Remuneration is one of the key factors that determine the motivation and performance of employees. Apart from the basic salary, employers provide their employees with additional benefits. These include pension programs, paid leave, employee assistance programs, and health insurance (HSBC, 2014). The aim of these benefits is to improve the welfare of employees. The resulting improvement in morale and staff commitment leads to high organizational performance. This paper will discuss the legal and discretionary benefits that are used in the United Arab Emirates. It will also discuss the differences between the benefits that the nationals of the UAE are entitled to and those that their foreign counterparts receive.
Types of Employee Benefits
Legal Benefits in the UAE
Legal benefits are mandatory compensations or rewards that employers must provide to their employees. In the UAE, labor laws require employers to provide the following benefits. First, employees in the UAE are entitled to several prescribed leaves. These include annual leave, sick leave, maternity leave, and Mecca pilgrimage or religious leave (HSBC, 2014). Employees who have been in service for more than one year are entitled to an annual leave of 30 days (Latham & Watkins LLP, 2009). The employees receive their full pay while on leave so that they can maintain their purchasing power. The long annual leave is justified by the fact that the ex-pats who dominate the job market have to travel back to their countries at least once a year to visit their families. During sick leave, employees are entitled to their full pay for the first fifteen days. In the subsequent thirty days, employees are entitled to only half of their pay (HSBC, 2014). However, after thirty days employees do not receive any pay. Female employees enjoy maternity leave, which lasts for forty-five days. Moreover, employees “are entitled to an unpaid leave of not more than thirty days to make a pilgrimage to Mecca” (HSBC, 2014, pp. 4-44).
Second, employees are entitled to social security benefits. The labor law requires employers in the private sector to contribute at least 12.5% of an employee’s monthly pay to the General Pension and Social Security Authority. In the public sector, the employer contributes up to 15% of the employee’s salary. Social security benefits enable employees to access a modest income after retirement (Lusardi, 2010). Third, employees in the UAE are entitled to end of service gratuity. Employees are required to be in service for at least one year to qualify for the end of service gratuity (Latham & Watkins LLP, 2009, pp. 1-6). Employees whose employment contracts are terminated because of misconduct often forfeit their end of service gratuity. Providing end of service gratuity is an important strategy for retaining employees in the private sector where ex-pats are employed for a limited period. Generally, end of service gratuity is provided by employers to enable their employees to survive after the end of their contracts.
Discretionary Benefits
Discretionary benefits are optional compensations or rewards that are provided by employers. The discretionary benefits that are provided in the UAE include paid time-off, services, and protection programs. Protection benefits are meant to cushion employees and their families from the negative effects of loss of income that might arise due to illness, unemployment, or disability (Lusardi, 2010). The main types of protection benefits that are provided in the UAE include insurance cover and pension programs. Insurance provides protection to employees and their families against the adverse effects of a disease, disability, and loss of life (Lusardi, 2010). Pension programs, on the other hand, enable employees to access income after retirement. The business case for providing protection benefits is based on the fact that employees who feel financially and socially secure tend to have high motivation and commitment (Otoum & Sulieman, 2012). This enables them to create value for their employers. Protection benefits are important in the UAE because they help in attracting talent in the private sector where the nationals of the UAE are reluctant to work.
Paid time-off benefits are payments made to employees while they are on leave or routine breaks such as lunchtime. The paid-time-off benefits motivate employees to take a break from their work and attend to their personal needs. This enables employees to achieve the desired work-life balance, which in turn improves their productivity (Golden, 2012). Employers in the UAE provide several services to their employees. These include wellness programs, stress management, employee assistance, education programs, and day-care programs. The main objective of these services is to enable employees to cope with the challenges of life that are likely to have adverse effects on their performance at the workplace (Golden, 2012). For instance, wellness programs improve the health status of employees by promoting healthy lifestyles. Undoubtedly, improved health leads to high performance.
Difference between the Benefits Provided to Expats and the Nationals of the UAE
There are several differences between the benefits that ex-pats and the nationals of the UAE are entitled to. To begin with, social security benefits must be provided to the nationals of the UAE. By contrast, employers have the option of not providing social security benefits to ex-pats. This difference is explained by the government’s commitment to implement the Emiratization policy, which aims at increasing the employment of the nationals of the UAE in the private sector (Latham & Watkins LLP, 2009). Specifically, mandatory provision of social security benefits motivates the nationals of the UAE to work in the private sector where wages are often lower than in the public sector. Employers are also allowed to provide social security payments as a discretionary benefit because of the difficulties they face in harmonizing their payrolls (HSBC, 2014). For instance, employees from high-income countries such as the US are likely to suffer losses if their social security contributions are made in the UAE where wages are relatively lower. In this regard, multinational companies are allowed to make social security contributions in their employees’ countries of origin (HSBC, 2014).
Second, ex-pats in the UAE are often entitled to a wide range of fringe benefits, which include house allowance, child education expenses, airline tickets, and relocation allowance (Otoum & Sulieman, 2012). By contrast, the nationals of the UAE are often not entitled to the aforementioned benefits in most companies. One of the factors that explain this difference is that ex-pats and the nationals of the UAE usually have different employment contracts. The expats are entitled to additional benefits such as payment of child education and accommodation expenses to enable them to settle and work comfortably in the UAE. In addition, most multinational companies provide extra discretionary benefits to expats to motivate them to relocate to the UAE. This compensation strategy is usually considered to be unfair to the nationals of the UAE since they perform the same tasks as their colleagues from foreign countries (Otoum & Sulieman, 2012). However, companies that provide extra benefits to expats justify their decision by the fact that the nationals of the UAE have access to stable social safety nets such as free healthcare, which expats do not enjoy.
Finally, health insurance programs vary in the UAE. The government and most private companies provide health insurance to employees and all members of their families (HSBC, 2014). However, expats are sometimes entitled to limited health insurance benefits. For instance, an expat who is hired on a ‘single status’ employment contract is required to provide health insurance to any person under his or her sponsorship in the country. By contrast, the nationals of the UAE do not face restrictions concerning the members of their families who can receive health insurance from their employers.
Conclusion
The labor laws in the UAE require employers to provide several benefits to their employees. These include end of service gratuity, social security benefits, and annual leave. Employers are not obliged by the law to provide social security benefits such as pension contributions to expats in the UAE. The labor laws also allow employers to provide various discretionary benefits. These include paid time-off, life insurance, and services that improve the wellbeing of employees. Generally, the benefits are provided to improve employees’ standard of living, which in turn improves their productivity.
References
Golden, L. (2012). The effects of working time on productivity and firm performance: A research synthesis paper. Geneva, Switzerland: International Labor Organization.
HSBC. (2014). Doing business in the UAE. Dubai, United Arab Emirates: HSBC Commercial Bank.
Latham & Watkins LLP. (2009). Employment issues in the United Arab Emirates. Los Angeles, CA: Latham & Watkins LLP.
Lusardi, A. (2010). Planning for retirement: The importance of financial literacy. Public Policy and Aging, 19(3), 7-11.
Otoum, M., & Sulieman, H. (2012). Comparison job satisfaction perceptions among Emiratis and expatriates in information technology management in Emirate of Dubai in United Arab Emirates. Sharjah: University of Sharjah.
