Employee Relations and Compensation and Benefits Packages


            Employee Retention is one of the critical issues confronting many employers around the world. In many studies, it is proven that employee relations, compensation and benefits packages are two of the main factors affecting employee retention. For the purpose of this essay, let’s feature the Employee relations, and Compensation & Benefits Packages of US Department of Veterans Affairs. To support discussion, let’s also quote Smith & Mazin’s guidelines for successful employee relation, and competitive compensation and benefits packages.

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VA Employee Relations

            Smart employers simply don’t want to loose their best employees. It actually cost those resources spent for training and developing them, and the relationship which both sides had developed and kept for years. Employees must be content, motivated, and regularly focused on their work. When the opposite takes place, employees will be unhappy, morale and productivity decreases, turnover increases, and the worst – they might decide to quit their jobs. Aside from unresolved compensation complaints, lowering employee retention rate is also people-driven: resulting from poor communication, lack of appreciation and recognition, unresolved grievances and conflicts (Smith & Mazin, 2004, p. 75).

            Handling these people-driven factors is very crucial to the success of employee retention effort. The following actions must be taken into account:

Promote Effective Workplace Communication
Structuring Rewards and Recognition Programs
Maintaining Work-Life Balance
Resolving Workplace Conflicts
Providing Competitive Compensation and Benefit Packages.
The VA Compensation System

            VA owes their success to the quality and contribution of their workforce. In return, they provide their employees with a complete compensation package – Competitive pay rates, recruitment incentives, pay increases, premium pay, and incentive pay.

The VA Working Hours (Balanced Work/Life Responsibilities)

Flexible Working Hours
Employees can have their own working hour preferences:

May vary arrival and departure times
May work longer but fewer days per pay period
To ensure employees maintain balance of their family/work responsibilities:

Employees may work from home regularly.
Employees may work from home on ad hoc basis.

VA recognizes the value of balancing work/life responsibilities. Employees feel more comfortable when they have an option to select their time preferences within a working day. For instance, an employee can work for less than 7 hours for a certain day, then work 9 hours the next day. When employees work larger amount of time per day, the extra amount of time can either be computed for overtime, or to cover up the duties for next days, allowing employees to take rest. Employees’ arrival time can be variable. The ability to work at the comfort of employees’ own home either regularly or on ad hoc basis gives an employee an opportunity to manage home/personal matters while performing his working duties.

Typical employers do not offer such working schedule flexibility. In most cases, employees are forced to stick with their working schedules. When employees commits tardiness, or under time, the cost of damaged time are deducted to the employee’s salary, which makes employees unhappy especially when he/she knows that what he has done was unintentional. This is one type of problem which normally occurs in cases. Under the fixed working hour system, both employers and employees are governed by operational policies, and working hour’s laws of specific organization. Although most of this policies are government regulated still it offers no protection for employees who frequently commits tardiness or under time, whether intentional or not. What happens then is that both employers and employees must stick to the agreed working schedules. Generally, VA’s flexible time is preferable.

VA Compensation Rates

Starting Rates
Education and trainings attained
Period of experience
Duties required by the position
Guidelines from professional boards
Adjustments for specific locations to keep pay competitive
Recruitment Incentives
Newly Hired but eligible may receive the ff:

Recruitment bonus: 25% of basic pay rate
Relocation bonus: 25% of the basic pay rate
Retention allowance: 25% of the basic pay rate
Pay Increases
Regular performance-based increases
Accelerated increases for outstanding performance
Pay comparability increases approved by the President
Premium Pay
Based on work schedules which includes:

Overtime work
Sunday work
Saturday work
Holiday work
Time spent on-call
Evening and night work
VA’s starting rate is attractive, it is directly proportional to the type of duties, and the amount of time spent on duties. According to Smith and Mazin (2004), salary rates should be based on the duties required, and the amount of time spent on duties, regardless of job description, or the sound of job-title it has. This is the answer to most employees complaining the higher rates given to executives despite the fact that they are working harder than these executives. For many years, the concept of how expensive intellect is, which typically refers to people occupying at higher working levels, especially among the executives have been criticized by subordinates who were mostly exposed themselves to danger. That kind of scenario often occurs with private employers who pay their executives at large amount.

