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Employee Benefits Plan


EmployeeBenefits Plan

EmployeeBenefits Plan

Employeebenefits refer to a set of welfare programs by organizations orcompanies that aim to enhance employee well-beingover and above meeting their varied needs as workers of theorganization. The paper discusses options for development of an by an organization or enterprise based oninformation of relevant factors in its internal and external businessenvironment. It also looks at the information that isconsideredas most important and that which is less important as functions ofthe vitalprocess of plan creation for any organization that aims to achievegood performance or productivity. A look at the employee benefitsprogramshows that it serves as a significant tool for facilitating employeemotivation on-the-job (Griffin, &amp Moorhead, 2011). The resultanteffect of implementing asensibleemployee benefits plan is that the employees get to have a sense ofbelonging and commitment to the organization. Human resource managersaretherefore facedwith constant challenges of ensuring the company offers employeebenefits that serve to meet the needs of not only the employees butthose of the organization based on the relevant and factualinformation.

Externaland Internal Information

Withoutany doubt, and as indicated before in this paper, the process ofdeveloping an employee benefits plan for an organization involves twocategories of information as the building blocks of the scheme.These include internal and external factors in the businessenvironment of the given organization. Nevertheless, the essentialinformation to be considered by the bodyis that which associates with factors that would make the teamenjoy employee loyalty. It isimplicitthat competition remains high in the job market of today. Companiesare alwaysseeking to hire and retain talented and competent employees, and theyobserve employee benefits plan as a means of achieving that (Bryant,&amp Allen, 2013). Even so, it is also true that similar job groupsoffer comparable core compensations within the country or region. Assuch, this paper observes added benefits as a primaryfactor toconsiderfor enhancing employee loyalty to an organization. From anotherperspective, one could say that employees are attracted to companiesthat offer them a sense of not only economic security but also socialsecurity as well (Stumpff, 2011). Fundamentally, the benefits act asa form of value rather than payment for work services (Griffin, &ampMoorhead, 2011).

Asaforementioned, some companies may seem attractive to potentialemployees for some reasons other than core compensation such involveoffers of daycare for the children, paid vacations and profit sharingamong others. Some of these grounds,however, tend to be of little consideration in the development of theemployee benefits plan for many organizations. Nevertheless, researchindicates that companies that provide such benefits also enjoydesirable productivity of their employees. For this reason and inconsideration of relevantinternal information in the development of a plan, a company mustconsider its organizational goals or objectives, mission,and vision (Stumpff, 2011). Alignment of organizational goalswith the needs of the employees also facilitates achievement of jobsatisfaction for the employees as well as desirable performance forthe organization. Italsoaids in the gathering of valuableinformation about developmental needs as they develop and or manifestamong the employees for purposes of achievement of organizationalgoals (Bryant, &amp Allen, 2013).

ImportantInformation for Planning Process

Forthe most part, external factors of information under consideration inthe developmentof the employee benefits plan are those of requirements of the law ofthe land. For instance, an employer is required by law, as anobligation, to providestaffwith benefits of core compensation (salary and wages) for theirservice or duty to the organization. One cannot decline to note thatsuch compensation remains a matter of vitalconcern in the development of a benefits plan. As such, organizationsought to consider adjustments to their benefits plan on a periodicbasis based on matters like cost of living, individual performances,incentives,and seniority. Nonetheless, and as hinted before, industry trendsseem to determine this factor and so the appropriate associatedinformation as it relates to the development of the plan. Also,an organization should consider external information regarding thepolitical environment of the country or region while developing itsemployee benefits plan. Therehave been several of reportsof workerrebellion against companies owing to the influence of the politicalenvironment over the years in the name of calling for reforms in theemployment sector (Griffin, &amp Moorhead, 2011). As such, it isimportant for organizations to make serious considerations about theneeds and or terms of organs like trade unions and human rightsorganization among others.

Theinternal information that is worth considering in the creation of thebenefits plan involves benefits that the employer or organization iswilling and able to offer employees based on discretion. Suchincludesfactors like company policies for healthcare, life, and disabilityinsurance coverage, paid time-offs, risk allowance, transportallowance, tuition reimbursement, and retirement benefits amongother things.Without any doubt, such depend on information regarding the financialsoundness of the organization. From this perspective, it is clear forpeople to observe that large organizations tend to offer moreenhancement benefits to their employees in comparison to smaller onesowing to their financial strengths (Tan, Tolos, &amp Manab, 2014).

Thenagain, it is important for the organization to consider internalinformation relating to intangible benefits to the employees. Suchcommonlyrelates to maintenance of a friendly organizational culture, propermanagement of a diverse workforce, management by objectives, thelikelihood for promotion and other Incorporeal means of appreciationand or valuing of the employees (Bryant, &amp Allen, 2013). In asmuch as the organization offers benefits to its employees, it isimportant to consider information regarding benefits thatcouldbepaidin part by the employees. For instance, it isunderstandablethat the cost of healthcare coverage or medical insurance isrelatively high and that the organization and the employees oftenmake partnered contribution towards facilitation of the benefit.

Informationof the least Consideration

Anotherpiece of internal information, which might be of least importantconsideration in some cases, it is the need for the company to easeits cash flow. The organization would engage in approaches like thesalary sacrifice system wherein employees relinquish some corecompensation for purposes of gaining some other benefits. Such worksfor large companies that are in a position to negotiate for discountswith mainstream employee benefits provider companies (mostlyinsurance companies). In reality, provisions of some non-cashbenefits imply lesser costs for the organization, over and abovepotential tax advantages (Biswas, 2014).

Furthermore,it is important for the teamto consider information of the needed resources for implementation ofthe benefits plan as an important internal factor. Such fundsare likely to involve evaluation systems and mechanisms for theprogram,which determine its impact on overall performance of the firm. Inmost cases, the evaluation systems also point out the employee issuesor needs that might be in need of more focus onthe management. For this reason, they facilitate effective HumanResource Management (HRM) in the organization (Stumpff, 2011). Duringthe planning stages of the system, however, there is a need forgathering and evaluating the strengths and weaknesses of the overallorganization from the perspective of HRM.


Developmentof an employee benefits plan involves an integration of criticalexternal and internal information in the business environment of anorganization. It’snice to remember thatthe core compensation poses as an important matter of considerationin the development of an employee benefit plan. Never the less, otheradded benefits offered at the discretion of the organization’smanagement, such as bonuses, vacations,and enhancements like cars and housing among others, stand out as themain pointsof attraction forpotential employees of a firm. In as much as benefits often involveoffers of material incentives, it is fair toobserve them asplatforms for demonstration appreciation and value for the employeesvia other intangible means. Research also shows that employees aremore attracted to firms that offer bonuses and added benefits thanthose that focus more on core compensation. Examples of such addedbenefits involve provisions like a company car or housing unit forthe worker at the expense of the enterprise.


Biswas,B. D. (2014).&nbspEmployeeBenefits Design and Planning: A Guide to Understanding Accounting,Finance, and Tax Implications.Pearson Education.

Bryant,P. C., &amp Allen, D. G. (2013). Compensation,benefits and employee turnover HR strategies for retaining toptalent.&nbspCompensation&amp Benefits Review,&nbsp45(3),171-175.

Griffin,R. W., &amp Moorhead, G. (2011).&nbspOrganizationalbehavior.Nelson Education.

Stumpff,W. A. (2011).&nbspEmployeeBenefits and Executive Compensation: Cases and Materials.Foundation Press Thomson/West.

Tan,S. C., Tolos, H., &amp Manab, N. A. (2014). Employee Benefits inSmall Medium Enterprises (SMEs): Practice and Challenges.