Chapter 13

Managing Employee Benefits

and Services

Human Resource Management, 5E 1

 Benefits and Services
• Why called FRINGE Benefits
• Difference between Benefits and Services

Human Resource Management, 5E 2

 Why Fringe Benefits
• Tax saving
• Less Salary Structure distortion
• Group plans benefits
• Portrays as Social Responsibility
• Tool to Attract competent people
• Building Corporate Image
• Theoretical perspective

Human Resource Management, 5E 3

 Examples of Fringes
• Legally Required Benefits- Old age
benefits, Health Insurance, Unemployment
allowance
• Contingent and Deferred Benefits- Medical
expenses, Group life insurance, Pension
plans, Maternity leaves, Child care leaves

Human Resource Management, 5E 4

 Examples of Fringes (Cont.)
• Payment for time not worked- Holidays,
Voting Allowances
• Other Benefits- Travel allowances,
Company car and subsidies, Moven
allowances

Human Resource Management, 5E 5

 Types of Non-monetary
Rewards Benefits and Services

Treats Knick-Knacks Awards

• Free lunches • Desk accessories • Trophies Office Environment
• Festival bashes • Company watches • Plaques • Redecoration
• Coffee breaks • Tie-pins, brooches • Citations • Office with a
• Picnics • Diaries/Planners • Certificates window
• Dinner with boss • Calendars • Scrolls • Piped music
• Dinner for the family • Wallets • Letter of • Flexible hours
• Birthday treats • T-shirts appreciation

Social Acknowledgement Tokens

• Informal recognition • Movie tickets On the Job
• Recognition at office get- • Vacation trips • More responsibilities
togetherness • Coupons redeemable at • Job rotation
• Friendly greetings, smiles, e-mail stores • Special assignments
• Solicitation of advice, suggestions • Early time-offs • Training
• Membership or recreation clubs • Anniversary, dating and • Representing the
• Use of company facilities for birthday company at public fora
personal projects allowance/presents

Human Resource Management, 5E 6

Administration of Fringe
BenefitsEnvironment

Establish Benefit
Objectives

Assess Environmental
Factors

Access Competitiveness

Communicate Benefit
Information

Control Benefit Costs

and Evaluation

Human Resource Management, 5E 7

 Guidelines to Make Benefits More
Meaningful
• Fringe benefit programmes should be looked at as a
worthwhile corporate instrument in HRM.
• Future policy planning in this area will have to keep in
view some fresh reference points. Non-unionisation and
skills shortage are no more relevant for policy
considerations.
• Any meaningful package of benefits must reflect some
perspective planning. Inflexibility brings stagnation.
• Separate programmes directly beneficial to workers from
those that are directed towards community welfare.
Clubbing them together adds to their cost. This may not
be liked by workers.
Human Resource Management, 5E 8
 Guidelines (contd..)
• It is advisable not to have a facility rather than
neglecting it in its administration.
• Poor internal communication hurts the programme in
at least three ways: (i) more money is spent for
officers’ welfare; (ii) excess money spent on corporate
image building at the cost of more bonus; (iii) priority
to officers’ children in admissions to schools.
Therefore, make the internal communication system
effective.
• Devise new ways to involve workers and their
representatives at all levels of planning and
implementation. Human Resource Management, 5E 9
 Reality Check
• Pick up five well known companies in your
city/town. Find out the benefits and
services offered by them to their
employees. Observe commonalities and
differences among them.

Human Resource Management, 5E 10