Why Konica Minolta Business Solutions Should Offer Employees 100% of Their Pay for STD Benefits - Case Study Example

Why Konica Minolta Business Solutions Should Offer Employees 100% of Their Pay for STD Benefits Table of Contents Introduction 3 2. ment of Issues 3 3. Literature Review 4 4. Issue Analysis 6 5. Issue Solutions 7 6. Solutions and Its Implementations 8 7. Justification 9 8. Summary and Conclusion 10 8. Reflection 11 References 12 1. Introduction Konica Minolta Business Solutions is a well-known technology optimization and cloud service provider. The company offers a wide range of services to its clients to assist them in accomplishing their envisioned goals and objectives. The cutting edge solutions provided by the company in the areas of optimized print, information technology (IT) services, digital solutions and enterprise content management has enabled it to emerge as a prominent business leader in the respective business field. The major factor adding towards the success of the company can be firmly related to its highly qualified and skilled employees. The company employs more than 41,000 employees across the multi-polar world (aKonica Minolta Business Solutions, 2014). 2. Statement of Issues The company has been firmly involved in promoting occupational health and safety of its employees. In this regard, the company is determined to achieve the goals of zero accidents. However, the percentage of employees with disabilities is identified to be constantly increasing within the company. Notably, during the year 2010, 1.10% of the total employees were working with disabilities, which increased to 2.01% in the year 2012 (Konica Minolta Business Solutions, 2014). The increasing number employees with disability within the company can be recognized to be a serious issue faced by the company, which may have a radical impact on the ability of the company to retain existing employees and attract new and aspirant candidates. Besides, the company provides short term disability coverage of 66.6%, which may not be considered as attractive for both existing and new candidates. Correspondingly, the employee benefit issue to be discussed in this study is concisely stated as: “Why Konica Minolta Business Solutions should offer employees 100% of their pay instead of 66.6 % for ‘Short Term Disability’ (STD) benefits?” This study intends to conduct benefit plan design analysis of Konica Minolta Business Solutions to acquire considerable understanding regarding the human resource benefits program. 3. Literature Review Jiang et al. (2009) postulated that in the contemporary world, the ‘traditional remuneration management’ is faced with significant challenges. Both private and public sector organizations are encountered with radical problems associated with its remuneration management, which has been stated to have a significant effect on the performance of an organization (Jiang et al., 2009). In this context, Ahmad et al. (2013) stated that ‘human resource management’ (HRM) is an important domain within an organization to attain long term success. Accordingly, salary and benefit management is affirmed to be a critical component of HRM. In the words of Ahmad et al. (2013), employee benefits are critical to retain talented and skilled pool of employees within an organization. Furthermore, employees’ benefits are recognized to be typically bifurcated into monetary and non-monetary compensations. Monetary benefits are identified to encompass tangible value. On the other hand, non-monetary benefits are ascertained to include non-tangible benefits such as recognition, relationships and task enjoyment. Compensation package is further claimed to be critical for both existing as well as new employees, as it also serves as an important determinant for employee motivation at workplace (Ahmad et al, 2013). According to Markova & Jones (n.d.), an organization demonstrates its care towards employees by delivering benefits to satisfy their needs associated with health care, and recovery. Nevertheless, it has been argued that different employees have different needs as well as preferences towards the coverage. In this regard, it has been claimed that providing the benefits plan in accordance with the needs and preferences of employees motivates them to deliver their best towards the achievement of the broad organizational aims and intentions (Markova & Jones, n.d.). Khan (2014) stated that STD plans are typically a salary percentage of lost income when an individual or an employee in a company is disabled due to illness or injury. In this regard, it has been further claimed that STD generally covers the duration between sick leave and paid time off. It has been argued that STD is a simple plan with high-frequency aids when compared to long term insurance or life insurance. This implies that even smaller companies can quickly develop meaningful experience. As far as risk tolerance is concerned, STD claims that experiences are subject to change from year to year particularly due to random volatility. In this regard, the yearly volatility risks are created by the insurance company (Khan, 2014). It has been further postulated that STD offers significant benefits to all employees within a company. Accordingly, STD is ascertained to provide financial support for the employees during their illness until they rejoin their work. On the other hand, providing sufficient STD is also argued to provide certain imperative benefits to employers. In this regard, employers are identified to avail stabilized retention as well as attract new talent. In addition, providing sufficient STD benefits to employees are also ascertained to provide employers with an opportunity to equip employees with financial planning tools (Khan, 2014). 