’ safety and credibility within and out of the organization. When employees are satisfied with the benefits they get from the company, they can be useful to attract other skilled employees to fill in positions.

To ensure benefit plan is designed in accordance to employees’ satisfaction, I will recommend the company’s executive team to enable a periodic survey performance that will determine the effective and efficient employees’ benefits plan basing on employees’ opinions. I would collect ideas from each employee that I can use as a clue to allocate benefits appropriately. There should also be a common understanding among company’s executive team members on the benefit system framework.

Reference

Benz, J. (2014). The Importance of Employee Benefits

Retrieved from http://www.paychex.com/articles/employee-benefits/importance-of-employee-benefits

Compensation & Benefits (2015). HR Council.

Retrieved from http://hrcouncil.ca/hr-toolkit/compensation-employee.cfm

Economist Intelligence Unit (2012). The role of employers: Workplace initiatives to tackle chronic disease.

Retrieved from http://digitalresearch.eiu.com/extending-healthy-life-years/report/section/the-role-of-employers-workplace-initiatives-to-tackle-chronic-disease

Fried, B., & Fottler, M. (2011). Fundamentals of human resources in healthcare. Chicago, IL: Health Administration Press

Harper, J. (2012). 7 Reasons to take advantage of employee healthcare benefits

http://money.usnews.com/money/careers/articles/2012/08/28/7-reasons-to-take-advantage-of-employee-healthcare-benefits