What does equity theory tell us about compensation in an organization? How many different types of equity do we typically refer to?

In almost any organization there will be concerns about whether all employees are being paid “fairly”. The term most widely associated with this issue is equity.

What does equity theory tell us about compensation in an organization? How many different types of equity do we typically refer to?

Emerging Trends in Benefits

Benefits now average 33% to 50% of an organization’s compensation costs; so it is important for the organization to ensure that the benefits are serving their purpose. For example, the design of the benefits package should make it easier to recruit and retain good workers. One of the critical challenges facing HR is choosing wisely among the available benefits. The benefits package should make sense in light of the organization’s business strategy.

More companies are offering flexible scheduling, childcare assistance and other work/family initiatives. Currently, over 68% of employers offer flexible scheduling arrangements and there is significant growth in the number of companies offering adoption, elder care and child care assistance benefits.

Click on the link to view video on the need for sick leave

No sick leave puts pressure on part-time employees [Video File][02 Min 21 Sec]

Elder care is moving toward the forefront of worker concerns as our life spans increase. Many workers are members of what is called the “Sandwich Generation.” These workers are caring for their children and, at the same time, for their parents who are living longer. One benefit that is increasingly available is Long Term Care. LTC has been available since 1987 and, with the passage of the Health Insurance Portability and Accountability Act of 1996, Congress provided LTC insurance with tax-favored status. LTC provides financial aid for workers and their dependents who need medical, personal, custodial and social services during long illnesses and disabilities.

\We are also seeing an increasing array of lifestyle-oriented benefits and services as a result of the growing diversity in the workforce. These include:

Retirement and Financial Planning
Estate and Will Planning
Legal Services
Loan Assistance for Home Purchases, College Tuition, Cars, Etc.
Ride-Share Incentives and/or Transportation Reimbursement
Vacation Planning and Time-Share Programs
Meals/Food Subsidies
Entertainment Discounts
Wellness Programs and Health Club Memberships.
One of the newer issues, even with cafeteria benefit plans, is the idea that childless employees feel cheated by the company and their co-workers. In one survey, over 40% of the employees indicated that childless workers feel they’re subsidizing health care and other benefits for employees with children. Childless workers often feel that options like flextime and telecommuting are most often used by employees with child care responsibility. Childless workers also report that they do not take as much time off as their co-workers who have children and that they are expected to work more overtime.

Now that you have completed this activity, please participate in the case study Good Old Acme Manufacturing that follows.