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Fringe benefits are any benefits that employers give employees in addition to their salary or
hourly wage. Some employers offer these benefits to all employees while other employers offer
them as an incentive to individuals who provide notable contributions to their workplace.
Examples of Fringe benefits: (i) Retirement benefit plans (ii) Group health insurance
(iii) Medical, prescription, dental, and vision plans (iv) Long-term care insurance plans
(v) Life insurance coverage (vi) Relocation assistance (vii) Legal assistance plans
(viii) Transportation benefits (ix) Child care benefits (x) Adoption assistance (xi) Employee
discounts (e.g. wellness programs, hotels and resorts, movie theaters, theme parks, business
establishments, etc.)
Benefits and services are need to be provided to the employees on the basis of a
genuine interest in the protection and promotion of their well-being
To satisfy the real need of the employees
Benefits need to be cost effective
Benefits need to be as broad-based as possible
Administration of the benefits need to be preceded by sound planning
Employees need to be educated to make use of the benefits
Fulfilling wishes of employees as expressed by their union representatives and
bargaining the power of union which has to be considered
B)Extra Pay For Time Worked: This Category Covers The Benefits Such As: Premium Pay,
Incentive Bonus, Shift Premium, Old Age Insurance, Profit Sharing, Unemployment
Compensation, Christmas Bonus, Deewali Or Pooja Bonus, Food Cost Subsidy, Housing Subsidy,
Recreation.
C)Employee Security
Physical And Job Security To The Employee Should Also Be Provided With A View To Promoting
Security To The Employee And His Family Members. The Benefit Of Confirmation Of The
Employee On The Job Creates A Sense Of Job Security. Further A Minimum And Continuous
Wage Or Salary Gives A Sense Of Security To The Life.
D)Retrenchment Compensation:
The Industrial Disputes Act, 1947 Provides For The Payment Of Compensation In Case Of Lay-
Off And Retrenchment. The Non-Seasonal Industrial Establishments Employing 50 Or More
Workers Have To Give One Month’s Notice Or One Month’s Wages To All The Workers Who Are
Retrenched After One Year’s Continuous Service. The Compensation Is Paid At The Rate Of 15
Days Wage For Every Completed Year Of Service With A Maximum Of 45 Days Wage In A Year.
Workers Are Eligible For Compensation As Stated Above Even In Case Of Closing Down Of
Undertakings.
E)Lay-Off Compensation:
In Case Of Lay-Off, Employees Are Entitled To Lay-Off Compensation At The Rate To 50% Of The
Total Of The Basic Wage And Dearness Allowance For The Period Of Their Lay-Off Except For
Weekly Holidays. Lay-Off Compensation Can Normally Be Paid Up To 45 Days In A Year.
1. Increased entreat: Employee benefit should be given so as it will help the dedicated and
hard working employees the growth and satisfaction of being in an organization. It often helps
to bring along a spirit of ownership by the employees towards their organization. There have
been various surveys across organization that says that hard working and dedicated employees
are the reason why they aim at providing benefits to the employees. The most important thing
an organization will be in need of the employees who are dedicated towards them and to keep
them in that organization for specified stimulated time to the employees
2. Minimizing the throughput: Often it seems difficult for a business to maintain its policies if
the people working under them are constantly going and coming around. To show that the
organization cares about the employee, it is required to offer employee benefits for them.
Loyalty works best for the organization. Loyalty helps in bringing the people and the
organization closer. By keeping the benefits to the employees it helps them to stay in the
organization for a longer period of time. By minimizing the throughput and keeping the senior
and the most dedicated employees stay in the organization it will eventually help the
organization to grow better.
4. Dedicated Workforce: The organization expects the employee to work with full dedication
and offer their work for the sake of an organization and on the other hand the organization
keeps the employees delighted so that they will serve to them for a long period of time.
Providing adequate benefits for the employee and asking for survey often from the employee
to help them in any possible way to enhance their performance will eventually help both the
organization and the employee grow.
5. Health is the wealth: Offering benefits may vary from organization to organization but health
benefits are those benefits that enhance the growth of the organization up to a greater limit.
Assuming if an organization offers a vivid variety of health plan for the employee under the
workforce and offering specific sick leave within stipulated time period will help the employee
to take the leave on the day they are not feeling well and at the same time their salary will not
get affected. By offering various medical plans for the employees the employees can inculcate
and support for the upliftment more for both themselves and their family and the organization
with which they are engaged.
6. Regularity in health checkups: Regular health checkups and proper medical steps are taken
under the various insurance plans from time to time which will first and foremost help in
detecting any disease if it is there and secondly will provide proper medication that will boost
the employee’s immune system and help him get prevented by any disease at its initial phase.
