Fringe Benefits Report

8/6/2019 Fringe Benefits Report

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TABLE OF CONTENT

1) INTRODUCTION [2]1.1) DEFINITION OF FRINGR BENEFITS [2]1.2) MEANING [2]1.3) PERQUISITES [3]

2) OBJECTIVES [5]3) TYPES OF FRINGE BENEFITS [6]4) FRINGE BENEFITS A WAY TO INCREASE EMPLOYEE

PRODUCTIVITY [8]

5) BEST WAYS OF DEALING WITH DIFFICULT EMPLOYES [9]6) EMPLOYEE BENEFITS [10]7) ADVANTAGES OF FRINGR BENEFITS [12]

7.1) ADVANTAGES FOR EMPLOYERS [12]

7.2) ADVANTAGES FOR EMPLOYEES [12]

8) DISADVANTAGES OF FRINGE BENEFITS [12]

9) LIVE EXAMPLE OF COMPANY [13]


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1. INT TION:

1.1Definition of Fringe Benefits:

As perSection 115WB (1) ,narrated in Column 1 of Part A, fringe benefits means

any consideration for employment provided by way of any privilege, service, facility

or amenity, directly or indirectly, provided by an employer, whether by way of

reimbursement or otherwise, to hisemployees.

1.2Meaning:

Fringe benefits are compensations made to an employee beyond the regular benefit of

being paid for their work.

Some fringe benefits are fairly standard, such as offering a few days of sick time

or paid vacation time. Others can be significantly greater, and rarer. Key executives in

large companies might also enjoy fringe benefits like use of time-

share condominiums, paid continuing education, use of a company jet, use of a

company credit card, discounted or free health club memberships, and a significant

amount of paid vacation.


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Here ismore informationabout fringebenefits.

Flexiblebenefits allowemployees topickbenefits that most theirneeds. The

idea is to allow each employee to choose abenefit package that is individually

tailored tohisorherownneedsandsituation. It replaces the traditional one-benefit-

plan-fits-allprograms that dominatedorganizationsformore than 50 years.

The average organizationprovides fringebenefits worth approximately 40%

ofan employeessalary. Traditional benefit programs were designed for the typical

employeesofthe1950s -amalewithwifeand twochildrenat home. Less than10%

ofemployeesnow fit thisstereotype. While 25% oftodaysemployeesaresingle,a

third ispart oftwo-incomefamilieswithnochildren.

Thethreemostpopulartypesofbenefitplans:

1. Modular plans: They are pre-designed packages of benefits, with eachmoduleput togethertomeet theneedsofaspecificgroupofemployees. oa

moduledesignedforsingleemployeeswithnodependentsmight includeonly

essentialbenefits. nother,designedforsingleparents,might haveadditional

life insurance,disability insurance,andexpandedhealthcoverage.

2. Core-plus plans: It consist of a core of essential benefits and a menu-likeselectionofotherbenefitsoptionsfromwhichemployeescanselect andadd to

thecore. Typically,eachemployee isgiven benefit credits, whichallow the

purchase ofadditionalbenefits that uniquelymeet hisorherneeds.

3. Flexiblespendingplans: Theyallowemployees toset asideup to thedollaramount offered in theplan topay forparticular services. Its a convenient

way,forexample,foremployees topayforhealth-careanddentalpremiums.

Flexible spending accounts can increase employee take-homepaybecause

employees dont have topay taxes on the dollars they spend out of these

accounts.


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Most companiesrealize that fringebenefits likehealth insurancecontribute to

the well being of their employees. Wheneverpossible, they try to offer a t least

partiallydiscounted insurance toanemployee,even iftheyarenot legallyrequired to

do so. Fringebenefits like sick or vacation time tend tobe fairly standard as well,

even ifanemployeedoesnot work full time. Thesepaiddaysoffdo tend tohavea

capon them.Forexample,anewemployeemight get aweeksvacation time tostart,

andeight to tendaysofsicktimeforyear. Employeesenteringhigher-levelpositions

maybeofferedgreaterfringebenefitsas incentive to joinacompany.

