The comparison is between EatNGas inc. an exhaustive review of their benefits bills and payroll records and the United States Department of Labor Bureau of Labor Statistics 1986 – 2001 data (USDL). The decision to hire or keep top employees is decided by the profitability and the cost-benefit analysis. The packages should be designed in a manner that the business operations are not suppressed in any manner and the business prospects are maintained in both the short run and the long run putting in mind the success of the business as a whole.
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This shows that the company has not harmonized the wages and salaries to conform with the market rates ignoring the other rates and this has greatly influenced most of the changes and the problems faced by the company e.g. Employee complaints, high costs of total benefits awarded, etc. The company’s benefits package needs to be reviewed since there have been numerous complaints in the recent past by most of the employees (the United States. Department of Labor’s Bureau of Labor Statistics, Employer Costs for Employee Compensation; Historical Listing (Annual), 1986-2001, 2002, table 22 )
|EatNGas Inc||United States Department ofLaborBureau ofLaborStatistics 1986 – 2001 data (USDL)||Differences|
|Current data |
(% of total compensation)
(% of total compensation)
|EatNGas Inc current data – USDL 2001 data|
|Total wages and salaries||76%||67%||9%|
|Total benefits costs||24%||33%||-9%|
|Retirement and savings||2%||4.5%||-2.5%|
|Legally required benefits||10%||6.8%||3.2%|
Comparison between EatNGas and United States Department of Labor Bureau of Labor Statistics 1986 – 2001 data.
The chart above is a comparative analysis of the dada from EatNGas Inc which is compared to the data from the U.S Bureau of labor statistics and shows the difference in the respective rates as compared to the two sets of data. The distinction column shows only the deviation as compared to the standard data i.e. data from the U.S Bureau of labor statistics. The comparative analysis is explained below:
The comparison is based on the benefits obtained by the employees in different sectors of the economy. The results of the comparison are evident in chart 1above. It shows various disparities or distinctions between EatNGas Inc and the bureau findings of 1986-2001. It shows negative differences in benefit costs, paid leave, supplementary leave, insurance premiums, retirement and savings, and other benefits while showing a positive difference in total wages and salaries and legally required benefits.
EatNGas is not competitive in the allocation of the benefits package to its personnel as is evident in the chart and since the company incurs lower benefit costs of 24% as compared to 33% of most companies in the market it exposes its employees a health risk in cases of poor medical covers, this indicative characteristic should be a reflective measure of the company and an awakening call for reforms in this package since these results indicate that it gives a poor benefits package as compared to the rest of the companies.
The paid leave allowed by EatNGas Inc is low i.e. 4% thus increasing the health insurance costs since the personnel is not given much time as leave as compared to the rest at 8.8%. It is also evident in supplementary leave which is lower by 3%.
Supplementary leave is low at 2% thus showing the company denies its employees emergency or supplementary leave, this impacts the employee satisfaction levels negatively and increases the complaints among them as compared to the market rate of 5%.
EatNGas Inc. insurance benefits given to their employees are low at 6% as compared to the others which are 7.6%; this will increase personnel dissatisfaction thus increasing complaints in the employee’s insurance premium level (the United States. Department of Labor’s Bureau of Labor Statistics, Employer Costs for Employee Compensation-December 2005, Para 2).
EatNGas inc. pays lower retirement and saving benefits as compared to other companies in the US i.e. EatNGas Inc. Gives 2% while the other companies offer 4.5% in 2001.
Retirement and saving benefits are designed to maintain or help the employees after the working years or in attaining retirement age. The retirement and savings benefits of EatNGas Inc rated at only 2% of the total compensation benefits to employees should be harmonized upwards with the market rates which stand at 4.5% of the total compensation benefits allocated, this would ensure that the employees of EatNGas would live a more decent life after their retirement as compared to the current situation where they are paid very low benefits as compared to the other companies in the market.
Legally required benefits are those benefits that are statutorily required by federal and/or state governments in certain political segments in the market. The company incurs higher legally required benefits i.e. 10% as compared to 6.8% by the other companies in the study this shows it has a lot of legal claims to settle which might be from the poor or low levels of employee insurance schemes.
Finally, the other benefits are usually the benefits agreed upon between the employer and the employees in the course of their employment. The company does not offer any other benefits as compared to the 0.3% offered by other companies. The low total benefits given reduces the employee’s morale and thus increasing cases like absenteeism, dissatisfaction with the company and also increases morbidity levels i.e the rate at which the employees get sick or ill, it can also be noted that the low morbidity rates when maintained will reduce brought against the company by the employees.
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EatNGas inc. should try to harmonize the compensation benefit to be in tandem with the market rates to avoid complaints and motivate employees. Costs for legally required benefits for the company may include Social Security expenses for funding social security schemes, Medicare charges which sometimes is known as medical insurance, unemployment insurance payments, and Workers’ compensation claims against the company in cases of injury or death in the course of their duties or within the premises of the company.
The employee compensation benefits should be done in phases to prevent strains to the business or shortages in capital for both short-term and long-term benefits for both the employees and the employers.
Employee compensation Benefits include: Paid leave e.g. vacations and business meeting, holidays leaves e.g. public holidays, sick leaves, and other leave e.g. Maternity leave; supplemental payments are the premium pay for work in addition to the regular work schedule e.g. overtime, weekends, and public holidays, shift differentials, and nonproduction bonuses; insurance benefits may include life insurance, health covers, short-term disability covers, and long-term disability insurance; retirement and savings benefits may be in form of benefit and defined contribution plans e.g. saving schemes like social service covers; legally required benefits includes social security, Medicare, Federal and State unemployment insurance covers, and workers’ compensation insurance; and other benefits may be in form of severance pay and supplemental unemployment plans maintained by the company (United States. Department of Labor’s Bureau of Labor Statistics, Analyzing Year-to-Year Changes in Employer Costs for employee Compensation, Compensation and Working conditions, 1998.
These benefits should be harmonized to conform to the market rates of all these benefits thus reducing both costs and at the same time increasing employee satisfaction. The harmonization must be implemented to increase the return in sales and investments to enhance the efficiency of both the management and the employees in the production process.
Many of the leading organizations in the 21st century must be competitive in many ways like increasing the competitiveness of their employees on the global scale.
United States. Department of Labor’s Bureau of Labor Statistics (2002). Employer Costs for Employee Compensation; Historical Listing (Annual), 1986-2001. Web.
United States. Department of Labor’s Bureau of Labor Statistics (2010). Employer Costs for Employee Compensation December 2005. Web.
United States. Department of Labor’s Bureau of Labor Statistics (1998). Analyzing Year-to-Year Changes in Employer Costs for employee Compensation. Compensation and Working conditions, 12.