HC14 Providing employee benefits

Employee benefits are compensation provided to employees in forms of cash.

• True

• False

Answer explanation

The term for compensation in forms other than cash is employee benefits.

With managed care, the insurer decides the effectiveness of procedures and avoids unnecessary procedures.

• True

• False

Answer explanation

With managed care, the insurer plays a role in decisions about health care, aimed at avoiding unnecessary procedures. The insurer may conduct claims review, studying claims to determine whether procedures are effective for the type of illness or injury.

Family-friendly benefits help in earning the loyalty of employees.

• True

• False

Answer explanation

Family-friendly benefits often have spillover effects in the form of loyalty because employees see the benefits as evidence that the organization cares about its people.

Young, unmarried men and women often place more value on pay than on benefits.

• True

• False

Answer explanation

Basic demographic factors such as age and sex can influence the kinds of benefits employees want. Young, unmarried men and women often place more value on pay than on benefits.

Employees have a hard time understanding the cost and value of their benefits.

• True

• False

Answer explanation

In practice, it is difficult for employees and job applicants to understand the value of their benefits. This is especially true for the complexities of health insurance and the nuances of getting the most out of retirement benefits.

A business employs many young workers who like to use their time off to travel to visit family or go on adventures. The human resource manager observes that when holidays do not fall on a Friday or Monday, workers are disappointed that having just one day off prevents them from traveling. Which would be the most effective way for the company to add to the value of the holiday schedule?

• by establishing policies for unpaid leave

• by establishing policies for other situations that require time off

• by creating a more generous sick leave policy

• by using floating holidays to create long weekends of time off

Answer explanation

Floating holidays are paid holidays that vary from year to year. The organization may schedule floating holidays so that they extend a Tuesday or Thursday holiday into a long weekend. Organizations may also give employees discretion over the scheduling of floating holidays.

It is a time off where the employer pools personal days, sick days, and vacation days for employees to use as the need or desire arises.

• A floating holiday

• Paid time off

• A paid personal day

• Unpaid leave

Answer explanation

The most flexible approach to time off is to grant each employee a bank of paid time off, in which the employer pools personal days, sick days, and vacation days for employees to use as they choose.

Puffer Consultants, a business consulting firm, wants to attract and keep highly ambitious employees who work hard and want to advance in their careers. Which benefit would especially appeal to this type of employee?

• a defined-benefit pension plan

• a generous vacation policy

• a health maintenance organization

• tuition reimbursement

Answer explanation

To encourage learning and attract the kinds of employees who wish to develop their knowledge and skills, many organizations offer tuition reimbursement programs. A typical program covers tuition and related expenses for courses that are relevant to the employee’s current job or future career at the organization. Employees are reimbursed for these expenses after they demonstrate they have completed an approved course.

Decisions about which benefits an organization will include should take into account

• how much the organization values its employees.

• popular trends.

• the expectations of the organization’s current employees.

• the benefits the government recommends employers offer.

Answer explanation

Decisions about which benefits to include should take into account the organization’s goals, its budget, and the expectations of the organization’s current employees and those it wishes to recruit in the future.

What is true of the benefits that are provided to employees?

• Employees have a clear idea of the market value of their benefits.

• Employees can understand the value of benefits through various media.

• Employees overestimate the cost of their benefits.

• Employees lack interest in what benefits offer them.

Answer explanation

In practice, it is difficult for employees and job applicants to understand the value of their benefits. This is especially true for the complexities of health insurance and the nuances of getting the most out of retirement benefits. The edge in the labor market goes to employers that help them understand. To do so, employers can combine several media, such as brochures and question-and-answer meetings. Other possible media include paycheck inserts and benefits fairs.