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

Book Description

In Compensation and Benefit Design, Bashker D. Biswas shows exactly how to bring financial rigor to 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. 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, this book will be valuable to a wide spectrum of HR and financial professionals, with titles including compensation and benefits analysts, managers, directors, and consultants; HR specialists, accounting specialists, financial analysts, total rewards directors, controller, finance director, benefits actuaries, executive compensation consultants, corporate regulators, and labor attorneys. It also contains chapter-ending exercises and problems for use by students in HR and finance programs.

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Dedication Page
  4. Contents
  5. Foreword
  6. Acknowledgments
  7. About the Author
  8. Preface
  9. Part I
    1. 1. Introduction: Setting the Stage
      1. The Cost Versus Expense Conundrum
      2. CAPEX Versus OPEX
      3. The Current HR Cost-Classification Structure
      4. The Current Accounting for Compensation and Benefit Cost Elements
      5. Key Concepts in This Chapter
      6. Appendix: The Terms
    2. 2. Business, Financial, and Human Resource Planning
      1. The Overall Planning Framework
      2. HR Planning
      3. HR Programs
      4. Key Concepts in This Chapter
      5. Appendix
    3. 3. Projecting Base Compensation Costs
      1. Base Salary Costs
      2. Key Concepts in This Chapter
      3. Appendix: Cash Flow Impact of Salary Increases
    4. 4. Incentive Compensation
      1. An Introduction to Incentive Compensation Programs
      2. Accounting for Annual Cash Incentive Plans
      3. Key Incentive Compensation Metrics
      4. Free Cash Flow as an Incentive Plan Metric
      5. Economic Value Added as an Incentive Plan Metric
      6. Residual Income as an Incentive Compensation Plan Metric
      7. The Balanced Scorecard and Incentive Compensation
      8. Balanced Scorecard and Compensation
      9. Key Concepts in This Chapter
    5. 5. Share-Based Compensation Plans
      1. Stock Award Plans
      2. Stock Option Plans
      3. Stock Option Expensing
      4. The Accounting for Stock Options
      5. Tax Implications of Stock Plans
      6. International Tax Implications of Share-Based Employee Compensation Plans
      7. Employee Share Purchase Plans
      8. Stock Appreciation Rights
      9. Key Concepts in This Chapter
      10. Appendix: Stock Options and Earnings per Share
    6. 6. International and Expatriate Compensation
      1. The Background to International and Expatriate Compensation
      2. The Balance Sheet System
      3. Expatriate Taxes
      4. The Cost-Differential Allowance
      5. Global Payroll Systems
      6. International Pensions
      7. Global Stock Option Plans
      8. Key Concepts in This Chapter
    7. 7. Sales Compensation Accounting
      1. General Accounting Practices
      2. Sales Compensation Plans
      3. Accounting Control and Audit Issues
      4. Other Salient Elements of a Sales Compensation Plan
      5. Travel Allowances
      6. Commission Accounting
      7. Key Concepts in This Chapter
    8. 8. Employee Benefit Accounting
      1. The Standards Framework
      2. Defined Contribution Versus Defined Benefit Plans
      3. Section 965 Explained
      4. Calculating Plan Benefit Obligations
      5. Claims Incurred but Not Reported (IBNR)
      6. Other Benefit Obligations
      7. Additional Obligations for Postretirement Health Plans
      8. Self-Funding of Health Benefits
      9. International Financial Reporting Standards and Employee Health and Welfare Plans
      10. The Financial Reporting of Employee Benefit Plans
      11. Key Concepts in This Chapter
    9. 9. Healthcare Benefits Cost Management
      1. The Background
      2. The Reasons for the Rising Costs
      3. Cost Containment Alternatives
      4. Forecasting Healthcare Benefit Costs
      5. Key Concepts in This Chapter
    10. 10. The Accounting and Financing of Retirement Plans
      1. The Background
      2. The Accounting of the Plans
      3. The Pension Benefit Obligation
      4. Pension Plan Assets
      5. The Pension Expense
      6. The Accounting Record-Keeping
      7. Accounting Standards Affecting Pension Plans
      8. Key Concepts in This Chapter
  10. Part II
    1. 11. Human Resource Analytics
      1. The Background for the Use of HR Analytics
      2. The Need for HR Analytics
      3. Measuring the Effectiveness of HR Investments
      4. Total Compensation Effectiveness Metrics
      5. A Changed Paradigm
      6. Key Concepts in This Chapter
    2. 12. Human Resource Accounting
      1. The Background
      2. The Debate
      3. HR Accounting Methods
      4. Key Concepts in This Chapter
      5. Appendix: No Long-Term Savings from Workforce Reductions
  11. Conclusion
    1. An HR Finance and Accounting Audit
  12. References
    1. Articles
    2. Books
    3. Websites
  13. Index