Midterm Coverage
• Employee Performance Rating and Changes in Employee Status
• Financial Compensation and Conditions of Employment
• Human Resource Maintenance
Employee Performance Rating and Changes
in Employee Status
Employee Performance Rating
Performance
management
Goal-oriented process directed toward ensuring that
organizational processes are in place to maximize the
productivity of employees, teams, and ultimately, the
organization
performance
appraisal
Formal system of review and evaluation of
individual or team task performance
Why measure performance?
Why measure performance?
[Link] cannot manage and define 3. Creating high performance requires a
what is expected and give feedback definition of clear goals so you will know
and recognition without defining the it when you see it. in addition, all high
basis or performance measures. It allows performers get there because they
management to specify what must be have a clear picture of where they are
done and to combine feedback with going.
goal setting.
4. Pay for performance requires metrics.
2. On the part of the employee, he/she if the organization will be giving pay
cannot improve on what he/she is based on performance, there is a need
supposed to do without necessary data to have some way of knowing when the
before and after to see if performance is
payout has been earned.
actually improving.
Objectives of
performance
appraisal
to determine if there is an
insufficient number of workers. it
provides an opportunity for the
supervisor and his/her
subordinates to review and
identify their strengths and
weaknesses or work-related
behavior.
it forms the basis in identifying
the training needs of employees
as well as evaluating the
success of training, thus
development initiatives are not
based on opinions but rather on
results
it helps in t h e f irm ’s ca re e r
planning process because it
provides a good opportunity to
review the person’s career plans
in light of his/her exhibited
strengths and weaknesses. Thus,
it could produce evidence
and/or opportunity for career
progression
it could justify reward
decisions including merit
increases, promotions and other
forms of rewards
it provides information to
evaluate effectiveness of
selection and placement
decisions. It provides information
upon which promotion, transfer,
demotion, layoff, discharge and
salary decisions can be made
it helps evaluate the individuals
share relative to the teams
contribution in achieving the
organizational goal.
it allows easy monitoring and
supervision
1|
2|
Who should
3|
evaluate
4|
performance?
5|
6|
7|
8|
1. Manager or best position to observe and have
Supervisor better understanding of the job
being performed.
O n t h e n e g a t i v e s i d e , t h e
immediate supervisor may
emphasize certain aspects of
employee performance and
neglect others.
Also managers have been known
to manipulate evaluations to justify
pay increases and promotions and
vice versa.
2. Self-
Appraisal If employees understand their
objectives and the criteria used
for evaluation, t h e y a re in a
good position to appraise their
own performance.
c a n h i g h l i g h t d i s c r e p a n c i e s
between what the employee
and management think.
comparing provide mutual
feedback for meaningful
adjustment of expectations
3. Subordinates
subordinates know better than
anyone else whether leadership
is good or bad. it makes
workplace more democratic
and responsive to human needs
and it increases the flow of
communication as well
4. Customer/
Supplier
service-oriented com p a nies
such as banks, where inputs
provided by external customers
can be useful in staffing
5. Team
members of a team who may
Appraisal hold different positions are asked
to appraise each other work and
work styles.
This assumes that the team’s
objectives and each member’s
expected contributio n h a ve
been clearly defined
6. Assessment
Center professional assessors who may
evaluate simulated or actual
work activities.
Objectivity is one advantage,
which produce reviews that are
not clouded by personal
relationships with employees
7. Peer Predictive of success and yielded
Appraisal good reliability and validity.
Based on assumption that co -
workers are most familiar with an
employee’s performance.
effective at focusing an
employee’s attention on
undesirable behaviors and
motivating change.
8. 360-
Degree/Full
Circle employee’s performance is
appraised by everyone with whom
he or she interacts, including
managers, peers, customers and
members of other departments.
most comprehensive and
expensive way to measure
performance
Indicators or matrix that can help
measure employee performance
1 | 6|
2 | 7|
3 | 8|
4 |
5 | 9|
INDICATORS
the number of units The percentage of work output
produced, processed, or that must be redone or is
sold rejected.
INDICATORS
how fast work is performed, cost of work performed, if the
number of units produced employee has some degree of
per hour control over cost
INDICATORS
an employee is obviously track creative work and
not performing when he is quantity them
not at work
INDICATORS
opposite of creativity, but
it is merely a boundary on
creativity.
