MEANING OF FRINGE BENEFITS: Fringe benefits may be defined as wide range of benefits and services that employees receive

as an integral part of their total compensation package. They are based on critical job factors and performance. Fringe benefits constitute indirect compensation as they are usually extended as a condition of employment and not directly related to performance of concerned employee. Fringe benefits are supplements to regular wages received by the workers at a cost of employers. They include benefits such as paid vacation, pension, health and insurance plans, etc. Such benefits are computable in terms of money and the amount of benefit is generally not predetermined. The purpose of fringe benefits is to retain efficient and capable people in the organisation over a long period. They foster loyalty and acts as a security base for the employees. FEATURES OF FRINGE BENEFITS: Different from regular wages: Fringe benefits are different from regular wages as such benefits are those payments, which an employee enjoys in addition to wages he receives. It is a supplementary payment and provides support to an employee. Employee motivation: Fringe benefits are not given to employees for performing certain jobs. The purpose is to encourage them to take more interest in the assigned work. Useful but avoidable expenditure: Fringe benefits constitute a labour cost for the employer. Not directly linked with efforts: Fringe benefits are not direct reward for the efforts made or the production given by an employee. Beneficial to all employees: Fringe benefits are a labour cost but its benefits should be made available to the entire labour force and not to a small group of employees.

OBJECTIVES OF FRINGE BENEFITS: To supplement direct remuneration: Fringe benefits supplement regular pay of employed. It raises the total earnings of an employee and provides better life and welfare to him. Employers prefer fringe benefits: employers prefer this indirect remuneration to direct pay increase. To retain competent employees: Fringe benefits create satisfied labour force. In addition, the management can attract and retain competent personnel in the organisation by offering liberal packet of fringe benefits. To develop good corporate image: Fringe benefits help to develop a good corporate image.

To raise employee morale: Liberal package of Fringe raises the morale of employees.

LIMITATIONS OF FRINGE BENEFITS: There are some limitations of Fringe Benefits. These are: Fringe Benefits may lead to unhealthy competition among employees The expected benefit may not be available if the monetary benefits are not adequately attractive to employees. The motivation may not be as per expectation if the implementation of the benefits scheme is not transparent.

ADVANTAGES OF FRINGE BENEFITS There are certain advantages of Fringe benefits. These are: Fringe benefits provide support to remuneration paid to employees. Fringe benefits improve efficiency and productivity of employees. Fringe benefits act as an added attraction to the employees. Fringe benefits reduce monotony and fatigue of employees. They make employees efficient and co-operative for whatever organisational changes required to be introduced. Fringe benefits raise morale of the employees. They develop affinity for the organisation. Fringe benefits develop good corporate image and raise market standing of the organisation. Fringe benefits act as a motivating force. They motivate employees and induce them to work for the progress and prosperity of the organisation.

TYPES OF FRINGES/ FRINGE BENEFITS: (1) Payment for time not worked by the employee: Holidays. Vacations. Leave with pay and allowances. (2) Contingent and deferred benefits: Pension payment. Group life insurance benefit. Group health insurance. Sick leave, maternity leave, child care leave, etc. Suggestion/service award Severance pay. (3) Legally required payments: Old age, disability and health insurance Unemployment compensation Worker's compensation.

(4) Misc. benefits: Travel allowances. Company car and membership of clubs, etc Moving expenses. Child care facilities. Tool expenses and meal allowances, etc Fringe Benefits in India:1. Statutory 2. Voluntary Statutory are compulsory and the employer has to give them to his employees. These benefits are generally social security and include gratutity and pension payments, the employers contribution to the employess provident fund. Voluntary include retirement benefit, medical care, compensation for injuries, subsidized food and housing, educational and cultural facilities.