EMPLOYMENT AND LABOR

Employment and Labor



Employment and Labor

Question 1- Dropping Discretionary Benefits

Given the option, I would engage in a cutting down of discretionary benefits with an approach that essentially hedges the discretionary benefits being given to employees. I would begin by reducing the number of days that employees are allowed to avail paid vacations. In addition, I would exercise a similar approach towards sick leave. These would help in softening the blow being caused to company finances as a result of the heavy cost of currently given discretionary benefits (Bamber, Lansbury & Wailes, 2011). If major reductions in cost are to be brought about through the trimming of discretionary benefits, then I think it would be feasible to bring about a reduction in the discretionary benefits being given at the senior management layer. As a replacement, discretionary benefits can be replaced with a revision in bonus policies or a positive alteration in incentive plans can be brought about (Schmidt, 2009).

The demographic composition of the workforce can be expected to have a major impact on the decisions taken with regard to the dropping of specific discretionary benefits. For instance, the dropping of post-maternity related discretionary benefits cannot possibly be considered if a majority of the workforce is female (Jacobs & Ryan, 2003). Also, it would be fruitless to expect long-term advantages if a discretionary benefit such as dental is dropped in a workforce that constitutes employees in the higher age bracket. It merits highlighting that if a complete elimination of discretionary benefits has to be exercised and there is no alterative action available, then it would be sensible to consider the dropping of discretionary benefits that are extensions of mandatory benefits (Bamber, Lansbury & Wailes, 2011).

Question 2- Defined contribution plans over defined benefit plans

A defined benefits plan is an employee plan in which the retirement plan of each individual is reliant on a formula that encompasses the characteristics of the individual's position in the organization (Levine, 2003). These characteristics may include factors such as the employee's seniority in the organization, the employee's salary history, the duration of the employee's employment in the organization and other such factors. In addition, under the defined benefits plan, the portfolio management and investment risk are managed by the organization and no intervention from the employee is allowed (Rockman, 2009). The employee is not exposed to any risk or portfolio management intricacies in this case. However, the ...