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Compensation and Benefit Design

Compensation and Benefit Design Applying Finance and Accounting Principles to Global Human Resource Management Systems

Name: Compensation and Benefit Design
Brand: Prentice Hall
SKU: 9780133064780
Price: 1100.00 HKD
Availability: OutOfStock
Author: Bashker Biswas
ISBN: 9780133064780

By Bashker Biswas

Prentice Hall January 2013

Specifications

ISBN-13: 9780133064780
Publisher: Prentice Hall
Publication: January 2013
Format: Hardback , 400 pages
Jurisdiction: International or US ? Countri(es) for reference only

Details

Compensation and benefit programs account for the largest line item expenses in most organizations; in service organizations, they often represent more than 50% of total costs. Hence, it's critical that these programs reflect a rigorous understanding of relevant finance and accounting principles, and apply these principles to maximize performance and value. In Compensation and Benefit Design, Bashker D. Biswas shows exactly how to bring financial rigor to the crucial "people" decisions associated with compensation and benefit program development. This comprehensive book begins by introducing a valuable Human Resource Life Cycle Model for considering compensation and benefit programs. Next, Biswas thoroughly addresses the acquisition component of compensation, as well as issues related to general compensation, equity compensation, and pension accounting. He assesses the full financial impact of executive compensation programs and employee benefit plans, and discusses the unique issues associated with international HR systems and programs. This book contains a full chapter on HR key indicator reporting, and concludes with detailed coverage of trends in human resource accounting, and the deepening linkages between financial and HR planning. Replete with both full and "mini" case examples throughout, the book also contains chapter-ending exercises and problems for use by students in HR and finance programs

The definitive HR professional's guide to designing exceptionally successful compensation and benefit programs.

Thoroughly explains best-practice techniques, methodologies, and accounting/financial concepts associated with superior compensation/benefit program design
Illuminates key connections between HR program development and relevant GAAP/IFRS accounting processes and procedures
Demonstrates key concepts through case examples
Includes chapter-ending exercises and problems

Part 1

Chapter 1 Introduction: Setting the Stage 3

The Cost Versus Expense Conundrum 4
CAPEX Versus OPEX 7
The Current HR Cost-Classification Structure 8
The Current Accounting for Compensation and Benefit Cost Elements 12
Key Concepts in This Chapter 23
Appendix: The Terms 24

Chapter 2 Business, Financial, and Human Resource Planning 29

The Overall Planning Framework 30
HR Planning 34
HR Programs 43
Key Concepts in This Chapter 52
Appendix 53

Chapter 3 Projecting Base Compensation Costs 55

Base Salary Costs 58
Key Concepts in This Chapter 67
Appendix: Cash Flow Impact of Salary Increases 67

Chapter 4 Incentive Compensation 71

An Introduction to Incentive Compensation Programs 71
Accounting for Annual Cash Incentive Plans 74
Key Incentive Compensation Metrics 77
Free Cash Flow as an Incentive Plan Metric 81
Economic Value Added as an Incentive Plan Metric 82
Residual Income as an Incentive Compensation Plan Metric 86
The Balanced Scorecard and Incentive Compensation 87
Balanced Scorecard and Compensation 92
Key Concepts in This Chapter 94

Chapter 5 Share-Based Compensation Plans 95

Stock Award Plans 97
Stock Option Plans 100
Stock Option Expensing 103
The Accounting for Stock Options 106
Tax Implications of Stock Plans 112
International Tax Implications of Share-Based Employee Compensation Plans 116
Employee Share Purchase Plans 121
Stock Appreciation Rights 122
Key Concepts in This Chapter 126
Appendix: Stock Options and Earnings per Share 127

Chapter 6 International and Expatriate Compensation 131

The Background to International and Expatriate Compensation 132
The Balance Sheet System 136
Expatriate Taxes 143
The Cost-Differential Allowance 151
Global Payroll Systems 156
International Pensions 159
Global Stock Option Plans 161
Key Concepts in This Chapter 164

