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Topic 9: Compensation - Pay, recognition and employee benefits ( Pay…
Topic 9: Compensation - Pay, recognition and employee benefits
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Employee benefits.
Employee benefits tend to fall into a number of categories, such as:
Social insurance
Private group insurance
Retirement income
Pay for time not worked
Family-friendly policies.
- Private group insurance
This relates to areas such as medical insurance and disability insurance. Medical insurance offered by companies can cover hospital and surgical expenses, expenses of medical practitioners (doctors/physicians), dental care, vision care, birthing centres, prescription drug programs and natural health modalities such as chiropractic, therapeutic massage, and acupuncture.
- Retirement benefits
The more common forms of retirement benefit are defined benefit plans and defined contribution plans. The defined benefit plan provides a guaranteed amount on retirement calculated on the basis of a formula that incorporates years of service, amount of contributions, and age and earnings level at the time of retirement. Defined contribution plans, on the other hand, specify a contribution level (e.g. 10 percent of salary) that an employee must make to the savings/investment plan.
- Social insurance
Social insurance covers areas like social security, unemployment insurance, and workers’ compensation. These benefits tend to be legally prescribed but the level of prescription, eligibility tests, and level of benefit paid can vary from country to country and state to state.
- Pay for time not worked
These benefits relate to paid vacations, sick leave, maternity leave and holidays. The level of pay and method of accruing entitlements vary widely.
- Family-friendly policies
These policies provide a range of benefits to reduce the impact of the conflict between family and work commitments.