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PROJECT TOPIC: EMPLOYEE BENEFITS AND IT EFFECT ON EMPLOYEE PRODUCTIVITY

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CHAPTER ONE

1.0     INTRODUCTION

According to Mathis and Jackson (2003), employees benefit are forms of indirect compensation given to an employee or group of employees as part of organizational membership. Brath and Gold (2009), define them as that part of the total reward package provided to employees in addition to base or performance pay.

     Employee benefit, focus on maintaining (or improving) the quality of life for employee and providing a level of protection and financial security to worker and their family member.

     Like base pay plan, the major objective of most organizational employee compensation programs is to attract, retain and motivate qualified and competent employees.(Bernadin,2007).

     Mathis and Jackson (2003), continue to state that an employer that provides a more attractive benefit package, often enjoys an advantage over other employers in hiring and retaining qualified employees when the competing firms offered similar base pay. Infact, such benefits may create ‘golden hand cuffs’ making employees  more reticent to move to other employers.

    Some common examples are, retirement or pension plans, medical and dental insurance, education reimbursement, time-off , paid vacation, use of computer car etc.

     Productivity is a relationship between outputs and inputs. It rises when an increase in output occurs with a less than proportionate increase in inputs, or when the same output is produced with fewer inputs. (Ilo , 2005).

     Productivity can also be considered in monetary terms, if the price received for an output rises with no increase in the cost of inputs, this is also seen as an increase in productivity. Productivity improvements can also be understood at different levels.

     The productivity of individuals may be reflected on employment rates, wage rates, stability of employment, job satisfaction or employability across jobs or industries. Productivity of enterprises, in addition to output per worker, may be measured in terms of market share and export performance.

      According to a study carried out by the U.S.A. Chamber of Commerce in 2006, employee benefit in the U.S.A, were not a significant part of most employees’ compensation packages until the mid twentieth century. For example, in 1929, benefits comprise only about 3 percent of total payroll cost for companies. However , employee benefits in the U.S, now comprise approximately 42% of the total payroll cost. Several things account for the tremendous  increase of employees benefit in the U.S.

     Employee benefit as generally constitutes a higher proportion of total employee compensation Europe than in the United State. In Europe they are most often the result of legislation, where as in the United States, collective bargaining has been more important in gaining such benefits for workers.

    The prevalence of employee benefit programs increase sharply during world war II because controls of this type of compensation were less stringent than controls on wages. (Martocchio, 2006).

Employee benefits are also called perquisites and are often provided by the employer on his own initiative or they are the result of a collective bargaining or state legislative.


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