A benefits package is necessary for the well being of employees in an organization. Employee benefits can be defined as non-monetary rewards which employees gain apart from their salaries and wages. These benefits are meant to improve the quality of life of employees working in an organization.
Some of the benefits offered will be either mandatory or discretionary. Mandatory benefits are benefits which an employer has an obligation to provide to his employees as stipulated by the law. Discretionary benefits are those benefits an organization offers its employees out of its own volition. The benefits packages offered will fall in the two categories. They are meant to improve the welfare of all employees working in this organization.
The first category of benefits to be offered will be in form of retirement benefits. These benefits are mandatory by law because the government values social security of all working people. All employees in the firm employed on a permanent contract are required to remit monthly payments in specific retirement schemes.
Employees will have a specific amount of money deducted from their monthly earnings depending on the amount of salary each individual earns. The money will be held in a pension fund from which an employee will be able to obtain his savings upon retirement.
Health insurance is important because workers need to have adequate medical cover whenever they fall sick. Workers who have families will have four of their nuclear family members covered by the health scheme. Employees’ salaries will be deducted and the funds obtained will be remitted to health service providers.
This benefit is mandatory because an organization with healthy employees has the ability to produce high levels of output. Sick employees will be granted sick leave to allow them to get treatment. The company will also offer maternity leave to pregnant female employees. Health benefits will improve the living conditions of employees that work in this firm.
Housing benefits will also be offered to all employees in the organization. These benefits are discretionary. The criteria to be used will influenced by the level of status an employee holds in the organisation. Employees in a specific pay grade will be offered a uniform housing allowance every month on top of what they earn. All employees will get additional monetary compensation on top of the salaries they earn monthly.
A transport allowance will be offered to interns at the organization to help them reduce their commuting expenditure. This is a discretionary allowance which will ease the burden of commuting costs on interns about to become full time employees.
Employees will be encouraged to join optional life insurance plans with various insurance providers. These plans will be easily transferable and will offer compensation depending on the length of time an employee is willing to subscribe to them. The insurance plans offered will yield annual interest depending on the amount of premiums an employee contributes.
An insurance risk cover for employees working in hazardous environments will be introduced. The company will also implement safety measures which guarantee the wellbeing of employees. Employees who get injured accidentally while performing their duties will be offered monetary compensation for injuries sustained.
This benefit will only apply to employees who get injured inside the company. They will have to provide evidence that shows the injuries they sustained were accidental. The compensation offered will be commensurate to the type and severity of the injury suffered. Employees who are found to have used intoxicating substances in the form of alcohol and drugs at the work station will not qualify for compensation.
Other benefits to be offered will depend on the individual situation of each employee. These benefits will be offered depending on the performance appraisals of each employee in the company. There will also be benefits that will be offered to employees going through difficult times to help them recover and continue with their duties at work. These benefits make the organization to be responsive to the needs of its employees.
The recruitment and staffing policy in the organization will focus on hiring competent individuals who are suitable for the organisation’s staffing needs. The organization will be divided into four departments all of which will coordinate closely. These departments are: finance, sales and marketing, production and human resource.
The production department is critical for the company’s survival and it will have the largest number of staff. The sales and marketing department will also need several support staff that will represent the company in its target markets. The finance and human resource departments do not require large personnel teams.
The company is to be headed by a Managing Director who will oversee the operations of all departments headed by their respective managers. This position fits a person with a long term growth strategy for the firm and good leadership skills. The finance department will be under the finance manager who will be responsible for computing and analyzing financial issues in the firm.
A person with good book keeping skills combined with good financial analytical skills will be suitable for this position. Seven accountants and an IT officer working under him will be responsible for maintaining and updating the firm’s financial records.
The production department will be headed by a production manager. This will suit a person with effective technical knowledge on suitable equipment and production processes to be used by the organization. The production manager will be responsible for planning work shifts for staff under his department.
He will liaise with the marketing department to determine the level of output which needs to be produced to satisfy existing demand in the market. He will work with three line managers who will supervise support staff in the firm. The support staff will be operating production machines. Employees in this department will be offered a risk cover because of the hazards they are exposed to in their working environment.
The human resource department will be headed by a human resource manager. A person with a thorough understanding of labour issues and efficient human resource practices will be suitable for this position.
The human resource manager will be responsible for recruitment, staffing and preparing organizational procedures to be followed by the firm’s employees. He or she will work closely with other support staff including front office staff, drivers, secretaries and security officers. These employees will assist the organization to run its operations smoothly.
A marketing manager will watch over sales and marketing functions in the organization. A person that can effectively analyse existing market opportunities and their potential will be suitable for this position. He will be responsible for initiating marketing strategies and plans that help to increase the company’s market share.
He will be assisted by sales executives who will be liaising with distributors to meet the set sales targets. Sales executives will also be required to conduct market research to gather important information and data which reveal more about the market.
The recruitment criteria for employees to fill these positions will be influenced by their skills, suitability and experience. All recruited candidates will have to undergo rigorous interviewing processes to determine their suitability. The finance, production and marketing departments need employees who have college education.
The interviewed employees will have to do aptitude tests to evaluate their skills, personalities and knowledge. Employees selected to work in production will undergo induction programs to make them conversant with technical procedures involved. The organization has a clear communication structure which all employees are required to follow when they are performing their duties.
Cafeteria plans will be included in the benefits policy being formulated. Employees will be able to purchase meals during lunch and tea breaks. The cafeteria program will be subsidized and employees will pay a small fee for the service which will be deducted from their gross salaries.
There will be schemes that reward employees who surpass established performance parameters. These individual incentives will be influenced by impressive performance outcomes. These employees will be given bonuses, holiday benefits and gifts to motivate them. A study leave paid for by the company will be offered to talented employees who desire to acquire more skills and knowledge in their areas of expertise.
In conclusion, these benefits will help to improve the welfare of all employees who work in the organization. All employees will be made aware of these policies to make them conversant with organizational procedures.
Job satisfaction is the attitude or the feeling of accomplishment within an employee in a quantitative and qualitative manner. Compensation holds a great significance in the lifestyle and self esteem of employees. The amount of money an employee earns will determine his/her level of their job satisfaction.
On the other hand, performance is the desire, ability, capacity and motivation that an individual has to carry out a specific task. The performance of an employee depends on the work setting, the tools provided, and information required to carry out the job at hand. The benefits that an employee enjoys can only be reflected in their performance in the form of a certain level of result-based services.
Impacts of Benefits and Service on Job Performance and Satisfaction
In the contemporary world, people not only look for jobs that are in line with their profession or careers but also the jobs that will provide them with benefits. Such benefits motivate employees, hence increasing their productivity and their levels of job satisfaction. In most corporate organizations, the benefits and service compensation of employees highly depends on job satisfaction.
Thus, enlightened managers receive equal levels of satisfaction from their employees due to the intrinsic and extrinsic benefits they reward them with. Furthermore, the employees of a given organization can have a sense of pride with their employer in an event where they work under a conducive working environment.
Skill based compensation is usually linked to various risks especially when employees becomes discontented with their work or when they do not have the opportunity apply their expertise at work. Therefore, positive performance is equitably rewarded through a benefit structure.