Chapter 7 Sales Compensation Accounting 165

General Accounting Practices 166
Sales Compensation Plans 168
Accounting Control and Audit Issues 175
Other Salient Elements of a Sales Compensation Plan 177
Travel Allowances 179
Commission Accounting 183
Key Concepts in This Chapter 185

Chapter 8 Employee Benefit Accounting 187

The Standards Framework 189
Defined Contribution Versus Defined Benefit Plans 190
Section 965 Explained 191
Calculating Plan Benefit Obligations 194
Claims Incurred but Not Reported (IBNR) 194
Other Benefit Obligations 196
Additional Obligations for Postretirement Health Plans 197
Self-Funding of Health Benefits 198
International Financial Reporting Standards and Employee Health and Welfare Plans 201
The Financial Reporting of Employee Benefit Plans 202
Key Concepts in This Chapter 207

Chapter 9 Healthcare Benefits Cost Management 209

The Background 209
The Reasons for the Rising Costs 212
Cost Containment Alternatives 214
Forecasting Healthcare Benefit Costs 228
Key Concepts in This Chapter 230

Chapter 10 The Accounting and Financing of Retirement Plans 231

The Background 232
The Accounting of the Plans 235
The Pension Benefit Obligation 245
Pension Plan Assets 253
The Pension Expense 256
The Accounting Record-Keeping 262
Accounting Standards Affecting Pension Plans 265
Key Concepts in This Chapter 266

Part 2

Chapter 11 Human Resource Analytics 271

The Background for the Use of HR Analytics 272
The Need for HR Analytics 273
Measuring the Effectiveness of HR Investments 274
Total Compensation Effectiveness Metrics 280
A Changed Paradigm 284
Key Concepts in This Chapter 285

Chapter 12 Human Resource Accounting 287

The Background 287
The Debate 289
HR Accounting Methods 291
Key Concepts in This Chapter 300
Appendix: No Long-Term Savings from Workforce Reductions 301
Conclusion 305
An HR Finance and Accounting Audit 306

References 309

Index 323

About the Author

Bashker “Bob” Biswas, Ph.D., is the Principal of the Biswas Group Inc., a Global Management Consultancy. Dr. Biswas concurrently holds the position of Visiting Professor at Keller School of Management at DeVry University in Sacramento, California.

Dr. Biswas has over 40 years experience in Total Rewards Management; Finance; Accounting; Executive Compensation; Base, Incentive, Sales and Equity Compensation; Human Resource Strategy; Human Resource Information Systems; International Human Resources; and International Compensation.

The companies he has worked for are Control Data, Bechtel, Memorex, Maxtor, Hitachi Data Systems and BioGenex, and Zain. Dr. Biswas has held positions at the Director level and above since 1982. At Maxtor and BioGenex he was a Vice President. While at Memorex and Zain, he worked out of London and the Middle East/Africa respectively. He has traveled to over 30 countries on variouscompensation and benefits related projects.

During his tenure in the Middle East, Dr. Biswas conducted Total Rewards and Global Human Resource Management Seminars throughout the Middle East and Africa. He was a leading instructor in the Zain Human Resource Management Academy.

In addition, he has held consulting positions at Skopos Corporation, a venture investment backed HRIS start-up cofounded by Dr. Biswas in 1983, at Coopers & Lybrand, and at PricewaterhouseCoopers. At Coopers & Lybrand, he was a Director of Human Resource Consulting in the San Francisco office and National High-tech Leader for Human Resource Consulting. Dr. Biswas was also responsible for the firm’s National Software Industry Compensation Survey. In total he has provided Compensation Consulting to over 40 companies.

Dr. Biswas has taught at various universities as an adjunct faculty member since 1984. He has authored and coauthored articles in Human Resource Management. Dr. Biswas also has presented at WorldatWork’s National Conference and briefly taught in their Certification Program.

Dr. Biswas holds a B.A., M.B.A., and Ph.D., and a post-graduate diploma in Industrial Relations.

He has been a member of WorldatWork (American Compensation Association) since 1972.

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