Functional Approach to Designing and Evaluating EE Benefits

Question 1

Functional Approach

Need for Functional Approach

Answer 1

• EE benefits = significant part of total compensation
• EE benefits = large labor cost for ERs
• Review existing plans to determine overlaps/gaps in benefits
• Systematic approach to keep benefits current, competitive, and in compliance

Question 2

Functional Approach

Steps

Answer 2

1. Classify EE needs in functional categories
2. Classify categories of persons
3. Analyze benefits currently available
4. Determine gaps/overlaps in benefits
5. Consider recommendations for changes in present plan
6. Estimate Cost/Savings for each recommendation
7. Evaluate methods of financing
8. Consider cost-savings or cost-containment techniques
9. Decide on appropriate benefits and financing methods
10. Implement changes
11. Communicate change to employees
12. Periodically reevaluate