Benefits and services are expensive. But management is to maintain a reasonably attractive benefits and services package to recruit and keep qualified employees. How does a firm design attractive benefits and services package? Managing of an effective benefit and service programme involves four steps with three interveners:
Step 1: Basic Pay Determination: Benefits and services are the additional motivation to basic pay to the employees. Therefore, management is to decide the basic pay structure of the organization and then benefits and services will be determined and be added with the direct compensation. How human resource management does it is discussed in the previous pay management chapter.
Step 2: Benefits and Services Survey: Now, a survey of the benefits and services offered by other firms in the same industry is to be made to know the existing industry practices. Both primary and secondary data would be used to get full picture view in this respect.
Step 3: Benefits and Service Structure and Rules: Now, actual benefits and service structure will be designed in consistent with the intervening forces discussed above. The specific rules regarding each element of benefits and services shall be prepared in detail to avoid any future problem. They are :
a) Employee Opinion: It is desired to involve employees and unions to make sense to find out desired benefits and services. Interview, discussion reports, memos etc are the tools to know about their preferences. Personal interviews with a cross section of employees, meetings with collective bargaining agent and small groups of employees, and questionnaires circulated among selected employees will provide opinions regarding employee preferences and choices.
b) Management Philosophy: Functional actions are derived from organizational mission, vision and management philosophies. Thus, to set objectives and strategy for benefits and services, managerial philosophies will be taken into consideration to ensure consistency of actions.
c) Legislation and Court Decisions: The laws relating to benefits and services which is mandatory upon organizations and relevant decisions of the court shall be a benchmark for designing benefits and services structure of the firm.
Step 4 : Benefits and Services Execution: Execution of benefits and services structure needs training to the people who will execute it in the organization. Continuous monitoring will ensure controlling costs of benefits and services and will ensure improving it through adjustments and cost containment.
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