D e v i a t i o n s f r o m p o l i c y
indicate an employee
whose performance goals
are not well-aligned with
those of the company
INDICATORS
personal habits like gossip
or rumor mongering can
disrupt job performance
and interfere with the
performance of others.
specific behaviors should
be defined, and goals
should be set for reducing
their frequency
INDICATORS
most people know to dress for work,
but in many organizations, there is at
least one employee who needs to
be told.
Inappropriate performance and
grooming should be spelled out,
their effects upon the employee’s
performance and that of others
explained, and corrective actions
defined.
Performance
Appraisal
Process
1. Identify Specific Performance
Appraisal Goals
2. Establish Performance Criteria and
Communicate them to Employees
3. Examine Work Performed
4. Appraise Performance
5. Discuss Appraisal with Employee
Performance
Criteria
1. Relevance - relevant performance dimension are determined by
the duties and responsibilities contained in the job description
2. Reliability - produced consistent and repeatable evaluation
3. Freedom from contamination - should measure each employee’s
performance without being contaminated by factors that an
employee cannot control such as economic conditions, materials
shortage or poor equipment.
Performance
Appraisal
Methods
1 | Trait systems
2 | Comparison systems
3 | Behavioral systems
4 | Results-based systems
1. TRAIT SYSTEM
Trait Systems - Type of performance appraisal method,
requiring raters (e.g., supervisors or customers) to evaluate
each employee’s traits or characteristics (e.g., quality of
work and leadership).
2. Comparison System
Comparison systems - A type of performance-
appraisal method, require that raters (e.g.,
supervisors) evaluate a given employee’s
performance against other employees’
performance attainments. Employees are ranked
from the best performer to the poorest performer.
2. Comparison System
A. Forced distribution method- Performance appraisal
method in which the rater is required to assign individuals in
a work group to a limited number of categories, similar to a
normal frequency distribution. superior, above average,
average, below average, poor
2. Comparison System
B. Paired comparisons Supervisors compare each
employee to every other employee, identifying the
better performer in each pair.
3. Behavioral System
Behavioral systems - Performance appraisal methods
that focus on distinguishing between successful and
unsuccessful behaviors.
The three main types of behavioral systems :
Ø Critical incident technique (CIT)
Ø Behaviorally Anchored Rating Scales (BARS)
Ø Behavioral Observation Scales (BOS)
3. Behavioral System
A. Critical incident technique (CIT) Performance appraisal method
that requires keeping written records of highly favorable and
unfavorable employee work actions.
3. Behavioral System
B. Behaviorally anchored rating scale (BARS) Performance
appraisal method that combines elements of the traditional rating
scale and critical incident methods; various performance levels are
shown along a scale with each described in terms of an
employee’s specific job behavior.
3. Behavioral System
3. Behavioral System
C. Behavioral observation scale (BOS) A specific kind of behavioral
system for evaluating job performance by illustrating positive
incidents (or behaviors)of job performance for various job
dimensions.
3. Behavioral System
4. Result-Based System
Results-based systems - Performance appraisal
method in which the manager and subordinate jointly
agree on objectives for the next appraisal period; in the
past a form of management by objectives.
Focus on measurable outcomes such as an individual’s or
team’s sales, customer service ratings, productivity,
reduced incidence of workplace injuries, and so forth.
PROBLEMS
IN
PERFORMANCE APPRAISAL
Conducting PAs is often a frustrating
task for managers
Managers have always loathed the
time, paperwork, difficult choices,
and discomfort that often
accompanies the appraisal process. APPRAISER
Going through the procedure cuts DISCOMFORT
into a manager’s high-priority
workload and the experience can be
especially unpleasant when the
employee in question has not
performed well
Almost all people make rating errors.
Rating errors reflect differences
between human judgment
processes versus objective, accurate
assessments uncolored by bias,
SUBJECTIVITY OF
prejudice, or other subjective, PERFORMANCE
extraneous influences.
EVALUATIONS
Major types of rater errors include:
• Bias errors
• Contrast errors
• Errors of central tendency
• Errors of leniency or strictness
1. BIAS ERRORS
Bias errors Evaluation errors that occur when the rater evaluates
the employee based on a personal negative or positive opinion of
the employee rather than on the employee’s actual performance.
Four ways supervisors may bias evaluation results are;
1. First-impression effects
2. Positive and negative halo effects
3. Similar-to-me effects
4. Illegal discriminatory biases.
BIAS ERRORS
1. FIRST IMPRESSION EFFECT might make an initial favorable or
unfavorable judgment about an employee and then ignore or distort the employee’s
actual performance based on this impression.
