Employee Benefits (How important is employee benefit and service impact their performances and satisfaction) – Research Paper Example
Employee Benefits What are Employee Benefits and Service? In his book, Human resource and personnel management: text and cases, Aswathappa points out that, employee services and benefits are variously also referred to as service programs, fringes or hidden payrolls. Employee benefits are optional, and can broadly be perceived as embracing a wide selection of different services and benefits that employees chance to receive as part of their wages and salaries compensation package. Examples of the benefits and services that an employee may enjoy include; group insurance, sick leave, vacation, retirement benefits, education advancement funding, day care, disability income protection and tuition reimbursement. The regular wages and salaries payments that employees receive are usually in the form of payments and, various compensations that are given to the employees based on their overall performance and other critical job factors (Aswathappa 319).
Benefits and services on the contrary are a form of indirect compensation mainly because they are typically usually extended as an inherent condition of employment. They are not in any way directly related to job performance but are usually extended as a basic condition of employment (Aswathappa 319).
Why Provide Employee Services and Benefits?
Nearly all organizations provide some sort of service or various benefits to their employees. One of the main reasons why benefits and services are essential is because they tend to represent increased earnings to a company’s employees. Most employees tend to prefer this mode of indirect remuneration as opposed to direct payments because an increase in one’s direct pay, only serves to further increase an employees taxable income, as opposed to most benefits, which are usually, not taxed (Aswathappa 320).
Most employers tend to use these indirect remunerations as opposed to direct payments mainly because they offer less distortion to a company’s salary structures, and are, therefore, easier to explain to a company’s shareholders as compared to direct payment (Aswathappa 320).
Fringe benefits such as educational and housing schemes help in building up a company’s corporate image, a factor that may contribute to an increase in a company’s sales revenue (Aswathappa 320).
The impact of Benefits and Services on Employee Satisfaction and Performance
According to Musse Abdifatah, Employee benefits and services have proven to be the most commonly asked aspect of employment, that is frequently asked by most prospective employees of their new employers. Although benefits for the most part might appear to be relatively quite expensive and almost useless from an employer’s perspective at the start, in hindsight, the advantages that these benefits bestow on employees are one of the most profitable expenses that an organization can accrue (36).
Employee benefits have been proven to aid in improving the overall productivity of a company’s employees. This is mainly because employees tend to become more effective as a result of their having peace of mind because they are assured of adequate security for not only themselves but also their families (Aswathappa 320).
Employees tend to feel a good sense of pride in their employer if they happen to be adequately satisfied with the current coverage (Aswathappa 320).
The awarding of good benefits and services to employees within a company’s helps the company in not only in making lucrative offers during the recruitment of highly qualified personnel, but also in the retaining of qualified employees as these employees are constantly assured of their job satisfaction (Musse 36).
Aswathappa, K. Human resource and personnel management : text and cases. New Delhi : Tata McGraw-Hill. 2005. Print.
Musse, Abdifatah. The Influence of Rewards and Satisfactions on Employees Performance in Organization: Rewards and Employees Performance. GRIN Verlag. 2012. Print.