            Education and trainings acquired by employees before hiring or during service is credited by VA. This often connected with promotion to higher positions. When employees are assigned to specific locations, VA adjusts pay rates when necessary to help employees enjoy the kind of comfort that they deserve. Employers must have a good estimate of the cost-of-living, and the inflation rate to get necessary adjustments (Smith & Mazin, 2004, p. 105). The best thing here is that because VA is federally funded, yes of course it can afford to give adjustments to salary rates. On the case of most employers on private sectors, salary rates are constantly threatened by business outcomes. The higher degree of failure may directly affect salary rates resulting from cost-cutting reduction effort. With VA, as with many government organizations in other countries, employees often enjoy higher salary rates, and more benefits. This is another factor why employee retention rate in the term of salary comparison is high.

            Recruitment incentive given to eligible employees is high. According to the US Office of Personnel Management Website, this type of incentive is given to newly hired employees when positions are difficult to fill in. The website also provided the following list of eligible positions: General Schedule (GS), Senior Level (SL), Scientific or Professional (SP), Senior Executive Service (SES), Federal Bureau of Investigation and Drug Enforcement Administration (FBI/DEA) SES, Executive Schedule (EX), law enforcement officer. Request to provide recruitment to other positions may be submitted for an approval to a Head of an Executive Agency. On the on going service of the employee, VA gives regular increases based on- employee’s performance, accelerated rate for outstanding performance, and comparability rate approved by the president.

            Compared to private employers, VA recognizes the value of time spent by employees beyond their working schedules or holidays. Private companies often face problems with issues concerning premium rates as they do not give credits to employees’ extra time spent. Whether the extra time spent is voluntary, approved by managers or not, employees are entitled for their pay (Smith & Mazin, 2004, p. 104).

VA Leaves and Vacation

            Shown in the table below are the vacation, sick, and holiday leaves which VA employees are entitled to enjoy. This is another way of showing how VA recognizes the value of Work/Life Balance, which is a critical factor in achieving a healthy and comfortable working environment for all employees.

Annual Leave
Observed Holidays

VA observes 10 paid federal holidays per year:

            New Year’s Day, Martin Luther King, Jr.’s Birthday, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving  Day, Christmas Day
Annual Leave Vacation
Allows a minimum of 13 and a maximum of 26 days per year. Accrued annual leave can also be used as time off, allowing you to attend to personal business, emergencies, and family needs.
Sick Leave
All employees are allowed to have 13 days of sick leave a year. No Limitation to the number of days which employees can be carried over from year to year. Sick leave can be use to deal off family care, bereavement, or adoption matters.
Family and Medical Leave
When leave extension is needed, VA allows 12 weeks of unpaid leave. Family and Medical leave can be granted during: Childbirth or caring for newborn, placement of a child for adoption or fostering, serious medical condition of the employee, or of spouse, son, daughter, or parent.
Leave Sharing
Allows any employee to voluntary transfer annual leave to cover a reasonable absence of co-employees under the Voluntary Leave Transfer Program.
Court Leave
VA encourages its employees to fulfill civic responsibility. Court Leave is paid.
Bone Marrow and Organ Donor Leave
7 days of excused absence per year for bone marrow donors with full pay. 30 days paid leave for organ donors per year.
Military Leave and Reinstatement
For VA employees serving in Armed Forces, all leave and employment rights adheres with the Uniformed Services Employment and Reemployment Rights Act (USERRA) and other applicable laws.

            VA employees can enjoy Leave Sharing, this is not offered by most employers. This type of system also shows the kind of working relationship, and the trust binding every employee. It is uncommon for an employee to voluntarily transfer his/her leave to cover up the absence of a co-employee. VA’s system provides enough leeway for employees in terms of employee breaks, or necessary vacation annually.

