Employee benefits

1. Part 1 – Relevance of
Employee Benefits
ALI SAEED

2. Introduction
 Employee benefits are non-cash and indirect compensations which are paid to
workers.
 These benefits are often issued to employees on top of their already derived
wages and salary. The aim of these is to retain and attract employees
 Since employees really love benefits, they seek out recognition and appreciation
for their contributions and hard work done.
Since employees are the most valuable asset of companies,
HR management values employees more than pay lip

3. Concept of Base Salary Cost
 The base salary cost can be defined as an amount which is paid to an employee
whenever a work is accomplished
 The base salary cost is different from salary, benefits, compensation, bonus, or other
forms of rewards which can be availed to employees
 When a work is applied for, the base salary becomes the amount which will be offered to
the worker for those specific tasks to be performed
Base salary is similar to Gross income but both have a lot of
differences

4. Importance of Incentive Compensation
Increase productivity
 Employees are driven by incentives to become more productive. Productive workforce
improves the success of the business
Reduction in the turnover of employees
 Issuing of incentives does not only ensure that employees are motivated but it also ensures
that these employees spend longer time in office affairs
Attracts new talent
 Research shows that incentives attracts 57% of candidates and acts as their highest
consideration before a job is accepted
Businesses are beginning to adopt measures of incentives in
order to improve the attainment of the success of the
business

5. Concept of EVA
 The Economic Value Added is a way of measuring the financial performance of a company
from their residual wealth. In order words, EVA is the operating profit minus the cost of
capital
 The performance of a company along with its management is assessed when when wealth
and profits are created for the shareholders
 The calculations of the Economic Value Added is solely dependent on the invested amount
and suitable for companies with rich assets
If the EVA of a company is negative, this means that enough
value is not generated from the funds

6. Concept of BSC
 A Balanced Score Card is used to evaluate employees based on different
quantitative factors and metrics
 The objectives of what needs to be accomplished is communicated to
employees using the Balanced Score Card
 A “Balanced” view of the overall performance of the organisation can be
understood by the adoption of strategic measures through BSC
Services, products, and projects are effectively prioritized by
the use of BSC

7. Expatriate Compensation
 An expatriate compensation is an additional money paid to workers of a company
abroad. These benefits can be a housing allowance or a relocation allowance, etc.
 The aim is to keep international employees abroad at a level of finance which is sufficient
during their international work or task
 This acts as a package of compensation along with the normal benefits and salary
offered in the home country of the employee
The expatriate compensation attracts employees who are
both interested and qualifies for international assignments
and tasks

8. Introduction – Part 2
 Study shows that the issuance of benefits and compensation appeals to the
employees within the organisation
 It helps to build a positive relationship with employees
 The effectiveness in terms of productivity and output is usually improved when
compensation schemes and benefits are ensured
The effectiveness of compensation can be measured using
HR Analytics

9. Concept of Healthcare Benefits
 Healthcare benefit is a reward and talent attraction procedure utilized by
organizations which provides different healthcare packages to motivate
employees
 The reason why this is adopted by organizations is to make healthcare cheap for
its workforce, motivate the employees, improve their efficiency and dedication,
and other reasons
 Research shows that the job satisfaction of 53% of employees who received
healthcare benefits was improved
Study from 45 business organizations shows that healthcare
benefits helped their organization to grow

10. Importance of HR Analytics in
Compensation
 Benchmarking Salaries: since hiring candidates is expensive and time consuming, the
HR analytics enables HR managers perform better negotiations when hiring, and helps
them to also understand how a candidate ranks compared to his/her peers and the
market demand for that role
 Ensures Pay Equity: racial or gender discrimination can be eliminated with the
adoption of HR Analytics which prevents some employee from receiving less due to
their sex or background
 Tracking business goals: the goal of the business can be easily monitored and tracked
to see if the organisation is working in accordance with its objectives, vision or
compensation
Compensation analytics assist HR managers to understand
those key drivers to reward or retain the right talent

11. References
 L. (2021, March 18). Employee medical insurance: Why is health insurance important? -
Pacific Prime. Pacific Prime’s Blog. https://www.pacificprime.com/blog/employee-
medical-insurance-why.html
 SHRM. (2017, August 22). Designing Global Compensation Systems.
https://www.shrm.org/resourcesandtools/tools-and-
samples/toolkits/pages/designingglobalcompensation.aspx
 Cook, I. (2021, March 12). HR Moments Matter: 3 Compensation Challenges Solved
With People Analytics. Visier Inc. https://www.visier.com/clarity/compensation-people-
analytics/
 Kantaria, S., Al Tamimi & Co, Barr, G., & Vesuvala, R. (2020, February 1). Thomson
Reuters Portal (beta) Signon. UK Practical Law.