Consequently, the key aspect of employee job satisfaction comprises compensations, promotions, the level of supervision, and work conditions. It is evident that the form of rewards and benefits arrangements under which employees perform powerfully influences their level of satisfaction. Therefore, the increased satisfaction arising from benefits helps to boost the expectations of employees in terms of presentation.
As a result of job satisfaction and contentment, employees usually put in more effort to their work hence meeting the goals and objectives of the organizations that they are working for. Benefits are effective incentives that play a critical role in the attainment of job satisfaction since the employees develop additional commitments and they become more satisfied. This makes them to kindle a sequence of positive actions (Gaurav, 2012).
Benefits enable employees to initiate diverse strategies that will enable them to enhance the performance of their organizations. Notably, desirable benefits will ultimately satisfy the esteem of employees by enhancing their strength and competence making them to be critical to the organizational performance.
Employee satisfaction is as a result of how reasonably they are treated because satisfaction arises from individual perception regarding work outcomes and the relative inputs as compared to others. On the other hand, employee dissatisfaction can arise even with similar outcomes in turnover under enhanced benefits for the work environment can fail to offer flexibility and desirable basis of amusement especially when the organizational tone becomes demanding and tedious (Gaurav, 2012).
Therefore, benefits should also provide employees opportunities to grow within an organization. This can be attained through performance reviews that accommodate diverse perspectives that help in correcting pessimistic behaviors in addition to rewarding productivity. Therefore, since employee satisfaction affects the bottom-line, it is crucial to have good leadership structures that appreciate the link between organizational performance and employee fulfillment (Kuballa, 2007).
References
Gaurav, K. (2012). Drivers of Employee Satisfaction and Attrition: A Quantitative Investigation. Chicago: GRIN Verlag.
Kuballa, J. (2007). Employee Satisfaction: A Precondition for Economical Success of Service Companies. Boston: Cengage Learning.
The skills and training needed by workers in today’s working environment has been greatly influenced by technology. The manager responsibility is to recruit, select, and compensate employees in its organization. Changes like this makes employees rely on effective management.
Emphasis is laid on output and performance. The manager and the staff create policies and programs to ensure their satisfaction through compensation. Compensation is a “systematic approach to providing benefits to employees in exchange for work performed” (Bagin, 2008, p.56). It recruits and measures job performance and satisfaction of employees.
Difference between job analysis and job evaluation
Job analysis is the process by which employees benefit from work they have performed. It has three components. Job contents which describes the duties and responsibility of the job. Job requirements that are used in the identification of formal qualifications, knowledge and abilities as well as personal characteristics required by employees to execute the job content and finally job context, which constitutes information concerning a specific job, its purpose and the position it takes within the organization. This practice helps to establish internally consistent job structures.
They locate the job in the organization structure, describe why the job exists and lists the major job duties and responsibly. They show the relationships with other positions within and outside of the organization. This is necessary for satisfactory job performance.
They identify the amount of thinking required in decision-making and the environment in which the problem solving takes place. It enables choosing the people with the highest levels of knowledge, skills, abilities, experience, and formal qualifications required to do the job.
They show the financial impact of the job and any licenses’ or special registration required. It helps in identifying the specific rights and limitations that apply to the positions decision-making authority. They show the crucial circumstances about a particular position and environment of the job.
They show the performance standards that are the requirements for effective performance and measures for evaluating performance. They show the trade unions and professional associations’ required. It helps in collection and report of job analysis information (Armstrong, 2007).
While job evaluation, is a systematic method of determining the walk to the organization of a job in relation to the walk of other jobs. It is concerned with how big and smart a job is to ensure that jobs of different sizes attract the appropriate pay differentials. There are two methods used. Job ranking, it is where the evaluator ranks the jobs from biggest to smallest. Job grading or classification, which uses a number of job related factors to create generic job descriptions for each grade.
Challenges encountered while developing internally consistent and market competitive.
Internally consistency compensation is the establishment of fair procedures to equalize payments with work performance. It involves creation of job designs, pay systems, and performance appraisals. It achieves job objectives through motivation of employees and determination of policies and practices that determine performance and behavior of employees. Market competitive compensation is the review of positions in the company to know their implications in the end and the much they deserve remuneration.
The challenges include determining equitable treatments in terms of wages and salaries due to the increasing responsibility and sustainability of companies. Ensuring appropriate analysis of employee positions to avoid legal problems and employee dissatisfaction.
Providing regular remuneration and performance reviews. Company performance is used in the measurement of employee strengths and weaknesses. There is the probability of promoting and paying employees beyond their level of competence.
A company has the ability to reduce the risk of loosing the talented employees to competitors. Ensuring there is a good relationship between the company and the external environment. The ability of the company to compete with compensation levels of other companies.
The manager can be unable to design appropriate payrolls, applicant, and employee training programs. The management can formulate policies and practices that produce the employee competence and behavior enough to achieve the company strategic goals. The manager can hire employees who have the ability to compete effectively with competitors’ technology.
Payment Quartiles
A merit pay system is a “method of determining the standard of performance of employees within a pay range” (Bagin, 2008, p. 77). Merit payment is according to the standards of performance and the pay range the employee is in. The guide chart may not have been well designed or communicated the employees are expected to seek changes from the managers.
The amount paid depends on the budget of the organization and the adjustments of wages in the wage structure. The guide chart shows a smaller percentage payment of employees in the third quartile compared to the first quartile thus the payment is fair.
Insurance
A health care insurance policy provides employers with benefit of an agreement to pay apart or all the medical expenses. The employee is supposed to cater for their medical insurance expenses but the employer can decide to provide a part or the whole health insurance premium. The costs incurred in the medical office are covered by insurance in areas such as illness, drug prescription, hospitalization including other medical services.
Due to the increased expenses on medical bills, employers are to pay a part or all through payroll deductions. Several employers approve their employees to cover medical insurance for their families. Other employees offer guaranteed coverage of medical expenses of their employees up to a certain position of promotion. Most employees do not accept companies where the employers do not offer health care insurance benefits (Bagin, 2008).
A change in business environment and society has effects on employees. Pollution of the environment through release of harmful chemicals, materials, and wastes generated by manufacturing companies has led to worse health conditions of people. Companies prefer introducing risk retention as away of avoiding unnecessary expenses.
An increased level of education has raised the living standards of people reducing the need of company involvement on employee benefit programmers. Governments’ intervention on the benefits of employees has led to adoption or negligence of some benefits of employees.
Economic and population growth worldwide has threatened business investment on employee benefits due to high charges on cost of business operation. There are increased levels of unemployment thus reducing job competition hence companies are not willing to spend on employee benefits. Companies charged high taxes tend to reduce expenses on employee benefits (Doyle 2006)
Conclusion
An organization general approach to compensation must be consistent with its overall strategic business objectives. The policies and practices should reflect the performance, behavior to be motivated, and the kind of employees to attract and retain.
Employees are aware of their benefits in the company.merit payment can result in a reduction or an increments on the base pay. There is increasing need to use a flexible compensation programmed links to employee performance. Benefit of employees can be in the form of financial rewards, non-financial rewards or according to the companies’ strategies.
Merit payment systems give employees feedback on work performance. It enables an organization to discern their employees’ strengths and weaknesses. There is need of companies to keep alert to changes in the labor market.Managers ensure talented employees are maintained in the company to improve its productivity. Managers must use employment laws to make employment decisions.
