Compensation & Benefits HW

1. As HR director at World Measurement (see the class exercise on benefits we did), your bonus this year is based on your ability to cut employee benefit costs (without causing massive numbers of employees to quit, which would negate any savings). Your boss has said that it’s okay to shift some of the costs over to employees (right now they pay nothing for their benefits) but don’t overdo it. What sort of data would you collect, and how would you use it? What alternatives would you want to explore, and why? Hint: think about the class exercise on benefits we did (the place that wanted to cut compensation costs 3 percent)….
2. Referring to the article on Lincoln Electric, Southwest, and SAS reading we discussed, What are the main (a) types of jobs and (b) attributes of employees that are found at Lincoln Electric vs. SAS vs. Southwest? How does the compensation system at the three firms complement the main job types and people characteristics at these different companies?
3. The Covid-19 pandemic has hit many people’s compensation in very dramatic and financially harmful ways. Unemployment insurance, which we discussed in class as a “mandated benefit” is proving difficult for many to get given the overwhelmed system. What do you see as lessons for how employees, employers, and the government can each be better prepared in terms of managing compensation when a crisis occurs that interrupts and changes the flow of compensation?
4. Identify the main trends in benefits (over the past few years) that we discussed in class, in terms of what is becoming more common: Defined benefits versus defined contributions, pensions, 401Ks, HMOs, or “traditional” insurance, etc. Be sure to define what is a defined benefit and what is a defined contribution.
5. While your company is in Philadelphia, you have major offices in Honolulu and you are in charge of compensation management there also. There are openings there. How do you respond to some of your top Philly employees who are applying for a transfer there? You can’t afford to lose and replace these employees! What would you do?

• Ignore it, hope this issue goes away
• Give Honolulu coast office employees a 20% cost of living ‘hardship’ adjustment (so expensive!)
• Give Philly employees a similar hardship allowance (cold winters!).
• Ask for an employee survey
• Write a memo to employees saying “free market” and all that- suck it up and be happy for the job you have
• Something else?
• What sort of data would you collect to arrive at your decision? How would you decide?

Lincoln electric, Southwest, & SAS article: