Companies have gotten more creative in their overall rewards packages. Instead of simply offering a salary, vacation days, sick days, and a retirement savings plan, companies are providing extensive employee-driven benefits packages that can make your life much better. Understanding benefits and benefit options can allow you to negotiate the best deal when starting a new job or arrange a different kind of pay raise at your annual performance review.
Types of Benefits
Pensions: Pensions are a key benefit. As of 2012, all employers in enrolled their employees in a pension or a National Savings Pension Scheme. Pensions are retirement benefits that allow employers and employees to put aside tax-free or tax-reduced money for retirement. While final salary pensions used to be the norm, stakeholder, group personal pensions, and money purchase schemes have risen in popularity. In addition to a pension, many employers also offer advisory services that allow employees to discuss their options with a financial professional. These services enable employees to make informed decisions about the level of risk they are willing to accept with their investments.
Share Schemes: Many employers motivate their employees by providing a genuine stake in the business in the form of shares. If the employee is personally invested in the company, then he or she is more likely to perform well. Some companies require employees to stay with the company for a certain period to qualify for a share scheme.
Insurance: Companies may provide their employees with insurance for a variety of situations. For example, many employers offer insurance for life/death, accidents, long-term disability, short-term disability, and maternity. Others offer medical, dental, and vision insurance. Each of these insurances may look different from company to company. For example, some medical benefits include a health savings plan.
Bonuses: Bonuses can be either performance related or incentives. They may be large or small, but they should never be ignored or taken for granted. Most bonuses reward all-around good work, thanking the employee for his or her service to the company. Typically, bonuses are an agreed upon amount of money paid out under certain conditions. Make sure you understand the structure of all bonuses. For example, if you are told that you may be entitled to a bonus of up to 30 percent of your salary if you work hard enough, you should be aware that “up to 30 percent” is a wide range. Most people may average ten percent. Some may only get two percent. Ask questions about bonus schemes, and make sure you understand the conditions under which bonuses are paid.
Market-based bonuses and pay may occur when employees learn additional skills and competencies that support them in their jobs. For example, an employee might earn a bonus for completing post-graduate work in a relevant field of study. These bonuses are based on the market and the worth the market puts on the skills the employees have developed.
Incentive bonuses motivate employees to above-and-beyond performance, such as meeting or exceeding weekly or monthly sales goals. Companies may also offer incentive bonuses as gifts at the end of the year or around the holidays. A company might offer an incentive bonus to a team of employees to get a project done is a specified time frame.
Indirect Compensation: Indirect compensation benefits is the largest and most varied benefit. Some companies offer health-related indirect compensation, providing gym memberships or employee assistance programs for managing health and stress. Others are directed at families, offering free or reduced-cost childcare. Indirect compensation can also include telecommuting days, flexible weekly schedules, or accumulating sick days to offset a long-term illness. Employers who want their employees to seek additional education may offer tuition reimbursement and flexible scheduling around class times. Others may provide “perks” for a job, like a car, rewards card, or subsidized snacks.
Keep in mind that many companies allow their employees to adjust their pay and benefits package to its best advantage. For example, your company may offer you money each year to waive your health benefits package. Depending on your personal situation, you may prefer the cash! Ask your employer about their benefits packages and the options that are available for you.
Many people routinely keep track of their pensions and how much they grow over the years. The rest of us, however, easily lose track of these types of benefits and sometimes forget they even exist. This can be a very unfortun...Read More