fringe benefits on compensation management

FRINGE BENEFITS ON COMPENSATION MANAGEMENT

INTRODUCTION ON COMPENSATION

• Human Resource is the most vital resource for any organization.

• Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards.

• The good compensation will also serve the need for attracting and retaining the best employees. .

FRINGE BENEFITS…..

• Is defined as any privilege, service, facility or amenity, provided to employees

• Can also be a reimbursement for any purpose .

• Can be a free or concessional ticket for private journeys of employees and family members

• Need not be directly connected with the employees productive effort, performance, service or sacrifice

FEATURES OF FRINGE BENEFITS

• Different from regular wages

• Useful but avoidable expenditure

• Not directly linked with efforts

• Beneficial to all employees

• Voluntary in character

OBJECTIVES OF FRINGE BENEFITS

• To supplement direct remuneration

• Employees prefer fringe benefits

• To retain competent employees

• To develop good corporate image

• To raise employees morale

• To motivate employees

TYPES OF FRINGE BENEFITS INCLUDES

• Payment for time out work by employees

• Employment security , health protection

• Legally required payments

• Miscellaneous benefits

• Old age retirement

FRINGE BENEFIT PLANS

• Are of three types that includes : Modular plans Core plus plans Flexible spending plans

• Comprises of 40% of employee’s salary

FRINGE BENEFIT TAX

• Is a tax levied on fringe benefits provided to the employees

• Is levied from the employees when certain conditions are met

• Is a tax levied in addition to the cash salary paid

• Includes Provision of employees transportation to work

Approval retirement plans

Employee stock option plans

ADVANTAGES OF FRINGE BENEFITS ( 1 of 2)

For employees include :

•Support employee remuneration

•Raise employee efficiency and productivity

•Reduce employee fatigue

•Raise employee morale

ADVANTAGES OF FRINGE BENEFITS ( 2 of 2)

For employer include:

• Improves efficiency and productivity

•Companies can keep their key employees

• Savings with quality coverage

• Provides high risk coverage at low cost easing the company’s financial burden

DISADVANTAGES OF FRINGE BENEFITS

• More costly for small employers

• Increase administrative cost of organization

• Creates bad image for an organization if fails to pay it

FRINGE BENEFITS BY HCL

• Health checkup once in a year

• Facility for career development

• Transportation benefit

• Flight facility

• Claim and voucher for parents treatment

• HCL colony less than market price

CONCLUSION ON FRINGE BENEFITS

Thus on the whole fringe benefits Is a privilege, service, facility or amenity,

provided to employees Helps to develop corporate image Increases efficiency and productivity among

employees Helps the organization to retain its key employees Acts as a security for both employers and employees