Not All Discretionary Benefits are Necessary

Of the three types of discretionary benefits, I think it would be easiest to eliminate those from the services category. The first type, protection programs, includes disability insurance, life insurance, and retirement plans. Within each one of these there are subcategories that vary the level of commitment to the employer. This is one of the primary factors I think would influence an organization’s benefits package because if they can reduce their risk without eliminating the benefit altogether, it can be mutually beneficial for employee and employer. For example, with the retirement plan, employers carry the risk with a defined benefit plan if they are unable to fulfill the promised funding to employees upon retirement. Defined compensation plans on the other hand have less financial risk to employers if they choose to give the choice to invest entirely on the employee and don’t decide to match, or reduce their matching percentage. Another primary factor that would influence an organization’s benefit package is how the benefits they provide align with their organizational goals. Employee well-being and protection should be an important consideration when choosing what benefits to provide. With this being said, I think each of the plans within the protection programs are necessary to keep. Another type of discretionary benefit is paid time off. There is variation in which states mandate PTO, but at a minimum organizations have to adhere to that requirement if there is one. If there isn’t one, I still think PTO is an important benefit to provide in some way to take advantage of the benefits associated, including minimizing absenteeism, decreasing turnover, and positively affecting employee morale. Finally, the services some organizations choose to implement do tend to have a positive impact on employee well-being, however they aren’t totally necessary in my opinion. Including benefits like family assistance, transportation services, and employee assistance are not frivolous expenses, what I’m saying is, if an organization is facing a need to reduce costs, these are appropriate to eliminate first.

Swift, Michelle (2022) Week 7 Lecture 1 Discretionary Benefits

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