Essentials of
Small Business Management

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Employee Benefits -- More Than Just $$

If you have employees, then salaries, wages, and benefits are a large part of your monthly expenses. You want to make sure that you are getting the most productivity for your money. While most employees are productive when their pay is tied to their performance, you may run into situations where this is not the case. What happens when you have a problem with low employee motivation and/or productivity?

When you have a problem with low employee motivation and/or productivity, it is important to search for the reason. For instance, one employee may feel underpaid for the work they are required to do. Another may want more recognition or interaction with other people. Still another may be bored with their day-to-day tasks. Simply raising your employee's pay or giving them a promotion may not be the answer. And what if you don't have the extra money to increase your employee's pay? What is the answer then? Do you try to ignore the problem until the employee quits? Or do you begin the termination process?

Before you do either, you may want to get more information from the employee. Many company's, in an effort to retain good people, have adopted flexible benefits in the realization that people have many needs and desires beyond their job descriptions. "Quality of work life" programs take a holistic, or complete, look at the employee to determine what he/she really wants and needs to be productive and then tailor benefits packages to satisfy their workers needs. The result is increased morale and productivity along with decreased turnover.

For example, you can reduce unwanted employee turnover and related recruiting, hiring and training costs by shifting these costs from developing new employees to keeping experienced employees. Or you can motivate an employee to increase productivity by providing opportunities for career development and training. The key is to recognize the worker's value and aspirations. By doing this, you will have addressed the problem of productivity and morale while at the same time increasing the skill base of your work force.

Age, education, job experience, job fulfillment, marital status, and family size are all considerations that determine the attractiveness of a benefit. Different benefits appeal to different people. It's important to remember that everyone's needs are different. A younger employee might be motivated by having use of a company car. An older person may want more status like a title or a professional association membership. The list of possible employee benefits and their applications is nearly unlimited. To achieve the maximum value, you've got to tailor the benefit to both the employee and the job as well as to your business requirements and financial capability.

Here are some of the more common flexible benefits you may want to include as part of your benefits program:

  • pre-tax thrift-savings programs
  • recreational programs
  • discounts
  • scholarships
  • personal financial planning
  • loans
  • tuition refund
  • profit sharing
  • company car
  • personal expense account
  • parking privileges
  • legal assistance
  • flex-time
  • extra vacation
  • child care
  • job titles
  • professional or trade association memberships
  • travel.

A flexible benefit is two-fold. Not only does the benefit satisfy the employee's needs, but it also communicates your concern to meet those needs, creating the kind of work environment that contributes to increased employee productivity.

If you have a problem with productivity, be sure to address both the problem as well as the needs of your employees so that you can tailor the benefits to meet the situation. To create a win/win situation, offer benefits that will meet employee needs while still providing the most value to your business.

 

David L. Heiserman, Editor

Copyright   SweetHaven Publishing Services
All Rights Reserved

Revised: June 06, 2015