28 April 2020
In a world where financial and emotional wellness is becoming the top priority in most workplaces, the management is taking all measures to retain their employees and keep them satisfied. It is no wonder that employees sometimes leave one company for another based on employee benefits, be it financial or non-financial. Most multinational corporations and stabilised start-ups have started recognising importance of money and the relief and ease financial incentives can bring to a person.
Most companies tend to focus more towards non-financial benefits due to their longer-lasting effects and their stronger de-stressing abilities. Financial benefits, on the other hand, give employees the freedom to spend the money on their needs and emergencies. Financial benefits are fairly simple and can depend on the kind of position you occupy in the company.
Some common and effective financial benefits that are provided by most organisations are :
Wage incentives are an extra motivation for workers who have achieved numbers beyond the desired or targeted results. Productivity Linked Wage Incentives reward hard working and ambitious workers and encourages them to be more innovative and productive with their methods, making them more efficient. Productivity Linked Wage Incentives are mostly found in departments where immediate results can be measured. For example, most companies implement Productivity Linked Wage Incentives for the sales department at their organisation. Hence, on top of a base salary offered, the worker also gets a certain amount of money for every ‘x’ sales made. There are a number of efficiency and wage plans that can be followed, for example, the Halsey Plan ensures that every worker gets a minimum wage, and a bonus is ensured if you complete the work within a stipulated amount of time.
Holiday bonuses are given off very generously to top-tier professionals. However, this does not mean that entry level employees go home for the holidays empty handed. Bonuses are actually given once a year, and most companies choose to give this off during a festival or holiday since this is when there is a major out-flux of money. The Payment of Bonus Act, 1965, applicable from 1st April 2014, has made it mandatory for a Company of at least 5 years of establishment with profits to pay their employees a bonus of no more than 20% of 7000 and no less than 8.33% of 7000.
Stock options allow employees to buy company shares at a price lower than the market price. The stock options are offered to the employees at a grant price (say half the original market price) and you can ‘invest in’ the company and feel a sense of ownership. This helps most employees give their best to the current company. Some of the largest companies, including Infosys, Microsoft and Amazon have granted stock options to their employees. Stock options help minimise the tax impact. Keeping too much stock options, however, is considered risky. Putting a large amount of money in one basket can swing either way, and if something negative happens, it often results in a loss of a lot of money.
Financial security after retirement is of utmost importance. While not all organisations offer a pension after retirement, the concept of a provident fund has become a must for all employers, however big or small. It is a retirement savings plan, managed by the government. Provident funds also go to differently-abled workers who are unable to continue service due to some reason. Some provident funds allow an early payout in case of some sort of emergency.
Penalising someone for not coming into work sounds like a sad but obvious punishment. However, many companies allow their workers to take leaves upto 30 days without any pay-cut. This eases the pressure on the workers. They can rest at home and recover from some accident, or even attend a family vacation without the fear of a pay cut.
While financial benefits may not be looked upon by employees with as much enthusiasm and excitement as non-financial benefits, they often help on rainy days. The holiday bonuses help you pay the extra money that goes into shopping, the paid leaves ensure that you relax and recharge yourself at regular intervals without the fear of losing money, and the retirement benefits help you sleep sound at night.