1. Understanding Benefits
TEKS 9 A

2. Objectives
The student will Evaluate and compare employment options, including salaries and benefits.

3. Methods of Compensation

4. Methods of Compensation
Compensation is payment for work done. It includes money plus any benefits received in exchange for work. Workers are compensated by various methods. A business typically pays employees different amounts, depending on their experience and responsibilities. Have you thought of ways that workers can be compensated at work ? The following three slides will discuss types of compensation.

5. Types of Compensation Tips Bonus Incentive
are small sums of money, usually cash, given to employees by satisfied customers.
Bonus
is an extra payment given to an employee for excellent work or as a share of the business’ profits.
Incentive
is a reward that acts as a motivation for an employee to be as productive as possible.
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6. Types of Compensation Straight commission Salary plus commission
pays a specific percentage of the total volume sold.
Salary plus commission
is a set salary plus a percentage of each sale as an incentive.
Salary plus commission-over-quota
is a set salary and a percentage of sales over a certain quota.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

7. Types of Compensation Wage Minimum wage Straight salary
is an hourly rate of pay for an employee.
Minimum wage
is the least amount of money an employee can be paid per hour.
Straight salary
is the set rate of pay for work performed.
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8. Methods of Compensation
Select two types of compensation . What are the advantages and disadvantages of each type of compensation you chose? Complete the charts on your study guide. Which type of compensation would you like to receive? Answer on your study guide.

9. Benefits

10. Benefits
In addition to pay, many employers provide benefits to their employees. Benefits are indirect forms of payment for work other than money. Think about some potential benefits that a business or company might offer employees. The next 10 slides will discuss potential benefits.

11. Benefits
Legally required benefits, no matter where a person works, include the following:
Social security
Unemployment insurance
Provides income for employees who have lost their jobs through no fault of their own.
Worker’s compensation insurance
Protects employees who might be injured on the job.
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12. Benefits Tuition assistance Health and wellness programs
Benefits that are not required by law, may include the following:
Vacation
Sick leave
Holidays
Cafeteria plans
Health insurance
Child care options/programs
Profit sharing and retirement programs
Tuition assistance
Health and wellness programs
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

13. Benefits
Vacation
Employees usually continue to receive pay during vacation or sick leave.
A new employee may be required to work a certain period of time, such as six months, before vacation leave can be taken.
Employees usually have to request permission to schedule vacation time.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

14. Benefits Vacation and sick leave
The amount of vacation and sick leave for employees varies from company to company.
Employees may accrue hours for vacation and sick leave or they may have an assigned number of days per year.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

15. Benefits
Holidays
Days set aside by law or custom to commemorate an event or to serve as a day of freedom from labor or work.
Private businesses are not required to observe holidays.
Certain holidays are observed by most companies.
Banks and federal offices are closed on federal legal holidays during the year.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

16. Benefits Cafeteria Plans
A benefit package in which employees are allowed to select a certain number of benefits from a benefit menu to fit their individual needs.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

17. Benefits Health Insurance
Most company-sponsored insurance plans or group health insurance plans cover hospital and medical costs.
The company may pay part or all of the health coverage premiums.
Group health insurance coverage may include:
Basic medical, major medical, dental, and disability
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18. Benefits Some may offer on-site child care centers.
Child Care Options/Programs
Businesses or companies may offer parental leave, child care subsidies, resources and referrals, and voucher systems.
Some may offer on-site child care centers.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

19. Benefits Profit-Sharing and Retirement Programs
The employer and often the employee contribute money to retirement or pension plans.
The money is collected once the employee retires.
Businesses may share part of their profits with employees through profit-sharing plans.
Employees may receive the profits through bonus checks or the money may be placed in special investment accounts.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

20. Benefits Tuition Assistance/Reimbursement Health and Wellness Programs
The employer may provide assistance with the costs associated with continuing education.
This may include reimbursement for tuition, fees, and books.
Health and Wellness Programs
Companies may provide on-site workout facilities, pay for a gym membership, or other incentives for improving one’s health.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

21. Activity
Think about what benefits are most important to you.
Complete the teaching aid: Ranking Benefits. (handout)
What benefits are most offered to employees?
Why are some benefits more important to one person than another?
What motivation do employers have to offer benefits to employees?
How might benefits serve as incentives to employees?
Complete Activity #1: Ranking Benefits (handout) and answer questions on your outline.

