You are the benefits manager at a medium-sized corporation and the president of
ID: 2654888 • Letter: Y
Question
You are the benefits manager at a medium-sized corporation and the president of the company has requested your advice. She overheard an employee saying that the employer spends too much money on benefits that aren’t really needed and that giving employees the money spent on benefits directly as cash wages would be better so they could buy what they want. The president thinks that this idea may have some merit. Discuss the following issues with her:
1)economic consequences to the employees
2)economic consequences to the employer
3)reasons to continue providing benefits to employees
4)your concerns with the current benefit plan, after hearing the employee’s comment
5)your recommendation(s) as to how to proceed from here
Explanation / Answer
Giving benefits directly in cash finds favour from the standpoint of different sections as follows:
1)economic consequences to the employees
> each one may have different preferences at different points of time - different need for money- benefits in the
form of cash may be very timely fo that person
> maximises employees' satisfaction level - as they are able to get what they want
> satisfied as they are left to make their own decisions in consultation with their families
> full monetary value of benefits known to them- what the company offers and what they deserve for their merit
2)economic consequences to the employer
> very good for employer- employee relationship - because of high satisfaction level and good employee morale
> easy-going - need not have to think / bother about deciding the appropriate/ different benefit ,every time the management decides to give benefits
> can be straight forward and transparent - as the benefits depend on levels/scales of pay- can be put down in writing - in tabular form
> easy handling - maximise productivity in all areas.
3)reasons to continue providing benefits to employees
> as as incentive to sincere and productive workmanship
> for retaining employees -
> reduces employee turnover to a certain extent
> to sustain in a competitive business environment
4)Concerns with the current benefit plan, after hearing the employee’s comment
> problems associated with the sudden change of procedures
> may be some already placed orders for benefits in other forms other than in cash going to be wasted
> possible procedural delays such as going for approval along the heirarchy
> as simple as resistance to change
5)Recommendation(s) as to how to proceed from here
> It is cerainly advantageous for any business managers to go with the trend and mood of the employees
> also, cash distribution of benefits is comparatively easy and less cumbersome
> up-beat employee morale results in enhanced work place unity and sense of belonging-ness
>emplotyees also have the satisfaction of participation in management- decision-making and also that their just and fair voices are certain to be heard.
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