“For instance, a manager expects that a newly hired graduate of a prestigious
university will be an exemplary performer. After one year on the job, this employee
fails to meet many of the work objectives; nevertheless, the manager rates the job
performance more highly because of the initial impression.”
BIAS ERRORS
2. POSITIVE HALO EFFECT ( halo effect)
NEGATIVE HALO EFFECT (horn error)
- occurs when a rater generalizes an employee’s good or bad behavior on one aspect of
the job to all aspects of the job.
“For example, Rodney Pirkle, accountIng supervisor, placed a high value on neatness, a
factor used in the company’s PA system. As Rodney was evaluating the performance of
his senior accounting clerk, Jack Hicks, he noted that Jack was a very neat individual
and gave him a high ranking on this factor. Also consciously or unconsciously, Rodney
permitted the high ranking on neatness to carry over to other factors, giving Jack
undeserved high ratings on some other performance criteria even though his actual
performance was low.
BIAS ERRORS
3.. SIMILAR-TO-ME EFFECT refers to the tendency on the part of raters to
judge favorably employees whom they perceive as similar to themselves.
Supervisors biased by this effect rate more favorably employees who have attitudes,
values, backgrounds, or interests similar to theirs.
“For example, employees whose children attend the same elementary school as
their manager’s children receive higher PA ratings than do employees who do not
have children..”
BIAS ERRORS
Similar-to-me errors or biases easily can lead to charges of 4. ILLEGAL
DISCRIMINATORY BIAS, wherein a supervisor rates members of his
or her race, gender, nationality, or religion more favorably than
members of other classes.
2. CONTRAST ERRORS
A rating error in which a rater (e.g., a supervisor) compares an
employee to other employees rather than to specific explicit
performance standards.
3. CENTRAL TENDENCY ERROR
Evaluation appraisal error that occurs when employees are
incorrectly rated near the average or middle of a scale.
When supervisors rate all employees as average or close to
average, they commit errors of central tendency.
4. ERRORS OF LENIENCY OR STRICTNESS
With a Leniency error, managers tend to appraise employees’
performance more highly than they really rate compared with
objective criteria. This behavior is often motivated by a desire
to avoid controversy over the appraisal.
However, leniency provides a false sense of confidence to the
employee and diminishes exceptional performance by other
workers.
4. ERRORS OF LENIENCY OR STRICTNESS
On the other hand, Strictness errors occur when a supervisor
rates an employee’s performance lower than it would be if
compared against objective criteria.
Being unduly critical of an employee’s work performance.
The evaluation process may also
create anxiety for the appraised
employee.
This may take the form of discontent,
and turnover. In a worst-case
scenario, a lawsuit is filed based on EMPLOYEE
real or perceived unfairness. ANXIETTY
Opportunities for promotion, better
work assignments, and increased
compensation may hinge on the
results.
Characteristics of an effective appraisal system
1 | Job-related Criteria
2 | Performance Expectations
3 | Standardization
4 | Trained Appraisers
5 | Continuous Open Communication
6 | Conduct Performance Reviews
7 | Due Process
1. Job-related Criteria
job analysis. Subjective factors, such as initiative, enthusiasm, loyalty, and
cooperation may be important; however, unless clearly shown to be job related, they should not
be used.
2. Performance Expectations
Employees must understand in advance what is expected of them. How can
employees function effectively if they do not know what they are being measured against? On
the other hand, if employees clearly understand the expectations, they can evaluate their own
performance and make timely adjustments as they perform their jobs, without having to wait for
the formal evaluation review.
3. Standardization
Firms should use the same evaluation instrument for all employees in the same job
category who work for the same supervisor.
4. Trained Appraisers
A common deficiency in appraisal systems is that the evaluators seldom receive
training on how to conduct effective evaluations. Unless everyone evaluating performance
receives training in the art of giving and receiving feedback, the process can lead to
uncertainty and conflict.
5. Continuous Open Communication
Most employees have a strong need to know how well they are
performing. A good appraisal system provides highly desired feedback on a
continuing basis. There should be few surprises in the performance review.
6. Conduct Performance Reviews
In addition to the need for continuous communication between
managers and their employees, a special time should be set for a formal
discussion of an employee’s performance. Because improved performance is
a common goal of appraisal systems, withholding appraisal results is absurd.
7. Due Process
Ensuring due process is vital. If the company does not have a formal
grievance procedure, it should develop one to provide employees an
opportunity to appeal appraisal results that they consider inaccurate or unfair.
