Employee benefit plans

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The Importance of Employee Benefits in the Growth and Well-being of Workers

The aim of this research is to assess the importance of the employee benefits package in the growth and well-being of workers within the company. External and internal considerations are two of the most important factors to address when designing and planning an employee compensation package. External considerations include benefits that the employer is often obligated to offer as required by statutes, such as social security and workers' compensation, while internal factors include employment benefits that are provided at the employer's discretion, such as life care coverage and retirement benefits. There are also various factors to be considered in developing this benefit plan for employees as highlighted that the employee benefits plan should be in link with the organizational mission, goals and objectives among other factors. Considering the requirements of the law and what is stipulated there in becomes the most crucial and important factor to be considered in planning and developing an employee benefit model plan. It will ensure that the organization operates within the law and cares about the needs of its employees while personal time-off should be the least to be considered. The planning and development of an employee benefits plan would require bringing together both internal and external factors that affect an organization.

Planning and Developing Employee Benefits

The plan for Employees’ benefits plays a major role in the development and wellbeing of all the employees within the organization (Downing, 2000). It also motivates employees to ensure they are more productive and retain them in the organization. In planning and developing employees benefit plan, two major important factors are considered. These are the external and the internal factors. The external factors are such like the benefits that the employer is always expected to provide as required by the law, for example, social security and workers’ compensation while internal factors are the employees’ benefits which is at the discretion of the employer to provide, for example, health insurance cover and retirement benefits.

Factors to Consider in Developing Employee Benefit Plan

There are various factors to be considered in developing this benefit plan for employees. First, it should link with an organization’s mission, goals and objectives (Ghio, 2002). Secondly, it must offer the required satisfaction to the employees. Thirdly, it is important to determine how to track the developmental needs that will mostly be required by the organization in achieving its goals, objectives and mission.

Additionally, it is necessary to consider all the resources that are needed to cater for the expenses. Another factor to consider is evaluation of how this plan enabled the organizational success in the past and how this will improve in future (Downing, 2000). Consequently, when planning and developing the employees’ benefits, to be better and successful, it is better to compile the information to indicate strengths and weaknesses the organization has. Moreover, it is important to consider the crucial benefits such as life insurance; the employers offer benefits equal to the annual salary of the employee, though in most cases life insurance amount offered to the employees’ dependents or the named beneficiaries can sometimes vary. Employees can therefore use the insurance company for the employer to purchase additional life insurance.

Health insurance for the employees is the most basic important benefits for most full-time employees, health insurance has either vision or dental benefits. Many employers always give a list containing choices in health insurance, starting with Health Maintenance firms, where employees use designated and approved medical providers, to plans where the employee and dependents may select and decide about their providers. This is where both employers and employees contribute together for medical insurance and in most cases employees contribute more for the generous plans.

Disability insurance is important as well and they always depend on with the type of work or employment. The employees with disabilities have benefits ranging from a half to two-thirds of their income. These benefits cover both partial and total disability. None can predict an accident or even illness that can result into disability, this makes the disability insurance very vital to an employee. Additionally, a retirement plan is important; where employers can offer to contribute for the employees with a certain amount of money for their retirement plans, where the latter is required to contribute a certain percentage of their salary. This can result into pensions that will be offered to the employee after retirement.

Vacations and holidays that are paid is another employee benefit. This depends on the position of the employee in the organization, period they have stayed working with the organization. This will influence the amount that is supposed to be paid to the employee. Family Leave is another component of a benefit plan where employees are always offered a period of rest which can be paid or not depending with the organization one working in. leave is normally given due to the following reasons, for instance employees health not in good condition to continue working, to take care of the spouse or children, in case of further studies and many other reasons. Personal time-off and the enhancement benefits including, risk allowance, transport allowance and housing allowance. Very important to note, the employer should plan and develop this benefit plan through adjusting to the core compensation. This would be achieved when incentive, living cost, individual focused, merit and seniority are factored in.

Considering External Factors in Employee Benefits Plan

Various external factors existing and information should be considered when developing and planning the employees’ benefits plan, for instance, the legal, political environments where the business operates. When planning and developing employees’ benefit, it is important to consider that it is mandatory to provide for the employee as an employer as required by the law (Storms, 2002). As a matter of fact, all the employees are correctly entitled to a fair compensation as indicated by the law. It is therefore important to plan and to develop a model of compensation referred to as compensation benefits plan, which will include hourly wage and annual salary for all the organizational employees. Another crucial external factor to be considered by the employers of an organization in designing this benefit plan is to adhere to the legal requirements of the organization. For instance, it is important for the employers to adhere to and follow workers’ compensation act, social security, medical and family acts. This enables the organization to operate in and within the legal parameters and frameworks by meeting the legal obligations when planning and developing an employees' benefit plans.

Considering the requirements of the law and what is stipulated there in becomes the most crucial and important factor to be considered in planning and developing an employee benefit model plan. It will ensure that the organization operates within the law and cares about the needs of its employees. Information on the requirements of the law is of great importance since it enables the organization to avoid going against the law to avoid legal suits against the organization by either the government or the employee. Indeed, the legal suits sometimes can be very expensive leading heavy losses or closure of the organization.

When planning and developing an employee benefits plan, personal time-off can be the least to be considered. Why? Various advantages accrue to personal time-off benefit plan for an employee which include employee retention, appreciation of employees for the job well done, employee motivation, improving the image of the organization to be most appealing to job seekers and by being most competitive within the market (Storms, 2002). However, personal time-off as a benefit plan can also have some negative impacts to the organization. For instance, most employees can take advantage to be absent because after all they will be paid, therefore, encouraging the culture of abseentism among the employees which can in turn be expensive for the organization paying for the work not performed.

Conclusion

The planning and development of an employee benefits plan would require bringing together both internal and external factors that affect an organization. Indeed, this plan plays a very important role in ensuring a platform of the wellbeing and welfare of the organization and the employees are well catered for. There are various reasons that motivate an organization to come up with, plan and develop an employee benefits plan. For instance, it ensures employees’ motivation, production, retention and fulfilment of the organization's legal obligations. The benefits plan includes social security, workers’ compensation, retirement benefits, health insurance, disability insurance, life insurance, accommodation, retirements plans, personal time-off and enhancement benefits including transport allowance, housing allowance and risk allowance. Whichever form this plan takes, it is often a vital form of business operations and should be taken up by every business.

References

 Downing, N. (2000). Maximize your benefits a guide for all employees. Chicago, IL: Dearborn.

Ghio, R. S. (2002). Contingent workers and employee benefits: do you know who your employees are? Compensation & Benefits Review, 34(3), 68-73.

Storms, R. (2002). Benefits that save retirement: Employees value their benefits morewhen they understand how their benefits protect their retirement savings. Compensation & Benefits Review, 34(1), 33-37.

December 28, 2022
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Education Economics

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Study Employee Organization

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