Questions And Topics We Can Help You To Answer

There is more to a job than just direct compensation or salary. Indirect compensation often far outweighs salary. Offering indirect compensation and benefit programs is a good way for a company to attract and keep better applicants and employees. A good benefit program impacts job satisfaction and turnover. Employees are more willing to stay with a firm that provides better benefits. Companies want and should offer the best benefits they can, but they also have a responsibility to manage costs wisely. 

Managing benefit plans usually falls under the HRM department. Such benefits include, but are not limited to: 401k plans, insurances for health and disability, paid time off, tuition reimbursement, and more. Costs for health insurance and health care continue to spiral. Some companies take steps to curb thee costs and to help employees manage these costs and their own health care. 
1. Conduct some research on the Internet in order to familiarize yourself with benefit plans that companies offer. Many companies post information about their benefits and indirect compensation plans on their websites. Visit some company websites to learn more about their benefits. Pay particular attention to "cafeteria" style plans. 


2. Assume you are the manager of a midsized software development company. Your company currently offers a relatively traditional benefits program. This program includes: 


•Health insurance: The organization contributes $500 per employee per month, which covers the cost for the employee. The employee pays an additional $100 per month per covered dependent. 
•Dental insurance: The organization contributes $50 per month, which covers the cost of the employee. The employee pays an additional $10 per month per covered dependent. 
•Life insurance: The company contributes $20 per month for $40,000 in term life insurance; the employee can buy additional units of coverage as a function of annual salary. 
•Paid Time Off – Everyone gets 2 weeks' vacation, 10 paid holidays and 5 paid sick days. 


3. However, your boss has determined that he cannot continue to fund these benefits as they are presented above. It has become too costly. He either must reduce benefits or start to lay off employees. Your boss has indicated he wants the company to adopt a cafeteria-style benefits plan. You have been tasked to present such a plan. 


•Define the term "cafeteria style" benefits. 
•Use the set of benefits listed above as a starting point. 
•Devise such a plan and give your employees as many options as possible. 
◦You must be specific and thorough. 
◦You must explain your reasoning. 
•In conclusion, explain why you think your proposed plan will work for both the employees and for the "boss."