Benefit:
Employees today work not only to find the cash
alone, but they expect more “extra”. This extra is known as employee benefits
and also in other words is fringe benefits. Employee benefits are a type of
compensation in the form of non-financial offered by the organization. Organization
will offer different benefit to different department or different type of job. Problem
will arise when organization begin to decide what benefit to give to whom and
on which basis? Employee benefits are not performance-based, they are
membership-based. Workers receive benefits regardless of their performances.
Employee benefits as a whole have no direct affect on employee performance,
however, inadequate benefits do contribute to low satisfaction level and
increase absenteeism and turnover in employees (DeCenzo and Robbins; 2007). So organization
needs to careful design their benefit package. It may include a cell phone to
each worker, taking them to a training workshop or seminar, giving them a day
or two off every month and so on. While deciding on the benefits package, do
consider the associated costs.
Compensation:
Is there are employee work for free? No. They would,
each employee will expect something in return. Just like common phrase: “Give
and Take”. Its means, in the simple word always have to give things to people and
return to what you take from them. Compensation refers to this exchange, but in
monetary terms. Compensation is the employer's feedback for an employee's work.
It simply is the monetary value organization would give to their employees in
return of the services.
Gary Dessler in his book Human Resource Management
defines compensation in these words "Employee compensation refers to all
forms of pay going to employees and arising from their employment." The
phrase 'all forms of pay' in the definition does not include non-financial
benefits, but all the direct and indirect financial compensations.
ADVANTAGES OF COMPENSATION & BENEFITS
Advantages for Organization:
A well designed compensation and benefits plan helps
to attract, motivate and retain talent in organization. A well designed
compensation & benefits plan will benefit in the following ways.
1. Job satisfaction: Employees would be happy with
their jobs and would love to work for the organization if they get fair rewards
in exchange of their services.
2. Motivation: Each employee has different kinds of
needs. Some of them want money so they work for the company which gives them
higher pay. Some value achievement more than money, they would associate
themselves with organization which offer greater chances of promotion, learning
and development. A compensation plan that hits workers’ needs is more likely to motivate them to act in the desired way.
3. Low Absenteeism: Why would anyone want to skip
the day and watch not-so-favorite TV program at home, if they enjoy the office
environment and are happy with their salaries and get what they need and want?
4. Low Turnover: Would employees want to work for
any other organization if organization offers them fair rewards. Rewards which
they thought they deserved?
Advantages for
Employees:
1. Peace of Mind: Organization offer of several
types of insurances to the employee relieves them from certain fears. The employees
as a result now work with relaxed mind.
2. Increases self-confidence: Every human being
wants his/her efforts to get acknowledgment. Employees gain more and more
confidence in them and in their abilities if they receive just rewards. As a
result, their performance levels shoot up.
