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BU 354 > Chp 10: Employee Benefits + Services > Flashcards

Chp 10: Employee Benefits + Services Flashcards

1
Q

LO1: 2 points to direct compensation

A

1) pay

2) based on critical job factors or performance

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2
Q

LO1: 3 points to indirect compensation

A

1) Benefits + services extended as a condition of employment
2) Not directly related to performance
3) Approaching 50% of annual payroll expenses

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3
Q

LO1: what will indirect compensation not replace

A

will not replace performance incentives as motivators but can make a great difference in corporate loyalty

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4
Q

LO1: 3 roles of indirect compensation

A

societal, organizational, employee objectives

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5
Q

LO2: 4 points to societal objectives of indirect compensation

A

1) To solve social problems and provide security for interdependent wage earners, gov relies on support of employers
2) Employers can deduct the costs of benefits as a business expense
3) Employees receive most benefits tax-free
4) Benefits and services give many employees financial security against illness, disability, and retirement

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6
Q

LO2: where was interdependence of wage earners exemplified

A

illustrated in mass unemployment of great depression

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7
Q

LO2: 6 org objectives of indirect compensation

A

1) Must offer benefits to recruit and retain
2) Help reduce fatigue and may enhance productivity (e.g., rest breaks, vacations)
3) Discourage labour unrest
4) Satisfy employee objectives
5) Aid recruitment and reduce turnover
6) Minimize overtime cost

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8
Q

LO2: 4 employee objectives of indirect compensation

A

1) Lower costs and availability for plans through employer than individually
2) Lower income taxes
3) Partial protection from inflation
4) Primary objective may be to obtain benefits and services (e.g., supplemental health and life insurance) that may be otherwise unattainable if employee has pre-existing medical conditions

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9
Q

LO2:6 sources of financial protection of gov regulation

A

1) Fair remuneration -> minimum wage acts -> federal and provincial
2) Retirement -> canada pension plan ->federal, except in quebec
3) involuntary unemployment -> employment insurance -> federal
4) Industrial accidents -> workers compensation acts -> fed + prov
5) Medical care -> health insurance plans -> prov
6) Child sustenance -> family allowances -> federal

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10
Q

LO2: what does gov seek to do

A

minimum levels of financial security of workforce

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11
Q

LO2: 5 legally required benefits

A

1) CPP/QPP
2) employment insurance
3) workers comp
4) health insurance
5) holidays + vacations

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12
Q

LO2: define canada pension plan

A

mandatory, contributory, and portable pension plan applicable to all employees + self employed persons in canada. Federal Public service employees have own pension plan (PSPP) but is coordinated with CPP

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13
Q

LO2:explain contributory plans

A

benefits that require employer to contribute to cost of benefit ie both employer + employee pay part of cost

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14
Q

LO2: define portability clause

A

clauses that allow accumulated pension rights to be transferred to another employer when employee changes employers

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15
Q

LO2: which plans are portable?

A

all plans in canada and tied to COL changes

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16
Q

LO2: define employment insurance

A

program to help alleviate financial problems of workers in canada during transition from one job to another

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17
Q

LO2: define workers compensation

A

compensable payable by employers collectively for injuries sustained by workers in course of their employment

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18
Q

LO2: who pays for workers comp?

A

only employers

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19
Q

LO2: define health insurance

A
  • health + medical insurance provided by provincial gov with assistance from federal gov
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20
Q

LO2: what are vacations usually based on?

A

employee’s length of service

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21
Q

LO2: how do we pay for health care

A

taxes collected at federal level

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22
Q

LO2: list 6 voluntary benefits

A

1) life and health insurance
2) disability insurance
3) salary continuation/income security
4) retirement security
5) paid time off benefits
6) employee services

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23
Q

LO3: 3 types of voluntary insurance benefits

A

1) life
2) health related (prescriptions)
3) disability

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24
Q

LO3: 2 points to life insurance

A

1) Almost universal benefit

2) lump sum or annuity

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25
Q

LO3: define short term disability insurance

A

benefit plan crediting number of days to be used as sick leave. Can be cumulative or noncumulative.

