Page 264 - Encyclopedia of Business and Finance

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Employee Benefits

of the day-care facility. One way many companies are han- 2. Gain sharing rewards employees for exceeding a pre-
dling this type of concern is through a cafeteria plan. determined goal by sharing the extra profits. If prof-
While there are several different ways to set up a cafeteria its exceed the goal, employees share in the extra
plan, such as setting aside pre-tax dollars for medical profits.
expenses, one of the most useful ways is to give employees 3. Lump-sum bonuses are a one-time cash payment
many different benefit options to choose from. Each based on performance. Lump-sum bonuses may be
employee is given a set allowance that can be used toward an annual reward, such as a Christmas bonus, where
any benefit the employee chooses, allowing the employees the purpose is to share profits with the employees,
to pick the options that will most benefit them. The cafe- and thus motivate them.
teria plan is one fair way to handle benefits for everyone
4. Pay for knowledge rewards employees for continuing
concerned.
their education and/or learning new job tasks. The
Another characteristic of the work force is its increas- more education or experience an employee has, the
ingly older age. As a result, there are an increasing num- higher he/she moves up on the pay-for-knowledge
ber of workers with aging parents who need care. Many
pay scale. Pay for knowledge is an incentive for
companies recognize the need for elder care and are pro- employees to continue their education because it
viding benefits to help, such as referral services for quality
results in immediate rewards on the job.
nursing homes and flexible work hours and/or days off so
employees can care for aging parents.
PERKS
Other benefits provided by some employers include
credit unions to help employees with financial needs, gym In addition to what are typically considered employee
facilities to allow employees to fit exercise into their busy benefits, many employers also offer perks to their employ-
schedules, cafeterias that sell reduced price meals to work- ees. Typically limited to employees in management posi-
ing employees, and on-site laundry services where tions, these perks include such benefits as country club or
health club memberships, a company car, special parking
employees can have laundry done while they are at work.
privileges at work, tickets for sporting events, first-class
Making the work environment seem more like a family
travel accommodations, and generous expense accounts.
helps boost employee morale and improve working rela-
However, certain types of perks are also being extended to
tionships. Many companies provide uniforms for their
employees in many different types of positions. One type
employees, so that workers do not have to worry about
of perk that is common in many retail stores is an
ruining their own clothing. The uniforms also help with employee discount on merchandise bought from the place
the feeling of unity because everyone in the company is of employment. For example, Dayton Hudson’s Target
dressed similarly. Because transportation can often be a stores offer a 10 percent discount to employees and their
problem for employees, some companies are even provid-
ing transportation options as a benefit to employees. Dis- immediate families when purchasing merchandise from
any Target store. Employees of local movie theaters often
ney World, in Orlando, Florida, has a shuttle that picks
receive free movie tickets as a perk, while many restaurant
employees up from their living quarters and takes them to
employees receive free or reduced-price meals. By offering
work. Corn detasslers meet in a central location and a bus employees such perks, the company is providing a strong
takes them to the site. Sales people are often provided with incentive for employees to continue working there.
a company car.
While these types of benefits are meant to attract and
FLEXIBLE WORK PLANS
retain employees as well as create a positive work environ-
ment, some types of employee benefits are used to encour- A flexible work plan is another type of employee benefit
age increased performance. The following are the four that has been proven to have a positive influence on
main types of benefits used as incentives to encourage employee productivity, attendance, and morale. A flexible
employees to exhibit superior performance: work plan allows employees to adjust their working con-
ditions within constraints set by the company and may
1. Profit sharing gives the employee a portion of the include such options as flex-time, a compressed work-
company profits. Profit sharing is often done week, job sharing, and home-based work. Flex-time
through making shares of company stock part of the involves adjusting an employee’s daily time schedule; it
employee benefit package. Employees receive a cer- can be as simple as allowing a worker to come into work
tain number of shares of stock each year, which pro- an hour earlier and leave an hour earlier than the normal
vides employees an incentive to help the company 8-to-5 workday. Usually there are some time constraints
succeed. This might also be accomplished through a set up by the company, but employees who work within
yearly profit-sharing bonus. those constraints can basically set their own schedules. A

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 241