References
Armstrong, M. (2007). Reward management. New York, NY: Kogan Page Publishers.
Doyle, A. (2006). Job searching. New York, NY: Adams Media Publishers.
Bagin, D. (2008). The school and community relations.Oklahoma, OK: Pearson Publishers.
It is important for employers to eliminate the benefits drawn by retirees to maintain the benefits of current employees. A number of companies are taking into consideration the changes they are likely to experience as a result of increasing health care costs and the dire economic situation.
Employers are therefore looking for the most effective ways to reduce such costs (C C H, Incorporated 2003). Elimination of benefits for retirees is a sure way of reducing the costs incurred by an organization, such elimination should be directed to the retirees due to their diminishing role within an organization and their financial position that come about as a result of accumulation of funds during the period of employment.
Retirees also draw benefits from organizations that carry out social work. Current employees do not enjoy such a feat. It is however important to reinstate that the reason for the elimination of retirees benefits is the amount of contribution drawn over time that is higher than that of current employees thus a need for employers to create a balance.
Employees should be charged more for health benefits as opposed to reducing their contribution to pensions. The reason is that pensions is a mode of saving that caters for the needs of such employees upon retirement while costs incurred as a result of health are termed as recurrent. It is unwise to feel comfortable meeting the health needs which will always form a part of an employee’s life. Pension benefits do not conform to such an ideology.
It is worth noting that public employees pay a small percentage of their pension’s costs. This is usually a third or less of the total cost. According to experts this contribution is quite low. It is actually less than 30% of the total cost of the annual pensions plan stated contributions. This means reducing the contributions to pension will impact minimally on the overall costs incurred by an employer.
In an effort to improve employee satisfaction, it is necessary to study and analyze their expectations especially in terms of finances and motivation. This lays the ground work for initiating corrective measures in case something is a miss.
It is inappropriate for employers to reduce employee’s incentives during tough economic times. This only serves to reduce employee loyalty and morale. Employers therefore need to provide channels for employees to voice their concerns in case such an activity is taking place; this is an important way to propagate job satisfaction. The bottom line is that the benefits drawn by employees should not be reduced (Lundy & Janes 2009).
After taking into consideration the above mentioned concepts. An employer should create a strategic plan in an effort to balance between the needs of the employees and their own needs. It is through employers performing their duties efficiently that employees can pick up the trend. These duties include provision of benefits appropriately. Employers can therefore take advantage of new tools related to electronic planning and offer benefits which are timely and accurate.
Strategic plans are useful in providing controlled budgets. An employer can achieve such a feat by evaluating the present benefit plans, identification of the goals and objectives of the company, determining strategies that relate to the culture of the company, coordinating the benefit strategies in reference to human resource programs, designing a communication plan and establishing a budget that fully supports this plan.
This will be useful in ensuring that employees receive their benefits as planned thus increasing the levels of satisfaction (Lundy & Janes 2009).
References
C C H, Incorporated. (2003). United States master employee benefits guide. Los Angeles, CA: CCH Incorporated.
Lundy, S. & Janes, S. (2009). Community Health Nursing: Caring for the Public’s Health. New York: Jones & Bartlett Publishers.
Sims, R. (2002). Organizational success through effective human resources management. New York: Greenwood Publishing Group.
Secretaries or administrative assistants play pivotal roles in every organization. Such roles include doing clerical works together with administrative functions (Bureau of Labor and Statistics, 2012). This paper does not focus on all industries. Rather, the focus is on the construction industry, with the particular organization that is utilized for discussions of the paper being Turner Construction Company.
Turner Construction Company is located in North Carolina. It started building in 1920s. The company’s first successful project was a concrete-frame textile mill in Gastonia in North Carolina. Since then, the company has increased its range of projects. The heart of the operation of Turner Construction Company rests on platforms of innovation and creativity as the main strategies for gaining competitive advantage.
This strategy has seen the company grow into an international organization. To keep in pace with this growth, an opportunity for a secretarial position has emerged within the human resource department. A candidate qualifying for this position will be based in North Carolina office that is located at Charlotte in Raleigh.
Responsibilities
The human resource secretary (administrative assistant) will conduct office duties involving file maintenance tasks from the organization of the company’s files, for instance payroll files, invoices for suppliers, summary for billing the organization’s projects, and invoices for contracts to suppliers and blueprints.
The office of HR handles a large number of information that is related to employees’ documentations including bookkeeping of accounts payable to the employees coupled with billing.
Being an administrative assistant, the secretary is anticipated to help in these roles through conducting chores such as reviewing invoices, clarification for accuracy in calculations of material costs, and costs of subcontracting (Christensen & Media, 2013). The sectary also reviews timecards for employees besides appraising and updating expense reports coupled with payrolls.
For successful performance in his or her range of chores, the secretary will also have to conduct extra duties such as using software applications to ensure that the costs related to employees are both tracked and maintained up to date for every project that is manned by the employees of the company within North Carolina.
The secretary will also help the HR to update information that is required to construct proposals together with budgetary reports.
Knowledge of software applications applicable in the HR department is also a very crucial requirement for the human resource secretary since the successful candidate will use the application programs to keep up to date by tracking the cost of the materials used in building and execution of Turner Construction Company projects.
Qualifications
The candidate should:
Be experienced in letter drafting.
Possess skills in administration of various tasks such as management of payrolls and supplier invoices.
Be capable to work in standalone environments and in a professional manner.
Be able to produce timely supplies reports when needed.
Be able to work with information secretly and in a private manner.
Have skills in time management to him or her know the priorities for effective work.
Be accurate in document typing.
Be highly knowledgeable in computer applications applicable in HR department.
Possess a degree in business administration and a one year experience in handling of construction related secretarial duties.
Possess incredible interpersonal and intrapersonal communication skills, as he or she will handle employees directly in the extents of documentation of their pleas before they are forwarded to the HR.
Compensation and Benefits Package
In every new job opening, compensation and benefits package offered constitute the starting point for recruitment of the most qualified person to fill the position. Employee compensation and benefits package comprises a myriad of facets such as variable pay, compensation based on equities, guaranteed pay, and benefits (Lambert & Vicki, 2012, p.307).
A guaranteed pay involves all monies that are accorded to an employee in terms of wages or monthly salaries. For the proposed secretarial position, the guaranteed pay is the basic salary that is arrived at from the minimum statutory pay set in the state of North Carolina as prescribed by the US Bureau of Labor and Statistics.
This salary is $30,830 (Christensen & Media, 2013, Para. 4). Indeed, with regard to these authors, secretaries in construction companies are paid the same amount of wages as in other industries.
In addition to the basic salary, the secretary will also be eligible to a variable pay package. Variable pay includes bonuses, commissions paid from sales, and money paid for overtime jobs done offered to employees due to jobs well done and good results achieved (Lambert & Vicki, 2012). In the case of the Turner Construction Company, secretarial position variable pay will comprise bonuses and overtime allowances.
The criteria used for overtime pay is based on extra hours worked per week. For every hour above 40 hours worked in a week, the secretary will be eligible to an hourly pay of 1.5 times more than normal hourly pay. This calculation formula is based on the BLS standards. Bonuses added to the salary of the secretariat includes the discretionally bonuses (Brockbank, 2003).
