Why does an employer need them?
Because employer wants the employees to work harder and earn more for the company.
Employer also wants that good employee stay with the company so that they will not have to spend money and time searching for another one.
Employee benefits help the employer do it – retain employees and motivate them to work more.
These are practices that will make an employee excited to come to work and make her more productive while she is there.
These benefits may be financial or non financial, long term or short term, and may include following;
- Remunerative wage structure which motivates the employee to contribute their maximum worth to the enterprise.
- Bonus to the employees either on festive occasions or as a reward to the employee for their high performance.
- Social security benefits for employee welfare in the form of provident fund, gratuity, medical facilities, compensations and insurance policies.
- Different type of leave benefits such as sick leaves, maternity leave
It is often noticed that attracting employees only with money is not always effective as some employees who are motivated by cash are less likely to enjoy their job.
Employee benefits can also go some way in meeting the employee’s psychological needs. Non – cash benefits and incentives have a role to play in fulfilling the psychological need – which is being recognized and rewarded for a job well done.
Such benefits are intangible benefits such as appreciation from a boss, likelihood of promotion, nice office, and more. Non-cash benefits can also create a closer bond between employee and employer.
For example – Technology company HP involved employee in its sponsorship of the London Film festival with screening of classical films, free cinema passes and competitions to win festival tickets. According to the director at HP – These programmes enable employees to broaden their knowledge of business activity and have some fun at the same time.
The organizations must understand to distinguish the balance between the economic transactions of the pay – which is why most of us go to work and the psychological context which makes an employee dedicated, committed and engaged.
Employee benefits whether tangible or intangible can be used individually or collectively, inside or outside the organization. Thus the employee benefits are the comforts and facilities given to employees to enable them to work in a healthy and peaceful environment.
Depending on the organization’s work culture and set up, employers can design, administer and manage the comprehensive benefit package for the employees.