Employee benefits constitutes all incremental and compensations beyond direct payment workers receive during their time of direct remuneration package as deduced by (Dechow, Myers & Shakespeare 2010, pp.2-25). Employee benefits are often featured as fringe reimbursements, because they increase employees’ salary and wages for the period worked in representation to core of monetary remuneration of employees’ package. Some of these fringe characterized benefits are voluntarily presented by employers and others are mandatory form the government to employers. According to Adin and Mendizabal (2016, pp.23-89), is that these benefits are ranging from cash that can result to decent standard of living. Therefore, this report has looked at contemporary issues related to accounting for employee benefits and how useful they are significant to financial companies in Australia.
The two research-based journal articles selected are Journal of Accounting and Marketing and Journal of Business Finance and Accounting. The first journal was written by Daniel (2010, pp. 1-255), whereas the second article was written by Christina (2009, pp.1-389). The group selected the two articles due to various reasons, but only few of these reasons will be explained in this report.
According to research conducted by Daniel (2010, pp. 44-65) in the journal of Accounting and Marketing is that one in every three employers or thirty five percent are saying the cost of accounting for employees health care have increased drastically compared to past few years. Whereas, forty percent of employers said health benefit cost have increased with as small percentage and the rest which representing twenty-two percent stated that the cost have remain the same. However, Christina (2009, pp. 111-118), provided some of the strategies in which employers can utilize to address this issue. In the Journal of Business Finance and Accounting (2009, pp.1-389) some of strategies and advice given include the following; employers should shift organization’s contributions techniques to define contribution but not to a define benefit. In other words, workers should be allowed to select their benefits with their benefit provider company. The strategy can be of benefits to employees from retirement to health-care as well as to employers by saving their time and money.
According to Christina (2009, pp. 44-67), employers are continuous reducing workers benefits costs through the implementation of consumer driven planning and self-insuring. They also introducing health saving accounts for their employees, launching of wellness programs within the companies and increase of voluntary benefit offers. However, there are various approaches of dealing with benefit cost changes and reductions.
Eventually, workers education is the primary key in addressing aspect in relation to accounting for employee’s benefits. Also, companies managers should communicate with workers why an organization has decided to offer the benefits to its employees as well as enforcement of employees’ company values should be communicated (Christina 2009, pp. 44-67).
Contemporary aspects of working with brokers
Christina (2009, pp.1-389) also highlighted that most employers work with brokers and agents of benefit provider companies. Christina (2009, pp. 1-389) explain that sixty-five percent of employers claims PPACA has prepared to rethink about the workers benefits offerings. While, twenty-one percent of the employers have considered moving their employees to public exchange benefit providers. The strategy to address this problem is that companies should use brokers and agents to provide them with options and information of solving problems related to accounting for worker benefits.
The purpose of the two articles selected in this report are to address various contemporary issues related to accounting of employee benefit. The first research based articles reviewed indicated that workers benefits cost has been a challenges to many companies in the past not only today. According to the author of the article Daniel (2010, pp. 1-255), the challenges facing employee benefits can be eliminated in an organization or company if workers are involved in the implementation process and selection of their benefits (Gonzalez-Aleu 2012, p. 243). The research literature highlighted that cost increase, changes of benefits and employers feeling of pressure from the reform of new health benefits regulations can be addressed by use of strategies and techniques provided in (Daniel 2010, p. 234). The second research literature based articles was used to find various aspect influencing workers benefits. These factors can be categorized either into mandatory or compulsory benefits and non-mandatory or optional benefits.
Some employees’ benefits are compulsory and companies must take care of them. These benefits are unemployment and worker’s compensation, and the Family and Medical Leave Act for companies that comprises of more than fifty workers (Muse, Harris & Field 2015, 172). In addition, the articles also help in exploring of various and significant legal requirement in various countries.
The non-compulsory workers benefits should also be accounted for by the company. These benefits include paid vacations, appropriate pension scheme plans, health insurances, and tuition remuneration package (Walsh 2012, p.192). Optional benefits are mainly based on the length in which an employee as worked in a particular organization as well as level of work performance of productivity. The article also indicated that employers should embrace competitive wages and salaries, and benefits to help in improvement of employees’ retention. Company can as well as proposal profit sharing has their optional benefits (Lee & Kim 2015, p.23).