They must have a procedure for pursuing their grievances and having them
addressed objectively.
performance appraisal interview
scheduling the interview
interview structure
use of praise and criticism
employees’ role
concluding the interview
discussions include
review of overall progress
discussion of problems that were encountered
discussion of sources of ineffective performance
agreement about how performance can be improved
discussions on how current performance fits with long-range career goals
specific action plans for the coming year and how to reach short and long-
term objectives
Changes in Employee Status
-Reassignment of an
employee to a higher job
position
-upward or vertical movement.
increase duties and
1. PROMOTION responsibilities, higher pay
and privileges
-serves as encouragements
and inspirations to exert
maximum effort
-help instill loyalty
PROMOTION
Approaches
1. Closed- responsibility of the supervisor to identify promotable employees
2. Open – job posting – enhance participation and the achievement of equal
opportunity goals
Criteria
1. Seniority – length of service
- Straight Seniority – length of service is the sole basis
- Qualified Seniority – more competent employee
2. Current and Past Performance – based on performance and evaluation
*Unofficial promotion criteria – personal characteristics , nepotism, social
factors/friendships
Process of moving a
worker to a lower
level of duties and
responsibilities,
[Link] which typically
involves a reduction
in pay.
Demotion
fewer skills, responsibilities, less important job, may not involve reduction in pay but
reduction in status and privileges
cautiously resorted for it badly affects individual and group morale and productivity
retraining and reorientation on the job and attitude toward work, or termination if no
improvement
CAUSES/REASONS
Reorganization - company mergers, forcing employees to accept demotion
inability to perform based on acceptable standards
disciplinary action - way to handle problems, routine form of punishment for
wrongdoing
informing the employee that he is beginning to be a liability than an asset
The lateral movement of a
worker within an
organization
Reassignment of an
employee to a job with
3. Transfer similar pay, status, duties,
and responsibilities or to
another work shift or from
one unit to another in the
same company
Transfer
-part of management’s inherent power or prerogatives reasons
CAUSES/REASONS
1. Reorganization
2. Conflict Management
3. Employee’s Personal NeedsConvenience
4. Organizational needs due to expansion, erroneous placement, meet
departmental requirements due to peak season
5. For promotion purposes (growth and experience)
occurs depending on
whether the employee or
the employer decides to
4. Separation terminate the
employment relationship
Separation
1. Resignation
Some employees cannot see promotional opportunities in work, or
at least not enough, and will therefore move on and leave the
organization
2. Retirement
Many long-term employees leave an organization by retiring.
3. Downsizing
also known as restructuring or rightsizing, is essentially the reverse of
a company growing; it suggests a one-time change in the
organization and the number of people employed.
Downsizing
Outplacement
A procedure whereby laid-off employees are given assistance in finding
employment elsewhere.
Severance pay
Compensation designed to assist laid-off employees as they search for new
employment.
basis: based on latest salary rate
Separation
4. Termination
Most severe penalty that an organization can impose on an
employee.
Just cause - a standard for determining whether to terminate an
employee and the standard is based on whether an employee
violated company policy or work rules and the severity of the
violation.
Financial Compensation and
Conditions of Employment
Compensation
Total of all rewards provided employees in
return for their services.
Compensation
1. Adequate to meet the needs of the employees and to acquire and retain
qualified personnel
2. Equitable – each person should be paid fairly, in line with his efforts,
abilities, and training. employees believe their pay is equitable when they
perceive the ff circumstance: fair relative to the pay coworkers in the
same org receive, fair relative to the pay received by coworkers in other
orgs who hold similar positions, fairly reflects their input or contribution
to the org.
3. Balanced – pay benefits and other rewards should provide a reasonable
total reward package
compensation
4. Cost-effective – taking into consideration the company’s ability to pay
5. Secure – pay should be enough to help an employee feel secure and aid
him in satisfying basic needs
6. Incentive-providing – pay should motivate effective and productive work
or reward desired behavior
7. Acceptable to employee – the employee should understand the pay
system being followed by the company and should feel it is reasonable
for the organization and for him.
8. Compliant with legal regulation
Components of
Direct
Compensation
1 | base pay
2 | premium pay
3 | base pay progression
4 | variable pay
Components of
Direct
Compensation
1 | base pay
- the hourly wage or
weekly/monthly salary earned
Components of
Direct
Compensation
2 | premium pay
- refers to the additional compensation
required by law for work performed
within 8 hours on nonworking days,
such as rest days and special days
Components of
Direct
Compensation
3 | base pay progression
-movement of base pay
overtime, from year to year
Components of
Direct
Compensation
4| variable pay
- incentive or bonus pay that does not fall into base
pay; such earnings may be based on performance
against preset goals incentives or pay at the
discretion of the company (bonuses); may be paid
at the individual, team, group or organizational
level.
