Wednesday April 24th 2013
Human resource management has numerous areas that they cover when managing. These include Equal Employment Opportunity, Recruiting and Selecting, Training and Development and Organizational Rewards just to name a few. However, this research is about employee benefits and roles and responsibilities of Human Resources Management in administering effective Employee Benefit Programs. The book also calls employee benefits, fridge benefits, and is defined as, “Rewards that employees receive for being members of the organization and for their positions in the organization; usually not related to employee performance” (Byars).
I started to gather my data and information by reading chapter 15, Employee Benefits, from the text Human Resource Management by Lloyd L. Byars. I just recently was hired on full time at Transamerica and started to learn about what my employee benefits actually were. This is my first full time job where I received benefits. I then went to the SHRM website that Ken had advised to on the first night of class. This was very informative and interesting website. It helped me understand what all benefits are out there for employees.
Employee benefits have grown a lot in the last several years. In 1951 it was at 15% of the total compensation. In 1994 is went up to approximately 39% of the total compensation (Employee). Benefits can be put into five different categories: legally required, retirement related, insurance related, payment for time not worked, and other (Mote). There are three main benefits that are required by law. These include social security, unemployment compensation, and workers’ compensation benefits. Today’s federal law requires that both the employer and employee must pay into the system. The social security is federally administered. The unemployment is funded by the employer’s taxes.
There are two different pension plans that are offered. In a defined benefit pension plan the employer is to provide a benefit determined by a definite formula at the employees retirement date. A defined contribution pension plan is a fixed or also known as an annual contribution instead of a known benefit. Employees tend to like cash balance plans because they allow the employees to take their pension funds with them in the form of a lump sum when they leave the company. The 401k plans are defined contribution pension plans and let employees make tax-deductible contributions up to certain limits. The 403b plans are very similar to the 401k plans however, are only used in a not-for-profit organization.
ERISA is the Employee Retirement Income Security Act. This was passed in 1974 by the federal law. This is to give employees increased security for their retirement and pension plans. This will also guarantee the fair treatment of employees under pension plans. IRA is a type of individual pension plan that employees can make tax-deductible contributions to a limit of $4,000 per year. Roth IRA is non-tax-deductible contributions (Martocchio). ERISA does not require employers to establish pension plans. Likewise, as a general rule, it does not require that plans provide a minimum level of benefits. Instead, it regulates the operation of a pension plan once it has been established.
I interviewed my mother, Jeannie Waite on how employee benefits affect her and her job. She is a nurse at Rockwell Collins and is a part of the human resource department. She primarily works on workers compensation for employees. She stated “Workers' compensation is administered on a state-by-state basis, with a state governing board overseeing varying public and private combinations of workers compensation systems. The federal government has its own workers' compensation program, subject to its own requirements and statutory parameters for federal employees. In the majority of…