Benefits and perks

For unto every one that hath shall be given…..but from him that hath not shall be taken away. St. Matthew

Many studies have shown that it is difficult to draw conclusions from the effect of benefits and perks. Typical benefits, in addition to a wage or salary, are: car, share options, staff discounts, medical checkups, counselling, private healthcare, dental insurance and subsidized restaurant. These usually attract the interest of the government authorities for personal taxation purposes. While benefits are usually written into a person's contract of service, perks are more unofficial. Typical examples are: managers use of the front car park or executive dining room, craftsmen being able to take home scrap for their own use, employees being able to purchase goods at a discount, etc. Perks, in general, do not attract additional personal taxation.

There seems to be a consensus that benefits and perks may lead to a person having greater commitment and being less likely to change jobs, particularly if they are earned only after some years of service. However, their existence will not make people actually work harder or lead to increased productivity. The larger the organization, the more likely it is to provide a range of benefits for its staff. Small organizations, and particularly those in the non-commercial sector, generally lag behind in this area.

Benefits and perks can reduce staff turnover with all the attendant costs of hiring and training new employees. However, they may make it much more difficult for the organization to encourage those staff who are not contributing effectively to resign without a large payoff. They often act as a symbol of status within the organization. 

Benefits cost time and money: Benefits cost the organization money (typically up to 30 per cent of a person's salary) and resources to administer, but many employees would actually prefer to be paid more salary and receive less in the way of benefits. As a person progresses through their working life, the type of benefits needed will change; with healthcare and contributions towards a pension becoming more important as people approach retirement. As a result, many companies have turned to flexible benefits packages, which operate on a 'self-select' basis, where benefits can be tailored to suit the individual's needs and exchanged for positive or negative salary increments. However, these schemes usually require the employee to take a minimum set of benefits - everyone needs some holiday!  >>>