            Another unique feature of VA’s sick leave system is it sets no limitation to the number of unused sick leave days to the next year. Compared to other companies, a maximum number of sick leave days which can be carried over to the next year are specified.

VA Employee Recognition

VA Awards
Superior Performance Awards
Special Contribution Awards
Quality Step Increases
VA Honor Awards
Non-Monetary Recognition

VA gives credit to their employees’ outstanding performance. Employee recognition is an important factor for keeping good employees and maintaining working relationships at all levels (Smith & Mazin, 2004, p. 76). VA has a properly structured reward and recognition system. To make reward and recognition system competitive, it has to be based on competitive Performance Appraisal system with structured processes (Smith & Mazin, 2004, p. 42-46).

VA Employee Assistance Programs

On-Site Child Care
Employees are allowed to take their children at work.VA has On-Site ChildCare center catering to employees’ children of different ages with the following services:

Educational programs teaching family values, social, cognitive, and physical development.
Parents can enjoy meals at their children.
Free to eligible employees. This provides:

Personal and Professional assistance for financial and legal matters, health and wellness, elders’ services, and etc.
Flexible Spending Accounts
VA offers employees tax-lowering spending accounts:

Health Care flexible Spending Accounts – employees can reimburse up to $4,000 per year for out-of-pocket expenses on a pre-tax basis covering medical, dental, and vision
Dependent Care flexible Spending accounts – employees can reimburse up to $5,000 per household, per year, for expenses on a pre-tax basis for eligible day care, and elder care.
Child Care Subsidy
VA provides funds for quality child care for employees’ children, which can be used to offset the cost of before-school or aftercare program, or summer care programs.
Transit Subsidy
Employees who regularly commute to and from work are eligible for commuting cost per month up to the maximum allocated amount.

VA Plans for Long-Term Income Security

            VA employees are encouraged to plan ahead for their future. Shown in the table below are VA’s income protection packages:

Thrift Savings Plan
Government version of Private sector’s 401K Plan.

Contributions from pre-tax dollars where investments and earnings are tax-deferred until withdrawn.
Offers investment funds to choose from.
Transfer money from other eligible retirement savings plans.
Government contribution of 1% of employee salary plus other contributions up to 5%.
Life Insurance
Federal Employees’ Group Life Insurance (FEGLI) which employees can be carried into retirement. It offers affordable coverage and benefits:

Basic Life Insurance Premium – VA pays 1/3 of this coverage.
Standard, additional, and family coverage.
Long Term Care Insurance
Employees can plan ahead of future health care needs for: Nursing home care, assisted living facility care, home health care, hospice care, respite care, and other long term care services.

            It is worth noting that VA is contributing reasonable amount for employee’s insurance plans. Most employers nowadays are depriving the same benefits to their employees especially when their companies are under a cost-cutting effort. The problem with other employers especially among the private sectors is that they are often caught on late remittance for their payments on insurance payments despite the fact that these amounts were already deducted from employees’ salaries.

VA Health Care and Benefits

Health Insurance
VA health insurance is comprehensive, affordable, and flexible. VA contributes approximately 75% of biweekly health benefit premium. Employees can opt with premium conversion, allowing payments to be done in pre-tax dollars.

Employees may choose from:

Health Maintenance Organizations (HMO)
Fee-for-Service Health Plans
Employee Assistance Programs
VA offers assistance employees with wellness assessment, referral, and short-term voluntary basis counseling including family members, and health and fitness facilities.
Health Care Screenings
Provides regular health checkups for prevention of long-term health problems such as glaucoma, high cholesterol, diabetes, and depression.
Health Care Centers
Staffed with trained and experienced physicians and nurses providing health care screenings to employees.
Health Care seminars
Increase employee awareness on health problems.

