Flexible Compensation and

Benefits
Why Variety Will Rule and How to Leverage It

PR ESENTED B Y :
RADHIKA AGARWAL - MBA07 10 5
SHR ADDHA PATIDAR - MBA0 7 13 6
RAJ R. KUMAR - MBA07 2 40
RITESH KUMAR PRAHRAJ - MBA0 72 27
M ANE ESH - MBA07 2 33
G VEEKSHITH - MBA07 2 13
 A CHA NGING SCE NE FO R H R PROFE SSION AL S
A "PE RFE CT STORM' OF MARK ET CON DITIONS
WH AT DO EMPLO YE ES WA NT IN COMPEN SAT IO N
AN D BE NE FIT S
Table of SIX CH AL LE NGE S IN MANAG ING
COMPE NSAT IO N A ND BE NE FIT S
Contents AC CE SSIBL E B E NEFITS AT SAINT T HO MAS
HE ALT H SERVIC E S
AC CE SSIBL E B E NEFITS AT HU MAN A
PER FORMANC E MA NAGE MEN T SHOUL D GUIDE
CH ANGE S IN T HE DE AL
E MPL OYE E RE CO GNIT ION AT C AL PER S
IS YO UR PER FORMANC E MANAG EMENT SYSTE M
WOR KING WE LL ?
AC TIONS TO TAK E
 Introduction
Compensation and benefits should be tools the firm uses to fulfill the requirements of
employees, promote productivity, and enhance performance. They should benefit both
the company and the employees.

In the current work environment, employees are more likely to favor rewards that
improve their life quality than those that are purely financial. In order to account for
these developments, organizations have reorganized their compensation plans.
This approach aims to improve employee satisfaction, lower turnover, and make the
company an attractive place to work.
 A changing scene for HR professionals
• Increasing workforce diversity in ethnicity, gender, age and background means now people with different
needs and preferences are part of an organization and organizations need to prepare compensation and
benefits according to it.

• Increasing workforce mobility and weakening worker loyalty because of downsizing means we need different
methods to motivate employees for better performance.

• According to recent surveys and research, employees frequently feel overworked, unable to switch off from
work, and actively disengaged. Organizations may increase engagement, effectiveness, and profitability by
carefully designing an employee experience which helps employee through this things.
• Now a days demand for recognition and status has increased among employees so employers can fulfill this
demands by expansion of roles and responsibilities.

• Some organizations work virtually now so there are no fancy offices or physical signs of status so employers
needs to find other forms of employee recognition.

• Due to a higher proportion of mature employees and many of them are partially retired to meet labor and
skills needs, organizations now need to adjust pay, role and rank in accordance with career downshifting.
 A "Perfect Storm" of Market Conditions?
Managing employee preferences and the customizability of employment agreements puts strain on firms, requiring
unprecedented flexibility in management operations, I.T., and H.R.

Pay, bonuses, and other employment agreement issues need clarification.

Start with payroll deductions for benefit-related payments, such as (in the U.S.) before-tax self-funding of supplementary
medical and educational accounts, insurance, stock purchases, government and employer pensions, and health care
premiums.
Employees must balance pay and privileges.

Do these ingredients form a "perfect storm" of bad luck?

Talent competition intensifies as the job market tightens. Savvy customers seek the finest employee deals, making them
talented workers. An aging workforce, rising healthcare costs, stricter government requirements, and the work and price
of maintaining complex benefits packages and adapting employee contracts drive up costs.
Employers are dropping defined-benefit pensions and raising healthcare contributions and out-of-pocket costs. Revisions
to pay and benefits are needed for recruitment and retention.

We should be cautious despite the need to cut healthcare and benefits expenses. Reduce advantages. Adjust the contract to
your company's timetable. Work-life balance helps S.A.S. build employee loyalty, performance, and business results.
Before enhancing company or employee efficiency, think big picture.

Another goal is getting people to work hard and improve themselves, their organization, their processes, and their
contributions. People are motivated by variable pay, learning and growth opportunities, culture, leadership, and job.

Optimize wage and benefit limits. When most employees value the agreement more, a new payment alternative or popular
benefit won't matter. Work-life balance makes employees happier. Employment agreements and performance
management systems should cover wages and benefits to find, evaluate, motivate, and reward employee performance.
Like employees, employers must dream big.
What Do Employees Want in Compensations and
Benefits?
What Do Employees Want in Compensations and
Benefits?
Six Challenges in Managing Compensation and
Benefits
CUSTOMIZATION
• Young workers: highly value time off for other pursuits, prefer rewards that are instantaneous, shows little
interest in the “old deal”
• Midcareer workers: focus on health care, financial management, and wealth accumulation benefits. Some
require either child care or elder care, or both. Also need time off for family, and other pursuits.
• Mature workers: want affordable, age-relevant health care, and insurance benefits. Also want to downshift
their responsibilities, phase into retirement.

