Nowadays most of the companies offer variety of benefits, especially if they are larger company. Among them some of benefits are compulsory. There are many major types of employee benefit plans to be offered for employee. There are many sub category under this main category all of them are described here in detail below:
Types of employee benefit plans
- Required or mandatory security
- Voluntary security
- Retirement – related security
- Time-off security
- Health insurance
- Financial service
- Social & recreational service
Required or mandatory Security
Government requires that employers provide a certain limit of protection or a security floor for each employee. There are three primary area of compulsory security:
- Workers compensation
- Unemployment compensation
- Social security benefit
Two of the major security benefit programs used by employers are voluntary severance pay and supplemental unemployment benefits. Severance pay is pay given to the employee at termination.
Its purpose is to provide funds to tide the employee over until he or she finds another job. The amount varies from several weeks of-pay for hourly: workers to several- workers to several year worth of salary for executives.
Golden parachutes, a form of severance pay, arc paid to execute as a form of compensation if they are terminated during a hostile takeover. Executives who fears hostile takeover often are able to obtain a golden parachute clause in their contact.
The second form of voluntary security is supplemental unemployment benefits. These are payments made by the employer to employees who are temporarily laid off. They are made in addition to unemployment compensation received from the state.
Retirement related security
Over 90 percent of full-time workers at companies with more than ‘T employees are covered by retirement plans, according to the employee benefits Research institute. Pension plan are considered rewards for long service and are not incentives to work more efficiently of effectively unless the premium is tied to a stock option plan, as sears is. Pension plans are used primarily to retain a loyal workforce.
Time-off related benefits
- Holiday Pay: Most employers provide pay for all established such as New Year’s Day, Memorial Day, and Fourth of July. Other firm also provides holiday pay for Christmas.
- Vacations: Most employers offer paid vacations that range from one to six weeks per year. Depending on length of time with the company. In one poll, employees rated paid vacations and holidays as the third most important benefit behind medical insurance and pension
- Leave of Absence: Leaves are given for military service, jury duty, election, disability, sickness and maternity. Longer leaves called sabbaticals are also given for renewal or special service.
Health and Insurance Related Benefit
Employers offer are various types of coverage including medical, disability, dental, life, and auto insurance. Maintaining adequate coverage while keeping cost w thin hound is a challenge for organization. Health Benefit.
- Cost containment method
- Employee co-payment
- Employee payment of deductible
- Self funded insurance
- Wellness program
- Providing more information
- Restriction on psychiatric and substance abuse program
No medical insurance benefit: Besides health related insurance employees also provide other forms of insurance. According to a recent survey by the international certified society of employee benefit specialists, life insurance is offered by more employers than any other product.
- Non-financial benefits: The use of a company car, company account, club membership, help in buying and selling a home and the use of company owned resort condominiums are examples benefits of available to manager, executives, and some employees.
- Stock benefits: Employee thrift, saving, or stock purchase investment plan are also popular. For example in a stock option plan an employee is often guaranteed the right to buy share of company stock at a discount or a certain price.
- ESOP: When stock is provided as a part of profit-sharing plan an employee stock ownership plan is developed. This benefit plan is available in the USA.
- Educational benefits: Many firms offer a tuition reimbursement plan for employees who attend a school, college or university. Usually the firm requires that the employee take a course related to work.
- Childcarc benefit: Working women with small children have become very common in our society. They should be given childcare benefit.
- Elder care: A study of benefit directors in 1988 indicated 77 percent of them believed that elder care will a major growth benefit in the USA.
- Cafeteria plan: Because of the variety of options in the benefit area many employers have shifted to or are considering cafeteria plan. Cafeteria plan allows employees to pick and choose from a variety of benefit “options much as a person chooses food at a cafeteria.
Social and recreational benefits
Big and reputed organizations offer some social and recreational benefits to the employees. For the purpose of giving relax, employees are given leave for picnic, pleasure trip etc.
Indoor and outdoor games, certificate for better performance award programe are some important social recreational benefits to the employees.
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