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Employee Benefits and Services

2. They foster loyalty and act as a security base for the employee. The purpose of
such benefits is to retain people in the organization and stimulate them to greater
effort and higher performance. The provision of benefits and services can be and are
important in maintain the employees and reducing the turnover and absenteeism
low. Management is concerned with attracting and keeping employees, whose
performance meets at least minimum levels of acceptability and at keeping
absenteeism and turnover to tolerable levelsINTRODUCTION

They foster loyalty and act as a security base for the employee.

Management is concerned with attracting and keeping employees, whose performance


meets at least minimum levels of acceptability and at keeping absenteeism and turnover to
tolerable levels.

The provision of benefits and services can be and are important in maintain the employees
and reducing the turnover and absenteeism low.

The purpose of such benefits is to retain people in the organization and stimulate them to
greater effort and higher performance.

INTRODUCTION

3. Employee benefits and services Any benefits that the employee receives in addition to
direct remuneration Fringes embrace a broad range of benefits and services that
employees receive as part of their total package. It is based on critical job factors and
performance. Benefits and services however are indirect compensation because they are
usually extended as a condition of employment and are not directly related to performance
*fringe benefits are also called welfare expenses, wage supplements sub wages or social
charges, etcConcept

4. These benefit programs must be managed carefully to enhance recruitment and to boost
the morale of the employees Benefits and compensation provided to the employees
usually depend on the conditions of employment and other factors like security, safety,
health, welfare and recreation of employeesConcept

5. Employers preferences: Employers prefer to give benefits to employees as it enhances


employees morale and works as an effective motivational tool provided it is within the
accepted norms and limits Employee demand: To meet rising prices and increased cost of
living employees demand various types of benefits Example: Variable dearness allowance,
Enhanced HRAo Trade union demands: The growth and strength of trade unions has
substantial influence on the benefits and services a company offersWhy Organizations
Provide Benefits

6. The reaction of employees Social responsibility Tax consideration Bargaining


strength of the trade union Needs of the employees Ability to pay CostFactors
influencing the decision to set up a particular employee benefit and service program

7. Coverage of Benefits

1. Payment for time not worked

(a) Vacation (b) Holidays (c) Sick leave (d) Miscellaneous types of non-working plans (e)
Shifts premium

2. Employee Security

1. Severance pay2. Lay-off3. Guaranteed annual wage4. Supplementary unemployment


benefits5. Retrenchment compensation

3. Safety benefits

4. Health Benefits (a) Medical benefit or insurance (b) Managed care

5. Maternity benefit

6. Dependent benefit

7. Insurance benefits (a) Life insurance (b) Vision insurance (c) Dental insurance

8. Welfare and recreational facilities (a) Educational assistance (b) Legal assistance
(c)Housing facilities (d) Financial services (e) Employee assistance programs

9. Old age and retirement benefits (a) Provident fund (b) Pension (c)Deposit linked
insurance (d) Medical benefit (e) Gratuity (f) Retirement counseling
These are provided at the discretion of the management with consultation with the trade
unions. These services are provided at low or no cost to the employee. In addition to
fringe benefits, organizations also provide services that employees find
desirable.Employee services

14. Cafeteria service Flexible time Outplacement services Medical services


Educational services Recreational, cultural and social programs Financial and legal

services Housing services Child care facilities Transportation facilities Eating facilities
Services related to type of work performed- includes subsidies for the purchase and upkeep
of work clothing and uniform.These services include

15. The fringe benefits were high in mining and plantation industries low and very low in
manufacturing sector.The quantum of the bonus varied sector to sectorA. Payments for
time not workedB. Statutory fringe benefitsC. Voluntary benefits When a study was
conducted , it was revealed that 19,60,981 companies pay little over 2148.3 million in wages
and fringe benefits per year in India.Fringe benefits in India

16. Charge of Paternalism = When too many benefitsProblems raised by benefit programs
& Neglect of other personnel functions = Due to excessive concern from management they
stop emphasizing on other aspects of personnel programs which can develop a concern
among the employees . Maintenance of least productive worker = With increase in
benefits and services employees ,particularly when they are not very productive ,tend to
stick to their jobs and are not interested in changing them. Excessive Expenditure = Its a
very costly affair and involves a great deal of paper workservices are offered to employees
, a feeling develops that employers are playing the role of parents and workers are looked
upon as children.

17. These problems can be avoided if following steps are taken:- To establish benefit
objectives- To assess environmental factors- To assess competitiveness- To communicate
benefit information- To control benefit costs and evaluation Employees have little
awareness about such programs Managers take little interest in benefits program and
trade unions are almost hostile to schemes Lack of employee participation Organizations
have seldom established objectives, systematic plans and standards to determine the
variability of the programAdministration of benefits and services