Topic 8: Employee Compensation and Benefits

Topic 8:Employee

Compensation and Benefits

Employee Benefits

3770 Beardshear Hall

Human Resource Services

“Something, typically money, awarded to someone in recognition of his/her work done to the organisation”

COMPENSATION?

Goals of Compensation Plans1. Employers are able to attract

and retain employees who will contribute to the organization’s success

2. Employees feel they are compensated/rewarded fairly for their efforts and contributions to an organization’s success

Employee Benefits

Hall

Employee Benefits



Supportive Corporate CultureExecutive Sponsorship

Rewards• Bonus

• Salary Increases

• Promotions

• Equity Offerings

• Awards

• Recognition

• New job assignments

Salary• Pay

• Overtime

Benefits• Health Plans

• Retirement Plans

• Vacation/ time off

• Paid Training

• Working Hours

Employee Satisfaction

How to satisfy employees?

Lays down the requirements concerning the payment of wages.

The Employment Act

What Factors Determine Pay?

1. Seniority2. Increase in the cost of

living3. Performance4. Degree of skills

Hall

1. Your business is in Jakarta & Vietnam are to run in 4 months time.

2. As the HR Manager in KL, you need to think of a competitive compensation package for the;

◦ CEO ◦ HR Manager◦ Marketing Manager◦ Interns

For each branch.

TEAM ACTIVITY (5%)

Employee Benefits



Compensation Structure Example

Employee Benefits



Compensation Structure: Example

Grade Minimum Midpoint MaximumMidpoint

ProgressionRange Width

12 $93,500 $131,000 N/A 14% N/A

11 $81,800 $114,500 $147,200 14% 80%

10 $71,800 $100,500 $129,200 14% 80%

9 $65,300 $88,200 $111,000 14% 70%

8 $57,200 $77,400 $97,200 14% 70%

7 $52,000 $67,600 $88,400 14% 70%

6 $45,600 $59,300 $73,000 14% 60%

5 $40,000 $52,000 $64,000 10% 60%

4 $37,800 $47,200 $60,500 10% 60%

3 $34,300 $42,900 $51,500 10% 50%

2 $31,200 $39,000 $46,800 8% 50%

1 $28,800 $36,000 $43,200 N/A 50%

Employee Benefits



Compensation Structure

Job Classifications

Rewards/Recognition

Compensation Philosophy

Core vs. Non-Core Benefits

Employee Benefits

Core Benefits (Traditional)

Non-core Benefits (Voluntary – Elective)

Health Insurance Dental

Prescription Drugs Vision

Basic Life Insurance Supplement Life, Dependent Life

Vacation Long-term care insurance

Holidays Auto-homeowners insurance

Sick Pay Mortgage services/discounts

Disability On-site daycare

Tuition reimbursement

Yes, even Pet Insurance

Health Benefits • General types of health coverage

– Medical– Prescription Drugs– Dental– Vision

Employee Benefits


Wellness Programs Many employers are starting to see the value from incorporating wellness initiatives into their work places

– disease management– health risk assessments– fitness programs– on-site clinics and pharmacies

Employee Benefits

Hall

Welfare Benefits • Provide safety and monetary security beyond health• Typical benefits – such as life insurance, etc.

Employee Benefits


Vacation• May be provided under separate program or combined under a PTO (paid time off) plan with sick days• May be earned monthly or provided on an annual basis• Many employers require all vacation to be used in a year – no carryover• If carryover allowed, typically subject to an accrued maximum number of days or hours

Employee Benefits



Retirement Benefits•Defined Benefit Plans (traditional Pension)

– Based on a formula that determines a future benefit– Employee Provident Funds (EPF)

Employee Benefits



Other Voluntary Benefits

• Offered as optional benefits – typically employee pays full cost• Voluntary benefit programs typically offered at a discount price resulting from group purchasing power• Employer may offer the option of payroll deduction• Examples are auto/homeowners insurance, pet insurance, computer purchase discounts

Employee Benefits



What is overtime?◦ The Employment Act states that no worker can be

required by his employer to work more than 8 hours per day, or 48 hours per week.

◦ In this happens OT

Working Overtime

1. A temporary shortage of workers2. A temporary increase in workload3. Low productivity of workers4. Difficulty in recruiting additional workers.

Reasons why employers conduct OT

1. OT on an ordinary working day = 1.5 times the normal hourly rate

2. OT on a rest day = 2 times the normal hourly rate

3. OT on a public holiday = 3 time the normal hourly rate.

How to calculate OT rates?

Questions??

Employee Benefits



Topic 8: Employee Compensation and Benefits

Documents

Transcript of Topic 8: Employee Compensation and Benefits