The many faces of employee benefitsArticle added by Ed Morrow on February 12, 2010
Ed Morrow

Ed Morrow

Middletown, OH

Joined: October 29, 2005

It is often said that a happy worker makes a good worker. This seems to imply that managers should attempt to intricately observe employee behavior in order to understand their individual dynamics in terms of what they value most, as their attitudes towards work greatly affects organizational performance. Many companies offer employee benefits as part of their compensation package, but do elements of this practice offer true benefits to the employee?

The use of employee benefits

Employee benefits are non-wage compensation provided to employees, and include group insurances, pension schemes and paid leave. Of course, depending on the country the organization operates in, some benefits, such as social security and unemployment insurance, are actually required by law, while others such as stock options and flexi time are entirely at the discretion of the employer.

Smart organizations employ systems of employee benefits that are aimed at attracting and retaining the most talented employees. The system of remuneration chosen should be to provide motivation and to increase loyalty and satisfaction among their workers. Promoting high morale should be the top priority for the HR department, as the quality of work that people express is often a result of the degree to which they are happy and motivated. Good employees really matter to any organization, and it's the duty of the employer to retain them.

Different strokes for different folks

Employee benefits are generally used in different forms, and sometimes, the employee is asked to give up a portion of their salary in return for the benefit. That begs the question as to whether or not the worker classifies it as a benefit, and is motivated to increase performance because of it. In this case, it is important for the employer to understand what their employees value most and what their needs are. There is a strong interrelationship between the satisfaction of needs and work morale, and employers must understand this if they are to succeed at getting the best from their workers. Some individuals are driven by social satisfaction and a sense of belonging which could mean something as simple as a reserved parking space, while to others, the thing that matters most to them is their need for health care, and thus, they will be willing to give up a portion of their salary for the cause.

Embracing change

As the economic and business environment changes, so too do employees' values and expectations. The modern employee expects to have meaning, involvement, flexibility in work hours and appreciation for helping to increase the organization's bottom-line. To this extent, I believe that the practice of employee benefits has not kept pace with the changing needs and desires of the employee. Most organizations are quick to offer group insurances and pension schemes as their contribution to employee benefits, but there are other dimensions that should be explored at greater lengths.

Stock options

An organization that fosters a culture of ownership and partnership should consider stock options as an employee benefit. This type of benefit was once a perk only reserved for senior executives, but is now often being offered to the average employee to create a sense of ownership. It provides the employee with financial incentives to ensure that the company succeeds. Stock options have a dual effect, as they benefit both the employee and the employer. Once the employee is motivated to ensure profitability, the end result is that the organization stands to benefit.


The need for properly monitored flexi-time schemes is a highly overlooked benefit that needs to be considered. Many organizations are so taken up with the idea of employees giving of their time and effort that they forget the human aspect of it. Employees do have another life outside the organization. In an effort to balance work life and personal life, many workers no longer have the desire to work within the confines of a fixed time pattern. With flexi-time, the employee has the opportunity to fit other commitments and activities in with work. Not only that, but it places the employee in control of their workload, which by any means is a good thing. Being able to reduce employee stress and fatigue from work overload and increase staff morale can only reap organizational rewards.

Since employee benefits are tied to motivation, when developing benefit packages, encourage staff participation and feedback. The idea to bear in mind is that the most appropriate benefits are the ones that are desired by the workforce. When employees are unmotivated at work, the business organization suffers and profitability is affected. The organizations that retain their employees the longest are those that take into consideration the value proposition by showing them that they personally care.

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