Strategic Value of Employee Benefits Programs

Strategic Value of Employee Benefits Programs

Strategic Value of Employee Benefits Programs

Attracting and retaining a pool of employees that is talented and committed to their work roles is essential for employers. Workers’ attitudes toward their compensation for their labor directly compare with their employment choices and their levels of engagement and commitment. Employers that design their benefit packages to entice and retain valuable employees realize a valuable and fundamental competitive advantage. When employers use benefit programs strategically for recruitment and retention, they realize increased overall company performance equated with those upholding the status quo. Offering benefits to workers is a sign that their employer has invested in their overall well-being as well as their future. Benefits can enable employers to differentiate their business from competitors. Employee benefits can increase an organization’s bottom line by convincing employees to take part in wellbeing programs. Moreover, satisfied employees mean reduced conflicts with employers. Those with fewer complaints and those that are satisfied spend more time working for their employers, bringing their best selves to their workplaces. Also, by creating positive employee morale, effective rewards programs increase the productivity of the organization as a whole.

Important Aspects Organizations Must Consider in Employee Benefits Programs

Organizations should consider the laws and regulations governing employee benefits when developing their benefits programs. They should develop their programs by incorporating the basic, federally stipulated employee benefits (Klonoski, 2016, p. 53). For instance, in the United States, the law requires employers to provide their employees with benefits such as health care benefits or Social Security. Some of the common legally sanctioned employee benefits comprise unemployment insurance, social security, and workers’ compensation insurance. Organizations operating in the United States must provide their employees the three benefits to protect them in cases of injury, unemployment, or disability. In Germany, the provision of employment benefits such as health care and retirement started in the 19th century while in the U.S., they were adopted in stages (Klonoski, 2016, p. 53). Overall, disregard of the employee benefits is tantamount to a violation of the employment law; thus the organization involved can be prosecuted.

It is prudent for organizations to develop their reward programs to comply with their business goals and objectives. Reward programs are one of the ways used by employers to improve the performance of their firms (Njanja, Maina, Kibet, & Njagi, 2013, p. 4). There is a positive relationship between reward management and the standards of performance in organizations. As such, organizations such as the Kenya Power and Lighting Company have developed rewards such as cash bonuses in a bid to increase its employees’ performance in the form of prompt and quality service (Njanja et al., 2013, p. 4). Organizations should use performance benefits options that help in shaping and planning employee performance and provide appropriate performance measuring tools. Also, rewards should be applied as a method of encouraging good behavior and productivity among employees. In this case, working overtime, teamwork, productivity, reliability, outstanding customer feedback, taking initiative, meeting deadlines or timeliness, and exceptional attendance among employees should be encouraged and rewarded. As such, organizations should design or come up with systems for measuring or quantifying all employee performance aspects so that benefits and rewards are given accordingly. Also, they should revisit the programs periodically to ensure it advances as employee requirements and regulations change while still boosting business priorities.

While developing their employee benefits programs, employers should pay attention to aspects that create value for their employees. If employers desire to achieve their goals, the benefits program they offer must have personal value to their employees (Tessema, Ready, & Embaye, 2013, p. 4). Thus, organizations should consider the recipient’s preferences. Employers should conduct research to determine what benefits are most important to their workers. The benefits must be timely and delivered in a manner that is preferred by the recipients. They may determine employee or potential employees’ preferences by surveying them to establish what benefit types have the most value for them. For instance, part-time retail workers will normally value a higher percentage discount for employee purchases over a bonus plan that is sales-based, whereas a company that hires a huge number of working parents might have more value in a benefit such as a child care subsidy.

Organizations should also consider the cultural factors that may influence the effect of the benefits programs they adopt. Cultures influence people’s lifestyle, attitudes, personality traits, and behaviors (Osabiya, 2015, p. 64). As globalization of business increases, variances in values and beliefs cause some challenges for human resource departments of multinational organizations (Tessema et al., 2013, p. 6). Culture, therefore, is one of the most critical factors affecting benefits and rewards management. Employees of different countries have varying perceptions and attitudes of the benefits process. Also, multinationals must balance between global consistencies with local relevance in their benefits programs. Cultural variances across locations can be managed provided they observe the strategic commonalities that uphold the organization’s underlying principles.

A Comparison of Income Protection and Pay for Time Not Worked Programs

An income protection program is a form of benefit offered by employers to employees as a back-up to their wages or salaries in the event that they lose their ability to work; for instance, due to sickness, disability, or when they are no longer able to work (Aguinis, 2011, p. 10). Some jurisdictions have enacted laws that make income protection programs mandatory. For example, Canadian organizations contribute to a fund that offers income protection in the occurrence of a disability (Aguinis, 2011, p. 10). In the United States, employers are required to submit 50 percent of every employee’s contribution to social security to secure their income in case of death, or of an incapacity that deters the worker from doing significant work for one year, and also when employees attain retirement age. On the other hand, pay for time not worked relates to a benefits program that allows employees to earn their salaries in times such as during holidays, funeral leave, time spent traveling for business, jury duty, vacations, jury duty, military duty, personal days, and sick leave (Citeman, 2010). Unlike income protection program which guarantees employees income when they fail to report to work due to uncertainties such as incapacitation, pay for time not worked arises from expected or planned events that are part of the normal employment activities that are recognized and agreed upon by employers and their employees. There are different benefits in different countries, and the percentages of the income employees earn during these periods vary based on the laws providing for them. For instance, in Canada, the University of Alberta gives their employees a monthly income of 70 percent of their salary whenever they become severely disabled, while in the U.S., employers are required to deposit 50 percent of their employees’ contribution to income protection programs (Aguinis, 2011, pg. 10). Overall, both income protection and pay for time not worked programs guarantee employees their salaries in the course of their employment term, particularly when they do not work while their service contract is still operational.

