Lecture Twelve Compensation.pptVIP

Lecture Twelve Compensation The Importance of Compensation Some concepts and theories of Compensation Types of Compensation Methods of Compensation Pros and Cons of Compensation The Managers’ jobs in Compensation Benefit Employee Benefits After reading this chapter, you should be able to: Discuss the growth in benefits costs and the underlying reasons for that growth. Explain the major provisions of employee benefits programs. Describe the effects of benefits management on cost and work-force quality. Employee Benefits Explain how employee benefits in the United States compare with those in other countries. Explain the importance of effectively communicating the nature and value of benefits to employees. Describe the regulatory constraints that affect the way employee benefits are designed and administered. Introduction The average cost of benefits adds up to about 37 percent for every payroll dollar benefits compose about 27 percent of the total compensation package. Benefits are unique because: there is little evidence on the impact that benefits have on attraction, retention, retirement, and performance level. there is more regulation of benefits than of direct pay. benefits have become almost obligatory for employers to provide. benefits are complex for employees to understand. Reasons for Benefits Growth Laws mandating benefits passed during and after the Depression Wage and price controls instituted during WWII and labor shortages The tax treatment of benefits The marginal tax rate（边际税率） is the percentage of additional earnings that goes to taxes Buying group v. individual insurance Organized labor Employer differentiation Benefit Programs Social Security Social Security includes provision for old-age insurance, unemployment insurance, survivors insurance, disability insurance, hospital insurance, and supplementary medical insurance. Social Security retirement benefits are free from federal tax and free from state tax in some states. Currently,