This way of providing daily checkup will ensure the organization that the employee will be
taking the minimal leaves as they will not be in need of additional sick leaves as their health will
be maintained from time to time and actions are being performed over them instantly
7. Social-Security: This will help them to contribute to the safety and security of themselves
and help them to get associated with the organization for a longer period of time. Retirement
plans and other life insurance plans also get into account for the employees. Retirement plans
helps the employees to properly maintain and get the money as a pension even after they are
not working anymore as an interest of the money they have deposited during the time they
were working. This amount helps them to live their life happily after retirement.
8. A step for betterment: The only motive of providing health benefits is to make the
employees healthier so that they can work in the organization for a longer period of time with
full determination and dedication. It is a good plan to offer medical insurance to the employees
and their families. To keep the productivity of the organization active they need to keep a good
and professional attitude. The more an organization cares about the employee, the more the
employee gives in return to the organization considering the organization as their own being.
9. Increased Productivity: By offering employee benefits, the employee gets more reason to
care about the company they are serving and being more dedicated towards them as much as
possible. A happy employee will help in better productivity for the organization. If the
employees working under an organization seeks attentions from the organization when and
where required they in return will favor hard work with full dedication that will eventually help
the organization to grow and increase profit, quality and productivity will be the outcome from
such dedicated employees.
10. Upbringing employees growth: Private as well as the government employees both
contribute their parts for the upbringing of their respective workplace. Not only in the worldly
affairs but within an organization, schemes are given under which the employee working the
most will get additional benefits and for this policy of reward management things are being
initiated across various organization to keep the employee have the spirit of competency. This
competency will drive the individual to perform better than other employees to get the
maximum benefit out from their work
11. Flexible Working hours: Flexibility in the working hour helps the employee to complete
their work assigned to them as per their condition .Flexibility does not include that the
employee will get flexible hour or any retention from the stipulate working hour given to them
rather it will provide an ease that if for certain reason an employee is unable to give full time in
a particular day, she/he can compensate that by working extra for the next day or so. Flexibility
in the working hours helps the employee to work efficiently without any specific fear from
constraints.
12. Tax advancement: Income tax deduction helps the employee for contributing in the tax
with minimal tax deduction. The benefit offered to the employees under this tax advancement
helps the employee to reduce the tax as much as possible. If the business is incorporated, all
costs for the insurance and the employees are deductible. This will also help the employee for
financial saving. . This competency will improvise both the company’s profit as well as the
employee’s growth. Offerings a good health benefit will help in creating a stable workplace and
will help in creating a position in the world for them.
13. Benefits offering advancements: It is often visible that the more the organization provides
benefits, the more their staff works. Flexibility helps in providing an ease for the employee and
helping them to work as per their wish but still they are asked to meet the deadline and not
take their work for granted. Sick leave benefits are still given to the employee so that they stay
up in their home and get well soon so that it does not becomes contagious for the other
employees.
1. Difficult to keep everyone happy: As in an organization the plans chosen are such that are
benefited for majority of the employees but some or few employees will not be satisfied with
the current chosen policy and with the amount they have to pay for their portion. The packages
chosen by the organization are often not too delightful and are meant more for their personal
benefit. Plans are often changed every year in different organizations and business which
hinders the growth of employee in the company as the insurance plans get along on the annual
basis gets affected.
2. Legalization and authentication curse: Often the benefits create concerns regarding legal
complaints against both the employees and the organization on breaking certain policy
intentionally or unintentionally. On breaking up of the specific policy and not paying the
retention carries legal fees that need to be submitted to get out of trouble which at times
becomes troublesome.
3. Too expensive for the employees to fit into: No matter how much amount the health
benefits are favoring the company but they still are going to deduce amount from the
employee more than what they actual want to offer. Smaller businesses are charged more than
the other because they do not have many employees within them while big businesses finds
benefit expensive as they need to pay portion of every employees benefit.
4. Management of budget becomes difficult: The cost associated with the health insurance is
rising day by day which in turn are increasing the turnover rate of the company. If the cost
increases the company for the compensation forces the employees to give more money to
accommodate their plans in the budgets. If the company cannot afford the increase in
insurance, it will force the employee to switch to a new insurance package which will take a
great deal of time to find a suitable package and then investing in them from the very initials.
5. Difficulty in switching: Switching often becomes very difficult to manage and company loses
many employees if proper actions are not being taken. The major disadvantage associated with
it is that the more the employees in the organization will be, the more the company need to
pay to the insurance company to manage the account of different employees.
(I)Rising Prices And Cost Of Living Has Brought About Incessant Demand For Provision Of Extra
Benefit To The Employees.
(Ii)Employers Too Have Found That Fringe Benefits Present Attractive Areas Of Negotiation
When Large Wage And Salary Increases Are Not Feasible.
