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 :
- To create and improve sound industrial relations .
- To motivate the employees by identifying and satisfying their unsatisfied needs .
- To provide security to the employees against social risks like old age benefits and maternity benefits .
- To provide health to the employees and safety against accidents .
- To promote employees welfare .
- To create a sense of belongingness among employees and to retain them. Hence , fringe benefits are called golden handcuffs.
- 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 .
12 Comments. Leave new
Elaborate and informative. Good job.
Good work 🙂
Informative article
nice
Nice!!
Good work!
Good work!
Informative!
good job!
Will promote a healthy work environment
Elaborative and well written
Great work.