Importance of Compensation and Benefits Policy for Workers

This report discusses the importance of compensation and benefit policy of workers and how it is one of the most importance policies that every business organization need to take care of and implement at their workplace. By taking an example of case study of Missouri, where the employee received a compensation of $20,000 as medical expenses from the employer for simple muscle strain. The major purpose of this report is to allow the reader to have a detailed and complete understanding of compensation and benefit act and how useful it can be for the employees.

MS909124_04022019
Introduction
Compensation and benefits can be considered as an amount in the form of salary or in any
other monetary and non-monetary form which is passed on by the company or employer to
the Employees. It is known as the amount paid to the employee for their labour which
includes basic salary, overtime wages, retirement benefits, paid vacations, bonus pay and
other non-monetary benefits. However, every state also has rules and regulations which also
required the employer of certain scale and size to offer their employees with worker’s
compensation benefits (Leibowitz, 1983). These laws and regulations are necessary to allow
the employees to have a safe and secure working environment and if any accident do occurs
at workplace, they will be compensated for their medical bills as per the compensation and
benefit act by the employer. In this report, we are going to discuss the importance of
compensation and benefit policy of workers and how it is one of the most importance policies
that every business organization need to take care of and implement at their workplace. By
taking an example of case study of Missouri, where the employee received a compensation of
$20,000 as medical expenses from the employer for simple muscle strain. The major purpose
of this report is to allow the reader to have a detailed and complete understanding of
compensation and benefit act and how useful it can be for the employees.
Literature review
Every state or Nation has their own compensation and benefit act whose main purpose is to
provide insurance to the Employees working for a medium or large scale organization. The
compensation and benefits are considered as social protection provided to the employees in

the organized sector in case of events such as Maternity, sickness, disablement or death due
to injury pertained during employment (Essays UK. 2018). The main aim of the worker's
compensation and benefits law is to ensure that the worker receives their wages and medical
facilities along with other benefits after pertaining injury while working at the workplace. In
the United States, the employee receives cash benefit in exchange for the service the worker
offers to the employer. The type of compensation includes wages and salary, commissions
and bonus, retirement plans, health Insurance, disability insurance, life Insurance, employee
stock ownership plan, etc. It is the responsibility of the employer to provide all sorts of
facilities to the Employees while working at the workplace so that the workers do not get
injured (Iyer et al, 2003). In case if any accident occurs at the workplace, it is the
responsibility of the employer to provide compensation as per the insurance policy to the
worker which include payment of complete medical bills, wages for the missing days due to
injury until he or she becomes fit to work again, keeping the job until the worker is fit for
work as the employer cannot fire the injured employee and other disability benefits for
instance if the employee does not able to work after the accident, the employee can claim
disability benefit from the employer which would allow them to receive disability benefit
from the employer (Krueger et al, 1989). In the Missouri case study, the worker who is a US
citizen having a native language of Spanish could not read or understand English. This unable
him to communicate effectively with the medical staff of the company where he was working
when he complained of chest pain. The medical staff misunderstood his chest pain which was
minor muscle strain as cardiac arrest. The worker suffered from chest pain after picking up a
turkey which weighed 80 pounds and lifted it into the tray. The medical staff became afraid
that the worker will suffer from a heart attack and perform various medical checkup which
includes CPK, EKG, etc (Shannon, 2002). The employees also went under a cardiac
catheterization which showcased that everything is normal and his heart is working normally

