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Slide #

Scene/Interaction

Narration

HRM500 Week 8 Scenario Script - Part 1: Providing Employee Benefits

Slide 1

Scene 1

Angela’s Office

HRM500_8_1_Angela-1: Welcome back, team! Today we need to take a look at employee benefits such as insurance, retirement, and paid time off.

Benefits are part of the total compensation package paid to employees. Benefits serve a function similar to pay. Benefits help to attract, retain and motivate employees.

Employees look for different types of benefits, and should examine their benefits regularly. Benefits can also be complex and expensive. If we spend a lot on benefits but employees do not understand their value or how to use them, the company will waste money.

At today’s meeting, we will examine benefits required by law, optional benefit programs, selecting employee benefits, legal requirements for employee benefits and communicating benefits to employees.

Slide 2

Scene 2 – Angela’s office

HRM500_8_2_Angela-1: Ashley and Michael, we need to look at creating a benefits package for the upcoming year for the organization.

Employees have come to expect that benefits will help them maintain economic security. Even though many kinds of benefits are not required by law, they have become so common that today’s employees expect them. Where do you think we should start?

HRM500_8_2_Ashley-1: We should first look at benefits required by law. The federal and state governments require various forms of social insurance to protect workers from the financial hardships of being out of work.

Social Security provides support for retired workers; unemployment insurance assists laid-off workers; and workers’ compensation provides benefits and services to workers injured on the job.

HRM500_8_2_Michael-1: Employers must also provide unpaid leave for certain family and medical needs. Because these needs are required by law, employers cannot gain an advantage in the labor market by offering them, nor can they design these benefits. The emphasis for these benefits must be adhering to the law.

Slide 3

Scene 3 - Angela’s office

2 person, 3 part interaction will be used for the 3 most common types of health care plans

HRM500_8_3_Angela-1: Good observations on required benefits, team! Now let’s take a look at optional benefit programs. These include various kinds of insurance, retirement plans and paid leave.

HRM500_8_3_Ashley-1: The main areas of paid leave are vacations, holidays, and sick leave. We should also establish policies for other situations that require time off. Organizations often provide paid leave for jury duty, funerals of family members, and military duty.

HRM500_8_3_Michael-1: Some organizations even offer paid time off to vote and donate blood! Establishing policies communicates the organization’s values, clarifies what employees can expect, and prevents situations in which unequal treatment leads to claims of unfairness.

HRM500_8_3_Ashley-2: Group insurance is typically offered at a lower cost than individual policies. When employees receive insurance as a benefit instead of higher pay so they can buy their own insurance, employees can get more for their money.

HRM500_8_3_Michael-2: The most important benefit is medical insurance. According to the Fundamentals of Human Resource Management textbook, almost seventy-five percent of U.S. employees receive medical benefits. Health insurance covers hospital expenses, surgical expenses and visits to physicians. Many organizations offer dental care, vision care, birthing centers and prescription drug programs as well.

HRM500_8_3_Angela-2: (interaction, home screen): Can you give me a quick rundown of typical health care plans we can choose from here at Montrose?

HRM500_8_3_Ashley-3: (interaction, home screen): Sure, Angela! There are three common types of health care plans organizations tend to use.

HRM500_8_3_Ashley-3a: (interaction, tab A): One widely used option for health care is the health maintenance organization, or HMO. This plan requires patients to receive their medical care from the HMO’s health care professional, instead of being able to choose their own provider.

HRM500_8_3_Ashley-3b:(interaction, tab B): A preferred provider organization, or PPO, is another option. This type of health care plan contracts with health care professionals to provide services at a reduced fee. Often the PPO does not require employees to use providers in the network, but it pays a larger share of the cost of services from PPO providers.

HRM500_8_3_Ashley-3c: (interaction, tab C): A final option is a flexible spending account controlled by employees. In this type of plan, pretax earnings are set aside to pay for certain eligible expenses, such as health care expenses.

HRM500_8_3_Angela-3: Thanks so much, Ashley! Based on the information you have given me, I’m thinking that the PPO is our most solid option for Montrose’s employee healthcare needs.

Michael, can you tell me about any supplemental programs we can also implement to let our employees know we care about them and their health?

HRM500_8_3_Michael-3: Absolutely! An employee wellness program, or EWP, is a set of communications, activities and facilities designed to change health-related behaviors in ways that reduce health risks. EWPs aim at specific health risks such as high blood pressure, high cholesterol levels, smoking, and obesity by encouraging preventive measures such as exercise and good nutrition.

Companies may also choose to provide life insurance, disability insurance and long term care insurance.

HRM500_8_3_Angela-4: OK, team, we have now covered the various types of insurance and paid leave available to employees. The next topics we need to discuss are also optional benefits - retirement plans and family-friendly benefits. Can you start us off, Michael?

Slide 4

Scene 4

HRM500_8_4_Michael-1: Well, Angela, while retirement plans are not required by organizations among persons over sixty-five years of age, pensions provided a significant share of income in 2006. About fifty percent of people working for private businesses have employer-sponsored retirement plans.

HRM500_8_4_Ashley-1: A contributory plan is funded by contributions from the employer and the employee. Noncontributory plans are funded entirely by the employer.

HRM500_8_4_Michael-2: The Employee Retirement Income Security Act, or ERISA, is a federal law that increased the responsibility of pension plan trustees to protect retirees; established certain rights related to vesting and portability; and created the Pension Benefit Corporation. This is the federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties.