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26
Q

LO3: define long term disability insurance

A
  • benefit plan providing employee with an income in case of long term illness or injury
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27
Q

LO3: 3 types of salary continuation/income security

A

1) severance
2) guaranteed annual wage
3) supplemental unemployment benefits

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28
Q

LO3: define guaranteed annual wage

A

employer assures employees that they will receive a minimum annual income regardless of layoffs or lack of work

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29
Q

LO3: define supplemental unemployment benefits

A

private plans providing compensation for wage loss to laid off workers

30
Q

LO3: 2 points to supplemental unemployment benefits

A

1) auto industry common

2) Employees income almost equal to previous earnings for as long as SUB fund remains solvent

31
Q

LO3: 3 types of paid time off benefits

A

1) on the job breaks
2) paid sick leave
3) holidays and vacation

32
Q

LO3: most abused benefit

A

paid sick leave

33
Q

LO3: explain sick leave banks

A

employees can borrow extra days above specific number and when they earn addition days, this is repaid

34
Q

LO3: what is the costliest category?

A

paid time off benefits

35
Q

LO3: 3 types of employee services benefits

A

1) educational assistance
2) financial services
3) social services

36
Q

LO3: 2 examples of social services benefits

A

1) employee assistance programs

2) relocation programs

37
Q

LO3: define employee assistance programs (EAP)

A

comprehensive company programs that seek to help employees and their family members overcome personal and work related problems

38
Q

LO3: define relocation programs

A

company sponsored benefits that assist employees who must move in connection with their job

39
Q

LO3: examples of EAP

A

child care, transportation, individual + group counselling

40
Q

LO4: what were originally designed to reward long service employees?

A

retirement plans

41
Q

LO4: 2 types of registered pension plans (RPP)

A

1) defined benefits (DB)

2) defined contribution (DB)

42
Q

LO4: define a defined benefits plan

A

benefits are defined by a formulas based on age and length of service, with employe assuming responsibility for funding

43
Q

LO4: what plan do employees+ unions prefer and why

A

Most employees + unions prefer this because predictable outcomes, more popular

44
Q

LO4: define defined contribution plans

A

based on amounts contributed by employer + employee with final pension depending on amounts contributed, investment income, economic conditions at retirement

45
Q

LO4: explain noncontributory plan

A

only employer makes contributions

46
Q

LO4: define vesting

A

provision in employer provided retirement plans that gives workers right to pension after specified number of years of service. Otherwise not entitled to employer matched contributions or investment returns earned during employment.

47
Q

LO4: 2 problems with pension plans

A

1) if employers go out of business - plan left unfunded

2) some companies minimize pension costs by having very long vesting periods

48
Q

LO4: what act regulates pension plans

A

pension benefits standards act

49
Q

LO4: define pension benefits standards act

A

federal act regulating pension plans in industries under jurisdiction of gov of canada.

50
Q

LO4: what does pension plan rules require

A

Requires funds not be held under complete custody and control of either employer or employees. Must be carried out by insurance company, pension, trust, or gov.

51
Q

LO5: 4 points to flexible benefits

A

1) Traditional benefit plans were “one size fits all”
2) allow employees to select benefits and services to match their needs, cafeteria style
3) Workers are provided a benefit and services account with a specified number of dollars in the account
4) Additional administrative cost, but increased employee participation

52
Q

LO5: 8 emerging services and trends in benefits

A

1) health spending account
2) buy more vacation
3) wellness accounts
4) concierge service
5) paid leaves eg education
6) child + elder care
7) same sex benefits
8) benefits for part time

53
Q

LO6: 2 points to management of voluntary benefits + services

A

1) Administration complexity of increasingly complex benefit packages
2) Communication of benefits to workers has been a challenge

54
Q

LO6: how to ease admin complexity of complex benefit packages

A

Eased by web administration and health plan providers (e.g., Blue Cross Canada)

55
Q

LO7: 4 implications of employee benefits for HR

A

1) Comply with all legal requirements and maintain accurate employee records
2) Avoid duplication
3) Reducing accidents to lower the cost of workers’ compensation
4) To control ballooning costs, consider cost/benefit of each type of benefit offered along with coverage rates
5) Retention of key employees
6) Benefit audit to examine claims and trends

