Introduction Psychologists believe that satisfaction of needs is the motivation behind all actions (Rebore, 2004).

The satisfaction or reward that bring motivation might be in the form of money, a promotion, recognition, acceptance, receipt of information, or the feeling that come from doing a good job. However, from an organization standpoint, a manager can develop satisfaction that lead to motivate employees through compensation and benefits. The term compensation is commonly using on human resource management. It deals with every types of reward individuals receive in exchange for performing organization task (Ivancevich, 2003). In addition, the objective of the compensation is to create a system of rewards that is equitable to the employer and employee alike. By the rewards, the employee can be attracted to the work, and motivated to do a good job for the employer. There are two types of financial compensation, direct and indirect financial compensation. In direct financial compensation, consists of the pay an employee receives in the form of wages, salaries, bonuses, or commissions. On the other hand, indirect financial consists of all financial rewards that are not included in direct financial compensation (Mondy, 2002). However, the paper attempts to discuss more about indirect financial compensation that is called as employee benefits. The paper wants to answer and discuss several issues that are highlighted by some questions: 1. Why do employers offer benefits and services? 2. Who makes decision about benefits? 3. What are types of benefits programs? 4. How manage the benefits? 5. How Islam shows about benefits?

Discussion Before the writer attempts to answer the following questions that to be guided for this paper, it is batter to understand first about employee benefits and the historical background beyond it. However, the benefits are a part of indirect financial compensation. In the school area, Employee benefits are commonly considered to be an important part of an effective compensation programs that can have a significant effect on ability of a school district to attract and retain good employees (Young, 2008). Furthermore, in an organization the employee benefits are a form of pay (including property, services, cash or cash equivalent) that have a purpose to stated pay for the performance of services (Mondy, 2002). The programs of employee benefits had been offered since 60 years ago before World War II. There were only several benefits that have been offered, and most of the programs started during war happened. The reasons that the employers offered the benefits because of they had employees welfare at heart, and they wanted to keep a union out (Ivancevich, 2004). However, the cost of benefits had changed from year to year. For example, in 1929 was only 3 percent of the wages, 1949 had 16 percent, and 1970s was 30 percent of salaries. Recently, the cost is from 20 to 60 percent of payroll. Why do employers offer the benefits and services? All organizations have different reasons regarding why they offer the benefits to their employees. According to Employee Solution (2010), the reasons that make the employers offer benefits to employees are, (1) To remain competitive with other top tier companies, (2) To encourage employers to remain with Employee Solutions. These reasons have helped the organizations maintain a loyal group of applicants and have helped their clients save money by having a core group of employees they can depend on.

Some employers provide these programs usually for labor market reasons. The first reason is to keep the organization competitive in recruiting and retaining employers, other reason is that they want to increase the employees performance (Ivancevich, 2004). There are still no evidences that this reasoning becomes a valid, but if we put ourselves in the position of the employees that have provided many benefits from organization, as an employee we will give the best effort for our organization that we work in. According to Small Business Administration (SBA), there are some of the reasons employers offer their benefits: 1. To attract and hold capable people. 2. To keep up with competition. 3. To foster good morale. 4. To keep employment channels open by providing opportunities for advancement and promotion as older workers retire. Who makes decision about benefits? In a company, there is independent consultant who is employed by benefit carriers like insurance companies. In every organization, they have a specialist of benefits, usually called as a manager of director of employee benefits. Employee benefit managers referred to as employee benefits specialists or professional benefits administrators, are responsible for developing and administering employee benefits programs, such as pension plans, retirement plans, medical and life insurance, and education benefits. Their duties include researching, designing, and evaluating the benefits options offered to employees by a business or government agency (Terry, 2008). In addition, employee benefits managers must be familiar with laws and regulations

governing employee benefits. In addition, they must be aware of employer tax incentives associated with certain benefits.

According to Mondy (2002), the employee benefit managers are not only concern with designing benefits, they also have some tasks for organization, such as:

1.

Perform difficult staffing duties, including dealing with understaffing, refereeing disputes, firing employees, and administering disciplinary procedures.

