Fringe Benefits

Fringe Benefits

Fringe benefits or supplementary compensation involve all expenditures by an employer designed to benefit employees over and regular base pay and variable compensation related to output . In simple words it refers to the extra benefits provided to the employees in addition to the normal compensation paid in the form of wage or salary .

The basic purposes of fringe benefits are 

  • to attract and maintain efficient human resources within the the organisation; and
  • to motivate the human resources.

Objectives :

  1. To create and improve sound industrial relations .
  2. To motivate the employees by identifying and satisfying their unsatisfied needs .
  3. To provide security to the employees against social risks like old age benefits and maternity benefits .
  4. To provide health to the employees and safety against accidents .
  5. To promote employees welfare .
  6. To create a sense of belongingness among employees and to retain them. Hence , fringe benefits are called golden handcuffs.
  7. To meet the needs the requirements of various legislation relating to such benefits .

Fringe benefits may include the following :

  • Payment for time NOT  worked . some of the examples in this category are paid rest periods , paid lunch periods , wash up time , clothes change time , get ready time , vacation , holidays , sick leave , personal leave , voting time etc.
  • Hazard protection. Income maintenance during such periods is the purpose of fringes designed to protect against the hazard illness , injury , debt , unemployment , permanent disability , old age and death.
  • Employee services . employee services such as housing , food , medical , recreation etc. are provided on continuing basis .
  • Legal payments . In most countries , the governments have enacted several laws for protecting employees against major hazards of life . payments under this classification may involve unemployment , lay off compensation , employees` insurance , old age benefits under social security etc.
  • Safety and Health. Under the provisions of the factories act 1948 , rules are laid down improving the working conditions of factory workers so as to ensure their health and safety .

Click here for government certification in Human Resources

Share this post

12 Comments. Leave new

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Management and its importance.
Indian farmer

Get industry recognized certification – Contact us