EMPLOYMENT

BENEFITS

INTRODUCTION

Once you have great employees on board, how

do you keep them from jumping ship? One way is

by offering a good benefits package.

Many small-business owners mistakenly believe

they cannot afford to offer benefits. But while

going without benefits may boost your bottom line

in the short run, than penny-wise philosophy could

strangle your business's chances for long-term

prosperity.

OBJECTIVES OF FRINGE BENEFITS

The view point of employers is that fringe benefits form an

important part of employee incentives to obtain their loyalty and

retaining them. The important objectives of fringe benefits are:

1.To create and improve sound industrial relations

2.To boost up employee morale.

3.To motivate the employees by identifying and satisfying

their unsatisfied needs.

4.To provide qualitative work environment and work life.

5. To provide security to the employees against social risks like old age benefits and maternity benefits.

6. To protect the health of the employees and to provide safety to the employees against accidents.

7. To promote employee’s welfare by providing welfare measures like recreation facilities.

8. To create a sense of belongingness among employees and to retain them. Hence, fringe benefits are called golden hand-cuffs.

(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). The growth and strength of trade unions has

substantially influenced the growth of company benefits

and services.

Need for Extending Benefits to Employees

TYPES OF BENEFITS

Organizations provide a variety of benefits. The benefits are classified under four heads as given under:

Employment Security

Health Protection

Old Age and Retirement

Personnel Identification, Participation

and Stimulation

Employment Security

Benefits under this head include unemployment,

insurance, technological adjustment pay, leave travel pay,

overtime pay, level for negotiation, leave for maternity,

leave for grievances, holidays, cost of living bonus, lay-

off, retiring rooms, jobs to the sons/daughters of the

employees and the like.

Cont.…….

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.

Safety Health Protection

Benefits under this head include accident insurance,

disability insurance, health insurance, hospitalization,

life insurance, medical care, sick benefits, sick leave, etc.

Old Age and Retirement

Benefits under this category include: deferred

income plans, pension, gratuity, provident

fund, old age assistance, old age counseling ,

medical benefits for retired employees,

traveling concession to retired employees,

jobs to sons/daughters of the deceased

employee and the like.

Personnel Identification, Participation and Stimulation

This category covers the following benefits:

anniversary awards, attendance bonus,

canteen, cooperative credit societies,

educational facilities, housing, income tax

aid, counseling, quality bonus, recreational

programs, stress counseling, safety

measures etc.

Other benefits are:-

Payment for Time Not workedExtra Pay for time WorkedRetrenchment CompensationLay-off Compensation

Payment for Time Not worked:

Benefits under this category include: sick

leave with pay, vacation pay, paid rest

and relief time, paid lunch periods,

grievance time, bargaining time, travel

time etc.

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.

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.

Lay-off Compensation:

Layoff is the temporary suspension or

permanent termination of employment of

an employee or (more commonly) a group of

employees for business reasons, such as the

decision that certain positions are no longer

necessary or a business slow-down or

interruption in work

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.

Employee Benefits Required by Law

Employee services

In addition to benefits, organizations

also provide services that employees find

desirable.

These services are provided at low or no

cost to the employee.

These are provided at the discretion of

the management with consultation with

the trade unions.

These services include

Services related to type of work performed- includes

subsidies for the purchase and upkeep of work clothing

and uniform.

Eating facilities

Transportation facilities

Child care facilities

Housing services

Financial and legal services

Recreational, cultural and social programs

Educational services

Medical services

Outplacement services

Flexible time

Cafeteria service

Problems raised by benefit programs

Charge of Paternalism = When too many benefits & services are offered to employees , a feeling develops that employers are playing the role of parents and workers are looked upon as children.

Excessive Expenditure = It’s a very costly affair and involves a great deal of paper work

Maintenance of least productive worker = With increase in benefits and services employees ,particularly when they are not very productive ,tend to stick to their jobs and are not interested in changing them.

Neglect of other personnel functions = Due to excessive concern from management they stop emphasizing on other aspects of personnel programs which can develop a concern among the employees .

RECREATION FACILITIES

Gymnasium at Electronics city campus of

Infosys at Bangalore is one of the largest

gymnasiums in Asia and a mini golf course

among others ...

They even have boating and saloon facilities

in their campus so that employees can relax

and can take break in their hectic schedules.

rest and recreation facilities such as a

gymnasium, swimming pool, tennis,

basketball and volleyball courts, in addition

to cafeterias offering international cuisine

Food Courts,

Health Club, Fitness Center with a

special enclosure for Aerobics, Golf

club.

Amphitheatre, , a well-stocked

Library, High speed connectivity,

transportation facilities, stone-laid

walking paths connecting each

building (or one can use the bicycles

provided to move around the campus)

Medical facilities, Bank, ATMs,

Travel Counter.

SCHOLARSHIP TO THE CHILDREN

AS PER THE LAST

ANNUAL REPORT,

INFOSYS SPEND LOT OF

MONEY AS

SCHOLARSHIP FOR

EMPLOYEES children.

HEALTH ASSESSMENT PROGRAMMES FOR EMPLOYEES

Measure to help employees to be proactive about their own health and well being",

It is also called health assessment and lifestyle enrichment programme. (HALE PROGRAMME)

Programme includes hobbies, interests, sessions for dance,aerobics, Yoga, painting, and Pranic healing.

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DEEPAK SINGH

DEEPANSHU VERMA

SHAKTI YADAV