Flexible benefit plans are those, which give employees a myriad of benefits that they pay for through salary contributions. These types of benefits are paid on a pre-tax basis, give employees a choice of the benefit they would prefer, and also give them the cash option if they opt out of the flexible benefits plan. The types of flexible benefit plans include medical insurance, life insurance, vacation days, childcare, and dental insurance. Many companies offer these plans to their employees. Open Enrollment, for example, offers three options for medical insurance for their employees. I am considering the possibility of offering my employees more plans next year. The paper analyzes the pros and cons, ways to solve the issue, and an explanation of whether or not to continue with the flexible benefit plans next year.
Advantages and Disadvantages of Flexible Benefit Plans
Helps in recruitment and retention - the benefit plans can help to attract employees to a company. Businesses can attract new talent and keep them with their skills and value. Ayache and Naima (2014) talk about employee's commitment and intention to quit where they find that flexible plans improve employee's attitude towards the workplace, thus making them more committed to the enterprise.
Productivity - businesses thrive when employees feel that their needs and wants are taken care of by their employers. The employees put in more effort towards their work to ensure the success of the business. Ayache and Naima (2014) assert that these compensation packages result in job satisfaction and improve productivity.
Costs - the amount of money put aside by companies is hefty. According to NHS Employers (n.d.), the cost of administrating the benefit plans is high for employers.
Changing plans - medical plans, for example, have numerous elements to the package. When employees need changes to the plan, a lot of paperwork is needed. In most cases, the type of coverage cost is complicated because it may require additional financial deliberations. In some occasions, employees might wish to change their schemes but as per the conditions, the schemes do not allow flexibility (NHS Employers, n.d.).
The possible way of solving the issue of flexible benefit plans is offering them to employees. The task ahead would be to make more comparisons of the costs and benefits of different plans. The benefit plan is part of a rewarding strategy in the organization and if cut off from employees, their motivation and performance would reduce considerably.
Conclusion and Recommendations
Given the advantages and the disadvantages of flexible benefit plans, a deeper analysis has prompted me to come up with the decision to continue with the plans next year. Based on the research done, it was established that flexible benefit plans are a strategic human resource solution that looks into the needs of their workers. The benefits clearly outweigh the disadvantages. In fact, I have realized that when dealing with these plans, it all comes down to the understanding the needs and values of employees as well as re-purposing the benefits of spending by a large margin. I would advise human resource managers in companies who have second thoughts regarding the flexible benefit plans to come up with a culture that promotes wellness and benefit plans. Overall, there is a need for these benefits on a global basis because they have the potential of making a company strive in the global markets.
Ayache, Zoubeir & Naima, Ghennam. (2014). The Impact of Flexible Benefits Plan on
Organization Commitment and Intention to Quit. Mediterranean Journal of Social Sciences. 5. 136-145. 10.5901/mjss.2014.v5n8p136.
NHS Employer. (N.d.). Retrieved from https://www.nhsemployers.org/media/Employers/Documents/Pay-and-reward/RST---An-introduction-to-flexible-benefit-schemes.pdf?la=en&hash=1844193C670B34D07B76BA79143ECB69B068959E
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Essay Sample on Compensation and Benefits: Flexible Benefit Plan. (2022, Dec 13). Retrieved from https://proessays.net/essays/essay-sample-on-compensation-and-benefits-flexible-benefit-plan
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