One element of a comprehensive package is the disability benefits. These are benefits that provide disability income replacement and they include worker compensation and social security. Most of these benefits are mandatory although some exist as tax free. Its major objective is long term income re-imbursement during the first six months of disability. Long term disability comes to an end when one retires. Another benefit is sick pay which most companies have formulated policies that give awards in form of cash for sick days that were not used at the end of the year. Medical benefits are another element. Re-imbursements of medical expense are one of the most important elements of a compensation package. There are voluntary types of medical coverage that include pre-paid plans and fee-for-service plans. There are also government backed plans like Medicaid and Medicare which serve to furnish medical coverage to those who cannot afford other types of health insurance. Under the fee-for-service plans, the insured is paid by the insurer physician and hospital costs only for which he is covered. Under pre-paid plan, it is insurance companies that arrange to paid providers of health care that the insured has taken cover. Health maintenance organization is the most common type of pre-paid plan. Most plans cover costs that relate to drugs, professional care, physician visits and hospitalization.
Retirement benefits are another element. Retirement benefits are mainly provided through three avenues: pension plans, social security and individual savings. Social security system is a program by the federal government that is paid for by tax on earnings which both the employee and the employer share equally. It provides payments to qualified individuals. It defrays income lost by people due to sickness, old age or unemployment. Employers finance pension plans and are subject to strict government controls so as to ensure that they exist for long term. They take two forms: defined contribution and defined benefit. Another retirement benefit is the supplementary individual savings plan. They are tax favored. Unemployment benefits are another element. This is where the employee is offered some form of protection by the employee against termination. A worker who gets terminated is compensated financially by a series of payments or lump sum. In severance pay, the length that a person had been employed is the major determining factor. Another element is survivor benefit. Here, the benefits of the survivors of employees that are deceased mainly comprise of workers compensation benefits and social security.
Among the factors that the management will take into consideration when giving a compensation package are external and internal factors. Internal factors include: company size, type of business, the geographical location of the business, the profitability that the company is enjoying, employment stability in the company and length of employment and job performance. These factors are within the management of accompany and hence they are the ones responsible for determining how the compensation package will be. Job requirements, employee skills and knowledge, employee acceptance and company factors are also some of the factors that will influence the making of a compensation package. External factors are factors that are beyond the management of the company in determining compensation package. External factors include: competition in the labor market i.e. the demand and supply of employees with different qualifications, conditions of the product market i.e. the demand for specific products and industry level competition and organizational characteristics i.e. industry, size and technology.
For junior employees, they want flexible benefits that can be adjusted to fit their individual needs. Such junior employees want benefits that give them flexibility during holidays. They want benefits that include being offered time off the annual leave like a day or two, off between Christmas and 1st. Most junior employees aged between 16-26 chose their employers based on the number of holidays that they would get. Junior employees also want employees that are committed to their personal development by offering secondments like going abroad. More so, junior employees also want employers that will foster employee-employee relationship and team work and organizational drive. More so, their social lives matter as well. They indicate that they want employers that allow bonding of employees once in a while. Research has shown that middle aged workers are the ones who benefit the most from health perks. Middle aged members are so concerned about their heath and companies offering health perks like private medical insurance or even gym membership are the ultimate choice of employers that middle aged workers will choose. At the age of 39 most people start to worry about their health and will therefore take measures to improve their health. Middle aged employees are also laden with responsibilities of children and investment. They are therefore busy and could jumble between several jobs in order to make ends meet. Mortgage loans also form part of the luggage of middle aged employees and will therefore consider companies that are well paying even if they do not offer excellent holidays and breaks. Companies that offer child benefits plan are also attractive to middle aged workers. Other benefits include career advancement benefits and further education.
Employees that are nearing retirement value their health so much due to old age. As a result they will require benefits that have been tailored to meet their heath requirements. As opposed to middle aged employees, their responsibilities are not so many and will want duties or responsibilities that are stress free. As a result of their retirement, they are concerned about pension schemes and retirement packages. They will therefore get attracted to companies that offer excellent pension and retirement benefits scheme. For technical employees like mechanical engineers, benefits and compensation like the following can be considered: heath life insurance, vacation, employee stock ownership plans. Other benefits also include workers compensation or unemployment compensation in the event that he loses the job.