SEGMENTATION
Traditional methods of categorising employees based on function, skills, or tenure are becoming obsolete.
Organizations require new types of segmentation that are more in tune with people's needs both on and off the job.
Age, generational cohort, life stage, lifestyle, and work stage are among the new segmentation variables.
COMBINATION

In pursuit of work/life balance, employees look not just at individual benefits offered,
but at specific combinations. Employers can increase the value of the benefits
package to employees by making such combinations apparent and accessible. Using
better segmentation, employers might point out or package sets of benefits options.

INTEGRATION

It takes a cross-functional effort to outline and articulate the overall deal offered by
the employer. If you have an employer branding initiative under way, its work
provides a head start in understanding your level of and need for integration with
employees' products and services. Employers must be able to view and manage
employee deals the same way.
FAIRNESS
Many countries' laws mandate equitable treatment of workers, especially
regarding benefits. Employers must maintain the perception of fairness among
employees. Flexible compensation schemes can finesse the situation by paving
for performance with a one-time bonus rather than a large raise in base pay.

ACCESSIBILITY

Employees should be educated (and possibly rewarded) to use their benefits

wisely and sparingly. Dealing with medical emergencies can drain an
employee both on and off the job. Simplify and streamline the process of
understanding what is available and selecting the best combination of
benefits.
Accessible Benefits at Saint Thomas Health Services

Ascension Health, Inc. is a nationwide Catholic health ministry with an extensive network of hospitals
and healthcare centers, including Saint Thomas Health Services. The hospital found that its primary
benefits package needs to be used by employees or the firm to reward loyalty, commitment, and
performance.

Saint Thomas Hospital revamped its perks in 2001 after an acquisition to boost associate value and
reduce waste and misuse. LifeWorks is the result. According to the hospital, H.R. projects have too often
concentrated on offerings rather than users' purposes or views. They are not understood, used, or valued.

LifeWorks! creates and expresses a holistic partnership between Saint Thomas Health Services and its
employees. These employee perks and support programs aim to help employees achieve a good work/life
balance.
The visual representation of the LifeWorks elements and philosophy is a pyramid with "seven levels of
support," starting with the most fundamental necessities like fair and competitive compensation and
progressing to higher-level wants and desires, such as health and recreation, closer to the pyramid's apex.

LifeWorks provides options and perks for its employees at every

stage of life, and the handbook thoroughly explains why each
degree of support is necessary. The handbook details perks,
eligibility details, expenses, and contact details at each level.

The objective of S.T.H.S. is to show its genuine and authentic

commitment to its employees to foster the conditions necessary to
draw talent despite shifting demographics.
H EA LTH B E NEF ITS
Increased control over Benefits

SmartSuite

B U ND LE
PPO, HMO, and CoverageFirst

$2M SAVING S
4.9 % increased claims against 19.2
% projected
Savings DO UB L E C O VERAGE
Double Coverage holders dropping Secondary
Coverage

C OPAY A ND DEDUC TIBLES

New, modified Copays and more planning options

C HA NGE IN B EHAVIO R
'"Employees are accessing care differently"

WIZ AR D
Online service provider for customization
 FE ED BACK
Monitoring and Receiving
Continious Feedback

FIN AN CIAL
FACTORS
Mix of other relevant factors over
Financial Factors
L EA R NING A ND
Performance INN OVATION
L&I towards organizational growth

Management
TH E L IN K FOR RISK
MOT IVATI ON Bold and Creative attempts
 R E C OGN ITIO N
The visible form of
Acknowledgement

C OR PO RATE
VALU ES
Actual system reinforcing the
corporate values
N OT EA SY
IN C EN TIV ES
Performance Linked to performance but not
automatic

Management E XE CUTIVES
IN C EN TIV ES
DO UBLE E DG ED SWO RD Alignment with the performance
Employee recognition at CalPERS
California Public Employees' Retirement System
CalPERS has put Performance management principles into operation in six year old employee recognition
program.

Three levels of recognition at calPERS

Day to Day Recognition - Verbal or written feed back known as "Rocks". Served as means for employees
and management to recognize one another.
Informal recognition involved management delivered, performance based recognition for individuals and
teams.
APEX (Achieving Performance Excellence) - Peer driven recognition system. Awarded to 1-3% of
organization. includes trophy, monetary reward and lunch with top management.

Resulted in
Empowered employee and customer satisfaction.
Increased productivity and decreased turnover rate.
 Is Your Performance Management System Working Well

To ensure PMS is working well following measures are must

• It must motivate employees and reflect business objectives.
• should be transparent and understandable specially to entry level employees.
• specific about baseline of performance everyone must meet.

while designing PMS we need to keep in mind following

• Wide range of needs and values of employees should be considered.
• Organization must win the trust of employees to understand their growth and learning needs and
requirements .
• Rapid incorporation is needed in organization. job satisfaction leads to membership in the organization.
 P R OBE WITH
PU RP OS E
Evaluate, and Eliminate

C USTOM IZE DEALS

Develop a sustainable and cost-
effective plan

E DUC ATE E MPLO YEES

AND RETIRE
Actions to Take Prepare employees to manage the
components of their benefits packages

E NG AG E IN TH E
IN A D JUST IN G DEB ATE
C OMPE NS AT IO N A ND Change the political debate around
B EN E FIT S pension and health-care issues
Thank you!