PEOPLE.IDEAS.PERFORMANCE

114 :KDW W\SH RI EHQHILWV VKRXOG EH SURYLGHG LQ WKH SODQ" The types of benefits to be offered, other than compliance issue, are to provide the best value to the employees. Thus, it is important to determine what employees’ needs are. The needs can be identified through life cycle approach or through marketing research. Life cycle approach provides general guidelines on the types of benefits to be offered. For example, if the workforce is mostly younger workers, providing gymnasium benefit rather than child care benefit is preferable. An employer also needs to decide whether to have one benefit plan for all employees or to have difference plan for different group of employees. Having a different plan may provide flexibility to employees, however, in terms of management, it may be cumbersome to the employer. :KDW DUH WKH HOLJLELOLW\ UHTXLUHPHQWV" Eligibility requirements must be determined to ensure that the benefits are fairly offered to eligible employees. For example, new workers may need to meet the vesting requirement before receiving benefits. In addition, benefits may be restricted to full time workers only. +RZ VKRXOG WKH SODQ EH IXQGHG" Funding the employee benefits program may vary from one benefit to another. Some funding arrangement must comply with government regulation, particularly for compulsory benefits. For some discretionary benefits, the employer may decide to self-finance or to use insurance. The following section will discuss further about the financing of an employee benefits program. :KDW SURYLVLRQ IRU FRQWUROOLQJ FRVWV VKRXOG EH FRQWDLQHG LQ WKH SODQ" Providing employee benefits can be costly to employers. Thus, there should be some cost control mechanism to avoid moral hazard i.e. utilization of benefits more than necessary. In health benefits, a popular cost control mechanism is cost sharing. Employees are required to share a percentage of the medical cost upon utilization of medical services. +RZ VKRXOG WKH SODQ EH FRPPXQLFDWHG WR HPSOR\HHV" The benefits program needs to be conveyed to employees. Employees need to understand what types of benefits available to them. This is to ensure that the employees get the most benefits and avoid unnecessary disappointment. With the current technology, information can be transferred easily to employees. The benefits program can be announced via email. For new employees, information can be disseminated through booklets or brochures. 7R ZKDW H[WHQW VKRXOG WKH DGPLQLVWUDWLYH IXQFWLRQ EH RXWVRXUFHG" Managing an employee benefits program may be cumbersome and costly to employers. In addition, employers may not have the technical knowledge required, especially in health care benefits. Thus, the administrative function may be more efficient if it is outsourced to a third party. Regardless whether the benefits are self-funded or transferred to an insurance company, employer can outsource the administration of health care benefits program. For example, the process to authorize admission to hospital and claim for medical expenditures. To ensure that the employee benefits program meets the changing needs of employees and the dynamic environment, the benefits planning should be reviewed continuously and modified.