Appropriate Other Benefits

Flextime is one of the most appropriate types of other benefits that can be offered to employees to increase their performance and increase their satisfaction. Burnout causes about 20 to 50 percent of annual employee resignation (Robinson, 2018). If organizations adopt strategies that prevent employee burnout, they help their workforce to build the timetable that works best for their lifestyle. As such, they are encouraged to attend their workplaces earlier and leave earlier, or attend to appointments and reserve time to relax with their loved ones at home. Consequently, the employees are able to balance between work and their private lives. Furthermore, employers can motivate their employees by allowing them to chart their own course. Moreover, flextime makes employees feel trusted by their employers, and this helps in building a good employer-employee relationship which improves workers productivity. Employees can also benefit from freebies from their employers as a form of other benefits (Robinson, 2018). Also, branded items such as T-shirts, pens, utensils, stickers, and books among many others can increase their pride, make them feel rewarded, and spread the word about an organization’s product or services. Freebies of these kinds make employees happy about their organization and connect them around their organization office.  Other forms of freebies may include tickets to a local game or group movie passes, and this make them feel recognized and valued by their employers, positively impacting their performance.

Employers can use shared meals as a form of other benefits to motivate their employees and retain them. For example, Google uses a similar program whereby it offers its employees over-the-top perks, such as lunches made by a professional chef (Jones, 2017). Also, Twitter provides its employees three catered meals each day. Shared meals offer an opportunity for workers to bond together and allow organizations’ leadership or line managers to interact with them outside the normal work environment. This program helps everyone in the organization to build a good relationship amongst them, a factor that is critical for effective performance in the workplace due to unity and shared goals. Alternatively, organizations can adopt employee service or product discounts as a form of other benefits to their workers. Employers can enable their workforce to benefit from the products or services they sell or offer to their organizations’ customers (Robinson, 2018). This form of benefit can enable employees to feel appreciated and recognized by their employers and to benefit from their labor. Also, it enables employers to take advantage of their employees as their marketing agents. For instance, if phone and food companies offer their employees their products at a discount, the beneficiaries can use them at home or elsewhere, and this can attract customers to purchase the commodities.

An Employee Benefits Package for Any Exempt or Non-Exempt Position Level

Both exempt and non-exempt employees can be provided with benefits packages such as free meals at their workplaces. Since exempt employees are not eligible to overtime pay, they can be provided with benefits that may make them feel appreciated for the extra time they have sacrificed for the benefit of their employer (Doyle, 2019). However, non-exempt employees are remunerated for the time they work rather than the task they accomplish; more work can be done if such workers are kept satisfied (Morley, 2019). Since these employees might be willing to work longer to earn more wages, they are likely to benefit because more work is completed without disruption or breaks in between. For example, employers and employees tend to benefit if free meals are used as a benefits package.  


Employee benefits programs create a strategic value as they help organizations to attract and retain qualified and productive employees. Organizations can also use employee benefits to motivate their workforce. However, these gains can only be realized if organizations develop the programs based on the applicable law. They should apply benefits programs that correspond to their goals since different benefit programs serve different purposes. The benefits should be relevant and valuable to the recipients since employees have varying tastes and interests that should be met for them to be comfortable and motivated at work. Also, the cultural backgrounds of every employee should be considered during the formulation of the programs because different cultures treasure or have varying lifestyles and attitudes of different items or actions. Income protection programs are the benefits offered to employees whenever they cannot work due to incapacitation, whereas pay for time not worked programs are the benefits provided to employees whenever they are not at work due to well settled work programs and calendars.


Aguinis, H. (2011). Performance management. Edinburgh: Edinburgh Business School.

Doyle, A. (2019). Difference between an exempt and a non-exempt employee. The Balance Careers. Updated February 22, 2019.  Retrieved from

Jones, K. (2017). The most desirable employee benefits. Harvard Business Review. Posted on February 15, 2017.  

Klonoski, R. (2016). Defining employee benefits: A managerial perspective. International Journal of Human Resource Studies, 6(2): 52-72.

Morley, M. (2019). What are the benefits of being exempt vs. non-exempt? Chron. Updated April 05, 2019. Retrieved from

Njanja, W. L., Maina, R. N., Kibet, L. K., & Kageni Njagi, K. (2013). Effect of reward on employee performance: A case of Kenya Power and Lighting Company Ltd., Nakuru, Kenya. International Journal of Business and Management, 8(21): 41-49.

Osabiya, B. J. (2015). The effect of employees’ motivation on organizational performance. Journal of Public Administration and Policy Research, 7(4): 62-75.

Rao, S. R. (2010). Pay for time not worked: Human resource management. Citeman, September 8, 2010. Retrieved from

Robinson, E. (2018). 14 creative (and affordable) employee benefits you should start offering now. Gusto Blog. January 18, 2018. Retrieved from

Tessema, M. T., Ready, K. J. & Embaye, A. B. (2013). The effects of employee recognition, pay, and benefits on job satisfaction: Cross country evidence. Journal of Business and Economics, 4(1): 1-12.  

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