1. Introduction of the Topic Employee benefits are various non-wage compensations provided to employees in addition to their normal wages or salaries. Where an employee exchanges wages for some other form of benefits, this is generally referred to as a 'salary sacrifice' arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans. Employee compensation includes wages or salary, commissions, incentives, overtime, and benefits. Benefits include holidays and paid vacations, insurance, health care, pensions, social security, disability payments, and services like credit unions, product or service discounts, legal assistance, travel clubs, and food services. For key personnel, the executive perquisites involve use of cars and airplanes, estate planning, entertainment allowances, and stock options The purpose of the benefits is to increase the economic security of employees. After productivity, employee compensation is the most difficult employee relations issue for small business owners to manage. Employee benefits can help you develop a stable and productive work force but you must have effective cost and administrative controls.
2. Statement of the Problem In Eastern Bank Limited, employee benefits, which comprise one portion of the compensation package, are not intended to reward an employee's individual productivity or performance. Effective job performance depends on the fulfillment of both motivation and maintenance needs. Motivation factors focus on the needs for achievement, responsibility, and recognition. Maintenance needs are satisfied by economic, physical, social, and security factors. Benefits are in the maintenance category, not motivational. We have chosen this topic because, employees expect benefits, and the absence of benefits may cause dissatisfaction in Eastern Bank Limted. Employees may even seek another job that offers more benefits. Further, where motivational opportunities are limited, employee interest in benefits often increases. 1
3. Rationale of the Study Many employers now pay for most, if not all, of the employees' life, medical and disability insurance. The rapid escalation of benefits costs, as compared to the total expenditures of direct cash compensation, has caused business managers to become more diligent in controlling these costs and in getting better employee relations. As a prudent business manager, you must decide which employee benefits costs that you incurred or are considering can be better managed through more cost effective financing and administrative practices. Examine all of the alternatives available when dealing with employees' needs. Avoid making heavy financial commitments by agreeing to pay for most or all of the employees' life, medical, and disability insurance coverage. For instance, it is financially desirable to avoid full coverage medical insurance, but the rising cost of medical care is a concern to everyone, and employees are looking closely at company health benefits. The trend seems to be to more medical benefits. Major medical coverage will provide the needed protection for catastrophic losses but this may not be enough health benefit to satisfy employees who are concerned and informed about health plans. Get employees to contribute toward some of these health costs.
4. Objectives of the Report This Particular project on Employee Benefits in EBL has the following objectives.
a. Board Objective To examine that current employee benefits packages is helping Eastern Bank Limited to develop a stable and productive work force
b. Specific Objectives The specific objectives are as follows: 1. Determine current total compensation costs 2. Audit present benefits to determine if they comply with Labor Laws
2
3. Explore specific total compensation objectives to assure that expenditures are cost effective. 4. Determine if group insurance benefits and other insurance funded benefits are placed with the most effective methods of funding 5. Have working, two-way communications with your employees 6. Identify changes to improve the value of present employee benefits.
5. Scope and Limitation of the Project a. Scope of the Project Through the project we expect to learn – •
How employee benefits effect affect operating capital, employee productivity, product quality, profits, and taxes in EBL
•
How proper management of benefits to assure their advantageous use and cost effectiveness in EBL
•
How Employee benefits can help you develop a stable and productive work force
•
What kind of benefits are available in a organization like EBL
•
How labor law is connected with employee benefits
b. Limitation of the Project This project was limiting to HR matter only. Other areas of management system were not taken into consideration. The maintenance function of HRM is a very confidential practice in every organization, and EBL is no exception. On this topic only managed to persuade them to explain the system no other information could be gained. At the same time the time constraint in our part, because in this semester we all are in constant pressure. Lack on initial background on such posh and ever busy organization also was a constraint in trying to approach the officials to spare a little time for the project. Despite all of the limitations, we give the best efforts and tried to make the project as informative and as comprehensive as possible
6. Methodology a. Data Sources 3
In order to supplement our theoretical knowledge of Employee Benefits with practical exposure, we are going to contract with the Eastern Bank Limited and collected data regarding real life scenario. Primary data are collected by interviewing employees in Eastern Bank Limited and gathered the necessary information. A written open-ended questioner is circulated among the employees of Eastern Bank Ltd. to collect the information. The main sources for secondary data are website, annual report, books from Libraries, and different types of research journal from Emeralds are all consulted in understanding different theories and principles and formulating questions. The information thus collected from various sources was first organized and then analyzed to draw the conclusions.
b. Activity Schedule No. 01 02 03 04 05 06 07 08 09
Title Preparation of project proposal Preparation of questionnaire Collection of the information Making the report Draft printout and consult with faculty Correction of the Draft Final Preparation of the report Print out and binding Submission of the report Total
Days Required 02 01 02 07 01 04 04 01 01 25
7. Recommendations Benefits should be designed with the help of an individual who is a competent planner and manager. Avoid doing exactly what other companies do as the primary reason for adopting a particular benefit. This approach could result in the blind leading the blind. You need an approach that allows you to offer employees benefits designed to meet your company's and employees' needs. For example, employees who are older and no longer have the responsibility of a growing family will have different requirements from those employees who have families. Also, employees whose spouses are employed and covered by another employer might be considered in such a way to minimize double coverage. 4
8. Conclusion You should consider carefully what you hope to achieve with benefit plans before committing any financial resources to them. Small business managers who demonstrate a sense of caring for their employees by providing a well-balanced compensation package will go a long way in developing a stable and productive workforce. A compensation package that provides recognition for individual achievements (direct pay) and non-cash benefits (employee benefits) to enhance the employees' purchasing power will provide the basis for good management-employee relations.
5