Human Capital Management Chapter: 4 EMPLOYEES BENEFITS & SERVICES Introduction Management is concerned with attracting & keeping

employees, whose performance meets at least minimum levels of acceptability, & at keeping absenteeism & turnover to tolerable levels .The provision of benefits & services are important in maintaining the employees & reducing the turnover & absenteeism low. The financial incentives are paid to specific employees whose performance whose work is above standard. On the other hand the employees benefits & services are provided to all the employees based on their membership in the organization. Definitions: According to the Employee Federation of India has defined Fringe Benefits Fringe Benefits includes payments for non working time, profits & bonus, legally sanctioned payments on social security schemes, workers compensation, welfare & contribution made by the workers under such voluntary schemes for the post retirement, medical, educational, cultural & recreational needs of the workmen. According to the Cockman Those benefits which are provided by the employer to or for the benefit of the employees & which are not in the form of wages, salaries & time related payments. Features of Fringe Benefits 1) Wages are directly related to the work done & paid regularly usually weekly monthly & benefits, which a worker enjoys in addition to the wages or salary he receives. 2) Benefits are not given to workers for any specific jobs they have performed but are offered to them to stimulate their interest in their work & to make their job more attractive & productive for them.

3) Fringe represents a labour cost for the employer, it is basically an expenditure incurred 4) Fringe is never a direct reward geared to the output, effort for merit of an employee not on the basis of hard work or long hours of work but on the basis of length of services, his sickness, sex the hazard of life. 5) The fringe benefit is enjoyed by all. 6) Fringe benefit must constitute a positive cost to the employer & should be incurred to finance an employee benefit. OBJECTIVES OF FRINGE BENEFITS To create & improve sound industrial relations. To Boost up employee morale To motivate the employees by identifying & satisfying their unsatisfied needs. To provide qualitative work environment To protect health & safety of the employees To promote employees welfare by providing welfare measures like recreation facilities. COVERAGE/SCOPE OF BENEFITS 1) Employee Security Payments: (a) Employers Contribution stipulated in legal enactment: old age, survivor, disability health (b) Payments under the workmens compensation Act. (c) Supplemental unemployment benefits (d) Accident insurance (e) Pensions (f) Contribution to the saving plans & health & welfare benefits. 2) Payment for the time not worked: (a) Rest Period: Among the office jobs the breaks popularly known as rest break or coffee break are allowed during the day to the workers

(b) Holidays: Holidays which includes Christmas, New Years, Holi, Diwali on which the employees have to be paid & they do not have to work. (c) Vacation: Paid vacations vary from 15 days to 1month in a year. (d) Sick Leave: This is provided to the employees when is out on illness (e) Severance Pay: This provides one time payment to an employee when he is terminated (f) Leave of Absence: These are generally educational leave provided to managers or management trainees during training period. (g) Pension Programmes (h) Insurance (C) Bonus & Awards: These consists of financial amenities & advantages as holidays, over time & shift premium, attendance bonus, Diwali bonus etc. EMPLOYEES SERVICES Introduction: In addition to the above fringe benefits, organization provides a wealth of service that employees find desirable. These services are usually provided by the organization at no cost to the employees. These services are provided at the discretion of the management & are generally are concern to trade union. These services mainly include: 1) Services related to the type of work performed, including subsidies for the purchase & upkeep clothing, uniforms 2) Eating facilities cafeteria, lunch rooms, canteens, lunch rooms 3) Transportation facilities including parking & bus services 4) Childcare facilities, comprising nurseries, day care centers for children. 5) Housing services including company owned housing projects. 6) Financial & legal services including sponsoring of loan funds. 7) Recreational social & cultural programmes including athletics, beauty, social clubs, parties, picnics. 8) Educational services 9) Medical services 10) Flextime

--------------------------------------------------------------------------------------Questions for Discussions 1. What do you mean by fringe benefits? What is the rationale behind offering benefits to the employees? 2. Appreciate the need for and significance of Fringe Benefits.