Benefits & services (fringe benefits

)
Dr.Devendra Kumar (MHA – III Sem. )
Acharya college of hospital administration Bangalore-32

10 Contact : dev_ten07@yahoo.co.in

04/20/09 1

CONTENTS
• Introduction. • Fringe Benefits. • Definitions. • Salient Features of fringe benefits. • Objectives of fringe benefits. • Kinds of fringe benefits.
10 04/20/09 2

CONTENTS
• Fringe benefits in India. • Fringe benefits and Tax. • Employee advantages. • Employee disadvantages. • Employer advantages.

10

04/20/09 3

Introduction
• Management concerned with attending 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 important in maintaining the employees and reducing or keeping turnover and absenteeism low.
10 04/20/09 4

Fringe Benefits
• Fringe benefits is a benefits which supplements thee employees ordinary wages and which is of value to them and their families in so for as it materially increases their retirement benefits.

10

04/20/09 5

Definitions
• According to the Glossary of current industrial relations and wage term:- fringe benefits are supplements to wages received by workers at a cost to the employers, the term encompasses a number of benefits paid vacation, pension, health insurance plans etc. which usually add up to something more than a fringe and is sometimes applied to a practice that may constitute a dubious benefits for workers.
10 04/20/09 6

Definitions
According to D.Belcher:- Fringe benefits are any wages cost not directly connected with the employees productive effort, performance, service or sacrifice.
According to The Employers federation of India:Fringe benefits includes payment for non-working time, profits and bonus, legally sanctioned payment on social schemes, workmen's compensation, welfare cess and the contributions made by employers under the such voluntary schemes as cater for the post retirement medical, education, cultural and recreational needs of workmen.The term also includes the monetary equivalent of free lighting, water, fuel etc which are provided by for workers, and subsidized housing and related services. 04/20/09
10 7

Salient features of fringe benefits

• These are supplementary to regular wages or salary. • These are paid to all employees based on their membership in the organization. • These are indirect compensation because these are not directly related employees performance. • F.B. involve a labour cost for the employer and not meant directly to improve efficiency. 04/20/09
10 8

Salient features of fringe benefits

• These raise the living standard of the employees. • Fringe benefits refers to items for which a direct monetary value to the employee can be ascertained eg.Provided fund, Pension etc, on the other hand services refers to the items like medical facilities, recreation etc.
04/20/09 • These benefits are may be statutory or voluntary. 9 10

Objectives of fringe benefits
• To recruit and retain the best employees. • To protect employee against the certain hazards eg. Life Insurance, Old age pension etc. • To improve motivation and morale of the employees by satisfying some unsatisfying needs. • To improve work environment and industrial relations. • to ensure Health, Safety and Welfare of the employees. • To develop the sense of the belongingness and 04/20/09 10 10 loyalty among the workers.

Objectives of fringe benefits
• To meet statutory requirements. • To satisfy the demand of the trade unions • To improve the public image of the organization.

10

04/20/09 11

Kinds of fringe benefits
• George R. Terry has enumerated as many 28 benefits under the fringe benefits. A few of them are – bonus for the quality work, Contribution to group insurance plan, travel expenses suggestion awards, medical leave with pay, overtime, university and trade course. • The Chamber of Commerce, USA has included 5 types of fringe benefits as1 Statutory payments such as old age pension, unemployment insurance, group insurance. 2 Payment for pension and labour welfare.
10 04/20/09 12

Continued….
3 Rest or leave with pay. 4 payment for time not worked. 5 Other benefits such as profit sharing , suggestions reward, reimbursement of tuition fees, festival allowance etc.

10

04/20/09 13

Fringe benefits in India
A. Payment for time not worked. B. C. D. E. F. Employee security. Safety and health. Workmen’s Compensation. Health Benefits. Voluntary arrangements.

G. welfare and Recreational facilities. H. Old age and retirement benefits.
10 04/20/09 14

A Payment for time not worked.
Paid holidays Shift premium Holiday pay Paid vacation

*According to factories Act, 1948, an adult worker shell have weekly paid holiday, Preferably Sunday.

*Companie s operating 2nd,3rd ,pay a premium to the workers who are required to work during the odd hour’s.
10

*Generally organizatio n offer double the normal rate the salary to those workers who work during holidays.

*Workers in manufacturing, plantations, and mining who had worked for 240 days during the calender year are eligible for paid vacation@ 1 day for every 20 days for adult.
04/20/09 15

B. Employee security
The minimum and continuous wage or salary gives a sense of security to the employees. The payment of Wage of Act 1936,The Minimum Wages Act 1948, the payment of Bonus Act 1965, provide income security to the employees. In addition to this the industrial Dispute Act 1947, provides for the payment of compensation in case of lay off and retrenchment
10 04/20/09 16

C. Safety and Health.
• Employees ‘ safety and health should be taken care of order to protect the employees against accidents, unhealthy working conditions and to protect the workers productive capacity. In India The Factories Act, 1948, stipulate certain conditions and requirements regarding working conditions with a view to safe working environment.
10 04/20/09 17

D. Workmen’s Compensation
• Workmen’s Compensation Act 1923, intended to meet the contingency of invaliding and death of a worker due to an employment injury or an occupational disease specified under the Act as the sole responsibility of the employer.