2.

Provide current and prospective employees with information about policies, job duties, working conditions, wages, opportunities for promotion and employee benefits.

3. 4.

Identify staff vacancies and recruit, interview and select applicants. Maintain records and compile statistical reports concerning personnel-related data such as hires, transfers, performance appraisals, and absenteeism rates.

5.

Oversee the evaluation, classification and rating of occupations and job positions.

In addition, if we refer to the role of operating and human resource mangers in benefits and services, there are two positions that can make decision and approve the programs, which are top management and human resource manager (HRM). However, the table below shows the procedure of decision making for the program of benefits and services (Ivancevich, 2004).

Benefit and Services Function Benefits and services budget Voluntary benefits and services

Operating Manager (OM)

HR Manager (HRM)

Administration of benefits Preliminary budget and service programs developed by HRM

Programs approved by OM Programs recommended by HRM Communication of benefits and (Top Management) services OM Cooperates with HRM Done by HRM Evaluation of benefits and service Done by HRM Administration of benefits and service programs

Before the top manager and Human resource manager consult with the professional consultant about the benefits that they want to offer, they should consider the following:

1. What should the program accomplish in the long run? In other words, what are the objectives of the program? 2. What is the maximum amount you can afford to spend on a program? 3. What is your administrative capability? 4. Understand your employee group today and what it may look like in the future - what kind of program would fit your employee population? 5. Do you want employee input? In which benefits are employees interested?

What are types of employee benefits programs? There two types of employee benefits, which are mandated benefits and voluntary benefits (Ivancevich, 2004. Young, 2006. Reborn, 2004, and Mondy, 2002) A. Mandated Benefits In this type, the employer has not choice about offering mandated benefits programs and cannot change it in any way without getting involved in the political process to change
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the existing laws. It is because the programs offered by federal and state governments, it means for the employers the programs which under mandated benefits are compulsory. There are three benefits program had been offered, which are: 1. Unemployment Insurance Unemployment benefits are payments made by the state or other authorized bodies to unemployed people. Benefits may be based on a compulsory governmental insurance system. Depending on the jurisdiction and the status of the person. They often are part of a larger social security scheme (Wikipedia, 2011). In some countries, there is different proportion of average that has given for unemployment insurance. For instance, the average unemployment rate for the United States was approximately 5.7 percent. In addition, the employee that can get unemployment insurance must have worked in a minimum number of weeks, be without a job, and be willing to accept a suitable position offered through a state unemployment compensation commission (Ivancevich, 2004). Referring to Ivancevich (2002), the employees that receive this compensation are only for limited period, and normally in a maximum of 26 weeks. However, in most states the weekly benefit amount is equal to 1/26 of the workers average earnings, yielding a total benefit of 50 percent of earnings, and the minimum and maximum of amounts are set by the governments themselves. There are several objectives that were designed by many countries for unemployment insurance: a. To provide income that can be used by the workers during they are unemployment b. To aid the unemployed find the new job

c. To encourage employers to stabilize employment d. The stabilize the labor supply 2. Social Security

In social security, the program is to provide income to retired people supplement savings, private pensions, and part-time work. However, the basic concept was that the employee and employer were to pay taxes that would cover the retirement payment and each employee would later receive in a self-finding, and employers and employees pay social security taxes. They pay a percentage of the employees pay to the governments (Mondy, 2002).

Employees become eligible to receive full benefits when they ate at age 65. In 2027, the agreement mentions that an employee will be not be able to retire with full benefits until he or she is 67 age. Furthermore, when an employee dies, the family with children who are under 18 can receive survivor benefits, regardless of the employees age. However, under Medicare provisions of the social security system, an employee with age 65 and above can require payment from hospital bill. 3. Workers Compensation Workers compensation means that the employees who incur expenses because of job-related to illnesses and accidents (Rebore, 2004). The workers compensation in every country is administrated differently. Normally, the employers pay the entire cost of workers compensation insurance. According to Ivancevich 2004, the workers compensation budget is increasing rapidly rather than health care insurance. This is because of several factors: escalating

fraudulent claims, the expansion of compensable injuries, and fewer restrictions to eligibility for benefits than in health care plans.

