Bautista, Mia Grace M.

BSITTM 4D

What cost considerations would

you take into account when
revising this part of your
compensation plan?
1
1. What cost considerations would you take into account when revising this
part of your compensation plan?
According to Lamber et al, 1991, The vacation accruals and time are the cost
considerations, and thus, it can be estimated by establishing total annual vacation hours
and the expected number of working hours. These are the two significant elements in
the cost consideration while revising this part of the compensation plan.
When giving employees paid time off, the PTO budget needs more money.
Employees devote their time in a similar way, and they must be given the appropriate
time off. The last revision, according to the current compensation benefits program,
happened about 15 years ago. To prevent potential employee attrition, the current
compensation structure must be changed. Additionally, by taking this approach, the
compensation plan is balanced, preventing the organization from incurring any
additional costs. For example, the employee won't have to pay more for their vacation
while still working hard to earn it.
The Operational Cost of the Production:
When revising the compensation plan, the human manager must absolutely take this
into account. This indicates that he should be aware that a vacationing employee
does not leave the company with whom he or she is employed. As a result, even
when the employee is away, a replacement must be found, adding to the cost.
Productivity Considerations:
The HR Manager has no justification for ignoring the fact that a typical human body
needs some rest, in this case a vacation or leave, as a production form. This is done
to ensure that each employee's output is improved or stable. The HR Manager must
Bautista, Mia Grace M.
BSITTM 4D

take into account the advantages of a worn-out employee serving the organization
and give him or her time off in exchange for service.

2. What other considerations would you take into account when developing a
new PTO plan?
- The other consideration while developing a new PTO is to use the data for the
decision-making process. The revised data helps the organization select the right
plan based on the organizational performance (Westover, 2014). Furthermore,
the data that backs up the new PTO plan can provide management/HR with
crucial information. Therefore, learning about the benefits that businesses in the
same industry provide to their employees will help in the data collection and
analysis process. This will enhance the competitiveness of the new PTO plan.
Analyzing the vacation trend is also necessary for an effective PTO plan, so it is
also necessary to review the company data. When creating a new PTO plan,
information such as when employees report sick, vacation time, and personal
leave will be considered. The trend will also give detailed information about how
much extra time workers will need and how that will affect the productivity of the
business.

Before recommending a new PTO plan, it is also necessary to examine how PTO
carries over when not used. The new PTO plan must also take into account the
company's policy regarding employees who leave the company. According to
Glassdoor and SHRM.org, some other considerations that can be considered in
developing a new PTO plan are:
1. Will vacation and sick days be allotted in separate buckets?
2. Will both full-time and part-time employees receive paid vacation and
holidays?
3. Will PTO be earned per pay period: monthly, quarterly, or annually?
4. How will unexpected events such as emergencies, bereavement, and jury
duty be considered?
5. How will employees be compensated during weather closures and/or natural
disasters?
6. How will paid holidays be considered for those employees who are required
to work on holidays?
7. Will yearly PTO allotments increase with tenure? At what intervals?
8. Will unused PTO roll over from one year to the next? At what point will it
expire?
9. Will employees be able to add unused vacation funds to 401(k), HCSA or
receive payment for it?
10. Will employees receive a paid sabbatical after a specific amount of tenure?