CHAPTER 17
BENEFITS AND SERVICES
Since the end of World War II, employee benefits and services have increased in importance as
part of the total compensation package. There appears to be no end to kind and amount of benefits
employees desire, seek, and demand.
Benefits and services can be classified and further subdivided within these major groups:
1. Disability income continuation
2. Loss-of-job income continuation
3. Deferred income
KEY CONCEPTS:
1. Recognition by employees of the importance of their benefits and services.
3. What employees can do about retirement now so that they will be protected when that day
arrives.
4. Continuing escalation of health-care costs and what employees and employers can do to
SIGNIFICANT POINTS OF INTEREST
2. In most organizations today, employee benefits consume over 35 cents of each dollar
3. A major classification scheme of employee benefits includes (1) disability income
4. The four principal methods for costing benefits are (1) annual cost of all benefits for all
employees, (2) cost per employee per year, (3) percentage of payroll, and (4) cents per hour.
5. Major advancements in flexible benefits programs are continuing to occur.
6. The entire benefits package will continue to increase in importance as each increase in pay
7. To be sure employees are receiving the benefits they desire, organizations must spend more
8. With the rapid increase in health care costs, organizations are looking at a number of ways to
contain these costs. Changes include increasing employee contributions and co-insurance