HRM500_8_4_Ashley-2: A defined contribution plan is a retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account. A defined benefit plan guarantees a certain level of retirement income.

HRM500_8_4_Michael-3: In a cash plan, the employer sets up an individual account for each employee and contributes a percentage of the employee’s salary. The account earns interest at a predefined rate.

HRM500_8_4_Angela-1: This is great, team! It seems we will have a wealth of options to choose from when selecting retirement plans for our employees. Next we need to look at family-friendly benefits.

Slide 5

Scene 5

HRM500_8_5_Ashley-1: Sure, Angela. These types of benefits include family leave policies and child care. Normally, these benefits support employees with family responsibilities.

Family or parental leave grants employees time off to care for children and other dependents. Additionally, child care benefits may take several forms, requiring different levels of organizational involvement. The lowest level is helping employees collect information about the cost and quality of available child care. At the highest level of involvement, the employer actually provides child care at or near the work site.

HRM500_8_5_Michael-1: Other support comes in the form of college savings for employees’ children as they grow up. Elder care benefits provide information and support rather than direct financial assistance. Organizations may provide access to counseling, flexible schedules and printed resources.

HRM500_8_5_Angela-1: This information is very helpful. We want Montrose to be known as a family-friendly company, that’s for sure! Let’s move on now to selecting an employee benefits package, legal requirements for employee benefits, and communicating benefits to employees.

Slide 6

Scene 6

*Add URL’s or screenshots for the resources listed

HRM500_8_6_Ashley-1: We must select an employee benefit package based on our employees’ needs for leisure time and protection against old age, loss of health and loss of life.

HRM500_8_6_Michael-1: The benefit plan must complement the efforts of employees on their own behalf. The benefits should be evaluated annually.

HRM500_8_6_Ashley-2: Employees expect to receive benefits that are legally required, widely available and ones they value.

By offering a cafeteria plan, employees can choose from a set of alternatives that allow them to select the types and benefits they want.

HRM500_8_6_Michael-2: Employers should look at costs of the benefits being offered. The benefits should also be coordinated with social insurance programs to which the company makes payments.

Resources to research the costs include the Bureau of Labor Statistics (BLS), the Employee Benefit Institute and the U.S. Chamber of Commerce.

Slide 7

Scene 7 – Angela’s office

HRM500_8_7_Angela-1: What are some of the legal requirements and issues we need to look at when determining employee benefits?

HRM500_8_7_Ashley-1: Some companies may offer overtime rather than adding new employees, and they may hire part time employees instead of full time employees. The IRS strictly limits the definition of “independent contractors” so that employers cannot avoid legal obligations for classifying employees as self-employed when the organization receives the benefits of a permanent employee. The IRS provides a more favorable tax treatment of benefits classified as qualified plan.

A number of laws are intended to provide equal employment opportunities without regard to race, sex, age, disability and several other protected categories. Equal employment opportunities are intended to cover access to employment benefits as well as many other job-related issues.

HRM500_8_7_Michael-1: Our company’s financial statements must meet the many requirements of the Financial Accounting Standards Board, or FASB. These accounting requirements are intended to ensure that financial statements are a true picture of the company’s financial status, and that outsiders, including potential leaders and investors, can understand and compare financial statements.

HRM500_8_7_Angela-2: These are important legal considerations to be aware of! Our final topic for today’s meeting will be the communication process regarding benefits.

Slide 8

Scene 8

HRM500_8_8_Michael-1: We must communicate benefits information to employees so they will appreciate the value of their benefits. This is essential so that benefits can achieve their objective of attracting, motivating and retaining employees.

HRM500_8_8_Ashley-1: Our employees are interested in their benefits, and they need a great deal of detailed information to take advantage of benefits such as health insurance and four – oh – one - k plans. Electronic technology such as the internet and supporting databases can play a significant role in modern benefit systems. Many companies are putting benefit information on their intranets.

HRM500_8_8_Michael-2: Here at Montrose, we have many ways of communicating benefits, which include brochures, question and answer sessions, intranet pages, memos and email. Some other communication vehicles include paycheck inserts, retirement and health coaching, training programs and benefit fairs.

HRM500_8_8_Angela-2: Our investment of creativity in communications to employees can reap great returns in the form of committed, satisfied employees. Great job team! Let’s complete a brief activity to test your knowledge on employee benefit packages before wrapping up today’s meeting.

Slide 9

Interaction – Matching Dropdown on the different types of benefits available to employees and an example of each:

Benefits Required by Law – Social Security

Optional Benefits – Paid Leave

Health Insurance – Health Maintenance Organization (HMO)

Retirement Plans – Defined Contribution Plan

Family-Friendly Benefits – onsite childcare

Slide 10

Scene 9 – Summary – Angela’s office

HRM500_8_9_Angela-1: Great job matching the types of benefits we have discussed with the examples of each.

Just to recap, our meeting today was designed to cover the different types of employee benefits companies can offer in order to revamp our own employee benefit package here at Montrose. We covered benefits required by law, optional benefit programs, selecting employee benefits, legal requirements for employee benefits, and communicating benefits to employees.

You both have done a very thorough job. I think we have enough information now to draft our proposal for the new benefit package and present it Montrose’s Board of Directors.

Let’s plan to meet next week in the conference room to discuss issues surrounding globalization and human resource management.

Please set aside time this week to complete your discussions on Benefits and Collective Bargaining and High Involvement Organizations and Benefits. Also, don’t forget that your assignment on Performance Management is due. As usual, have a wonderful week, team!