Compensation and Benefits

Role of benefits in compensation
Benefits in compensation came as a fundamental tool for motivating
workers. In essence, companies offered these benefits in an effort to
encourage good management, as well as enhance the productivity of their
workers (Beam & MacFadden, 2001). They contributed immensely to positive
employee commitment and attitude to the company.
Reasons organization provides benefits to their employees
Benefits are offered to employees in an effort to provide them with a
chance to balance their official duties with non-work demands and
interests. Indeed, employees would legitimately take time from their
scheduled work without incurring any loss in the benefits and pay,
thereby assisting in the reduction of unapproved absenteeism from
one’s work (Beam & MacFadden, 2001). This would essentially enhance
the quality of service and product in the institutions.
Future trends of employee benefits
Employee benefits have become increasingly fundamental. While there may
never be legislation forcing companies to give such benefits, it is
evident that they will be extended to cover other aspects of the
employee’s personal lives. On the same note, they will be more likely
to take on a monetary angle especially considering that cash benefits
have been seen as highly motivating to workers.
Factors to consider when creating a benefits plan
While benefits plans come with numerous advantages to the companies, it
is imperative that extra care is put in designing them. Consideration
should be placed on existing legal structures pertaining to benefits.
This is especially concerning age discrimination legislation more so
with regard to loyalty payments and benefits that increase with the
length of service. In addition, the uniformity of the plans so as to
prevent the possibility of creating categories of `haves` and `have
not`. Moreover, the flexibility of the benefits and the relative tax
inefficiencies should be considered to ensure that the benefits are not
taken up by taxes.
References
Beam, B. T., & MacFadden, J. J. (2001). Employee benefits. Chicago, Ill:
Real Estate Education Co.
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