Employee benefits are important to the well being and security of employees and important to organizations for the purpose of attracting and retaining qualified personnel. However, employee benefits have grown increasingly costly to employers. Health care costs are of particular concern to employers and human resources managers. Of course, the level and type of benefit programs available to employees vary widely among firms and industries. Flexible benefit plans (or cafeteria benefit plans) are gradually being adopted by organizations across the country. Many federal and state laws and court decisions influence the type of level of employee benefits provided by employers. By law, most employers are required to pay into social security, unemployment compensation, and workers compensation funds. There are other laws regulating voluntary benefits, ensure nondiscriminatory benefit practices, or establish taxable status. Im sure you all are aware of the Family and Medical Leave Act of 1993 requiring employers with fifty or more workers to provide unpaid leave for up to twelve weeks in the case of a family or medical emergency.

Management can obtain important guidance in modifying benefit programs by periodically identifying employee preferences. Organizations often make incorrect assumptions when they do not make inquiries. Some of the methods used to identify these preferences are personal interviews with a cross section of employees, meetings with small groups of employees and questionnaires accompanied by computer printouts of current benefits so that employees can readily visualize the present package. In fact, an organization might ask a random sample of employees to rank various combinations of benefits and services. Various pairs of benefits at different levels of cost and coverage are printed on separate cards so that employees can make a series of choices between various pairings. A statistical analysis of the rankings and of the costs of each pair can help management make decisions among various options.

Collective bargaining that increases the benefits of unionized employees tends to result in increased benefits for non-unionized employees. Competition in recruiting qualified talent tends to increase employee benefits, whereas lack of financial resources will obviously restrict an organizations ability to offer generous programs. The changing nature of the work force has also influenced employee benefits. For example, the rapid increase in the number of women employed has added to the pressure for childcare assistance and family leaves. Management philosophy is also a major factor in the type of level of employee benefits. Benefits must be managed carefully to enhance recruitment and retention efforts and morals, to avoid excessive costs, and to avoid problems of perceived inequity. Resentment by single employees and couples without children over perceived inequities stemming from special attention to family matters is beginning to surface in many organizations.

Tools in the management of benefit programs are benefit surveys, focus groups and other methods of assessing employee preferences, carefully planned rules of administration, and careful cost analysis. Many techniques can be used for controlling costs, including establishing deductibles and ceilings on benefits and even providing rewards for not using a benefit. Now, the human resources department has a major role in the development and management of benefit programs. It is in everyones interests for that department to draw on the expertise of specialists in accounting, finance, and insurance in administering these programs and in analyzing costs and cost trends. Changes in benefit programs should be based on consultation with managers across the organization and will require top management approval before implementation.

UNIONS

Now that you have read the impact of unions in wage determination let's review how unions came about. Employees join unions and employee associations for a variety of reasons in addition to seeking better wages and benefits. Economic issues may be less of a driving force than issues around such matters as recognition and appreciation, equitable treatment, job security, protection from change, and trust. The different types of labor organizations through which employees bargain with management include craft unions, industrial unions, and employee associations. Remember, employee association is frequently used to denote organizations of professional or white collar employees that have a bargaining relationship with employers. The National Education Association and various associations of government employees are examples.

The National Labor Relations Board (NLRB) of five members enforces the regulations of the Wagner, Taft Hartley, and Landrum Griffin Acts. Some of the boards activities include determining bargaining units, holding representation elections, certifying and decertifying unions as bargaining agents, and requiring employers and unions to cease and desist from unfair labor practices. As you know, the process of unionization is regulated by federal law, and both unions and employers are restricted in what they can do during an organizing campaign.

The American trade union movement is still strong in numbers and well established in law and public policy. However, it faces increasing difficulties. The membership is declining in proportion to the total work force as larger percentages of that work force are employed in service, trade, and professional occupations. Unions are attempting to deal with this problem by redoubling their efforts to organize white collar workers, including those employed by government. And as you can guess, global competition and managerial pressure for rapid technological change and improved productivity have also presented major challenges. Unions have had to choose between resisting change to protect the immediate interests of some workers and encouraging change while minimizing the effects of worker displacement in order to acquire long term advantages for the majority of American workers.

DISCUSSION QUESTIONS:

1. What are the major factors in determining employee benefits in a particular organization? Given the wide variety of factors and choices, if you were the Benefits Manager, how would you go about making your recommendations?

2. Explain the importance of controlling the costs of benefits and identify some cost control measures. What might be some of the challenges associated with initiating such measures?

3. It is probably true that, if given a choice, unions would prefer to implement a skill based pay system than some form of gain sharing plan. Why?