Designing Benefit Plans
Introduction
Historically, unions fought hard for pay and benefits for their members. Companies and the government realized that a certain base level of benefits was essential to a healthy national workforce, as well as to a well-funded retired workforce. As demographics and economics shifted in every direction, benefits issues began to become as important as pay issues for ensuring an effective contract between employer and employee.
Fewer than 40 years ago, benefits accounted for approximately one-fourth of payroll. Today, many companies budget benefits at 40 percent of payroll or even more, which is a huge number to fund and manage for any size company (Gerhart & Newman 2020).
Reference
Gerhart, B. & Newman, J. M. (2020). Compensation (13th ed.). New York, NY: McGraw-Hill.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
Competency 3: Create a base benefit plan.
Describe a complete benefits package for a company that would attract highly qualified candidates.
Determine an appropriate cost target for a benefits package as a percentage of the total compensation package.
Describe trends affecting a selected cost target.
Analyze the potential for discrimination in a selected benefits plan.
Describe the impact and issues that might arise from unintended discrimination in a selected benefits plan.
Explain the advantages and disadvantages of administering a selected benefits plan in a small employer environment.
Competency 4: Evaluate effective incentives and perks programs.
Describe business competition in the community and the competitive factors involved in attracting employees.
Explain how the benefits plan will help retain and motivate the workforce.
Competency 5: Analyze the effects of laws and regulatory agencies on compensation and benefits strategies.
Explain how to ensure a selected benefits plan will meet legal requirements.
Preparation
Given what you know about benefits plans and options, as well as costs and factors for designing a benefits plan, draft a basic plan for a start-up company of fewer than 100 employees in your local community. In your plan, include the following:
Describe the benefits options you will offer along with the cost of these options. Explain why you chose these options.
Explain which of the benefits you selected would be considered standard, which are unique for your industry, and which would attract highly qualified candidates.
Describe your company’s competition in your community, and describe strategies to manage the competitive factors that are at play for attracting employees.
Determine an appropriate cost target as a percentage of the total compensation package for your total benefits package, as well as the process to determine the cost target. What trends will have an effect on your cost target?
Explain how your plan will affect retention and motivation of the workforce. Propose a review plan to maintain a competitive benefits package into the future.
Explain how you will ensure that your plan meets legal requirements now and into the future.
Will any of your benefits show an unintended preference for people of a certain age, gender, marital status, or number of dependents? Describe the impact and any issues that might arise from this. Suggest best practices to avoid discrimination resulting from the plan.
Explain whether you would be able to administer the plan in a small employer environment. What are the advantages and disadvantages of administering the plan in a small employer environment? How might the company leverage the advantages and manage the disadvantages?
Additional Requirements
Length: Your plan should be 3-4 double-spaced pages.
APA style and formatting: Be sure to cite all outside resources used in your assessment in proper APA (6th edition) format.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
Competency 3: Create a base benefit plan.
Describe a complete benefits package for a company that would attract highly qualified candidates.
Determine an appropriate cost target for a benefits package as a percentage of the total compensation package.
Describe trends affecting a selected cost target.
Analyze the potential for discrimination in a selected benefits plan.
Describe the impact and issues that might arise from unintended discrimination in a selected benefits plan.
Explain the advantages and disadvantages of administering a selected benefits plan in a small employer environment.
Competency 4: Evaluate effective incentives and perks programs.
Describe business competition in the community and the competitive factors involved in attracting employees.
Explain how the benefits plan will help retain and motivate the workforce.
Competency 5: Analyze the effects of laws and regulatory agencies on compensation and benefits strategies.
Explain how to ensure a selected benefits plan will meet legal requirements.