Other forms of gifts and payments given to an employee on a special occasion are bonuses given even in employees’ absence, for example if the employee is on holiday or is ill. The job position will entail working in odd hours especially in times when there are urgent meetings (United States Department of Labor, 2012).
For this reason, the eligible person will not be limited to work for a specific amount of hours. The bottom line is that any candidate applying for this position should be ready to work in unusual hours as long as she or he is compensated for the extra time worked.
Reference List
Brockbank, W. (2003). If HR Were Really Strategically Proactive: Present and Future Directions in HR’s Contribution to Competitive Advantage. Human resource management, 38(4), 337-352.
Employee compensation and benefits characterize an investment from which an organization derives value. In this regard, it is imperative for the company to manage this investment in line with the overall organizational strategy as opposed to writing it off as an expense.
In view of hiring the new senior Secretary for Capital Nursing Home Limited, it is important to design and implement a compensation and benefits plan that will not only attract competent candidates, but also ensure that the company receives the best service from the employee attributed to motivation (Kouzes & Posner, 2012).
This will ensure that the company retains skilled and competent employees thus reducing the rate of employee turnover (Massey & Gary, 1992).
Senior Secretary Total Compensation
The following is the proposed personalized compensation plan for the Senior Secretary at Capital Nursing Home Limited (CNH). The proposal indicates the contributions CNH will make towards the Total Compensation package.
The proposal demonstrates that the value of the employee’s benefits augmented with the annual salary and provides the total compensation. This is to illustrate to the employee how much his/her service is valued at CNH.
Senior Secretary Job Description
The Senior Secretary will have the responsibility for the general supervision specifically in assisting all tasks associated with systematic operations of the physician practice. The secretary’s duties will include receiving phone calls in a pleasing and receptive manner and direct the calls suitably (U.S. Equal Employment Opportunity Commission, 2013).
Qualifications
The position for Capital Nursing Home Senior Secretary entails standard secretarial responsibilities. In addition, it requires the creation of rapport among the company departments for organizational efficiency, handling of petty cash and other minor duties. The potential candidates SHALL meet the qualifications outlined below to be considered eligible.
The position needs two (2) years of secretarial training in a recognized institution or completion of secretarial training or equal business knowledge, skill and familiarity. The candidate MUST possess at least three years of experience in related field. A Bachelor degree in relevant fields is desirable. The candidate must be computer literate with an International Computer Driving License and have the capacity to type 55-65 words per minute.
Domestic Compensation and Benefits
Remuneration
The successful candidate for the position of Senior Secretary shall receive a competitive package that includes compensation and benefits. The initial annual base pay is $40,000. Other cash benefits (Annual bonus) will total to $1,200 while the company paid benefits will sum to $18,940. The total compensation for the new senior secretary is $60,140 annually. The breakdown for the remuneration is as indicated below.
Benefits
The total annual benefits for a senior secretary as paid by the company amount to $20,140. These include $18,940 Company-Paid Benefits and $1,200 Annual Cash Bonus.
Insurance Benefits
Insurance is essential as it covers the employee against most workplace mishaps (Guo & Burton, 2010).
Retirement Benefits
The company shall contribute towards the senior secretary’s retirement benefits.
Time Off benefits
The company shall pay the secretary $3,538 as personal time off benefits.
Mandated Benefits
The company shall meet its legal requirements according to the Federal Law by paying the following towards the secretary’s benefits (All amounts in dollars). Federal Unemployment is $56; State Unemployment is $184, and Worker’s compensation 1,512. All these amount to $1,752.
Special Benefits
It is important for the candidates to note that the corporation exclusively contributes towards this. In fact, this is to ensure that the senior secretary performs his/her duties conveniently for self and company performance, growth and development. These benefits encourage employees to work harder, commit to duties and be loyal to the institution (International Society for Performance Improvement, 2013)
Total Compensation Package
CNH as a competitive employer offers its employees competitive packages to ensure it retains the most competitive workforce in the healthcare industry. The total compensation package for the position of Senior Secretary includes the base pay ($40,000) and the company-paid benefits and cash ($20,140).
This amounts to the total annual compensation of $60,140. The company-paid benefits represent 68 percent of the senior secretary’s total benefits. The company-paid benefits and the annual cash bonus represent an extra 50 percent of the secretary’s base pay.
Additional Company Perks
Basically, perks by the company initially include coffee services, company picnics, team bonding and annual holiday retreats (Krueger, 1990). Additional perks shall be given upon the evaluation of the secretary performance and negotiations with the human resource manager.
Benefit Perspectives
In order for the company to retain its competitive edge, it is critical to be creative in view of the benefits (Schneider, 2008). It is imperative to present employees with improved access and value of the benefits. The company should ensure that it allows the secretary to access the benefits immediately they are hired (SHRM, 2013).
Indirect non-financial compensation
The culture of CNH will be contributed to by the employment structures including the compensation rewards system. It is imperative to ensure that the program aligns with the company strategic goals (Stewart & Brown, 2012).
Recent research indicates that the contemporary changing and increasingly competitive healthcare industry’s inventiveness and flexibility draws and maintains highly skilled and competent workforce including expatriate (Burns-Green, 2013).
Conclusion
Contemporarily, it is a prerequisite for companies to reward employees for new ideas, superior performance and creativity for them to be innovative in a way that will help the company achieve its organizational strategic goals. This will be attained by putting in place a compensation and benefits program that reflects the changing economic times and the need for companies to attract and retain highly skilled employees.
In order to retain employees for a long period as opposed to recruiting new workforce frequently, the company should offer annual bonuses. It is also plausible to tie the salaries to the tenure of employment.
References
Burns-Green, C. (2013). Consistent flexibility- The challenges of managing expatriate benefits. Benefits Magazine, 1(3), 12-19.
Guo, X. & Burton, J. (2010). Worker’s compensation: Recent developments in moral hazard and benefit payments. Industrial and Labor Relations Review. 63(2), 340-355.
Kouzes, J., & Posner, B. (2012). The leadership challenge: How to make extraordinary things happen in organizations. San Francisco, CA: Jossey-Bass.
Krueger, A. (1990). Incentive effects of workers’ compensation insurance. Journal of Public Economics. 41(1), 73–99.
Massey, R. & Gary, L. (1992). Compensation packages for farm employees. Web.
Schneider, J. (2008). Recent court decision sheds new light on ERISA’s top hat plan exemption. Journal of Financial Service Professionals, 1(2), 34-37.
Stewart, G. & Brown, G. (2012). Human resource management. Danvers, MA: John Wiley & Sons, Inc.
Competition for employees has always been on the rise. Each and every employer wants to hire and keep that experienced, talented and dedicated employee that will be instrumental in delivering quality towards the achievement of the company’s goal (Chapman, & Kelliher, 2011). In this paper, I am going to look at several employee benefits that provide great opportunities to increase their productivity. The advantage of these benefits is that the employee gets satisfaction, less likely to quit, and at the same time, can be more committed to their work. What are the basic benefits that business is able to offer to their employees?
Basic Benefits Offered
The law stipulates that you need to allow your employees to leave for an electoral process and national duties either in military or jury. These are salary, hourly pay, piece-rate payment, whichever applies to the business. The employer is required to provide their employees with retirement benefits and disability benefits. The government expects employers to act accordingly in reference to the FFML (Atkinson, 2009).
