1. Employee benefits
Session-15

2. Benefits Benefit Strategic Perspectives on Benefits
An indirect compensation given to an employee or group of employees as a part of organizational membership.
Strategic Perspectives on Benefits
Benefits absorb social costs for health care and retirement.
Benefits influence employee decisions about employers (e.g., recruitment and retirement).
Benefits are increasingly seen as entitlements.

3. What are fringe benefits?
Fringe benefits are benefits which employees receive from their employment but which are not included in their salary cheque or wages.
They include such things as company cars, private medical insurance paid for by the employer and cheap loans.

4. FEATURES OF FRINGE BENEFITS
An employee enjoys them in addition to the salary he/she receives.
They are not given for specific jobs performed but to make jobs more attractive.
They are not linked to productivity so do not reward performance in any way, criteria used is other than performance.
They have an indirect impact on workers’ efficiency. If impact is direct, it is not a fringe benefit.

5. NEED FOR FRINGE BENEFITS
Employee demands
Trade Union demands
Employer’s preference
As a social security
To improve human relations

6. Types of Fringe Benefits
Pay for time not worked
Hours of work
Paid holidays
Shift premium
Holiday pay
Paid vacation
Employee security
Retrenchment compensation
Lay off compensation

7. Types of Fringe Benefits
Safety and health
Workmen’s compensation Act
Health benefits(Sickness benefit, Maternity benefit, Disablement benefit, Dependant’s benefit, Medical benefit)
Voluntary arrangements
Welfare and recreation
Canteens
Consumer stores
Credit societies
Housing
Legal aid
Holiday homes
Educational facilities
Parties and picnics

8. Types of Fringe Benefits
Old age and retirement
Provident fund
Pension
Deposit link insurance
Gratuity
Medical benefits

9. Calculation of EPF,EPS & EDLI
Scheme Name
Employee contribution
Employer contribution
Employee provident fund
12%
3.67%
Employees’ Pension scheme
8.33%
Employees Deposit linked insurance
0.5%
EPF Administrative charges
1.1%
EDLIS Administrative charges
0.01%

10. Benefit Design Decisions Affecting Benefit Design:
How much total compensation?
What part of total compensation should benefits comprise?
What expense levels are acceptable for each benefit?
Which employees should get which benefits?
What are we getting in return for the benefit?
How will offering benefits affect turnover, recruiting, and retention of employees?
How flexible should the benefits package be?

11. Benefits Administration
Benefits Communication
Benefits Statements
Annual “personal statement of benefits” that translates the benefits into monetary terms to show their worth.
The Internet and Benefits Communication
Web-based HR information systems allows employees to change their benefit choices, track their benefit balances, and seek benefit information on-line.

12. Typical Division of HR Responsibilities: Benefits Administration

13. Most common benefits provided in India
HRA
Gratuity
Housing loan
Medical reimbursement/allowances
Insurance
Leave travel allowances
Conveyance allowances
Education allowances
Superannuation
Car loan
Social/sports club membership
Home furnishing

14. Flexible Benefits Plans (Cafeteria Plans)
Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs
Advantages
More appreciation of benefits offered
Better match between benefits and employee preference
Disadvantages
Increased design and administrative costs