10

04/20/09 18

E. Health Benefits
Sickness benefits Maternity benefits The benefit is payable in cash to an insured women for confinement / miscarriage or sickness arising out of pregnancy with full pay leave up to as 12 wk, 6 wk, 30 days.

(Employee State Insurance Act 1948) Dependents benefits Medical benefits

Disability benefits Cash payment , free medical treatment. Temporary disablement benefits is about 72 of his % wages. For permanent disability 72 % of his wage
10

The benefit is payable for a maximum period of 91 days in any continuou s period of 365days.

In case of • Out pt. death, as services a result of •Specialist services of all employme branch nt injury •Investigations dependent •Immunization person are •Family planning eligible for services pension. •Supply of drug Up to the dressings 18 year of •Ambulance emergency age services04/20/09
•In pt.treatment.
19

F. Voluntary Arrangements.
• Most of the large Organizations provide services over and above the legal requirements to their employees free of cost by setting up hospitals, clinic’s, dispensaries,………

10

04/20/09 20

G.Welfare and Recreational Facilities.

• Welfare and recreational benefits includes Canteens, Consumes Societies, Credit Societies, Housing, Legal Aid, Employee Counseling, Welfare Organizations, Holiday Homes, Educational Facilities, Transportation, Parties & picnic’s, Miscellaneous.

10

04/20/09 21

H. Old Age and Retirement Benefits.
• Employees provided some benefits to the employees, after and during old age, with a view to create a feeling of security about the old age. These benefits are called old age and retirement benefits include Provided fund, Pension, Deposit linked scheme, Gratuity and Medical benefits.

10

04/20/09 22

H. Old Age and Retirement Benefits
• The employee Provided Fund Act provides for the institution of Provided fund for employees in factories and establishments. • Employees Pension Fund Act provides pension and life insurance benefits to the employees of various establishments. The payment of Gratuity Act, 1972 and Deposit Licked Insurance Scheme 1976 under the PF Act 1952, provides the respective benefits to the employees.

10

04/20/09 23

Insurance Benefits
• Insurance benefits are broadly divide in two types • 1. Life Insurance • 2. Health Insurance

• Life Insurance is probably the oldest form of company sponsored employee benefit. Grop life premium are considerably smaller than those of insurance purchased by the individual. 04/20/09
10 24

Insurance Benefits
• Health Insurance accidents and industrial diseases growing out of the job are compassable under state worker’s compensation laws US / UK, India ESI Act 1948.

10

04/20/09 25

Fringe benefits and Tax.
• India , officially the Republic of India, is a country in South Asia. It is the List of countries by area country by geographical area, the List of countries by population country, and the largest liberal democracy in the world.... ) the 'fringe benefits' are subject to the Fringe Benefits Tax • Fringe Benefits Tax • Fringe Benefits Tax is a taxation of most, but not all fringe benefits, which are generally non-cash employee benefits.... (FBT), which applies to most, although not all, fringe benefits.
10 04/20/09 26

Advantages to employee.
• Employee advantages • Peace of mind leading to better productivity as employees are assured of provision for themselves and families in any mishap. • Employees with personal life insurance enjoy additional protection • Confidence in company's EB schemes boost staff morale and pride in company
04/20/09 27

10

Employee disadvantages
• In the UK these benefits are often taxed at the individuals normal tax rate , which can prove expensive if there is no financial advantage to the individual from the benefit.

10

04/20/09 28

Employer advantages
• Helps attracts and retain better qualified employees. • Provides high risk coverage at low costs easing the company's financial burden. • Improves efficiency and productivity as employees are assured of security for themselves and their families. • Premiums are tax deductible as corporation expense, which means savings with quality coverage.
10 04/20/09 29

THANKS YOU

10

04/20/09 30

QUESTIONS

10

04/20/09 31

References:• • B. Flippo Edvin, Personnel Management, 6th edition, Pp- 330331. Park K, Park’s textbook of PREVENTIVE AND SOCIAL MEDICINE,16th edi., M/s Banarsidas Bhanot Publishers, Jabalpur,Pp-567- 570. Gankar S.V. & Mamoria C.B.,Personnel Management and cases, Himalaya publishing house, Pp-490. Joshi Rosy & Gupta Shakshi K, Human Resource Management ( With Case Study) Kalyani publishers,Pp-19.1519.19. www.google .com

• •

Note : this is just a Class presentation only which is share to all.
04/20/09 32

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.