Chapter Case PTO: Too Little or Too Much? You just finished analyzing informatio

Question

Chapter Case PTO: Too Little or Too Much? You just finished analyzing information for the current compensation and benefits program. You find that some changes should be made, as the majority of employees (you have 120 employees) are not happy with what is being offered. In fact, the plan had not been revised in over fifteen years, making it dated and definitely ready for some changes. One of the major points of contention is the PTO the organization offers. Employees sick time and vacation time offers too few options. For example, one employee says,"I often come to work sick. so I can still have my vacation time for my vacation. Another employee says, "I have given nine years to this organization, but I receive only three days more than someone who has just started." Here is the current PTO offering: feel the current system of 1+ year 7 days 5+ years 10 days 10+ years 14 days 1. What cost considerations would you take into account when revising this part of your compensation plan? 2. What other considerations would you take into account when developing a new PTO plan? 3. Propose a new plan and estimate the cost of your plan on an Excel spreadsheet. Be prepared to present to the board of directors

Explanation / Answer

(1) Cost considerations taken into account while revising compensation plan:

As per the question, the compensation plan needs revision so that the employees feel satisfied from what they receive. Following cost considerations need to be taken into account:

(2) Other considerations taken into account while framing new PTO plan:

While making decisions on framing new PTO plans for the employees, following points must be considered:

(3) New PTO plan and estimation of the cost:

The new PTO plan would include the following points:

The cost for the plan would vary and depend upon financially how strong is the organization and how well is it able to deal with its liabilities. The costs can be roughly estimated by comparing costs with the benefits that the employees are giving to the organization, and thus increasing its profitability.

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