Health, Welfare, and Retirement Benefits
Organizations seek for ways where they can attract, retain and motivate employees. This is done by recognizing what employees need from the organization. Benefits are one of the ways used in retaining and motivating good employees (ERI Economic Research Institute). Benefits include retirement plans, welfare plans and health plans. These are provided by the organization to ensure the financial security of an employee is protected. Benefit plans have been evolving to strike stability between the professional and personal lives of employees. Indirect financial compensation is also known as benefits and services. Other than providing salaries and wages, employers also provide services and rewards to the employees. The rewards and services arise from various categories like legally involved social insurance payments, retirement plans and private insurance.
The cost of benefits has risen by an estimated 10 percent in the last year. The growth has shown that the benefits may be unsustainable in future, if the costs keep on rising. The recession of the economy made the prices to increase. The growth has superseded the wage increase even during periods of inflation. Employers were looking for ways where they would balance the competitive benefits while containing the costs. Various structural issues are also changing how benefits are offered to employees. The structural issues include the aging population, recent expensive drugs and costs changes in public health. The population is increasingly utilizing rates offered by the various benefits. Employees are also faced with the issue of containing costs while enhancing employee health and increasing the link between employee engagement and the benefit programs.
Organizations that offer attractive benefit plans in the professional market have extra buying power. Employees currently do not only work for salaries or wages, they also expect something more from the employment they have been offered (ERI Economic Research Institute). Organizations that offer voluntary benefits have higher chances of employing and retaining qualified individuals. Employees who do not get benefit plans look for areas where they develop and have personal growth. Organizations have to deal with those issues.
Efficient benefit plans accomplish various goals for the employee and organization. The employee will have financial protection in case of an emergency like unemployment, death, illness or a disability. The organization will have higher productivity since the employees will have motivation and morale to work harder. Benefit plans also act as tools of recruitment for the organization. The process of designing and administering an efficient benefit plan, which will satisfy the criteria, is not a simple task. Not all benefits offered are valued at the same level by all the employees. Leaders of organizations are offering employees “cafeteria” benefit programs. Employees are able to choose from a variety of pre-made benefit plans. The plans are tailor made to fit a wide range of employee needs. The first step in creating the benefit plan is including benefits that are federally mandated and basic. The benefits include social security, workers compensation insurance and unemployment insurance. All organizations in United States must provide a minimum of three benefits. The three benefit plans protect employees against any emergency that may occur while they are working in the organization. The second step is considering benefits that are optional but must be included. Various optional benefits been made as industry standards. Hiring and retaining employees without those benefit plans is very difficult. Examples of the optional benefit plans include life insurance, health insurance, retirement plans, paid sick leave plans and flexible compensation plans. Many industries have made these plans as staples in their...