Benefit Programs and Indirect Compensation Systems

Please answer these questions in YOUR words. Can not include more that 10% cited

material.

1. List and discuss four possible limitations of merit pay programs.

2. Under what conditions is it appropriate for companies to adopt individual incentive

pay plans?

3. Subjective performance evaluations are subject to several rater errors, which makes

objective measures seem a better alternative. Discuss when subjective performance

evaluations might be better (or more feasible) than objective ratings.

4. Many compensation professionals are faced with making choices about which

discretionary benefits to drop because funds are limited and the costs of these benefits

continually increase. Assume you must make such choices. Rank-order discretionary benefits

from the ones you would most likely eliminate to the ones you would least likely eliminate.

Explain your rationale. Do such factors as the demographic composition of the workforce of the

company matter? Explain. Below is some of the benefits to consider

Health care coverage for employees 91% 9% 0%

Health care coverage for dependents 89% 9% 2%

Company-paid relocation 55% 20% 25%

Amount of employee leave accrual/balances 54% 42% 4%

Defined benefit pension plans 47% 35% 18%

Amount of employee leave carryover from one year to the

next

46% 42% 13%

Employer match to defined contribution (e.g. 401K) 44% 51% 5%

Paid time off 38% 57% 5%

Workplace flexibility benefits (e.g. telecommuting, flex

time, compressed workweeks)

33% 58% 8%

Paid sick time only 27% 64% 9%

Paid personal days only 22% 67% 11%

Paid vacation time only 9% 91% 0%

5. The authors of these articles focuses on a number of things relating mostly to indirect compensation. Based on your experiences and readings, what do you see as

the future of benefits? How do you envision benefits evolving? Both articles are

attached

Alexander, S. (2015). The secret weapon of modern benefits: A strategic plan. Employee

Benefit Plan Review, 69(9), 12-13.

Brown, D. (2014). The future of reward management: From total reward strategies to

smart rewards.Compensation & Benefits, 46(3), 147-151.