Provide an detailed overview on the topic indirect pay/benefits. Use the information given: Indirect Pay: any type
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Provide an detailed overview on the topic indirect pay/benefits. Use the information given:
- Indirect Pay:
- any type of employer-provided reward (or "benefit") that serves an employee need but is not part of base or performance pay
- 15% of total compensation in medium to large private-sector firms
- 17% in manufacturing sector down to 10% in the accommodation/food industry, where many employers don't provide any benefits beyond the statutory minimum
- Other research put this cost between 10-20% of the total compensation, depending on the type of employers surveyed
Benefits mandated by law
- (including employer contributions to the Canada/Quebec Pension Plan, Employment Insurance, and Workers' Compensation benefits.)
- Deferred income plans (known as retirement or pension plans).
- Life insurance; extended medical, dental, and disability insurance; and other types of health benefits.
- Pay for time not worked, such as paid holidays and leaves.
- Employee services (ranging from psychological counselling to food services).
- Miscellaneous benefits, which may range from provision of company cars to purchase discounts on company products or services.
- Advantages
- Competitive pressure
- Matches unionized firms
- Favourable tax treatment
- Economies of scale in purchasing
- Protect financial security and peace of mind
- Protect employees from adversity
- Can support managerial strategy
- Promote consequences that benefit the organization
- Disadvantages
- Cost can be substantial
- Rigidity
- Difficult to eliminate once provided
- Difficult to develop efficient benefits package
- Admin and communication costly
- Does not motivate task behaviour
- May cause excessive employee stability
- May encourage undesirable behaviour
- Impact of indirect pay on performance still unclear
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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