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Discretionary Benefits

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Q1.Many compensation professionals are faced with making choices about which discretionary benefits to drop because funds are limited and because costs of these benefits continually increase. List your top three discretionary benefits that you would not cut, your rationale for your decision, and factors that influence your decision.

Q2. Answer the three questions at the end of the case study attachment.
1. Do you think changing Superior's time off policies will decrease unscheduled time off?
2. Beyond reducing occurrences of unscheduled time off, are there any other benefits to offering PTO?
3. Are there any disadvantages to offering PTO?

Reference:
Martocchio, J. J. (2011). Strategic compensation: A human resource management approach (6th ed.). Upper Saddle River, NJ: Prentice Hall.

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Solution Summary

Discusses the top discretionary benefits that you would not cut.

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Q1. The top three discretionary benefits that I would not cut in my organization include the health insurance (medical, dental, etc.), paid benefit days such as paid vacations and employee assistance plan.

The primary reason for including health insurance is the fact that this benefit provides peace of mind and feeling of security to employees which, in turn, helps in retaining their loyalty and commitment towards the organization as well as help in reducing stress among the employees. Employees feel secure and motivated if the employer covers their health and medical related costs via such insurance policies. Employees are able to devote attention to their work without being worried about medical or healthcare costs.

Paid benefit days such as paid vacations, paid maternity leaves or paid sick leaves are essential because such benefits boost morale and motivation level of employees as well as provide them peace of mind. For example, paid maternity leaves or sick leaves allow employees to recoup from pregnancy and illnesses and thus, employees will not have to worry about salary cuts. This will enhance their morale and motivation levels and will allow them to concentrate on their work with full productivity. This will also enhance their ...

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Sandeep Bardia, MBA
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  • MBA, Rochester Institute of Technology
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