Other benefits apart from these are not required or stated in the law. However, the normal practice has been that firms have come up with other benefits outside the law margins to remain competitive. Such benefits are discussed below.
Paid Holiday, Vacations and Sick Leaves
This is one of the benefits that employers have for a long time now used to attract and keep their employees. This benefit is given, especially during the national holidays, New Year Day, Christmas festivities, and other occasions. Other employers also allow their employees a few days off to attend religious functions and occasions like funerals (Davis, & Blaskovich, 2012).
Health Insurance Benefit
There are a lot of benefits that can be provided by employers, but Health insurance is for sure the most enviable of them. With constantly rising health cover expenses, this benefit is to keep your employees motivated. In setting up this benefit, there are several options that an employer can reach out to. The available options include the traditional indemnity plan where an employee visits their preferred health care provider, and sums incurred are later reimbursed (Isenberg, 2006).
The other approach is managed care. There are two forms involved, Health Maintenance (HMO) and Preferred Provider Organization (PPO). HMO healthcare workers and health facilities used must be under HMO. On the other hand, the patient pays a minimum of $10 to 20$ in one visit, and the rest of the amount is paid by the insurance company. The other health insurance plans are self-insurance and Archer Medical Savings Account (Isenberg, 2006).
A practical example is the Microsoft Corporation, which profusely offers its employees paid maternity and paternity leave, unlike other companies. 3M assists its workforce socially by helping them lose weight, quit smoking, and manage stress (Business Journal). Boeing, the aircraft manufacturer, offers its workforce up to 12 fully paid vacations (Simon, Traw, McGeoch, & Bruno, 2007).
Challenges Associated with Offering Benefits
Though they are an incentive tool to the employee, they are a burden to the employer. The rising cost of health has put pressure on employers giving their employees this benefit. This has made most of the small businesses withdraw the health benefit (Chen, & Hsieh, 2006).
In conclusion, an employer that uses employee benefits is at a greater advantage than the other who does not include such added advantages. As we have seen, these benefits can go a long way retaining best employees in the firm as well as achieving the intended goals.
Repeal of Unemployment Compensation Act
Under this act, eligible workers are entitled to benefits when they lose their employment due to faults not committed by them. This act has enabled workers to have a soft ground, which they land on as they try looking for another job. Essentially, there have been different categories of people who have benefited from this Act. On the other hand, employers have been on the receiving end. They have all along bore the cost of paying to the insurance firms.
This has reduced their profit margins and consequently led to the collapse of small businesses, which form the majority of the employers. In order to protect the interest of such businesses, it is of paramount importance that this Act is repealed. This is a viable option as it gives insurance firms the opportunity to solely offer such a product. Withdrawing this benefit also cushions small employers who are ‘infants’ in business. It will be an incentive to other businesses to come up as the cost of opening and running will relatively decrease (Kovac, 2005).
The law mentions a number of circumstances that add up to the eligibility to receive this particular payment. These are inclusive of people who lose their jobs to disasters, such as ex-service men and federal employers (Kovac, 2005). As it has been already mentioned, this law needs to be repealed and in its place, come insurance players. They will carry out the same services but will be an employee based not employer based. This will allow individual employee to choose a particular products in terms of premiums to be paid. Therefore, allowing flexibility on the part of the employee will be ensured.
References
Atkinson, W. (2009, November). Filling in around the edges. HRMagazine, 54(11), 55- 58.
Chapman, J., & Kelliher, C. (2011). Influences on reward mix determination: reward consultants’ perspectives. Employee Relations, 33(2), 121.
Chen, H., & Hsieh, Y. (2006, Nov/Dec). Key trends of the total reward system in the 21st century. Compensation and Benefits Review, 38(6), 64-71.
Davis, C., & Blaskovich, J. (2012). Enterprise risks, rewards, and regulation. The Journal of Applied Business Research, 28(4), 563 – 579.
Isenberg, S. (2006). Coordinating dual health insurance benefits. Ear, Nose, & Throat Journal, 85(9), 584.
Kovac, J. (2005). Revisiting Total Rewards. Workspan, 48(1), 73.
Simon, T. M., Traw, K., McGeoch, B., & Bruno, F. (2007, Summer). How the final HIPAA nondiscrimination regulations affect wellness programs. Benefits Law Journal, 20(2), 40-44.
Issues concerning health care and pension benefits are widespread among companies. In fact, while some companies offer good working conditions to workers, others do not. Moreover, some companies find it difficult to offer good employment packages to employees. Additionally, a number of companies fail to guarantee continued payment of retirement benefits upon takeover or merger. However, it should be noted that such actions take diverse dimensions. These dimensions may take legal or moral obligations to guarantee payment of packages. To answer this question, the paper will examine conditions associated with payment of retiree pensions and health benefits. In addition, the paper will explore both dimensions to arrive at an answer to the question.
From the case study, it has to be noted that Sears was a blue-collar worker with the large mining company. Additionally, it has been noted that the union negotiated a deal to secure their health insurance and pension benefits. Interestingly, their retirement benefits were not indexed to inflation. In this regard, their benefits remained constant irrespective of inflation. Another issue that should be taken into consideration is the fact that the original company in which Frank Sears worked has been taken over by a new management.
In this regard, a new management has taken over with new plans and new strategies. Furthermore, it has been indicated in the case study that a union negotiated the benefits provided. This may mean that these benefits could be considered as postretirement benefits. Actually, the only exception to this is pension benefits, which complicates the situation with regard to retirees. Courts consider legal contracts to be binding to companies irrespective of their financial situation.
To add weight to this matter, I can give an example of General Motors, which have a number of workers on post retirement benefits. According to the company, the contract, which was negotiated (on behalf of workers) by their union, is not legally binding. Instead, the company pays its liabilities as a moral obligation to its retirees. In essence, informal plans do not force companies to honour agreements. However, formal plans are usually honoured as a legal requirement.
Most companies remit health care cover to retirees, however, this is covered under postretirement benefits. This explains why Sears and other retirees opted to pay their health insurance premiums from the pocket. Moreover, it has been indicated that the company targeted retirees’ health insurance as a profit venture. Essentially, it can be noted that post retirement benefits are not legally binding. However, as noted in General Motor’s case, they are morally binding. Therefore, to answer the above question, we have to establish whether the contracts indicated in the case study were legally binding.
To start with, workers union negotiated these contracts. This makes the contracts more binding whether morally or legally. In essence, these contracts could therefore fall between legal or moral lines. That is, they could not be ignored as with the case in the case study above. Essentially, I can therefore categorically state that the company erred in its decision to stop remitting pension benefits to the retirees. Reasons being that pension benefits are not considered as postretirement benefits. Moreover, this deal was negotiated formally by a union, which acted on behalf of the workers.
In this regard, irrespective of whether it was legally binding or morally binding, the company should have shown faith in its agreements. Additionally, the company should have ensured that pensions are remitted continuously. In the context given, it has not been specified whether the contract negotiated by the workers union was legally binding or not. However, based on the procedures and functions of a workers union as stipulated in law, any agreement reached is considered formal in court. Additionally, although it may not be as strong as a contract in law, it has more weight than an informal agreement.