            The beauty with VA is that because the organization caters to providing quality service to American veterans, VA employees can enjoy similar benefits. Providing assistance programs to employees is one that makes compensation & benefits package competitive (Smith & Mazin, 2004, p. 136). VA provides variety of services which employees can choose from. The problem with private employers often comes in from the cost of giving employee assistance services. The higher the cost, the more it’s possibly deprived.

VA Continuing Education and Reimbursement

Another way of maintaining work/life balance for employees is VA’s training and educational programs. Employees may voluntarily or necessarily enroll to courses which is crucial to the improvement of employee’s performance. It is good to know that VA provides its employees with continuing support for growth and development while conducting federal service.

Student Loan Repayment
VA provides Student Loan Repayment Program offering eligible employees with $10,000 per year, with lifetime maximum of $60,000 to help repay student loans.
Tuition Reimbursement
VA provides eligible employees with monetary awards for medical or work-related training support or student loan payments. VA has two programs offered:

Employee Incentive Scholarship Program (EISP) – scholarship for earning a degree or training in health care discipline where recruitment or retention is hard. Requires at least 1 to 3 years of full-time VA service.
Education Reduction Repayment Plan (ERRP) – employees can loan up to $45,364. Qualification: employees appointed to direct patient care services, or service incident to direct patient care.

VA Employee Training and Educational Development Programs

Online Learning
VA Learning Online (VALO) – web-based learning offering 1500 e-learning courses which employees can access 24 hours a day at work or at home. This aims professional development opportunities for employees.
VA Knowledge Networks
VA provides a state of the art digital satellite systems which delivers learning and professional performance development aired on 4 channels 24/7.
Colleges and Universities
Employees can sign up and may quality for general or specialized course work from nearby universities and colleges. Employees may also elect for temporary assignments to other agencies to broaden work experiences.
Managers and Executive Training
Nationally recognized executive development program sponsored by private sector organizations and universities.

VA Retirement Benefits

Retirement Benefits
VA employees are part of Federal Employees Retirement System (FERS) which offers:

Monthly retirement benefits after 10 years of Federal Service.
Portable retirement benefits where Social Security Components can be carried over to employee’s new employment.
Disability Retirement
Long-Term Disability benefits which requires at least 18 months of federal service.

            VA recognizes the value of employees’ years of federal service. Federal Employees Retirement System is a retirement plan that provides benefits from Basic Benefit plan, Social Security, and the Thrift Savings plan. The last two, Social Security, and the Thrift Savings plan can be carried over to the next employment when you an employee leave federal service before retirement.

Comparison with Other Employers

            In general, VA’s employee relation and compensation and benefit packages offer more advantage to employees when compared to employers especially among private sectors. Its flexible working hours, unlimited number of sick days leave allowed to be carried over to the next year, its retirement plan, income protection strategies, and employee assistance – offers comfortable, and balanced work/life opportunities for its employees.


            Based on my personal understanding, VA’s employee relation, and compensation and benefits packages are effective. However, if they want to keep good working relationship and high employee retention rate, they must always be watchful with their work/life balance idealism. Providing flexible working hours for employees is good, but at some point when not structurally done can become threatening. Employees may within the span of time working under this type of condition develop some kind of sarcastic behavior (abuse flexibility of working hours). One way to avoid this is to regularly give recognition and reward system, conduct performance appraisal regularly, regularly informs employees of VA’s short and long-term goals, and motivate them to cooperate in working towards VA’s goals.


Smith, S. & Mazin, R. (2004). The HR Answer Book, an Indispensable Guide for Managers and Human Resource Professionals.United States of America: Amacom

The United States Department of Veterans Affairs Website. VA Job Benefits. Retrieved Feb. 10, 2009 from http://www.va.gov/jobs/job_benefits/benefits.asp

The US office of Personnel Management Website. Retrieved Feb. 9, 2009 from http://www.opm.gov/retire/


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Employee Relations and Compensation and Benefits Packages. (2016, Sep 03). Retrieved from https://graduateway.com/employee-relations-and-compensation-and-benefits-packages/