When Should a Company Drop Employee Benefits?
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The paper discusses how employee benefits play a major role in motivating and building morale among employees and result in improved performance, dedication, commitment and employee loyalty. The paper then considers the arguments against employee benefits that are based on the fact that employees undervalue the cost of benefits that are extended to them. The paper discusses how the decision to drop indirect employee benefits may constitute a sound business decision but it also may impact the ability of the organization to attract and recruit highly motivated and experienced professionals. The paper concludes that although there are many advantages to companies using more direct compensation and reducing benefits, benefits should be maintained to ensure sustained employee satisfaction, commitment and loyalty to the firm.
From the Paper:"Though employees undervalue the cost of benefits that are extended to them on the company, the decision to drop them in entirety could have adverse ramifications on the organization. Employee benefit constitutes an important aspect that job seekers look for whenever they are engaged in efforts to secure employment. As such, benefits act as a pull factor for highly motivated and qualified professionals to the organization. This is due to the fact that employees seek out employers who value the workforce and who is committed to their well being. Therefore, decision to drop employee benefits will impact on the ability of the organization to attract and recruit highly motivated and experienced professionals (Jackson, 2007:361).
"Additionally, scrapping of benefits extended to the employees will have a shocking effect on the current workforce. This is due to the fact that most the employees will have developed a dependency on the benefit plan though subconsciously. Most employees tend to rely on their medical insurance benefit extended by most employers to cover their medical expenses. Thus, removal of such benefits will mean loss of medical cover for the employee leading to resentment and disillusionment of the employees. In effect, the employee will develop feelings of indifference and negative attitude towards the firm leading to poor performance (Jackson, 2007:362)."
Sample of Sources Used:
- Berger, D., & Berger, L. A. (2008). The Compensation Handbook. Cambridge: McGraw-Hill Professional.
- Calvin, R. J. (2004). Sales Management. Cambridge: McGraw-Hill Professional.
- Canan, M. J. (2005). Qualified retirement plans. New York: Thomson/West.
- Caruth, D. L., & Handlogten, G. D. (2001). Managing compensation (and understanding it too): a handbook for the perplexed. California: Greenwood Publishing Group.
- Champion-Hughes, R. (2001). Totally Integrated Employee Benefits. Public Personnel Management , 30 (3), 287.
Cite this Analytical Essay:
When Should a Company Drop Employee Benefits? (2013, June 16) Retrieved January 21, 2021, from https://www.academon.com/analytical-essay/when-should-a-company-drop-employee-benefits-153570/
"When Should a Company Drop Employee Benefits?" 16 June 2013. Web. 21 January. 2021. <https://www.academon.com/analytical-essay/when-should-a-company-drop-employee-benefits-153570/>