Employee Benefits and Organization’s Success
Benefits given to the employees in addition to the salary or wages are called employee benefits and these benefits are given to the employees to fulfill their additional needs and requirements in order to motivate them and to maximize the loyalty and employee performance. Employee benefits act as an assurance to the employees for their well-being, safety, and protection. The main focus of providing employee benefits is to maximize the employee performance, to retain the employees, to maximize productivity, to reduce the absenteeism and to motivate the employees.
Usually, employee benefits vary with the job and designation and it is provided voluntarily or on the demand of the employees, trade unions and to fulfill the Government policies rules and regulations. Depending on the organization’s size, policies, beliefs, and values these benefits varies. Some organizations may believe that providing employee benefits can maximize the wealth of the organization and leads to economic development.
Objectives of employee benefit programs
- The main focus of providing employee benefits is to reach the employee expectations and needs.
- Employee benefits can attract the more skilled and efficient manpower
- To maximize the employee loyalty and morale
- To retain the employees and to reduce the employee turnover, cost of hiring and training & development
- To acquire competitive advantage with the highly skilled and motivated employees.
- To reduce the conflicts and unionism in the organizations
- To meet the employee needs such as health and safety
Factors influencing in providing employee benefits
Needs of the employees
Employee need is the main factor which influences the organizations to provide employee benefits. These are the benefits given to the employees in addition to the normal pay in order to fulfill health, safety, security and various other needs.
Cost of living
Cost of living is one of the major constraints in providing various benefits such as housing and transportation allowances, etc. The strategy involved in it is to reduce the cost associated with employee turnover and to motivate the employees.
Organizations ability to pay
Employee benefits provided by the organizations vary with the size and wealth of the organization. Generally, organizations show interest to provide various benefits to the employees but it is not possible to fulfill by many smaller organizations due to the scarce financial resources and profitability.
Social responsibility nature of the organizations makes them provide various employee benefits for the well-being of the employees. These involve providing low priced canteen facilities, health, safety, crèches and educational facilities to the employee’s children etc.
On demand of the employees and trade unions
Many organizations provide employee benefits on the demand of the employees and trade unions; here their demands may vary from job to job organization to organization. In some organizations, active trade unions create awareness in the employee groups and fight on behalf of employees for the benefits.
Types of employee benefits
According to the influence of trade unions, Government policies and rules, on the demand of employees and on the nature of organization’s interest employee benefits may differ from job to job and company to company, Various types of employee benefits include payment for non-working days, employee security, safety benefits, health benefits, maternity benefits, dependent benefits, insurance benefits, retirement benefits, and welfare & recreation facilities.
Payment for non-working days
Pay for time not worked is one of the costly benefits because organizations have to pay money and time to fulfill the benefit for time not worked. These are also called supplementary pay benefits, which involve holidays, vacations, sick leave, jury duty, military duty, funeral leave or bereavement leave, sabbatical leave, maternity leave and unemployment compensation and insurance benefits for terminated employees.
Employee security benefits
Employee security benefits not only satisfy the employee needs but these can highly motivate the employees and helps in reducing employee turnover and cost. These security benefits involve guaranteed annual wage, severance pay (pay for early termination of contract), layoff, supplementary unemployment benefits, and retrenchment compensation.
Safety and health benefits
Providing safety and health benefits highly reduces the rate of accidents, occupational diseases, and workplace hazards. Safety benefits involve designing a safe work environment by providing safety goggles, helmets, warning lights, guards, automatic shutoffs etc. Health benefits involve providing medical benefits, medical insurance, cashless hospitalization group health insurance, and defined contribution health plans (organizations fix cost on monthly basis).
According to the maternity benefits act organizations have to provide benefits to the pregnant woman employees of the organization, these involve paid maternity leave of minimum 12 weeks, medical bonus, free meals for pregnant and lactating employees.
Insurance benefits can act as a promise to take care of the employees and their family members. These involve life insurance, vision insurance, dental insurance, group life insurance and legal insurance.
Various plans of retirement benefits help the employees after their valuable services to the organizations. These involve pension plans, gratuity, provident fund, deposit linked insurance, medical benefits, retirement counseling and deferred compensation plans.
Welfare and recreation facilities
Welfare and recreational facilities involve providing educational facilities to the employee’s children, providing housing facilities, legal assistance, financial services and cooperative credit societies, employee assistance programs, game zone, fitness zone, team outings etc.
- Bicycle and car loans
- Health screening for employee partners
- Mobile phones
- Motorbikes and breakdown cover
- Company car
- Discounted travel
- Free sample products
- Travel insurance
- Discount coupons
- Additional contribution in retirement benefits
- Cash plan for health & hospital
- Legal advice
- Season tickets
- Membership in gym and game zone
- Game zone for employee’s children
- Cooperative stores
- Free medical camps for retired employees
- Providing computers and laptops
- Financial advice and support
- Housing plans
Various stages in employee benefit programs
While framing employee benefit schemes, organizations have to listen to the requirements and problems of the employees in order to design better employee benefit programs. Employee requirements and problems may differ from place to place and industry to industry. Active listening to the employee’s problems enables the organizations to implement better solutions.
The next stage in employee benefits program is problem identification and analyzing, it helps the managers in designing well-suited benefit programs.
The third stage involves searching for possibilities and implementation; it involves finding strengths and opportunities from the internal and external environment for providing benefits suitable to their needs and lifestyle.
Communicating and feedback are the last steps in the entire process of designing and implementing employee benefit programs, here communicating with employees about benefit schemes can make organizations in creating awareness and taking feedback helps in fulfilling the gap between the achieved and expected.
Advantages of providing employee benefits
- Employee benefits can fulfill the needs and expectations of the employees
- It motivates the employees and helps in maximizing productivity
- Helps in increasing employee morale and loyalty
- It highly reduces employee turnover and cost associated with recruitment and training
- It helps in retaining the skilled employees
- Helps in reducing organizational disputes and conflicts
- It helps in gaining competitive advantage