22. Calculating Percentages of Company Benefits

23. Calculating Percentages of Company Benefits
Company benefits have value even though people cannot spend them. These benefits may be worth a great deal of money. Review the scenario on the next slide. Next, you will use the second slide to demonstrate how to calculate the percentage of company benefits for the employee in the scenario.

24. Calculating Percentages of Company Benefits
Scenario Example: Ashley works at a local sandwich shop earning $7.25 per hour and working 20 hours per week. The company does not offer benefits, such as vacation or sick leave, however, Ashley does get paid four hours total for each of two company holidays every year – Thanksgiving and Christmas Day. (Calculations on next slide.)
TAFE
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25. Calculating Percentages of Company Benefits
$7.25 x 20 hrs = $145 weekly
$145 x 52 weeks = $7,540
Annual Salary A
Weekly pay x 52 weeks or
Monthly pay x 12 months
________________
Legally Required Payments B
Annual Salary (A) x 8.1% = B
(8.1% represents the national average for legally required payments that private
industry employers must pay for social security, unemployment compensation,
and worker’s compensation.)
Annual Dollar Value of Company Benefits C
Benefit Hourly or Daily Pay x Number of
Hours or Days = Annual Amount
____________________ _____________________________________
(To determine daily pay, divide annual salary by 52 weeks, then divide weekly salary
by 5 days)
_______
_______________
Total Pay Package D
A + B + C = D
Percentage of Benefits E
Total Annual Dollar Value of Company Benefits (B + C) /
Annual Salary (A)
= E
________
$7,540.00
$7,540 x 8.1% =
$610.74
$610.74
$145 wk/ 5 = $29
$29.00 x 4 hrs = $116.00
$116.00
$116.00
$7,540 + $ $ = $8,266.74
$8,266.74
$726.74
$ $ = $ / $7, = .096
$7,540.00
9.6%
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26. Calculating Percentages of Company Benefits
Activity #2 Using the information just learned, calculate the percentages of company benefits for each of the four employees shown on the next few slides. (You will need 4 Forms of “Determining Pay Package and Benefits” to complete this assignment.)

27. Job Situations
Jack
Jack works full time (40 hours per week) as a stocker for a grocery store. He earns $6.50 per hour. The company observes six holidays each year for which he is paid.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

28. Job Situations
Will
Will works as an accountant for a national business. His monthly salary is $2,100. The company benefits include five vacation days per year, five days of sick leave per year, four paid holidays, and a monthly parking allowance of $50 per month.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

29. Job Situations Crystal
Crystal is a graphic designer for a public relations firm. She earns $1,900 per month. She receives one day of sick leave per month, one day of vacation per month, and fourteen holidays per year. Her employer also pays $175 per month for her health insurance and $45 per month for parking. Her employer also contributes $100 per month to a retirement account for her.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

30. Job Situations
Tracy
Tracy works as an administrative assistant to the president of a small business. Tracy earns $1,500 per month. The business pays for two holidays each year and two weeks of vacation each year.
Copyright © Notice: The materials are copyrighted © and trademarked ™ as the property of The Curriculum Center for Family and Consumer Sciences, Texas Tech University.

31. Evaluate Benefit Packages

32. Evaluate Benefit Packages
Before taking a job offer, it is important to look closely at the benefits offered to determine their value to you and your family. It is possible that an individual might take a job that pays less because the benefits are so good.
Activity #3: Read the Internet article “Evaluating Your Benefits Package.” Answer questions or identify the benefit on your outline.
(From this article you could develop a check list when evaluating benefit packages.)

33. The End !