Employee Benefits and Services

Employee Benefits and Services

Employee benefits and services include any benefits that the employee receives in addition to direct remuneration. The synonyms used are fringes, service programs, employee benefits and hidden payroll.

Indirect remuneration may:

·         Mitigate (Ease, Less) fatigue

·         Discourage labour unrest

·         Satisfy employee objectives

·         Aid recruitment

·         Reduce turnover

·         Minimize overtime costs

S.NO.	Examples of Fringes
1	Legally required payments: ·         Old age, survivors, disability, and health insurance (social security) ·         Worker’s compensation ·         Unemployment compensation
2	Contingent and deferred benefits: ·         Pension plans ·         Group life insurance ·         Group health insurance (Medical expenses, Disability income) ·         Guaranteed annual wages ·         Prepaid legal plans ·         Military leave and pay ·         Jury duty and bereavement paid leave ·         Maternity leave ·         Child care leave ·         Sick leave ·         Dental benefits ·         Tuition aid benefits ·         Suggestion award ·         Service award ·         Severance pay
3	Payments for time not worked: ·         Vacations ·         Holidays ·         Voting pay allowances
4	Other Benefits: ·         Travel allowances ·         Company car and subsidies ·         Moving expenses ·         Uniform and tool expenses ·         Employee meal allowances ·         Discounts on employer’s goods and services ·         Child care facilities

 

Non-Monetary Rewards

Types of Non-Monetary Rewards

(Benefits and Services)

Ø  Treats

o   Free Lunches

o   Festival Bashes

o   Coffee breaks

o   Picnics

o   Dinner with boss

o   Dinner for Family

o   Birthday Treats

Ø  Knick- Knacks

o   Desk accessories

o   Company watches

o   Tie-pins, brooches

o   Diaries/planners

o   Calendars

o   Wallets

o   T-shirts

Ø  Awards:

o   Trophies

o   Plaques/ Plates, medal

o   Citations

o   Certificates

o   Scrolls

o   Letter of appreciation

Ø  Office Environment

o   Redecoration

o   Office with window

o   Piped Music

o   Flexible Hours

Ø  Social Acknowledgement

o   Informal recognition

o   Recognition at office get-togethers

o   Friendly greetings, smiles, e-mails

o   Solicitation of advice, suggestions

o   Membership of recognition clubs

o   Use of company facilities for personal projects

Ø  Tokens:

o   Movie Tickets

o   Vacation Trips

o   Coupons redeemable at stores

o   Early Time-offs

o   Anniversary, dating, and birthday allowances/ presents

Ø  On the Job

o   More responsibility

o   Job rotation

o   Special assignment

o   Training

o   Representing the company at public fora

PRINCIPLES OF WAGES AND SALARY ADMINISTRATION

PRINCIPLES OF WAGES AND SALARY ADMINISTRATION

The generally accepted principles governing the fixation of wages and salary are:

(i) There should be definite plan to ensure that differences in pay for jobs are based upon variations in job requirements, such as skill effort, responsibility or job or working conditions, and mental and physical requirements.

(ii) The general level of wages and salaries should be reasonably in line with that prevailing in the labour market. The labour market criterion is most commonly used.

(iii) The plan should carefully distinguish between jobs and employees. A job carries a certain wage rate, and a person is assigned to fill it at that rate. Exceptions sometimes occur in very high-level jobs in which the job-holder may make the job large or small, depending upon his ability and contributions.

(iv) Equal pay for equal work, i.e., if two jobs have equal difficulty requirements, the pay should be the same, regardless of who fills them.

(v) An equitable practice should be adopted for the recognition of individual differences in ability and contribution. For some units, this may take the form of rate ranges, with in-grade increases; in others, it may be a wage incentive plan; in still others, it may take the form of closely integrated sequences of job promotion.

(vi) There should be a clearly established procedure for hearing and adjusting wage complaints. This may be integrated with the regular grievance procedure. if it exists.

(vii) The employees and the trade union, if there is one, should be informed about the procedure used to establish wage rates. Every employee should be informed of his own position, and of the wage and salary structure. Secrecy in wage matters should not be used as a cover-up for haphazard and unreasonable wage programme.

(viii) The wage should be sufficient to ensure for the worker and his family reasonable standard of living. Workers should receive a guaranteed minimum wage to protect them against conditions beyond their control.

(ix) The wage and salary structure should be flexible so that changing conditions

can be easily met.

(x) Prompt and correct payments of the dues of the employees must be ensured and arrears of payment should not accumulate.

(xi) For revision of wages, a Wage Committee should always be preferred to the individual judgement, however unbiased, or a manager.

(xii) The wage and salary payments must fulfil a wide variety of human needs, including the need for self-actualisation. It has been recognised that “money is the only form of incentive which is wholly negotiable, appealing to the widest possible range of seekers…. Monetary payments often act as motivators and satisfiers interdependently of other job factors.”

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Factors Influencing Employee Remuneration

Factors Influencing Employee Remuneration

1.      External Factors:

Ø  Labour market:

o   Demand and Supply of labour:

§  If the demand for certain skills is high and the supply is low. the result is a rise in the price to be paid for these skills.

§  if the demand for manpower skill is minimal, the wages will be relatively low.

§  The Minimum Wages Act 1948, is precisely meant to prevent labour exploitation.

o   Going Rate:

§  The going rate system involves fixing wages/salary rates in tune with what is paid by different units of an industry in a locality. Going rates are generally paid in the initial stages of plant operations.

o   Productivity:

§  is measured in terms of output per man-hour. It is not due to labour efforts alone. Technological improvements, better organisation and management, the development of better methods of production by labour and management, greater ingenuity and skill by labour are all responsible for the increase in productivity. Actually, productivity measures the contribution of all the resource factors - men, machines, methods, materials and management.

§  productivity can be measured at several levels - job, plant, industry or national, economic level.

Ø  Cost of living:

o   The cost-of-living pay criterion is usually regarded as an automatic minimum equity pay criterion. This criterion calls for pay adjustments based on increases or decreases in an acceptable cost of living index.

o   When the cost of living increases, workers .and trade unions demand adjusted wages to offset the erosion of real wages. However, when living costs are stable or decline, the management does not resort to this argument as a reason for wage reductions. The cost of living index at certain places is higher than other cities or centres.

Ø  Labour Laws:

o   Labour laws of state and central govt.

o   Wages boards, tribunals, fair wages committees

o   The Payment of wages act 1936, the Minimum wages act 1948, The Payment of bonus act 1965, Equal remuneration act 1976, The Payment of gratuity act 1972, The company act 1956.

Ø  Society:

o   Remuneration paid to employees has social implications too. The supreme court has been keeping social and ethical considerations in adjudicating wages and salary disputes.

Ø  The Economy:

o   A depressed economy will probably increase the labour supply, wages rate will be lower.

o   Cost of living will rise in an expanding economy, will impact the pay decisions.

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2.      Internal Factors:

Ø  Business Strategy:

                    i.      Rapid growth: High salary than competitors

                  ii.      Stability: Average payments

                iii.      Retrenchment strategy: Below average payments, incentives.

Ø  Job evaluation and performance appraisal:

                    i.      Establishing satisfactory differentiation among jobs

Ø  The Employee:

                    i.      Performance

                  ii.      Seniority

                iii.      Experience

                iv.      Potential

                   v.      Luck: Right Place at Right Time