Compensation is a routine approach to granting monetary value to employees in exchange for work completed and can accomplish numerous purposes helping in areas of recruitment, job performance, and job satisfaction. The competitive and global marketplaces as well as employee benefit programs today has become known as necessary tools used by companies to draw creative and useful employees. Meeting the requests and needs of employees can be rather complicated during difficult financial times in which businesses must find its balance between compensation methods and keeping overhead costs low. This paper will analyze the impact of various compensation methods and benefit programs on employees ...view middle of the document...
According to EBRI (2005) Employee benefits are intended to
promote economic security by insuring against uncertain events and
to raise living standards by providing targeted services. Employee
benefit programs also add to economic stability by helping secure the
income and welfare of American families, which helps the economy as a whole. An organization performance is determined on how well they take care of their employees with benefits. The government does require that an employer offer certain benefits to their employees, still the employer has the leeway in providing extra benefits than allowed in order to attract employees. The decision on what types of benefits to offer is based on the organization’s long-term goals, allowable budget, and the types of employees they are trying to seek. “The term benefits refers to all of the "extras" a company offers in addition to salary or hourly wages” (Goldberg, 1994). The importance to an employer of benefit programs are to provide a healthier happier more productive employee who in the long run will provide solid productivity from said employee in the long-term. This healthier happier employee will be less likely to leave saving the employer turnover costs in hiring new employees.
People want to feel a sense of security knowing they can provide for themselves and their families. Therefore, people will seek employment with a corporation that introduces a well-rounded benefit package other than just an hourly wage or salary job. In discussing benefit programs it is important to understand what benefits are and their importance to the economy and families as a whole. It is also important to understand what impact benefit programs have on the total compensation package of an employee, to what extent these plans affect an employer and discuss what those programs are in general. Some of the benefits that people are looking to obtain with an employer are as follows:
• Medical and Dental care
• Short and Long-term disability
• Life Insurance
• Sick Days
• Paid Vacation
• Paid Holidays
• Paid Military Leave
• Maternity Leave
“Traditional benefits packages include health insurance, paid vacation and personal/sick days. To keep up with changing times, companies may offer anything from childcare assistance to a free haircut” (Goldberg, 1994). Employees expect to receive more from the employer than just ordinary benefits; otherwise the employee will search for employment elsewhere where they can get more for their abilities. If an organization does not offer more than the ordinary benefits, the employer may have difficulties hiring and keeping quality workers. Some of the extra benefits employees are looking to obtain are:
• Discounts on products and services
• Stock options
• Legal assistance
• Child daycare
• Exercise equipment room
• Break/Resting room area
The employer offering these extra benefits as resources to the employee allows the employee to have...