4. Issue Analysis It has been identified from the review of literature that employee benefits in the contemporary environment are crucial determinant for the success and failure of the any business organizations. Konica Minolta Business Solutions is a Japanese solution provider and a recognized technology optimization as well as cloud service provider. It has been determined that the company is engaged in providing 66.6% for STD benefits. In the recent years, the company has been able to create a wide platform for training individuals in order to enhance their skills as a part of human resource planning. During the year 2013, the company has also founded special subsidiary Konica Minolta With You Inc., with the objective of supporting the independence of persons with disabilities by providing them meaningful employment. As stated earlier, the company is also engaged in promoting the health and safety of its employees. The company is identified to firmly value the prosperity of its employees and accordingly, the company’s commitment towards its employees’ health is clearly visible through the motto that reflects, “safety first for employees”. In line with this motto, the company is involved in developing a culture where safety of employees is highly valued. In this regard, the company has engaged senior management for reinforcing safety measures within the company and has taken steps for generating adequate awareness amid every individual working within the company. The company has also developed rank based educational system to promote mental health care of its employees. Despite the significant initiatives of the company and non-monetary benefits provided to the employee, risks of employee health problems are ascertained to be increasing (Konica Minolta Business Solutions, 2014). In addition, the strategy of the company to provide 66.6% for STD may also de-motivate the existing and new candidates. Thus, it is essential for Konica Minolta Business Solutions to design holistic employee benefit strategy in line with the business strategy and personal strategy. 5. Issue Solutions It has been reckoned that Konica Minolta Business Solutions is involved in providing 66.6% of their pay for STD benefits. Correspondingly, this strategy of the company has not been sufficient to meet the needs and expectations of the employees to a great extent. In addition, human resource is ascertained to be an important factor that contributes towards the success of the company that adds up to its competitive advantages. Hence, it is crucial for the company to design STD benefits plan that meets the objectives of both organizations and the employees working within the company. With respect to the determination of alternative solutions for Konica Minolta Business Solutions, three options can be identified. In this regard, the first option can be related to individual disability benefit. The second alternative can be identified as group disability benefit. The last option can be short term disability benefit. The current benefits strategy followed by the company falls under the category of short term disability benefit (TheSimpleDollar.com, 2014). Each of the above mentioned alternatives have own advantages and disadvantages that are discussed hereunder. Individual Disability Benefit Individual disability benefits plan can be identified to be another alternative to short term disability benefits where employees can purchase discounted policies offered by the employers. The advantages associated with this type of plan can be related to the flexibility and comprehensiveness of the plan. One of the major disadvantages of this plan is that the rate of premium is relatively high (University of California, 2014). Group Disability Benefit Group disability coverage is generally provided to individuals who are sick or injured for few days. One of the potential advantages of this plan is that the entire insurance is associated with much lower premiums. The major disadvantage of this plan is that premium could increase periodically (University of California, 2014). Short Term Disability Benefit (High Limit Disability Insurance) One of the most important advantages of the short term benefit plan to employees is that the plan entitles employees to receive a certain percentage of salary or in certain circumstances entire salary during their illness. Nevertheless, the disadvantages associated with this plan are related to waiting time (University of California, 2014). 6. Solutions and Its Implementations From the analysis of the pros and cons of the above identified alternative solutions, STD benefits can be identified to be the most feasible one. Notably, the employee benefits strategy of Konica Minolta Business Solutions firmly relates to the STD benefit i.e. ‘High Limit Disability Insurance’, which is developed to pay a certain percentage of the covered individual’s income when a particular individual or employee become disabled, sick or injured. However, the percentage of the covered individual’s income receivable by an employee in the case of disability is identified to be 66.6%, which can be argued to be non-compliance with the prevailing circumstances and efforts of the company towards promoting occupational safety and welfare of the employees. Thus, it is recommended to the company to raise the percentage