B. Voluntary Benefits

Many employers also provide other kinds of benefits for their employees. The benefits are called as voluntary benefits. However, there are several benefits that usually were designed by the organizations such as compensation for time off (paid holidays, paid vacations, international vacation benefits, personal time off) sick leave, family leave (maternity and parental leave) employer-purchased insurance (health insurance and life insurance). Thus, the writer attempts to discuss few of voluntary benefits, that are normally applying in some organizations.

1. Compensation for time off

Time off also means that the employees did not always work hard all that time, there are several benefits that under time off such as holidays, vocations, sick leave, funeral leave, and jury duty.

If the employers want to ask their employees to work overtime because of reasons, they should give extra salary also. However, most nations have overtime laws designed to dissuade or prevent employers from forcing their employees to work excessively long hours. These laws may take into account other considerations than the humanitarian, such as preserving the health of workers so that they may continue to be productive, or increasing the overall level of employment in the economy. One common approach to regulating overtime is to require employers to pay workers at a higher hourly rate for overtime work. Companies may choose to pay workers higher overtime pay even if not obliged to do so by law,

particularly if they believe that they face a backward bending supply curve of labour (Wikipedia, 2011).

2. Sick Leave

Sick leave (or paid sick days or sick pay) is time off from work that workers can use during periods of temporary sickness to stay home and address their health and safety needs without losing pay or their jobs. Some workplaces offer paid sick time as a matter of workplace policy, and in some jurisdictions it is codified into law. However, states around the USA are considering legislation that would provide workers access to paid sick days.

3. Employer-Purchased Insurance

Employer-Purchased Insurance also known as Payment protection insurance is an insurance product that is often designed to cover a debt that is currently outstanding (only income payment protection, or the Competition Commission preferred term "short term IP" is not specific to a debt but covers any income). This debt is typically in the form of a loan or an overdraft, and is most widely sold by banks and other credit providers as an add-on to the loan or overdraft product. It typically covers the borrower against an accident, sickness, unemployment or death, circumstances that may prevent them from earning a salary/wage by which they can service the debt (Wikipedia, 2011).

The insurance that usually offered by organizations is such as life insurance, disability income replacement insurance, and health insurance. In all these benefits are designed by organization for the employees satisfaction. Consequently, the workers will work hard because the employers full fill extra facilities through the benefits.

How manage the benefits?

Benefits Management aims to make sure that desired business change or policy outcomes have been clearly defined, are measurable, and provide a compelling case for investment - and ultimately to ensure that the change or policy outcomes are actually achieved. Benefits realisation management is a key topic in programme management, but its equally relevant for large projects. There are six steps to planning a successful approach to managing benefits (Harris, 2011).

1. Create a benefit management strategy

This is the outline for how the project or programme will achieve the desired benefits. How will you measure benefits? Who will be responsible for doing so? How long will you track them for?

2. Identify benefits and tie them back to project/programme objectives

Benefits, like project tasks, have dependencies. What are your benefits dependent on? What benefits do you hope to see as a result of your project or programme? How do they all fit together to deliver coherent change, and does this take you in the right direction?

3. Plan when benefits will appear

Just as you plan tasks on a schedule, plan out when you expect the benefits to appear. Some deliverables will have benefits immediately. Others may take longer before you start to see any tangible results. If the benefits are going to appear after the project or programme is

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finished, who is going to be responsible for recording and tracking them? Tie this back to the benefit management strategy.

4. Realise the benefits OK nows the time to deliver the change and make those benefits possible.

5. Conduct a benefit review

Review the expected benefits against the actual results seen. How do they match up? Are your original plans still valid? Do the stakeholders want to see anything else?

6. Identify new benefits and tweak existing benefits

Part of the ongoing project and programme management (or the role of the benefits manager, if the project work is over) is to see if the change can result in any new benefits. What else has been identified as positive improvement as a result of the project? What improvements can be delivered to further enhance the benefits that are being delivered already?