Wages vs. Salary
Wages vs. Salary
wages – refers to hourly compensation paid to skilled and
unskilled workers or those performing blue-collar jobs, with time as
the basis in the computation
salary – fixed amount per pay period, income paid to an
individual not on the basis of time but on the basis of performance.
Given to professional and managerial employees or those who
are performing white-collar jobs.
WAGE SALARY
PROS PROS
• Overtime Pay • Regular
• Holiday Pay paycheck
• Schedule • Paid time off
Autonomy • Benefits
CONS CONS
• Lack of stability • Unpaid
• Pay losses overtime
• Fewer benefits • Less Autonomy
• Fixed Schedule
Government organizational politics
EXTERNAL FACTORS
• Cost of Living - This tends to vary money wage depending upon the variations
in the cost of living
• Labour Union - Organized labor is able to ensure better wages than the
unorganized one. Higher wages may have to be paid by the firm to its workers
under the pressure or trade union. If the trade union fails in their attempt to
raise the wage and other allowances through collective bargaining, they
resort to strike and other methods hereby the supply of labour is restricted. This
exerts a kind of influence on the employer to concede at least partially the
demands of the labour unions.
EXTERNAL FACTORS
• Prevailing Wage Rates - Wages in a firm are influenced by the general wage level or the
wages paid for similar occupations in the industry, region and the economy as a whole.
External alignment of wages is essential because if wages paid by a firm are lower than those
paid by other firms, the firm will not be able to attract and retain efficient employees. For
instance, there is a wide difference between the pay packages offered by multinational and
Indian companies. It is because of this difference that the multinational corporations are able
to attract the most talented workforce.
• Government - To protect the working class from the exploitations of powerful employers, the
government has enacted several laws. Laws on minimum wages, hours of work, equal pay for
equal work, payment of dearness and other allowances, payment of bonus, etc., have been
enacted and enforced to bring about a measure of fairness in compensating the working
class. Thus, the laws enacted and the labour policies framed by the government have an
important influence on wages and salaries paid by the employers. Wages and salaries can’t
be fixed below the level prescribed by the government.
INTERNAL FACTORS
• Ability to Pay Employer’s ability to pay is an important factor affecting wages not only for the
individual firm, but also for the entire industry. This depends upon the financial position and profitability
of the firm. However, the fundamental determinants of the wage rate for the individual firm emanate
from supply and demand of labour. If the firm is marginal and cannot afford to pay competitive rates,
its employees will generally leave it for better paying jobs in other organizations. But, this adjustment is
neither immediate nor perfect because of problems of labour immobility and lack of perfect
knowledge of alternatives. If the firm is highly successful, there is little need to pay more than the
competitive rates to obtain personnel. Ability to pay is an important factor affecting wages, not only
for the individual firm but also for the entire industry.
• Top Management Philosophy - Wage rates to be paid to the employees are also affected by the top
management’s philosophy, values and attitudes. As wage and salary payments constitute a major
portion of costs and /or apportionment of profits to the employees, top management may like to
keep it to the minimum. On the other hand, top management may like to pay higher pay to attract
top talent.
INTERNAL FACTORS
• Productivity of Workers - To achieve the best results from the workers and to motivate him to increase
his efficiency, wages have to be productivity based. There has been a trend towards gearingwage
increase to productivity increases. Productivity is the key factor in the operation of a company. High
wages and low costs are possible only when productivity increasesappreciably.
• Job Requirements - Job requirements indicating measures of job difficulty provide a basis for
determining the relative value of one job against another in an enterprise. Explicitly, job may be
graded in terms of a relative degree of skill, effort and responsibility needed and the adversity of
working conditions. The occupational wage differentials in terms of
a) Hardship,
b) Difficulty of learning the job
c) Stability of employment
d) Responsibility of learning the job and
e) Change for success or failure in the work.
INTERNAL FACTORS
• Employees Related Factors
Several employees related factors interact to determine his remuneration. These include
i) Performance: productivity is always rewarded with a pay increase. Rewarding performance
motivates the employees to do better in future.
ii) Seniority: Unions view seniority as the most objective criteria for pay increases whereas
management prefer performance to effect pay increases.
iii) Experience: Makes an employee gain valuable insights and is generally rewarded
iv) Potential: organizations do pay some employees based on their potential. Young managers
are paid more because of their potential to perform even if they are shortof experience.
in conducting job evaluation, the ff. must
be taken into consideration:
consistency
freedom from bias
correctability
representativeness
accuracy of information
in conducting job evaluation, the ff. must
be taken into consideration:
Consistency - to establish reliability
Freedom from bias - free from political considerations or personal biases,
those making evaluations should be objective
Correctability - process should be firms should provide mechanisms to
modify inaccurate or out-of-date evolutions.