rate of the covered individual’s income receivable by an employee from 66.6% to 100% of their pay. The STD plan, in combination with sick pay, offers employees with salary protection for the period of 26 weeks due to a non-work related sickness or disability. The STD plan is functional per disability experienced by employees. Every employee in the company will be eligible to avail this STD benefits. For female employees, this STD benefit will cover 100% of their pay while on a disability leave due to pregnancy or childbirth. On the other hand, both female and male employees will be eligible for any serious sickness or illness causing temporary disability. It is worth mentioning that this STD plan will be applied only to a period that an employee is disabled as determined by the physicians. The determined disability period for pregnancy as per the company’s policy will be two weeks prior to the delivery and eight weeks after the delivery. Subsequently, after the delivery female employees can use paid time off for becoming eligible for paid during the child rearing leave. The STD plan will commence after the one-week before and after the employees use the precondition sick days or Paid Time Off (PTO). Provisional on available employee’s sick days, the STD will begin as early as week 2, but no earlier than week 9 of a qualified disability (Yale University, 2014). 7. Justification The above stated solutions pertaining to 100% of employees pay for STD benefits have certain advantages and limitations. In this regard, the major advantage of this solution is that employees will be eligible for 100% of their pay for STD benefits for any sickness or injuries until they are completely healthy to get on their work. Another advantage of this STD benefit is that employees will have to bear no cost to avail this benefit, as costs associated with this benefit will be entirely covered by the employers only. On the other hand, limitations associated with this STD benefits as associated with its name, which reflects that employees are eligible to avail this benefit for shorter duration only. Similarly, if the earnings of employees are not truly reflected through their salary, this STD benefits may be insufficient for them to meet their needs during the period of disability. 8. Summary and Conclusion From the foregoing discussion, it can be concluded that Konica Minolta Business Solutions is determined towards promoting good health and wellbeing of its employees. The company has undertaken several measures to reduce workplace accidents and promote occupational safety. Nevertheless, the company is involved in providing 66.6% of their pay for STD benefits. Hence, it is recommended to the company to provide 100% of employees pay for STD benefits. This benefits strategy is anticipated to benefit the employees within the company to a considerable extent in dealing with health related problems faced by the employees in the company. 8. Reflection This study supplemented me with an increased knowledge regarding the STD benefits for employees in the modern corporate scenario. Before starting with this research work, I have little knowledge and understanding regarding the STD benefits and its importance. However, after the successful completion of this study, I have been able to enhance my knowledge in relation to employee benefits. During the entire course of the completion of this research work, I have gained a unique experience, which I anticipate to aid in my later life. I have been extensively involved in gathering relevant data for this research work that include journal, business reports and online sources to complete this research work reliably. Initially, I was little worried and perplexed about the research task, but as I proceeded with this research work, I felt interested about the successful completion of this research work. Truly speaking, this study has changed my perceptions related to employee benefits, which I wish to use in my later life. I am determined to take more challenges and inclination towards performing such study in the future has increased. References Ahmad, R., Yei, E. T. P., & Bujang, S. (2013). Relationship between types of benefit. International Journal of Education and Research, 1(8), 1-14. Jiang, Z., Xiao, Q., Qi, H., & Xiao, L. (2009). Total reward strategy: a human resources management strategy going with the trend of the times. International Journal of Business and Management, 4(11), 177-183. Konica Minolta Business Solutions. (2014). Growing together with our employees. Retrieved from http://www.konicaminolta.com/about/csr/csr/download/2013/pdf/2013_en_34-37.pdf aKonica Minolta Business Solutions. (2014). An overview of Konica Minolta. Retrieved from http://kmbs.konicaminolta.us/wps/portal/web/home/about/company Khan, T. S. (2014). Benefits perspectives. Retrieved from http://us.milliman.com/uploadedFiles/insight/Periodicals/bp/pdfs/BP_032014_STDisability.pdf Markova, G., & Jones, F. (n.d.). Attitude formation of benefits satisfaction: knowledge and fit of benefits. International Journal of Business Research and Management, 2(1), 45-50. TheSimpleDollar.com. (2014). Disability insurance: understanding your options. Retrieved from http://www.thesimpledollar.com/disability-life-insurance/ University of California. (2014). Short term disability Insurance plan. Retrieved from http://ucnet.universityofcalifornia.edu/forms/pdf/short-term-disability-plan-booklet.pdf Yale University. (2014). Benefits. Retrieved from http://www.yale.edu/hronline/benefits/DisabilityMP.html Read More