There some other steps that can managing an effective benefits on an organization (Jackson, 2009):

1. Set Objectives and Strategy for Benefits 2. Involve Participants and Unions 3. Communicate Benefits 4. Monitor cost closely

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How Islam shows about benefits? Islam asks people to find the job that they can survive with it, And say (O Muhammad SAW) "Do deeds! Allh will see your deeds, and (so will) His Messenger and the believers. And you will be brought back to the All-Knower of the unseen and the seen. Then He will inform you of what you used to do." (At-tawbah, 105). Many verses in al-Quran mention about compensation, An-nahl verses 97: Whoever works righteousness, whether male or female, while he (or she) is a true believer (of Islmic Monotheism) verily, to him We will give a good life (in this world with respect, contentment and lawful provision), and We shall pay them certainly a reward in proportion to the best of what they used to do (i.e. Paradise in the Hereafter). In Al-Kahf 30, Allah mentions that Whoever works righteousness, whether male or female, while he (or she) is a true believer (of Islmic Monotheism) verily, to him We will give a good life (in this world with respect, contentment and lawful provision), and We shall pay them certainly a reward in proportion to the best of what they used to do (i.e. Paradise in the Hereafter). From verses we can identify that every effort that have been done, it has a compensation, even it is a good or bad effort. In organization also has a compensation that they give to the employees who work with them. Some Hadists shows abot giving benefits to the workers, They (the slaves and servants) is your a brother under her brother, God put it should them under your care; so be given to eat whoever has like what he

care then

ate(own) and gives clothes like what she wore (his own) and not imposes on them with a very heavy task, and if you charge him with such a task, then it should help them (do it) (HR Muslim).

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In another hadith, narrated from ibn Syadad Mustawrid Messenger of Allah said: Who is a worker for us, let him find a wife (for her); an aide if they do not have it, let him find her for the maid. If he does not have a place to live, let him find a place to

live.Abu Bakr said: It is reported to me that the Prophet Muhammad. said: "Who took the attitude other than that, then he was an outrageous or thief." (HR Abu Daud)

Referring to verses and hadith we can identify that Islam very concerns about human right especially in giving compensation and benefits to the people who are workers.

Conclusion

Employers must be aware of the issues and be ready to make informed decisions when they select employee benefits for their organization. However, the employee benefits play an increasingly important role in the lives of employees and their families and have a significant financial and administrative impact on a business, before decided the benefits program the company has to identify what is the objective that can be faced by the benefits. Furthermore, the employee benefits have to be redesigned and the rate changed to incorporate the change happening in the environment.

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References

Armstrong, M. & Stephens, T. 2005. Employee Reward Management and Practice. Kogan Ivancevich, J. M. 2004. Human Resource Management (9th.ed). Booston:McGraw. Mondy, R.W., Noe, R. M. & Premeaux, S.R. 2002. Human Resource Management. (8th ed.) Upper Saddle River, NJ: Prentice Hall. Rebore, R.W. 2004. Human Resource Administration in Education (7thed.). Saint louis University: Pearson.

Terry,

2008.

Managers Employees Insurance Employers Government Plans Offer Firms.

From: http://careers.stateuniversity.com/pages/207/Employee-Benefits-Manager.html
http://ilmumanajemen.wordpress.com/2009/06/20/pengertian-upah-dalam-konsep-islam/

http://www.uniquebusinessdevelopment.com/toolkit/topics/m4j.htm

http://www.gantthead.com/blog/The-Money-Files/2731/

http://www.quranexplorer.com/Hadith/Default.aspx

http://en.wikipedia.org/wiki/Sick_leave

http://en.wikipedia.org/wiki/Performance_management

http://en.wikipedia.org/wiki/Payment_protection_insurance

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CONTENTS Preface Introduction Discussion Why do employers offer benefits and services? Who makes decision about benefits? What are types of benefits programs? Mandated Benefits Voluntary Benefits How manage the benefits? How Islam shows about benefits? Conclusion References vii 1 2 2 3 5 5 8 10 12 13 14

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