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Inequities in employee benefits

HRM 533 Total Rewards
Week 8 Discussion 1: "Ethical and Legal Problems"
1.) Describe ethical and legal features associated with equity based recognition plans and recommend how leaders can prevent such potential abuse.

Week 8 Discussion 2: "Employee Benefits"
1.) From the e-Activity, select one type of employee benefit and report about how this specific benefit category is represented within the employment categories. For instance, you may choose retirement benefits and note the various industries which might be more inclined to provide that type of benefit. Debate how much inequity exists among the categories and justify your response with a specific example. (For the e-Activity Go to the Bureau of Labor Statistics Website to read the "Tables Organized by Benefit") and select one type of benefit to explore at (http://www.bls.gov/ncs/ebs/benefits/2010/benefits.htm.)

Please note these discussion questions not an assignment. Also add references and also add The WorldatWork Handbook of Compensation, Benefits & Total Rewards. (2007) as a reference in order to get full credit.

Solution Preview

Equity Based Recognition Programs: Ethical and Legal Implications

Equity based recognition programs are designed to reward employees for achievement. However, they come with many considerations, including the legal implications and ethical considerations of owning and maintaining stock shares. At one time, this type of offer as a reward or benefit was considered highly valuable. Today, the markets are volatile and such systems for offering rewards and benefits are not nearly as desirable. In addition, maintaining financial viability of stock options requires education and monitoring on the employee's part. Otherwise, the employee may not be able to maximize the benefit and may even experience financial loss. In positions where employees work in positions that do not require education beyond high school, there may be little understanding of how the stock market works and how to monitor stocks. Companies that offer such options need to ensure that employees understand the potential risks and benefits.

In the past, companies would often offer corporate stock options for employees. This may have been considered a reward for employees, when the company was profitable. However, companies might offer stocks as a means of increasing their value. For an organization that is only marginally profitable or that may face financial difficulties in the future, such an action can be viewed as a means of benefitting the organization, without benefit to the employee (World at Work, 2010). Such an action does little to motivate employees to do a good job. Some companies may inflate their value, to make stock options appear more lucrative. This is not a good way to encourage mutual trust between the organization and the employee.

Today's share plans may be difficult to sell to employees. The more global approach to hiring and to stock share plans comes with many challenges. Exchange rates may make such plans less profitable. At the same time, offering such ...

Solution Summary

The discussion highlights the inequities in employee benefit programs for various workers at different levels of the organization. Legal and ethical implications of offering stock or share options are also discussed, from a global perspective.

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