In fields where there is a high demand for workers, such as nursing and

teaching, some unusual fringebenefits maybe offered to attract employees. mall

school districtshavegotten quitecreative in thisrespect,since teachersalariesarestill

relatively low. few unusual fringebenefits offeredby school districts havebeen

paid housingor use ofprivate lakes for fishing. More likely arepaid incentives for

joininga teachingstaffsuchashiringbonuses,offers tofundcontinuingeducationso

teachersget higherdegreesand thushigherpay,orofferingmentorprogramsfornew

teachers.

ometimes thefringebenefits turnout tobegreatlyneeded.Forexample, the

risingcost ofprivatehealth insuranceoftenmakesobtaininga jobwithagoodhealth

plan highly desirable. Where job compensation is not commensurate with money

needed to livecomfortably,housingallowances,orcompanyhousingcanoftenmake

thedifferencebetweenbeingable to takea joband lookingelsewhere.

omecompaniesalsopay fringebenefitsforthosewho worknight orswing

shifts. These fringebenefits maybe in the nature of a 1030% increase ofbase

payfor working a non-standard shift. This is called a shift differential and is quite

common in themedical fieldand inmanufacturing.

2. OBJECTIVES:

Theviewpoint ofemployers is that fringebenefitsforman importantpart of

employee incentives toobtain theirloyaltyandretaining them. The important

objectivesoffringebenefitsare:


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1. To create and improve sound industrial relations.. To boost up employee morale.. To motivate the employees by identifying and satisfying their unsatisfied needs.. To provide ualitative work environment and work life.. To provide security to the employees against social risks like old age benefits

and maternity benefits.

6. To protect the health of the employees and toprovide safety to the employeesagainst accidents.

7. To promote employee s welfare by providing welfare measures like recreationfacilities.

8. To create a sense of belongingness among employees and to retain them. ence,fringe benefits are called golden hand-cuffs.

9. To meet re uirements of various legislations relating to fringe benefits.

3. T ES OF FRINGEBENEFITS:

Organi ations provide a variety of fringe benefits. The fringe benefits are classified

under four heads as given here under:


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a. ForEmploymentSecurity:Benefits under this head include unemployment, insurance, technological

adjustmentpay, leave travelpay,overtimepay, level fornegotiation, leavefor

maternity, leaveforgrievances,holidays,cost oflivingbonus,call-backpay,

lay-off, retiring rooms, jobs to the sons/daughters of the employees and the

like.

b. ForHealth Protection:Benefits under this head include accident insurance, disability insurance,

health insurance, hospitalization, life insurance, medical care, sickbenefits,

sickleave,etc.

c. ForOldAgeandRetirement:Benefitsunderthiscategory include:deferred incomeplans,pension,gratuity,

provident fund,oldageassistance,oldagecounselling ,medical benefits for

retired employees, travelling concession to retired employees, jobs to

sons/daughtersofthedeceasedemployeeand the like.

d. ForPersonnelIdentification, ParticipationandStimulation:This category covers the followingbenefits: anniversary awards, attendance

bonus, canteen, cooperative credit societies, educational facilities, beauty

parlour services, housing, income tax aid, counselling, quality bonus,

recreationalprograms,stresscounselling,safetymeasuresetc.

Thefringebenefitsarecategorizedasfollows:

a) Paymentfor Timenot worked: Benefits under this category include: sick leave

withpay,vacationpay,paidrest andrelieftime,paid lunchperiods,grievance time,

bargaining time, travel timeetc.


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b)Extra Payfor time Worked: This categorycovers thebenefitssuchas:premium

pay, incentivebonus,shiftpremium,oldage insurance,profit sharing,unemployment

compensation, Christmasbonus, Deewali orPoojabonus,foodcost subsidy,housing

subsidy,recreation.