The research questions being explored on the topic accounting for employee benefit by the two articles are;
The two articles are similar in two ways. First, they suggest that companies should look at their budget constraints when accounting for employees’ benefits (Hunk 2014, 481). The company have to belief and understand how its workers are motivated to work either by giving monetary benefits and re-establishing of the organization mission. By re-establishing of the organization mission the company will be able to determine what it gives to its workers. The two studies highlighted that small organizations with imperfect budgets can match its smaller wages and salaries with a bigger remuneration package (Badertscher & Rego 2009, p.65). These package may include salaries and bonuses increment based on particular attained goals. However, the starting wages and salaries of a company can be low but can increase with time, enabling the company to recruit more skilled and talented workers.
The second similarity from the two articles is that companies should put into consideration of what their counterparts are offering in the market. According to Journal of Business Finance and Accounting by Daniel (2010, pp. 1-255) is that what a company competitors are offering to employees should be consider to enable the organization to compete successful in the marketplace. In addition, Christina (2009, pp. 1-389) stated that small business that might not afford to offer good employee’s benefit and remuneration package as their competitors but can afford to offer conducive and welcoming working environment normally escalate employee or worker job satisfactions.
The differences the two articles is that the first articles focuses mainly on issues affecting the accounting practices and accounting of employee benefits, while, second article mainly account of the benefits of workers benefits. For instance, first studies looked at job-related expenditure crackdown. While the second article, focuses on what a company should account for as workers costs benefits (Hladchenkol 2014, p.170). For instance, health insurance can be expensive to an employee when he/she is left to handle it, but when employer insured an employee to a health provider company he/she will be able to cater for the expensive through the help of the insurance company.
Study by Christina (2009, pp. 1-389) highlighted two implications for accountants which are; medical and transportation implications and paid holidays implications to accountants. Study by Daniel (2010, pp. 1-255) state two implications to accountants which are employment appointment bonuses and flexible education assistance program.
Accounting regulators implications; according first articles these implications are job satisfaction and, mediation between companies and employees (Cerner 2011, p.45). The second study implications include HR practices regulations and controlling of the rules.
The implication of the accounting for employee benefit of external users, the first articles suggested that accounting benefit will be reduction of tax changes and delivering of deadline without individuals straining themselves (Cerner 2011, p.45). While, the second articles implications comprise of getting of external user on board of modern technology benefits and, growing and sustaining external user practices in their working environment.
Conclusion
In summary, the report reviews the reasons for the selection of the two research-based articles journals that are connected to the topic of the research. It also explains the purpose and related research questions which are explored by the two literature research articles in section two of this report. Finally, it beheld the similarities and differences, as well as the implication of the accounting of benefits to various stakeholders
List of References
Adin, I., & Mendizabal, J. (2016). Key Performance Indicators (KPIs) of Employee. IEEE Transactions on Intelligent Transportation Systems, pp.23-89
Badertscher, B.A. & Rego, S.O., (2009). Earnings management strategies and the trade-off between tax benefits and detection risk: To conform or not to conform? The Accounting Review, 84(1), pp.63-97.
Cerner, H. (2011). Project administration metrics, KPIs, and consoles: a guide to gauging and specialist care project presentation. John Wiley & Sons, pp. 31-54
Christina, G. (2009). The general of benefits accounting for workers benefits in Australia. Journal of Business Finance and Accounting: (1) 2, (1-389).
Daniel, D.K. (2010). In Accounting of Organization Workers. Journal of Accounting and Marketing (3, 2010), (1–255).
Dechow, P.M., Myers, L.A. & Shakespeare, C., (2010). Fair value accounting and gains from asset securitizations: A convenient earnings management tool with compensation side-benefits. Journal of accounting and economics, 49(1-2), pp.2-25.
Gonzalez-Aleu, F. (2012). Continuous improvement in similarities and differences in worker benefits: critical success factors. The TQM Journal, p. 243
Hladchenkol, M. (2014). A strategic management of accounting system in employees’ benefits. International Journal of Finance Management, 29(2), 167-176.
Hunk, S. C. (2014). How to generate research question from literature research review. The TQM and Kaizen Journal, pp.451-501
Lee, J. Y., & Kim, Y. S. (2015). Evaluation and Implication of the Quality of the Workers in Australia. The Journal of the Petrologic Society of Australia, 24(3), 233-252.
Muse, L., Harris, S.G., & Feild, H.S., (2015). Work?life benefits and positive organizational behavior: is there a connection? Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 29(2), pp.171-192.
Walsh, R. (2012). Refocusing on the human dimension of quality benefit in working environment. Future of Working Environment Journal, 3(3), 195-196.
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