From the case study, it can be noted that the company was obliged to pay pension to its retirees. In fact, given that the deal was negotiated by a union, this was to be considered a formal agreement, which is morally binding for the company to honour. In this respect, I would consider the moral obligation of the company to honour the deal since formal procedures were followed in negotiations for the pay. Additionally, I consider the deal a moral obligation to the company because workers had the right to change parts of the deal.
For instance, some retirees realised that the company was targeting profit out of health insurance deals. This prompted them to withdraw from the company’s insurance scheme to focus on self-funded insurance schemes. This was after the company increased its insurance premium to 21 % and 26 % respectively. Actually, this only shows that although the contract was formal, it was not legally binding as observed in the unexplainable changes to the agreements. Moreover, the ability of retirees to withdraw from health insurance scheme could only point to a contract, which was not legally binding.
In summary, companies have a moral commitment to all their retirees and unions. This commitment is towards payment of agreed dues or accrued rights concerning pensioners. This happens because some of the terms such as health insurance become postretirement benefits, which can be withdrawn upon request by the retiree. Additionally, some terms only apply during employment. Once a person retires, these terms sometimes require renegotiation or termination. In which case, the employer has a moral obligation to continue with some of the terms as noted in General Motor’s case. In other words, benefits other than pensions may not be legally binding to the company.
In this regard, they should be considered as morally binding since they were negotiated and signed before retirement. Companies should therefore ensure that they comply with their end of the bargain irrespective of consequences at the end of employees’ terms since employees also take risks in signing such agreements. For instance, Frank Sears is forced to cut on daily expenses including basic needs because the pension given is inadequate. Moreover, things worsen when the company withdraws even the little they depend on (Leimberg & Mcfadden, 2011).
Does the purchase of the original company by another company, or changing economic circumstances, obviate the employer’s obligation concerning retiree benefits? Why or Why not?
In a constantly dynamic business environment, companies try to remain profitable. This forces them to take some necessary but painful decisions. These decisions may affect their expenditure, quality of produce or even workers. The case of Frank Sears highlights the difficult situations under which workers are sometimes left when companies make necessary but painful decisions. The Sears are left without pensions in a difficult fiscal environment. They have to renovate their house, feed and buy other needs. Moreover, their withdrawn pension has been inadequate forcing them to miss some meals in order to survive. In the end, their situation is painful and severe for a person who committed his whole life helping the company to meet its goals. It is only responsible for the company to pay back this commitment by honouring its pledges irrespective of a takeover. Essentially, take over should not obviate an employer from honouring its financial obligations (EBSA, 2013).
Whenever a merger or take-over occurs, numerous aspects must be put into consideration. For instance, financial aspects regarding the level of funding for pensionable employees should be considered. These considerations are usually based on available resources based on assets of the company. Additionally, these considerations tend to include other benefits payable in respect of other services such as health insurance, among others. Moreover, the effect that taking over another company has on employees of original company should also be considered. Pension benefits of the original company to its retirees should be considered in this section. It should also be noted that, theoretically, pension funds usually lie outside the control of employer. Nonetheless, practically, employers decide on the trustees that oversee the operation of pension funds. Moreover, the employer is entitled to approve any amendments reached concerning pension funds. This usually complicates an employee’s retirement package as seen in the case above.
Employees are sometimes forced to seek ways of protecting their rights to pensions whenever takeovers happen. Additionally, original owners are tasked with the responsibility of ensuring that new employer consider retirees situation in their takeover deal. More often, retirees find themselves in traumatic situations during takeovers as observed in Frank Sears’s case. The question posted above requires consideration of a number of variables regulating employees’ terms of services and pensions.
For instance, employees get salaries based on available funds to the employer. Additionally, employees get retirement benefits based on pension funds available to the employer. In this regard, different negotiation packages can give rise to varied solutions. For instance, when employees fund their retirement packages, then it is mandatory that they receive the pensions as required. However, if the company solely funds the retirement benefits then it becomes available based on ability to fund them. These decisions tend to complicate remittance of pension to employees.
Protection of accrued pension rights is therefore important whenever takeover happens. In the case shown above, it is very clear that employee pension rights were ignored or were not protected by the original employer in the discussions that led to take over of the company. Actuaries have the responsibility of ensuring pension funds are transferred from one place to another whenever takeovers happen. This is done to reassure retirees of continued remittance of their pension funds even after a takeover.
From the case study above, this transfer did not happen. In fact, it seems that the original company as well as the new company ignored their pension rights. This was absurd especially in tough economic situations. It has been stated in the case study that Frank Sears and his wife even considered going back to employment in order to pay their expenditures. However, the rate of unemployment worsened their conditions since it was difficult for them to find any well paying job.
In considering the question above, it can be stated that purchasing the original company by another company, or changing economic circumstances, does not obviate the employer’s obligation concerning retiree benefit. In fact, it is the responsibility of the company to ensure that former employees are paid their dues without complications. Moreover, in the event of a takeover or merger, companies should ensure that pension funds are transferred to the second fund to enable continued remittance of benefits to former employees.
Additionally, the second fund should ensure that the package from the first fund is not affected or reduced to the disadvantage of pensioners. Therefore, in the event that the second company or the new company takeover the original company, they should ensure that pensions are remitted to pensioners. Alternatively, if they want to prevent such remissions, they should transfer pension funds to a second fund, which is responsible for such remittances. When this is done, both the employer and the pensioner will be contented with the solution. The events in the case study above show serious malpractices, which deny innocent pensioners their right to pension benefits.
From the case study, it can be observed that the company never considered Frank Sears’s right to pensions as well as other employees. Secondly, they did not tie the previous pensions to inflation although health insurance premiums were increased above normal rates. In essence, the company gave little assistance to its former employees. The company contravened its earlier promises to its employees through the union. Moreover, when the new company took over, all the pension benefits were withdrawn as well as health insurance benefits. However, based on employment laws, a new company can continue with payments of funds to its pensioners and present members.
Additionally, the new company can terminate the fund. In addition, the company can transfer the accrued rights of the pensioners or members to another fund. However, it should be noted that in rear occasions do the first and second options take place. Mr. Frank Sear’s company opted for the second option, which ultimately infringed on the family’s s right to pension. In essence, companies should not obviate their obligation concerning retiree benefits for moral reasons. It is inhumanly to deny a pensioner his/her accrued rights although there is an option for that (Leimberg & Mcfadden, 2011).
Could Mr. and Mrs. Sears expect to receive any retirement benefits as a result of ERISA?
Every retiree expects remittance of health and pension benefits for his/her survival. Alternatively, they have to receive pension benefits after retirement to help pay for their upkeep. It is immoral for a pensioner to resort to going back to work because his/her pension benefits have been held. Mr. and Mrs. Sears are facing traumatising situation in which they have to survive without in financially challenging environment without pension benefits. The company’s new decision to stop remitting pension benefits as agreed before retirement has increased pressure on their limited resources.
Moreover, the family was not given adequate time to prepare for such an announcement. Additionally, it was not indicated in the contract that such an occurrence would happen. In essence, this is quite challenging for an ageing family that has been considering going back to employment for lack of adequate funds. The first step in ensuring their survival is guaranteed would be to report the matter to ERISA, which is more than capable of resolving their issue.