4. FRINGE BENEFITS - A WAY TO INCREASE

EMPLOYEE PRODUCTIVITY

Manypeoplebelieve that increasingfringebenefits,orbenefits that arenot mandated,

establishes loyaltyandboostsproductionamongemployees. omeargue thesebeliefs

are incorrect,but manyotherssupport them.

It wouldbedifficult toexamine theeffectsofallpossiblefringebenefits,but looking

at afewcangiveemployersasenseofhowemployeeproductivitymightbe increased

byofferingfringebenefits.

ome countries offerfree healthcare,but in other countries,people need tobuy

insurance. fferinghealth insurance isafringebenefit,and the qualityofit couldbe

directly tied toemployeeproductivity. Ingeneral,sickemployeesarenot productive

employees, and any insurance offered to workers shouldbe affordable and offer

reasonableamounts of coverage. ffordability shouldadditionally take intoaccount

things likecopaymentsanddeductibles.

sgreat asfringebenefitsmaybewhen it comes to increasingemployeeproductivity,

theyarent toohelpful underbadworkingconditions. Employeesdeservebasicrights,

likebeing treatedwithrespectbysupervisorsandbeingpaidfairlyfortheirwork. ll

thebenefits in theworldmaynot makeupforconsistentlypoormanagement skillsor

under-marketpay.


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5. BEST WAYS OF DEALING WITH DIFFICULT

EMPLOYEES:

There are several types of difficult employees who can make thework

environment miserable and unproductive for everyone in the workplace. The

personalities involved maybevaried,but therearebasicactionshelpful indiffusing

most situations. These include acknowledgment of theproblem, listening to all

concerns and identifying theproblem, andproviding constructive feedback when

dealingwithdifficult employees.

omepeoplefeel iftheproblem is ignored, it will goaway. Thesimple truth is, like

most problems, ignoring the issueofdealingwithdifficult employeesoften leads to

moreproblems. Thebest courseofaction is toacknowledge there isaproblem and

implement aplan to ease concerns. Getting to thebottom of the issue as soon as

possiblecan lead toasmoothandswift resolution.

supervisorormanagershouldresearch theproblempersonally insteadofrelyingon

thewordofanotheremployee. Listeningskillsarevery important at thisstage toget

the full story and to understand exactly what the issues are. The manager should

address theproblemcalmly,allowing theemployee time torespond. Clearexamples

oftheproblemsexperiencedshouldbeprovided,remembering toaddress theactions

andnot thepersonal aspectsoftheperson involved.

Identifying thepersonalityoftheemployee in question isakeycomponent todealing

withdifficult employees.Perfectionists will often takecriticismpersonally,whereas

unproductive employees may not acknowledgeconstructive criticismat all unless

clear examples and expectations are shown. Documentation and follow-up are also

important when dealing with difficult employees, especially if termination is

considered.

Termination isanoption,but researchhasshown it is morecost effective to tryand

resolvedifficulties in theworkplaceratherthanhiringand traininganewemployee.

ome coaching maybe required in order to help the employee in identifying the

problemand togive them tools tochange theirbehaviour. Whendealingwithdifficult


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employees, managers should remember that everyone can occasionally have abad

day. It iswhen thebaddaysbecomeapatternandaffect theproductivityofothers that

actionsneed tobe taken.

lthough manypeople may feel defensive whenproblems areaddressed,providingconstructive feedback can help the employee improve hisor her workperformance.

Patienceandfeedbackcanhelp theemployee toget backon trackandbecomemore

productive. This in turn will serve asan example to other supervisors or managers

seekingways indealingwithdifficult employees.

6. EMPLOYEE BENEFITS:

Employeebenefitsare theextrasorperksapersonreceivesfromhisemployer. These

perksare inaddition to thebasicpayanemployeereceives inexchangeforhiswork.

For example, some common employeebenefits includevacationpayandpersonal

leave. ome typesofemployeebenefitsarerequiredby lawwhileothersareoptional.

The list oflegallyrequiredemployeebenefitsvariesfromplace toplace.

In manyplaces, employers are required toprovide certain employeebenefits. For

example,employers insomeplacesarerequired topaycertain taxesforthebenefit of

their employees. ften, employers are requiredby law to carry certain types of

insuranceaswell.