(Iii)As Organizations Have Developed Ore Elaborate Fringe Benefits Programs For Their
Employees, Greater Pressure Has Been Placed Upon Competing Organizations To Match These
Benefits In Order To Attract And Keep Employees.
(Iv)Recognition That Fringe Benefits Are Non-Taxable Rewards Has Been Major Stimulus To
Their Expansion.
(Vi)The Growing Volume Of Labor Legislation, Particularly Social Security Legislation, Made It
Imperative For Employers To Share Equally With Their Employees The Cost Of Old Age, Survivor
And Disability Benefits.
(Vii)The Growth And Strength Of Trade Unions Has Substantially Influenced The Growth Of
Company Benefits And Services.
(Viii)Labor Scarcity And Competition For Qualified Personnel Has Led To The Initiation,
Evolution And Implementation Of A Number Of Compensation Plans.
(Ix)The Management Has Increasingly Realized Its Responsibility Towards Its Employees And
Has Come To The Conclusion That The Benefits Of Increase In Productivity Resulting From
Increasing Industrialization Should Go, At Least Partly, To The Employees Who Are Responsible
For It, So That They May Be Protected Against The Insecurity Arising From Unemployment,
Sickness, Injury And Old Age. Company Benefits-And-Services Programs Are Among Some Of
The Mechanisms Which Managers Use To Supply This Security.
Employee services are employee benefits, but they are a more specific form of
employee benefit that employers offer to help instill loyalty among their workers. Small
business owners must decide which benefits and services to offer employees.
Employee compensation is the total amount an employee can expect to receive when working
for an organization. There are many different types of compensation packages that an
employer will offer employees. Human Resource Management: Help and Review / Business
Courses.
The goal is to give the employee enough information to help them make an informed decision
about the benefit choices available for themselves and their family, but not so much
information that they throw up their hands in despair. A Summary of Benefits , which provides
a brief description of each benefit in a consolidated, quick glimpse form, is a good tool to
highlight available benefits; and, although they are great during the open enrollment period,
they should be made available to employees year round. They are particularly good for
introducing new employees to the benefits available to them.
Another great tool for ongoing communication of benefit related material is a website
dedicated to providing information and resources related to the benefits offered on a year-
round basis. A good benefits website will have summary information of each of the benefits, as
well as links to resources that will provide more in depth information as needed. This is also a
good place for employers to post required plan information, such as plan documents, summary
plan descriptions, etc. Claim forms and important contact information can also be made
available via the website.Other items that can be useful in communicating with employees on
issues that relate to their benefits are:
According to the MetLife Study of Employee Benefits Trends, “Employees who are satisfied with
the benefits offered by their employer are three times more likely to be satisfied with their jobs
and feel more loyal to their employer.”
The communication plan should include a timeline of when you’ll be reaching out to the
employees and what mediums you’ll be using. Due to today’s multi-generational workforce, a
one-size-fits-all communication strategy around employee benefits will not be effective. As
more baby boomers forego retirement and more tech savvy millennials make up the workplace,
the stark differences in communication styles and preferences are becoming more pronounced.
Generation Y likes to use text messages, tweets and instant messages to communicate.
Baby Boomers and older Generation Xers prefer to use a phone to actually speak to
someone rather than to text or tweet.
Younger Millennial employees tend to use a lot of abbreviations and informal language in
their everyday communication. They prefer to communicate through social media.
If your outreach to these groups isn’t in the manner they prefer, your communications will not
be effective. Employers need to ensure that the overall communication plan takes each group
into consideration in order to increase their engagement. Using a combination of the available
mediums usually works best to address the needs of each generation.
1. Collect facts: Collect facts about the history of the firm’s workers compensation.
Compare these figures to profits, sales, and salaries to see if they are out of proportion.
2. Be sure to understand: Be sure to understand the current programs in safety and health.
Are there areas that can be improved?
3. Invite outside vendors: Invite outside vendors especially insurance carriers, who often
have innovative plans and can propose alternative plans that will help curb rising costs.
4. Become more involved: Become more involved in the workers’ compensation
reforms in the states in which the company does business. Us voice may help to change
the process.
5. Communicate information: Communicate information about workers’ compensation
benefits to employees— it can keep them from taking an adversarial stance.
Future of Fringe benefits: The need of the employee never ends and employee has more
demands, so the employers must be prepared to meet the growing demand.
Conclusion: The benefit will help the employees to work better and stay with the organization
with which they are related for a long period of time. This policy of providing better employee
benefits helps in demonstrating solid benefits to the employee so that it helps in proving the
organization that they offer enough deed to keep their employees delighted. It sort of
generates stability amongst the organization and builds a relation which states that the
company has the power to praise their employees or the fresh talent by offerings. Government
also for increasing the economic security of employee is helping to keep this scheme
mandatory in different organizations.