(Krueger et al, 1989). However, after the expensive treatment was over, the employee came
back to work without missing any deadline and suffered no other complications. But his
employer refused to compensate for his medical bills saying that the employee did not had
any complications at all. Therefore, in this case study, we can say that the employer violated
the worker's compensation benefits policy (Krueger et al, 1989).
Analysis
Workers compensation benefits policy is extremely important for any business organization
as it helps them to attract top talent and also enhance the motivation of the employees. It
increases the loyalty of the employees and also offers them job satisfaction in the process. In
every organization, employee work in order to receive something in return. Compensation is
considered as the exchange in the form of monetary and non-monetary which the employer
provides to the employee for their hard work. It is known as the remuneration to the worker
which arises from their employment (Seabury et al, 2011). On the other hand, benefits is also
part of compensation which is offered to the Employees at the workplace. The worker today
does not only work for money but also expect some additional benefit which would help
them live their life easily (Burton, 2001). These benefit are provided to each of the employees
regardless of their performance and can be extremely valuable to promote low absenteeism
and increased turnover (Krueger et al, 1989). Some of these benefits include transportation
allowance, travel allowance, special allowance, overtime allowance, insurance, retirement
benefits, pension, hospitalization and medical bills (Seabury et al, 2011). Every organization
offers accidental insurance and life insurance to the Employees which provide them with
emotional security and make them feel valued in the company (Larson, 2015). Similarly, in
case of any accident that may or may not occurs at the workplace, for which the employee get

hospitalized, it would be the responsibility of the company to provide their medical bills until
they are fit to work again. The employee will be able to reimburse all the medical bills from
medical claim provided by the company for the treatment (Burton, 2001). However, there are
some cases where the employer refuses to reimburse the medical bills stating some or other
factors. In this particular case of Missouri, the employer refuses to pay the medical bills,
following which the employee filed the case against an employer in the court (Seabury et al,
2011). As per Court judgment, the employer was aware of the injury pertained by the worker
and was not prejudiced. The court also stated that it was not necessary for the medical staff to
conduct all these tests in order to rule out a heart attack as per the consequences would have
been extremely serious. As per the judgement, the employer was ordered to pay $20,000 to
the employee for conducting all the medical tests without requirement along with the trial
fees. According to Hansen, 2007, it is important to understand that the human resource
management of the company responsible for developing all the compensation and benefits
policies for the company and ensuring that every employee receives their benefits and
compensation as per that policy. Furthermore, the compensation and benefits policy does not
only help the employees in the future but also play a very crucial role in the success of the
business. As per Hackl, 1997, this is because such kind of policies attract the attention of
highly skilled professionals who want to work with the company where they can receive
benefits such as health insurance, life Insurance, disability benefits, paid leaves, maternity
leaves and much more (Seabury et al, 2011). This increases their job satisfaction and loyalty
towards the company, enabling them to work with great performance and contribute to higher
productivity of the company. Apart from that, it is also ethical for the employer to provide
benefits and compensation to the employee not based on the performance of the individual
but as a result of association with the organization membership. As in the case study, it is
clear that the employer was not ready to reimburse for the medical bills of the employee as

they believed the employee did not suffer from any injury (Hackl, 1997). However, the court
didn't follow their understanding of the case and ruled against them. This would certainly
damage the reputation of the company and the employer and would also demotivate other
employees to contribute effectively for the company. Furthermore, the employee himself
would not be willing to work as efficiently as before due to the negligence and unethical
behaviour by the employer (Larson, 2015). On the other hand, if the employer would have
reimbursed his medical bills, then he would have performed much better for the company
which would also motivate other employees in company to perform diligently. The court case
defamed company's reputation which would result in decreased performance of the company.
Conclusion and Recommendation
As per the report, it can be stated that the compensation and benefit act needs to be
implemented in every business organization and should be ethically followed in order to
attract and motivate the employees to perform better in future. The direct compensation
strategy and the program can also be utilized for organizational effectiveness and it is also
necessary for the company to fix a fair pay rate which is competitive and appropriate by all
the companies.

References
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Shannon, H. S., & Lowe, G. S. (2002). How many injured workers do not file claims for
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Larson (2015). Missouri: $20,000 in Medical Expenses Ordered Paid by Employer for
Simple Muscle Strain Due to Lack of Interpreter. [online] LexisNexis® Legal
Newsroom. Available at: https://www.lexisnexis.com/legalnewsroom/workers-
compensation/b/recent-cases-news-trends-developments/posts/missouri-20-000-in-
medical-expenses-ordered-paid-by-employer-for-simple-muscle-strain-due-to-lack-
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