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Discretionary Benefits

Updated on April 4, 2016

What are the components of discretionary benefits? Provide two examples for each component of discretionary benefits and identify an organization that effectively includes those benefits in its benefits portfolio.

Discretionary benefits are those benefits that are not mandated by law (Markel, 2010). There are three main components of discretionary benefits: protection programs, pay for time not worked, and services. Protection programs are designed to provide family benefits, promote health, and protect against income loss caused by factors like unemployment, disability, or serious illness (Martocchio, 2014, p 204). A protection program could include a retirement program, also known as a pension plan; this could come in the form of a 401(k) plan or an IRA. These retirement plans are meant to provide income to employees and their beneficiaries during their retirement. Disability insurance is also a type of protection program; disability insurance comes in two forms: short-term disability insurance and long-term disability insurance. Short-term disability insurance typically provides benefits for a set period of time, normally six months or less; this insurance typically covers surgery recovery time, pregnancy, and/ recovery from an injury. Long-term disability insurance provides benefits for periods lasting six months to life; this normally involves permanent disabilities and injuries.

Paid time off is meant to provide employees pay for when they take time off from work for vacations, jury duty, sick leave, funeral leave, and/or personal leave (Martocchio, 2014). An integrated paid time off policy is the combination of holiday, vacation, sick leave, and personal leave into a single paid time off policy; this allows employees the ability to schedule their time off without having to explain their reasons. Sabbatical leave is a type of paid time off where employees are given time off with pay to engage in professional activities like research projects or curriculum development. Volunteerism is part of a paid time off program where employees are paid while they take time off to support a cause.

“Services provide enhancements as tuition reimbursement and daycare assistance to employees and their families” (Martocchio, 2014, p 204). A family assistance program is a type of service where an employer helps employees with either child or elder care. This program helps employees to provide care for their family member so that they can continue to be a productive employee. Tuition reimbursement programs offer reimbursement for either partial or full tuition costs to their employees in order to promote employee education.

Teaching Strategies for Early Childhood is an employer that offers multiple discretionary benefits to their employees. Teaching Strategies for Early Childhood offers a 401(k) retirement plan, short and long term disability insurance, paid vacation leave, paid maternity leave, employee assistance programs, and tuition assistance programs (Teaching Strategies for Early Childhood, n.d.). Teaching Strategies for Early Childhood does not currently provide paid sabbatical leave or paid leave for volunteerism.

References

Markel, K. (2010). Discretionary Employee Benefits [PowerPoint slides].

Martocchio, J. (2014). Strategic compensation: A human resource management approach (8th ed.). Upper Saddle River, NJ: Prentice Hall.

Teaching Strategies for Early Childhood. (n.d.). Benefits for Employees - Teaching Strategies,

LLC. Retrieved March 03, 2016, from http://teachingstrategies.com/careers/employee-

benefits/

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