Benefits plan is crucial for the competitiveness of any company since it enables to attract and retain the most talented and productive employees.
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At the moment, the benefits package of this company consists of health indemnity plan, disability insurance, and life insurance which are required by law. However, it does not meet the best standards established in various industries. This paper aims to work out a new benefit package and make several recommendations that can improve the compensational policies in this organization.
The management of this enterprise should not disregard the importance of the discretionary benefits that include retirement plans, paid sick leaves and vacations, tuition reimbursement, child and elder care, as well as vocational training (Schermerhorn, 2010, p 302; Condrey & James, 2010, p 819).
To some extent, these benefits allow the management to convince the personnel that the company genuinely values them. There are several legislative acts which the management should take into account, in particular, Family and Medical Leave Act of 1993, Social Security Act, and Pregnancy Discrimination Act (Beatty & Samuelson, 2007).
The knowledge of laws will allow the management to avert numerous legal conflicts, for example, lawsuits for illegal termination of the employment, or alleged pregnancy discrimination. The new benefit program must be tailored strictly in accordance with these laws so the company could avoid potential legal issues.
The second question is how to distribute discretionary benefits which are not mandatory. The management should set some eligibility criteria for the employees. These benefits should be provided only to those people who have stayed with a company for a long time, for instance, more than two years.
They can also be distributed on the basis of employee’s performance throughout the previous year. If the management adopts such an approach, they will establish a merit-based compensation system. So, the new benefit program can offer a powerful incentive to those workers who have just joined the company.
On the whole, the adoption of this benefits plan will enable the company to achieve several important objectives. First, it will allow them to decrease the turnover and reduce the cost of hiring and training new employees. It is quite probable that these organizational expenses significantly deteriorate the financial performance of the company. Secondly, the new remuneration police will provide a powerful stimulus to the employees to work more productively.
Finally, the competitors of this company will not be able to entice the employees by providing them a more advantageous benefit plan. Therefore, one may argue that the plan will bring two kinds of improvements quantitative (reduction of costs) and qualitative (better organizational performance).
There are several ways of communicating the new benefit program to the personnel. In this case, one should mention orientation programs which are launched for new employees. Such programs normally take place during the first two weeks and this period is the most crucial one since at this stage new-hires form their opinion about the company. Hence, the advantages of the benefit program should be explained clearly to them.
The management should also send each worker a pamphlet describing the benefits that he/she would receive. Furthermore, it is advisable to hold employee seminars which will allow the management to answer the questions, posed by the workers. In this way the management will increase employees’ awareness about the new policy and convince them that the company values their work.
Beatty. J. & Samuelson S. (2007). Essentials of Business Law. Cengage Learning, 2007.
Condrey S. & James P (2010). Handbook of Human Resource Management in Government. NY: John Wiley and Sons.
Schermerhorn. J (2010). Management. NY: John Wiley and Sons