Employee Benefits
True or False - Paying CPP premiums must stop when an employed person turns 65.
False - part of Post Retirement Benefits. They can elect to stop but also can continue to contribute.
What is the purpose of the Employment Equity Act?
Equality in work opportunities and removal of barriers for the 4 designated groups: women, minorities, indigenous persons and disabled persons.
What Human Resource process is used to help determine merit increases?
Performance Management
High turnover can be a good thing when....?
Poor performers are leaving.
A company who sells flip phones would probably compensate their employees below market, at market or over market? Explain.
Below, as their products are not exactly hot sellers right now!
Sarah recently had gall bladder surgery. What employee benefit might help her financially during her 2 month recovery?
EI Sick benefits (if no company benefit) OR
Company short term disability STD benefit
Explain a flight risk?
This is when a valued employee may be tempted to "fly" to another company as the rewards/culture/strategy are just not feeling right for him/her. The company might need to sweeten the rewards to retain them.
As a manager, what are two cases for which you would use the compa-ratio index?
When hiring to ensure equity in the team
When determining a pay raise
Annually, at least, to review where all staff members are against the compa ratio
Why is a company's Compensation spend impacted by the C-SOX legislation?
Compensation is one of the highest expenses of a company and therefore has a direct impact on the business results requiring good governance and controls over those processes that are part of the rewards process.
Explain how the Law of Supply & Demand impacts compensation.
If you need employees who are hard to find, it will cost you more. If those roles are plentiful in the market, you can pay less as you have more to choose from.
This benefit enables any employee to feel they own apiece of the company.
Employee Share Purchase Plan ESPP
A salary survey might be helpful in what 2 situations?
When reviewing one of your own positions with a possible look at changing the level/grade
When creating a new position.
When trying to determine why people are leaving your company?
Periodically to ensure you are staying competitive and at the strategy you have set.
You earn $40,000 within a pay range of $36,000 to $50,000. What is your compa ratio? And how long would we guess you have been in the role?
93% - less than 2 years - closer to 1.
Explain bottom up and top down budgeting. And, what are 2 of the considerations that should be made to determine the right budget for compensation?
Bottom up is when a manager will forecast his/her budget requirements for salary for a coming year. Top down is when senior leadership determine the appropriate budget to provide to the manager.
Consider: turnover, new work being taken on, leaves affecting staff, retirements, last year's starting and end point.
What were the 2 factors that created such a difference in the Bank Pay Level exercise we did?
Where business is done
The nature of the business - key focus areas such as Investment versus lending.
Having a diet program, smoking cessation program or yoga are examples of which employee benefit?
Wellness Programs
Some companies adopt a broad band approach to their compensation structure. What does this mean and give an example of a company who might use this approach?
Fewer levels of jobs in the organization - especially when there are fewer roles, a simpler structure. Example - Walmart, Home Depot.
Why might a group variable pay be problematic? 2 reasons.
More complex to manage
"free rider" issues
Individual performance may be overlooked
How can a company manage it's labour costs?
Hire contractors, minimize overtime, layoffs, downsizing, hiring freezes.
Explain the difference between equal pay for equal work, and, equal pay for work of equal value.
The first is when talking about the same job being performed. If all factors are equal (tenure, accreditation, performance, etc) two people doing the same job should be paid the same.
Value indicates that a job traditionally seen as "women's" work is fairly evaluated against a "man's" job that is rated the same. These involve different jobs
You are a 27 year old single university Grad with her/his CHRP and have just been hired by the Training Department of a large tech company. What 3 benefits would you likely opt for from the company that provides a wide range of benefits?
ESPP
Life Insurance & ADD
Better Health care plan
Company Pension
Define a perquisite and give 3 examples.
A special payment/advantage/benefit given to executives primarily.
Examples: car, sports games, golf club membership, security, housing, etc.
Give two reasons why a variable pay plan is an advantage?
Attracts employees
Widens employee rewards
Shows honour to individual performance
Increases retention
Boosts employee engagement and promotes a good culture
Explain 4 ways in which companies can control their overall "people" spend?
1. Lengthen time for benefits to kick in
2. Compa ratios - use them properly
3. Ranges and mid points - stick to their guidance
4. Etc: The budget process itself
Approach of maximizing self-funded approaches to incentive plans
GAAP/IFRS (International Financial Reporting standards)
Inherent Pay techniques: annual process
job analysis
job evaluation
merit increase guidelines
strong communication
governance processes
HR System controls
Explain the Reservation Wage Theory.
Job seekers have a reservation wage level below which they will not accept a job. Based on experience, education, accreditation.