Describe how employee benefits fit into the total compensati

Describe how employee benefits fit into the total compensation function.

Solution

Answer:

Beyond tangible rewards such as pay, and intangibles such as mentoring, a business owner can profoundly shape a worker\'s life by providing a generous package of employee benefits. The entrepreneurs acknowledge that lower level staff contributes to the success of the organization that is why their compensation should include some benefits that are important for their welfare.

Now for an successful entrepreneur to offer generous benefits, you must first practice careful financial planning. Most benefits packages do not come cheap and costs can rise exponentially as your company expands. Furthermore, once you offer a benefit, it is awkward to take it away should the economy turn south.

That said, if your company becomes known for offering good benefits, you will generally find it easier to recruit talented employees and you may even see some positive side effects with respect to marketing and sales. Theeir are several components of those packages:

1. Health insurance

2. Pension benefits like Providend funds etc.

3. House rental allowences.

4. Travel allowences.