ERISA is a federal law, which works to regulate every kind of employee benefit plans in private sector. In essence, ERISA regulates pension plans, among other plans. To access help, the federal government has tasked EBSA, an Employee benefits security Administration to answer to questions regarding employee benefit plans. ERISA performs numerous tasks to ensure that pensioners receive their accrued rights. For instance, they set minimum standards for participation as well as funding.
Moreover, it provided rules for funding to ensure that plans are sustainable. ERISA also ensures accountability of fiduciaries. In this regard, fiduciaries that mismanage their plans can be held responsible for such malpractices. Moreover, they allow participants to sue fiduciaries for breaches of contract as well as pension benefits. To this extent, it can be observed that ERISA would assist Mr. and Mrs. Frank Sears to receive retirement benefits from the employer since it is the responsibility of ERISA to protect their rights.
Several angles to the case study can be examined to find ways of reaching a solution for the Sears. For instance, the cruel nature of the company’s actions would warrant a contravention to ERISA’s regulations. This would in this respect result in compensation to the Sears. Moreover, it is quite likely that the takeover of such a large corporation would have been done in line with the regulations of pension benefit Guaranty Corporation. However, in case this was not done, then the company would be responsible for the compensation to the Sears. Moreover, ERISA gives the Sears the right to sue the company over accrued pension benefits as well as for breaches to the negotiated contract. Additionally, it should be noted that ERISA shields pension plans to ensure that malpractices, which may involve corruption, are mitigated. In this regard, it is clear that Mr. And Mrs. Sear’s rights concerning pension is protected under ERISA.
From the case study, it can be noted that the company contravened several agreements with its employees. For instance, they had negotiated a formal package with the workers union. This package was morally binding to the company even after takeover because the employees had sacrificed their lives to meet the company’s objectives. Moreover, the company did not inform all its employees on the increases on insurance premiums. Additionally, it was necessary the company inform employees of intended increase in premiums or of their intended change of policy to target profit on health insurance. Instead, Mr. and Mrs. Frank learned of these changes through colleagues.
Again, the company did not inform its pensioners of a possible takeover as well as what it would mean to their pensions. This would have given the pensioners adequate time to press for their rights or otherwise find alternatives to help facilitate their expenditures. However, the company did not consider them important in this matter or their union in order that the messes caused are mitigated. Instead, the company sent shocking letters to the retirees as seen in Frank Sears’ case. This was unacceptable since the company should have utilized alternative ways to pass the shocking information. One of the ways, which could have been utilised, was to call former employees and to advise them appropriately.
Furthermore, the company did not indicate in the agreement that such changes would result in pension funds being held. The resulting situation is a near death circumstance for former employees of the company. This practice should never occur because it would result into serious repercussions to pensioners and their families. From the case study, it is very clear that the company did not follow all the regulation as laid out by ERISA. Moreover, they did not communicate effectively with their former employees or their union to arrive at the best solution to health insurance and pension benefit issues. The procedure followed by the company to arrive at their decision did not put into considerations the regulations enforced by ERISA concerning pensions or termination of pensions. In this regard, the company was to follow ERISA’s regulations in order to process employees’ pension benefits effectively. Considering all the factors involved, Mr. and Mrs. Sears would receive retirement benefits through ERISA.
To achieve compensation, ERISA would require the company to provide a detailed plan on how pension procedures were followed. Additionally, the company would be held accountable to outstanding balances to their pensioners. Going by the flaws observed, (in the company’s actions) it is highly probable that Mr. and Mrs. Sears would get retirement benefits as negotiated by the union. Having examined all the factors relating to this matter, I can state that Mr. and Mrs. Sears will get their retirement benefits through ERISA. Firstly, it is highly impossible that after a sacrificial service to the company and the country, they are left to feed on nothing at an age in which they cannot actively seek for employment. Secondly, the level of accountability shown by the company is lacking based on their actions to loyal workers. Essentially, ERISA would come in handy in helping the family to get their retirement benefits (Leimberg & Mcfadden, 2011).
References
EBSA (2013). Frequently Asked Questions about Pension Plans and ERISA. Web.
Leimberg, S. & Mcfadden, J. (2011). Tools and Technique for Employee Benefits and Retirement Planning. Erlanger, KY: National Underwriter Company.
Pioneer enterprises have the responsibility of providing a good working condition for its employees. For that reason, it is essential for its management to consider the various insurance benefit programs that can help to facilitate the employees’ welfare for the period of the service and after retirement. The following are the options available for the company.
List of benefit plan options
Health benefits program: This program can help the company’s employees together with their families meet their health care needs.
Dental benefits: the management can arrange with insurance companies, to provide dental benefits to the employees, their dependents as well as the retirees.
Employee life insurance/retirement plan: Upon employees’ retirement, a certain percentage of their salary base can be paid to them as annuity income.
Long term disability insurance scheme: This scheme can be provided to safeguard against the loss of income as a result of lengthy periods of illness, disablement or injury.
Travel accident insurance: travel accident insurance can be provided for the employees to compensate them against total permanent disability, bodily injury, or death as a result of an accident sustained in the course of official duty.
Workers’ compensation: The workers’ can be compensated in different instances especially in a manner that complies with the state laws.
Vision benefits: Employees together with their dependent can be provided with eye examination and compensation.
Employee assistance program: This plan can be provided alongside a medical plan to ensure employees, and their dependents are paid benefits to enhance their job performance and personal satisfaction.
Group service plan: This cover can allow the employees to access legal support through a network attorney.
Education program: The Company can arrange for its employees to get assistance whenever they wish to further their education, or education of their dependents.
The plan that best suits the company
Vision Benefits
Pioneer is a manufacturing plant, hence making the vision health status of its employees very vulnerable. As such, a plan that guarantees their eye examination, at least once annually can be helpful. The eligible beneficiaries can pay partially for the examination, though the management may want to stand for the full charges since the company is remarkably profitable.
Tuition Assistance Program
The company goal of ensuring professionalism can be encouraged if the staff is well educated. In this regard, it can be advisable to arrange a tuition assistance program; which will help the employees in paying for their degrees or any other approved course. This will also ensure that the company remains competitive in the market.
Employee Assistance Program
The company can arrange to have an assistance program for the employees and their dependents. This can help improve their working conditions as it can address the predicaments that interfere with job performance and personal satisfaction.
Issues that can be sent through this program include “the stress associated with relationships, work and career issues, financial and legal difficulties, substance abuse, child and elder care and a variety of other Work Life situations” (Lengnick-Ball, 1988, p. 456).
Employees’ Retirement Plan
Pioneer enterprises should arrange for a benefits pension plan, especially if it is a requirement by law. This plan will ensure that the employee enjoys income upon their retirement. This is very important as it will ensure that the employees’ welfare is guaranteed even after retirement. Upon retirement, the employees can be given the option of receiving a lump sum or monthly income.
Conclusion
These benefits options are designed to improve the welfare of the employees, as well as to help the company achieve its long-term goals. It is the mandate of the management and the board to assess the most suitable benefit plans for implementation, but at the same time, the state laws affecting these plans must be adhered to.
Reference
Lengnick-Ball, M. L. (1988). Strategic Human Resources Management. A Review of the Literature and a Proposed Typology’, Academy of Management Review, 13(2), 454 -70.