Researcher

Scenario 1

Many employees in company A are not likely to have needs for the specifict benefit programs that the company offers, hence it makes sense to get rid of the benefit programs that some employees use and others do not use. The level of benefits provided must meet the needs or objectives of the employees and employers in order to attract employees’ willingness to receive benefits instead of direct cash compensations. For company A, the characteristics of the workforce must be considered first when choosing the benefits. In this scenario, Sue is an old female employee whose children are out of college and parents are deceased. It is not likely that the child-care program along with an elder-care program would be highly valued and considered desirable to her. In addition, many other employees have no need for this benefit either currently or in the future. In another word, the benefits program which the company has offered is not attractive or adequate; employees cannot take full advantage of the use of these benefits.

The best way to solve the above problem is using the flexible benefits to employees who have no use of such benefits. A flexible benefit allows employees to choose from a selection of employer-provided benefits to satisfy their benefits need. For company A, the core benefit provides basic need of security to employees, including company retirement plan, health insurance plan, vacation, long-term disability and some additional benefits such as child-care, dental plan, employee and family assistance program, etc, which are based on employees’ individual situations or priorities.

There are two parts to a fair benefits procedure in this scenario: purpose and policy. The details of procedure are described as follows:

Development Benefit Procedure

I. Purpose

Company A recognizes the need to implement a flexible benefits program as defined in a core-plus-options plan.

II. Policy

§ To demonstrate employee’s eligibility for benefits, office of Human Resource must consider the most recent date of hiring and numbers of hour employee’s work per week. Employees are eligible for benefits coverage from their date of hire.

§ Options plan can be allocated to employees according their full-or part time status plus a percentage annual salary. New employees can choose three options.

§ Generally, participants may not change their core-plus-options elections in the middle of the plan year.

§ Claim procedure for core-plus-options must be provided by each employee benefit plan.

§ Vacation benefit: annual leave of 1 calendar month.

§ Company must made employee benefits to all employees in a non-discriminatory manner such as non-discrimination on the basis of disability, sex and pregnancy and age.

Scenario 2

Dan, the manager of employee benefit at company B, has come up with a six personal-leave days policy to replace the existing benefit that entitls one sick leave day per month to the employee. Dan’s purpose was to improve employee efficiency since he noticed some employees use sick leave as a way to take care of personal business. However, it is not necessarily a good idea to entirely eliminate the sick-leave policy because of the following reasons : First of all, workers cannot completely avoid getting ill. Every employee has chances to be sick, therefore, sick leave benefit is reasonable and necessary.

Secondly, totally withdrawing the sick-leave benefit that is already implemented may have negative effects on morale. (chapter 12) Thirdly, it is likely to have negative affects on the perception of company’s internal equity as well as external equity. The phenomenon of using sick leave as a way to take care of personal business is caused by only a small portion of employees; therefore, those who obey the rules strictly and take sick-leave only when they are sick may perceive this change as unfair. Also, employees will certainly compare their benefits to that of employees at other companies in the industry. If they found out other firms are offering sick-leave benefits, they may perceive their own situation as unfair. Finally, since the six personal-leave days are not paid leave, employees who are sick may still try to work. This is likely to reduce the productivity or the quality of work and chances of other employees getting infected increase.

Two important issues with benefits administration are the use of flexible benefits and communicating benefits to employees so that they understand the significance of their benefits and how to use