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INTRODUCTIONManagement is concerned with

Attracting and keeping employees, whose performance meets at leastminimum levels of acceptability.

And at keeping absenteeism and turnover to tolerable levels.

The provision of benefits and services can be and are important inmaintaining the employees.

It helps in reducing or keeping the absenteeism and turnover low

Financial incentives are paid to specific employees whose work is above

standard. Employee benefits on the other hand, are available to all employees

based on their membership in the organization.

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Meaning These benefits are usually known as Fringe Benefits.

The International Labour Organization has defined fringe benefits as Wages are often augmented by special cash benefits, by the provisionof medical and other services, or by payments in kind that form part ofwage for expenditure on the goods and services.

In addition, workers commonly receive such benefits as holidays with

pay, low-cost meals, low rent housing, etc.

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Features ofFringe Benefits Fringe Benefits are those payments or benefits which a

worker enjoys in addition to the wages or salaries he

receives.Offered to them to stimulate their interest in their

work and to make their job more attractive andproductive

Represents a labour cost to employer.

It is never a direct reward geared to the output.

It is enjoyed by all the employees.

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ObjectivesTo keep in line with the prevailing practices of offering

benefits which are given by similar concerns.

To recruit and retain the best personnel.To foster good morale.

To improve and furnish the organizational image.

To provide for the needs of the employees and protect

them against certain hazards of life.To comply with benefits regulations.

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Factors Determining Fringe BenefitsCost

Ability to pay

The needs of the employeesThe bargaining strength of the Trade union

Public relations

Social responsibility

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Classification ofFringe Benefits

Fringe Benefits

EmployeeSecurity

Payments

Payment forTime Not

Worked

Bonus andA

wards

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Contd..Employee SecurityPayments

These include:-

Payments under the Workmens Compensation Act.

Accidental Insurance.

Pensions.

Contributions to saving plans and health and welfarefunds.

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Contd.Payment for Time Not Worked

These include:-

Rest Period

Holidays

Vacations

Sick Leave

Severance Pay

Leave of absence

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Contd.Bonus and Awards

These consist of financial amenities and advantages such

as:-Holidays

Over time and shift premiums

Attendance bonus

Diwali BonusProfit-sharing bonus

Suggestion Awards

Year end Bonus

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Employee ServicesThese services are usually provided by the organization at no cost to theemployee or at a significant reduction from what might have to be paidwithout the organizations support.These services include:-

Eating facilities Transportation facilities Child care facilities Housing services Financial and legal services Purchasing services Recreational, social and cultural programmes Educational services Medical services Flexitime

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Problems raised by Benefit Programmes

Change of Paternalism

Excessive Expenditure

Fads become FashionableMaintenance of the least productive workers

Neglect of other personnel functions

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Case Study: Carter Cleaning Company It has traditionally provided only legislatively required

benefits for its employees.

At present Jennifer can see several potential problems withthe companys policies regarding benefits and services,such as:

She wants to know, what the other companies are providingto their employees.

High labour turnover

Low productivity

Dissatisfaction among the employees

No formal policy or inconsistent policy

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Recommended Policy StatementThe Employee Benefit and Service Plan should include:-

Benefits:-

1. Insurance- Accidental, life and health2. Pension Scheme after retirement

3. Rest period at regular intervals

4. Paid vacations of 12 days per year

5. Sick leaves

6. Severance pay

7. Bonus on different occasions and year end bonus

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Contd.Services:-

There should be a provision for:-

1.C

ompany restaurants, cafeterias, canteens etc.2. Parking lots and bus services.

3. Day care centers for children

4. Company owned housing and subsidized housing.

5. Loan funds, income tax service, legal aid, saving plans.

6. Company operated stores and discounts on companyproducts.

7. Clinics and hospitals.

8. Flexitime.

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Advantages

Turnover will be reduced

Enhancement of moraleEmployee commitment will be more.

Increases the productivity

Goodwill

Employees will be more satisfied

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DisadvantagesCompanys cost will increase

Employees will demand more what they are getting

now, or in short, they will expect more and more.The employees who are not productive, they are given

these benefits which are not needed.

If benefits are given in excess, then the employees will

start thinking that these benefits are their right..

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How Jennifer can determine that the company

should have Day Care Centers or not

Jennifer can determine that is there any need of day carecenter or not in the following ways:-

She can go for a Questionnaire and ask for thefeedback from the employees. In this way she willcome to know about what employees need.

If the other companies in the same industry areproviding these centers then it is advisable that

Jennifer should also provide this service to heremployees.

She should also take into consideration the companysability to pay for day care centers.

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Thank You