Representativeness - all employees affected by the process should have
their concerns represented
Accuracy of information - ratings must be based on accurate info
1. payment for time worked
2. incentive forms of
compensation
3. performance-based rewards
4. spot bonuses
different forms of 5. skill and knowledge-based
pay/competency-based pay
compensation 6. merit pay plans
7. profit sharing
8. stock ownership plans
9. executive compensation
Indirect Financial
Compensation
(Employee Benefits) As a rule, employees
receive benefits because
consists of all financial rewards not of their membership in
included in direct financial the organization.
compensation
Classification of Employee Benefits and Services
1. Legally Required Benefits
2. Discretionary Benefits
Legally Required Benefits
02Unemployment
Insurance
Social
Security
01 Workers’
03 compensation
Social Security System (SSS)
Government Service Insurance System (GSIS)
Home Development Mutual Fund (HDMF)
Philippine Health Insurance Corporation (PhilHealth)
Employees’ Compensation
13th Month Pay
Service Incentive Leave
Paternity Leave
Meal and Rest Periods
Right to Holiday Pay under Article 94 of the Labor Code
Premium Payment
Night Shift Differential
Legally Required Benefits in Philippines
Discretionary benefits are benefit payments made
as a result of unilateral management decisions in
nonunion firms and from labor–management
negotiations in unionized firms.
Discretionary Benefits
1 Protection
Programs
Health Insurance And Retirement Plans
2 Paid
Time Off
Vacation; paid time off (PTO) banks; sabbaticals; Others
3
Child Care; Educational Assistance; Subsidized Cafeterias;
Services Scholarships for Dependents; Relocation; Domestic Partner
Benefits and Same-Sex Marriage
Discretionary Benefits in Philippines
Holiday/Christmas Bonus
Midyear Bonus
Cost of Living Allowances
Paid Holiday and Vacation Leaves
Sick Leave
Emergency/Bereavement Leave
Birthday Leave
Healthcare/HMO Coverage
Group Life Insurance
Pension Plans
Health Care
Health Care represents the most expensive item in the employee benefits package.
Fee-for-service Plans Managed Care Plans Specialized Insurance Plans
hospital expenses, surgical dental plans, vision plans, prescription drug plans, and
expenses, and physician’s charges. mental health and substance abuse plans
emphasizes cost control by
l i m i t i n g a n e m p l o y e e ’s
choice of doctors and
hospitals.
1
Consumer-Driven Health Care
Plans
helping companies
maintain control over costs
Retirement Plans
Retirement income security is a major concern to individuals of all ages, but particularly to the members of the
baby boom generation who are entering retirement in unprecedented numbers. Individuals rely on three sources
for retirement income
0 1 0 2 0 3
Retirement plan that Is a retirement plan Is a plan with
provides the that requires specific elements of both
participant with a contributions by an defined benefit and
fixed benefit on employer to a defined contribution
retirement. retirement or savings plans.
fund established for
the employee.
Life insurance provides a payment to a designated
beneficiary in the event that the policy holder passes
away. There are a variety of life insurance plan
options. Disability insurance provides partial income
replacement after an employee becomes unable to
work. There are short- and long-term disability plan
options.
Life insurance and Disability Insurance
Term Life Insurance
provides protection to
employees’ beneficiaries
only during a limited
period based on a
specified number of years
subject to a maximum age.
After that, the insurance Whole Life Insurance
A type of life insurance that provides protection to employees’
automatically expires.
beneficiaries during employees’ employment and into the
retirement years.
Paid Time-off
Vacation. Vacation time serves important Sick Pay and Paid Time Off Banks
compensation goals. For instance, paid vacations help Many firms allocate to each employee a certain number of days of
workers to be more creative and productive, reduce sick pay they may use when ill
paid time off (PTO) banks Means of dealing with the problem of
stress, brings families and friends closer, and improves
unscheduled absences by providing a certain number of days each
job performance.
year that employees can use for any purpose.
Sabbaticals Temporary leaves of absence from an Other Types of Paid Time Off
organization, usually at reduced pay.