Compensationand benefit packages are very crucial for the success of a business. Nearly all organizations offer compensation and benefits packages toemployees. This paper explores the impact compensation and benefitspackages have on employees’ job satisfaction and motivation.Insurance is part of employee compensation. Different insuranceprograms that are important in every business are explored, and theirimpacts on employee performance are explained. They benefit both thecompany and workers. Employers are advised to include these insuranceprograms in their employee benefits packages if they want to see animprovement in employee performance, the growth and success of theirbusinesses.
Themain goal of most companies and companies in the world is to succeedat what they do. A sure way of attaining success in a firm is havinga strong team of employees who are motivated to work and alwaysstrive to meet the goals and objectives of the company or business.Employers are, therefore, encouraged to motivate their employers inorder to enable them to yield great results that benefit the companyin the long run. One way of motivating, retaining and appreciatingemployees is offering compensation and benefits package (Sageer,Rafat & Agarwal, 2012). This paper purposes to describe impact ofcompensation and benefits package on employee satisfaction andexplores different types of employee insurance policies.
Compensationis a concept that is used to refer to all tangible and financialbenefits that an employee gets as part of their employment agreement.Compensation is normally grouped into two cash and fringecompensation. Cash compensation is the salary the employee gets uponrendering their services and fringe compensation includes extrabenefit packages (Odunlade, 2012). According to Hameed, Ramzam &Zubair (2014), compensation and benefits packages are closely relatedto how much an employee is satisfied with their job. Greatsatisfaction leads to high motivation and better commitment in theworkplace. However, despite knowing the importance of offeringcompensation and benefits packages, a lot of employers do not offersome of the most important insurance programs that ought to becovered in their compensation and benefits packages. This has led topoor performance in the workplace and an increased employee turnover.To improve employee performance and reduce the rate of turnover, itis imperative that all employers offer their employees attractivecompensation and benefits packages that include different insuranceprograms.
Thereare different types of insurance programs that are included incompensation and benefit packages. Workers compensation and socialsecurity compensation are the benefit programs that are legallyrequired. Disbursement benefit programs include: campusaccommodation, child care, pension plans, paid time off andresponsibility allowance among others. Compensation and benefitspackage also includes different types of insurance programs.
TermLife Insurance is a policy that requires the insured to pay premiumsfor a specified period. If the insured happens to die within thespecified duration, their beneficiary receives the compensation. Ifby the end of the period the insured is still alive, there is nocompensation (Peters & McKay, 2014).
Thecoverage costs remain constant unless the insured decides otherwise.The premiums are normally set for about 10-20 years (Peters &McKay, 2014) and once the period is over, the insured has the choiceof renewing the cover. If the insured decides to renew the cover,they are required to pay higher premiums. This is because of theincrease in age heightens the chances of death.
Thereare some benefits employees get from this insurance program. Firstand foremost, it is a very affordable program since one gets tochoose the period they want to be covered. A shorter period is moreaffordable than a longer period since it requires less premiums. TermLife Insurance is also very advantageous because it is a great safetynet for the insured’s beneficiaries in the event of the insured’sdeath. Another advantage is that insurance rates are guaranteed notto change.
UniversalWhole Life Insurance
Thislife insurance program more complicated compared to Term LifeInsurance. The insurance policy also requires the insured to paypremiums. However, the premium pays two different things. Oneportion of the premium covers the insurance, and the other portionacts as an investment (Peters & McKay, 2014). A fund manager usesthe cash meant for investments to invest in securities. This is verycrucial because it makes sure that the money is invested inprofitable activities. The income generated from the securitiesaccrues to the policyholder. After a duration, the income increasesto a point that it can underwrite the premiums. When this happens,the policy becomes self-funding (Peters & McKay, 2014). Thismeans that the insured is not required to make any more payments andthe policy remains effective throughout their life. In the event ofdeath, the beneficiaries get the compensation.
Thereare advantages one gets from Universal Whole Life Insurance. Firstand foremost, when the policy becomes self-funding, the insured willnot be required to pay anything. Another advantage of this insuranceprogram is the fact that the insured is guaranteed that thebeneficiaries will get compensated in the event of their death.Unlike other life insurance covers, this one is probably the mostadvantageous because it does not require the insured to make paymentstheir entire life. Lastly, the investments profits generated from thepolicy are not taxed (Peters & McKay, 2014).
AccidentalDeath and Dismemberment
Thisinsurance policy only pays out only if the insured is injured orkilled in an accident. An insured individual normally qualifies forthe injury pay out only if the injury causes loss of speech, sight,hearing or loss of a body part. This means that if the insured isonly injured and does not suffer any of these losses, they do not getcompensated. In the case of an injury, the insured only gets half ofthe insurance benefit (NerdWallet, 2016).
Thistype of insurance policy is very advantageous especially foremployees working in high-risk environments such as factoriescontaining dangerous machinery and chemicals. With this insurancecover, an employee is can cover medical bills from injury and in theevent of death his or her beneficiaries get compensated (NerdWallet,2016). This policy is also advantageous because the insured getsfinancial support in case the accident causes a disability thatprevents them from resuming their normal lives.
Longand Short-term Disability Insurance
Along-term disability insurance program is one where the insured getscompensations following a disability that prevents them from workingand making the same amount of salary they were making before thedisability (Beik, 2013). On the other hand, short-term disabilityinsurance is compensations given to the insured after suffering apartial disability that interferes with their ability to work.
Long-termand short-term disability insurance policies are crucial foremployees, especially those working in high-risk environments. One ofthe advantages employees get from these insurance covers is thecompensations they get in case they incur injuries that causedisabilities. This is important because it makes it possible for themto cover medical bills and take care of other financialresponsibilities. These insurance covers are also advantageous to theemployees’ family because they do not get burdened by finances whenthe insured gets disabled.
Compensationand benefits packages are crucial in the recruitment and retention ofemployees. They not only motivate employees but also enable them tohave better work output. As a result, this leads to reduced employeeturnover and businesses have a higher chance of succeeding. Employeesincrease their individual commitment and teamwork to ensure theachievement of personal targets as well as organizational goals oncethey are guaranteed that they are insured by the company policies.This paper has revealed the importance of having some types ofinsurance programs in companies. There is a need for employers torevisit their compensation and benefits packages to ensure theyinclude one or two of these insurance programs. Employers shouldanalyse their work environment to determine the safety levels andsome of the factors that pose risks to their employees’ safety.This way, employers will be able to know which insurance programs arebest for their employees and will help to create an environment thatis not only conducive but also safe.
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