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An employer may be required to have insurance that provides coverage if an

employee ishurt on the job, for instance. ometimesemployersarealsorequired to

carrydisability insurance toprovideat least some incomeforemployeeswhobecome

disabled,even ifthedisability isnot theresult ofawork-related injury.

ften, employersprovide employeebenefits that arebeyond those requiredby law.

Employers often do thisbecause goodbenefit packages help them attract qualified

employees.

Forexample,apersonmayreceivesimilarjoboffersfrom twodifferent companies. If

thepay isabout thesame, the jobcandidate maychoose thecompany that provides

thebest benefit package. Insomecases,employeebenefitsareseenasso important

that a jobapplicant mayconsidertakinga lower-paying job iftheemployeebenefits

areveryattractive.

For manypeople, health care coverage is among the most desirablebenefits. There

arecountlesspeoplewhodonot havemedical coverageandhave topayout ofpocket

for doctor and dentist visits.A single hospitalization, even for something relatively

minor,has thepotential tocost anuninsuredpersonagreat deal inmedical fees.

Ifan individual hasa family tocare for, thepotential costs maybeevenhigher.As

such, companies that offer generous medical coveragebenefits may have an easier

timeattractingandkeepingemployees.

Another in-demand employeebenefit is vacation time. Many companies offerpaid

vacationdays for employees who have worked for them for a significant period of

time.

These dayscanbeused foranypurpose the employeesees fit. Hemayuse them to

travel around the world or even to simply loaf at home in hispajamas. ome

companiesoffereachemployeeaset numberofdays,whileothers increasevacation

timeasemployeesgainseniority.


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7. ADVANTAGES OF FRINGE BENEFITS:

7.1ADVANTAGES FOR EMPLOYER

1. Improvesefficiencyandproductivityasemployeesareassuredofsecurityforthemselvesand theirfamilies.

2. Premiums are tax deductibleas corporation expense, which means savingswith qualitycoverage.

3. Helpsattract andretainbetterqualifiedemployees.4. Provides high risk coverage at low costs easing the companys financial

burden.

7.2ADVANTAGES FOR EMPLOYEES

1. Employeeswithpersonal life insuranceenjoyadditionalprotection.2. Confidence incompanysschemesboostsstaffmoraleandpride incompany.3. Employees enjoy cheaper rates negotiated through their employer than they

couldobtainasan individual.

4. Peace of mind leading tobetterproductivity as employees are assured ofprovisionforthemselvesandfamilies inanymishap.

8. DISADVANTAGES OF FRINGE BENEFITS:

While giving fringebenefits will have significant advantages to employers and

workers, thesearesomeofthedrawbacksaccording toanemployment attorney:

1. Forsmall employers,fringebenefitswill cost more.Also, theyhave lesschoicein drafting their workers retirement or healthplanbecause of administrative

costs.

2. Thecost ofhealth insurancecoverage issteadilyrising in the U ,making it lessaffordable tomost employersespecially in tougheconomic times.


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3. The morebenefitsa company will provide, the higher the administrative feeswill cost.

4. Employersmayface lawsuit (usuallyon thebasisofdiscrimination) iftheyfailtoprovidefringebenefits toall workersorexcludesomeonefromreceiving this.

9. LIVE EXAMPLE OF COMPANY:

FRINGE BENEFITS IN WIPRO :1. Cashcompensation.2. Social securityandwell-being.3. Development andeducation.4. Employeestockpurchaseprogram.5. 5% discount ofWIPR stocks (up to10% ofsalarypayments). Leaveofabsenceprograms (sabbaticalsetc.). Relocationprogram.. Railwayhalf-fareseason ticket.

9. FamilyService:Support in theareasofChildcare10.Homecareand Eldercare.11.Bonusforrecommendingnewemployees.12.Special conditionsforinsurance.13.Sicknessandaccident incomeplan.

Documents

Fringe Benefits Report