Employee Benefits

ABZ Companys Benefit Plan


Description of the Benefits

Basic Benefits

Basic benefits will be given to a full-time employee and full-time in this case means that the employee works more than 30 hours per week. The company provides the benefits both in compliance with the government regulations and also for the purposes of rewarding the workers.

The benefits include:

Pension: The named benefits will be provided to the employees immediately after their employment by ABZ Company. The benefits, however, are tied to a 2-year working participation meaning that the employee is only eligible if his/her working relationship with the company will amount to at least two years. ABZ Company, under this requirement, therefore, contributes 5% of the employees salary before taxes.

Health Insurance: Under this benefit, the company will provide its employees with $2000 health insurance benefits per annum. The benefits in this category are for each worker. However, employees, who are a couple, will be rewarded differently as there will be additional $500p.a. This benefit serves to aid employees in paying for their medical insurance. The main strategy of this benefit is to allow employees in making their decisions in regard to health care insurance using their money without expecting the company to fund their self-choices. The benefit amounts to 5% of the total of the employees salary.

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TOTAL COST OF BASIC BENEFITS = 10% of salary budget.

Added Benefits

The company will give added benefits in order to reward workers for their relationship with the enterprise. The benefits are also offered with the purpose of increasing employees engagement and morale (Bach, 2013). For example, paid vacations are provided in order to allow the workers to rest after a long period of work.

Leave/Vacation Benefits:

The named benefits are not the same for all employees. Instead, workers are divided according to their rank in the organization. These divisions include; top management, supervisors, and ordinary employees.

Top Management: Top management will be given the whole month of paid vacation during the usual 12 months calendar.

Supervisors: Supervisors will be provided with three weeks of paid vacation during standard 12 months calendar.

Ordinary Employees: This category of employees will be provided with two weeks of paid vacation during 12 months calendar.

The Sick Leave: This benefit will be given for personal and family purposes. The leave will be paid under serious circumstances, which must be proven to the company in order to get the payment for the leave. However, the company can only provide a maximum of 1 month paid sick leave.

Non-Utilized Leave: For employees who do not utilize their leave, there will be no carrying over or accumulating of such leave. Instead, it will be counted in the employees performance or bonus account.

Fringe Benefits

These benefits will be given with the sole intention of increasing employee retention and performance. For example, board recognition awards will be given to honor employees who have highly contributed to the companys success (Bach, 2013).

Utilities: Employees, who reside on the enterprises premises, will be provided with the necessary services such as the internet access, water, and electricity. TV cable satellites and telephone are not counted among these benefits. However, it must be noted that not all employees are required to reside on the premise as those who do are required to do so within the companys employment conditions.

Tea Break: The company will provide lunch break to its employees during the working hours. However, meals at the cafeteria are not counted as benefits but as food costs.

Board Recognition Awards: These benefits will be provided at the end of each year. They include long vacation trips, theater and dinner tickets. These benefits will be given depending on the how the board wants to reward its employees.

Group Performance Benefits

Just like the fringe benefits, these benefits will be provided in order to increase employees performance and retention. In addition, the benefits will be given with the aim of increasing teamwork, which is important for the success of this company (Bach, 2013).

The company will constantly set and review its goals. If the goals are attained and additional benefits such as reduction of costs and increase of revenues are obtained, employees will be rewarded accordingly. These rewards will be done through salary increases and cash bonuses.

These benefits can also result from the following:

Employee Safety: since employee safety is paramount in this organization, there will be added cash bonuses at the end of each year if safety is maintained and fewer or no accidents are recorded.

Company Performance: If the enterprises performance in terms of such things like revenues and if the companys goals are realized within a certain period, then the employees will be rewarded using cash bonuses.

Conservation: If the company meets necessary conservation goals such as energy conservation, the employees will surely be rewarded through cash bonuses.

Categorization of Benefits in Terms of Standard and Uniqueness

Among the named benefits, basic benefits are considered as STANDARD since they are in compliance with the law. All the other benefits are considered unique to the company. That is because they are directly related to the companys performance since they are meant to boost the companys revenues, reduce cost and help in building its reputation. Among all these benefits, the board recognition awards are intended to help in attracting high-quality candidates who value performance (Bach, 2013).

Companys Competitive Position and Strategies for Countering Competition

Currently, the company is facing serious competition from other similar firms. Areas of competition include customer attraction market share and employee attraction. The main strategy used to counter all these competitions is employee benefits. Through employee benefits, customer will be attracted, and the other competition countered because of the high-quality workforce generated from the offering of benefits.

Cost Target

The total benefits will represent 30% of the total employee compensation. The company's performance will determine this cost in terms of revenues and cost. The benefits will also be adjusted each year in accordance with the enterprises performance.

Employee Retention

As seen earlier, the unique employee benefits are aimed at attracting and retaining customers. These objectives are achieved by making sure that the benefits are more attractive than those of other companies within the same industry. In order to ensure that the enterprises benefit remains competitive, research will be done in order to update the current plan in accordance with the employee benefit and compensation trend (Armstrong, 1996).

Legal Requirements

In order to meet the mandatory legal requirements, the company will align the benefit plan with the set laws and policies regarding employee benefit and compensation. The company will also make sure that it carries out its operation within the law as doing so would make sure that it is always on the safe side (Sacher, 2000).

Unintended Preference

The benefit plan will also show some preferences to married couples especially those working in the organization as their medical benefits will be higher than those of others. The reason behind this is to encourage hard work among couples because of challenges that face couples working in the same company. It might be considered as discriminatory by others, but the company has good reasons for rewarding spouses differently than others.


For a small company like ABZ, administering benefits to its employees can be costly. However, the company will counter this by demanding high-quality work and performance from its employees. In fact, this is the major reason some big parts of the benefits are tied to performance.

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