1. MGT-351 Human Resource Management Chapter-13 Employee Benefits and Services

2. Employee Benefits
Do not directly related to worker’s performance like incentives
But inadequate benefits lead to employee dissatisfaction
Benefit and service offerings add about 30-40% to an organization’s payroll cost
Benefits become the focus of negotiations with employees when large wage and salary increases are not feasible

3. Paid Time Off Maternity Leave
Under Article 4(1) of Maternity Protection Convention, 2000, ensure the period of maternity leave of not less than 14 weeks.
Rule 197(1) of the Bangladesh Service Rules (as amended 9 January 2011) provides for female Government servants six months and
The Bangladesh Labour Act, 2006 section 46, provides for a female workers 16 weeks maternity leave.
Though paternity leave is not a new concept but Bangladesh has no paternity leave opportunity for its male employees or workers.

4. Paid Time Off Disability Insurance Programs
Provides salary continuation for:
Short-term disabilities (sick leave)
Long-term disabilities (coverage usually effective after 6 months)
Vacation and Holiday Leave
Vacation time is usually related to the length of time on the job
Some companies also allow personal days that can be used for any reason

5. Pay for Time Not Worked Severance pay
A one-time payment when terminating an employee.
Reasons for granting severance pay:
Acts as a humanitarian gesture and good public relations.
Avoids litigation from disgruntled former employees.
Meets Worker Adjustment and Retraining Notification (“plant closing”) Act requirements.
Reassures employees who stay on after the employer downsizes its workforce of employer’s good intentions.

6. Pay for Time Not Worked (cont’d)
Supplemental unemployment benefits (SUB)
Payments that supplement the laid-off or furloughed employee’s unemployment compensation.
The employer makes contributions to a reserve fund from which SUB payments are made to employees for the time the employee is out of work due to layoffs, reduced workweeks, or relocations.
SUB payments are considered previously earned compensation for unemployment calculation purposes.

7. Insurance Benefits Workers’ compensation
Provides income and medical benefits to work-related accident victims or their dependents, regardless of fault.
Death or disability: a cash benefit based on earnings per week of employment.
Specific loss injuries: statutory list of losses
Controlling worker compensation costs
Screen out accident-prone workers.
Make the workplace safer.
Thoroughly investigate accident claims.
Use case management to return injured employees to work as soon as possible.

8. Insurance Benefits (cont’d)
Hospitalization, health, and disability insurance
Provide for loss of income protection and group-rate coverage of basic and major medical expenses for off-the-job accidents and illnesses.
Preferred provider organizations (PPOs)
Groups of health care providers that contract to provide medical care services at reduced fees.
Employees can select from a list of preferred individual health providers.
Preferred providers agree to discount services
Employees using non-PPO-listed providers may pay all of the service costs or the portion of the costs above the reduced fee structure for services.

9. Retirement Benefits Pension plans
Contributory: employees contribute to the plan.
Noncontributory plans: employer makes all contributions to the plan.
Qualified plans: plans that meet requirements for tax benefits for employer contributions.
Nonqualified plans: plans not meeting requirements for favorable tax treatment.
Defined contribution: contributions of employees and employers are specified; plan payouts are not.
Defined benefit plans: plan payouts are specified; however, contributions must be sufficient to insure payouts.

10. Provident Fund
The Employee Provident Fund, popularly known as PF is the retirement saving scheme available to all the salaried employees, is backed by the government on which fixed interest is paid.
A provident fund is a form of social safety net into which workers must contribute a portion of their salaries and employers must contribute on behalf of their workers.
Example: at company “X” both the employees and employers contribute 10% of the basic wages and dearness allowance to the provident fund (PF) account.
Total contribution to the PF= 20% X basic salary x months of service
. Note: However, full/partial contribution depends of service tenure

11. Gratuity
Gratuity is a long term financial benefit given by the employer to its employee during separation. As per Bangladesh Labor Law 2006 gratuity is not mandatory to employers.
Gratuity policy is depends upon company's own resolution. It may be applicable after 3 years or 5 years continuous service tenure.
Example: Company “X” allow Gratuity after 5 years of continuous service.
Total gratuity payment = Years of service x Last basic salary
Note: However, sometimes company use different “basic salary” for different service tenure. Usually Dismissed employees don’t received Gratuity.

12. Flexible Benefits Programs
The cafeteria (flexible benefits) approach
Each employee is given a benefits fund budget to spend on the benefits he or she prefers.
The fund limits the total cost for each benefits package.
Core plus option plans establish a core set of benefits which are mandatory for all employees.
Flexible spending accounts
Enable employees to pay for medical and other expenses with pretax dollars by depositing funds in their accounts from payroll deductions.