56
Q

LO7: give some examples of way to prevent ballooning costs

A

1) Reducing drug coverage from 100% to 80%
2) Combined max amount of coverage across all paramedical services
3) Stopping out of country medical coverage for personal travel, or 30 day limit or dollar max
4) Investigate if 6 month dental checkups are necessary
5) Encourage generic drug substitution, multi-tiered formularies, case management for speciality + high cost medications
6) Encourage employees to seek pharmacies with low dispensing fees and request several months refill at time
7) Allow employees to focus benefit coverage and forego coverage across all domains
8) Embrace proactive health maintenance for employees
9) Employers can’t afford to treat employee benefits + services as independent from direct compensation

57
Q

LO7: define benefit audit

A

system to control the efficiency of benefit program

58
Q

LO7: 2 components of benefits audit

A

claims audit and org audit (examines efficiency + effectiveness of employee benefits within org, including dealings with insurer or 3rd party)

59
Q

LO7: 5 things benefit audit enables firm to do

A

1) Identify opportunities for savings
2) Ensure insurers and third-parties are effective
3) Exert effective control over benefits area
4) Identify who is in control of benefits budget
5) Compare claiming patterns to other employers

60
Q

LO7: list 8 things GST has to be paid on benefits

A

1) Company cars (if also used for private purposes)
2) Car operating costs
3) Tax return preparation
4) Short-term residential accommodation
5) Holiday trips within continental North America
6) Frequent flyer points
7) Financial counselling
8) Parking

61
Q

LO7: 8 benefits not affected by tax

A

1) awards
2) health benefits
3) stock options
4) low interest or no interest loans
5) tuition fees
6) child care
7) christmas turkey,
8) gifts under $100

62
Q

LO7: 7 steps to ensure benefits are leading to desired org outcomes

A

1) Define the objectives of the organization
2) Link HR and organizational objectives
3) Assess the needs of employees
4) Assess and comply with legal requirements
5) Compare company’s benefits with competitors
6) Make sure benefits are valued by employees
7) Conduct an annual benefit audit

63
Q

LO7: how are short term goals of compensation usually satisfied

A

with merit pay + incentive systems that reward high performers (high motivation + productivity)

64
Q

LO7: how are long term goals of compensation usually satisfied

A

valued pension or profit sharing plan (retaining good employees)

65
Q

Lecture: Alberta-Pacific Forest Industries

A

offers interest free loans, on site facilities, training programs etc

66
Q

Lecture: Amsterdam Design Studio

A

1) No more working late, at 6pm, the office disappear but turn into creative community uses and keeping staff from working too late.
2) We are able to pull the tables up into the ceiling and make the whole room into a dance floor, yoga studio, trend session, networking reception, or anything else you can think of–the floor is literally yours
3) At nights and weekends, the firm offers the space to others for free.

67
Q

Lecture Crazy Inc

A

1) Employees who sleep at least six hours a night, for at least five days a week, are awarded points by Crazy Inc, a wedding organiser in Japan.
2) The points can be exchanged for food in the company cafeteria worth as much as 64,000 yen ($802) a year. Nightly rest will be tracked using an app made by Airweave Inc, a mattress manufacturer.
3) Crazy also promotes better nutrition, exercise and a more positive office environment. Child support is available, as well the opportunity to take company vacations on regular business days.

68
Q

Lecture: Facebook

A

1) Four months of paid time off for new mothers and fathers,within the first year of a child’s birth or adoption.
2) Free meals and snacks throughout the day
3) A wellness allowance to finance gym membership or other healthy activities.
4) 21 days of paid vacation for full-time employees.
5) $4,000 in “baby cash” for new parents, along with financial assistance for egg-freezing and adoption fees.

69
Q

Lecture: Google

A

1) including above and beyond death benefits, on-site bowling and arcade machines, and free books
2) Fun office setting: Slides that lead from upper floors to lower floors, secret ladders, scooters and ping-pong tables
3) On-site gyms (or subsidized gym memberships), standing desks and reduced health insurance premiums for employees who exercise
4) Encourage a healthy diet: on-site cafeteria with free food and healthy snacks

70
Q

Lecture SAS

A

Not every employer could do this, it’s very expensive. But even small firms should try to do small things

71
Q

Lecture: employee and their benefits

A

Compensation surveys indicate that a majority of employees are unable to accurately name the benefits they receive, and employees vastly underestimate the cost of benefits paid by their employers

72
Q

Lecture: explain benefit scenario

A

nicolas works in restaruant in alberta. hw wondered about how we could approach owner about asking of benefits and how to increase communication of benefits

BU 354 (11 decks)

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