Employee Benefits Final

Human Resource
Management
Submitted By
Priyanka Punjabi
Sunita Punjabi
Rahul Rane
Dannis SAyyed
Omkar Sawant
Mihir Shah

MMS - C
13-Mar-14
Human Resource Management -
Employee Benefits
Human Resource Management - Employee Benefits

MET Institute Of Management Page 2



Company overview

Ashok Piramal Group of Companies
Ashok Piramal Group has a presence in diverse business sectors, from textiles to real
estate and engineering to entertainment. Each company operates independently and
has its own set of directors and shareholders. Every company in the Group while
working towards their individual objectives, shares the Group's collective vision and
philosophy. The groups success lies in creating niche models that ensures each
company features among the top 5 in the industry they operate.

Morarjee Textiles is a leader in premium shirting and high fashion printed fabric in the
domestic as well as global arena and boasts of all the leading apparel brands as its
clients.The real estate company, Peninsula Land Ltd was the first company in Mumbai
to develop a cotton textile mill land after it was opened up for development. This
development changed the face of Central Mumbai and transformed it into the most
preferred business district.

The engineering business under PMP Auto Components Private Ltd includes auto
components and cutting tools business. Two major acquisitions in Europe in the last two
years in the wiping systems, have catapulted PMP Autos growth and today it
commands a 7% of the market share in Europe in the wiping systems business.
The Group is on an accelerated growth path and in keeping with its vision, promises to
create maximum value for its shareholders.



Vision:

Investing in Growth Globally.
We will touch the lives of at least one in five people on the globe, thereby creating
enormous value for all our stakeholders.



Introduction

Employee benefits include various types of non-wage compensation provided
to employees in addition to their normal wages or salaries. In instances where an
employee exchanges (cash) wages for some other form of benefit is generally referred
to as a 'salary packaging' or 'salary exchange' arrangement. In most countries, most
kinds of employee benefits are taxable to at least some degree.
Examples of these benefits include: housing (employer-provided or employer-paid),
group insurance (health, dental, life etc.), disability income protection, retirement
benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-
paid), social security, profit sharing, funding of education, and other specialized
benefits.
The purpose of employee benefits is to increase the economic security of staff
members, and in doing so, improve worker retention across the organization. As such, it
is one component of reward management.
The term perks is often used colloquially to refer to those benefits of a more
discretionary nature. Often, perks are given to employees who are doing notably well
and/or have seniority. Common perks are take-home vehicles, hotel stays, free
refreshments, leisure activities on work time (golf, etc.), stationery, allowances for lunch,
andwhen multiple choices existfirst choice of such things as job assignments and
vacation scheduling. They may also be given first chance at job promotions when
vacancies exist.
Once you have great employees on board, how do you keep them from jumping ship?
One way is by offering a good benefits package.
Many small-business owners mistakenly believe they cannot afford to offer benefits. But
while going without benefits may boost your bottom line in the short run, than penny-
wise philosophy could strangle your business's chances for long-term prosperity. "There
are certain benefits good employees feel they must have," says Ray Silverstein, founder
of PRO, President's Resource Organization, a small-business advisory network.


Heading the list of must-have benefits is medical insurance, but many job applicants
also demand a retirement plan, disability insurance and more. Tell these applicants no
benefits are offered, and often top-flight candidates will head for the door.
The positive side to this coin: Offer the right benefit, and your business may just jump-
start its growth. "Give employees the benefits they value, and they'll be more satisfied,
miss fewer workdays, be less likely to quit, and have higher commitment to meeting the
company's goals," says Joe Lineberry, a senior vice president at Aon Consulting, a
human resources consulting firm. "The research shows that when employees feel their
benefits needs are satisfied, they're more productive."

Importance of employee benefits:
Helps in retaining performing employees
Increases the goodwill of the firm in the markets
Improves the ability of the firm to attract new talent
Reduced labor turnover
Motivates the employees to give their best for the organization
Helps in improving the various aspects of the employee life
The company ensures that the employees are always motivated



Various types of Employee Benefits

Contingent and Deferred
Benefits
Payment for Time Not
worked
Other Benefits
Pension Maternity Leave Travel Allowances
Life insurance Child Care Leave Company Car and
Subsidies
Health Insurance Sick Leave Employee meal allowances
Tuition aid Benefit Casual Leave Child care facilities
Suggestion Award Earned Leave Residential allowances and
facilities
Provident fund Quarantine Medical Checkups
Disability Insurance Half Time Financial Assistance
Gratuity Study Leave Education



Leaves and Holidays

The employees of any government, non-government or private organization are entitled
to certain types of leaves during their work tenures to help them maintain a proper work-
life balance. Various studies have emphasized the importance of improving the balance
between work and life balance in the daily life for both the employers and employees. It
helps not only to ensure health and happiness for the people but also to help build
productive businesses.
The employees can utilize various types of leaves to take time out for activities that are
important to them including spending time with friends and family, taking part in sports
and recreation, volunteering, or even undertaking further study among others. Let us
have a look at the various types of leaves that employees can avail in India under
different circumstances.
1. Holidays: These are the leaves that are always paid for and no deductions are
made from the salary of the employees. There are the following types of holidays in
India:
National Holidays: These are the fixed holidays that we have in India on the 26th
of January, 15th of August, and 2nd of October every year.
Weekly Holidays: There are either one or two weekly holidays at the end of the
week for all the employees depending upon the organizational policy.
Festivals: Various religious and regional festivals also account for holidays in
India. There are very few festivals like Christmas, which fall on the same date
every year. However, the exact dates of some festivals depend on the lunar
calendar and are subject to change on the sighting of the moon. Each company
can devise its own policy regarding how many festivals it will give a paid leave for,
every year.


According to the Factories Act, 1948, an adult worker shall have a weekly paid
holiday as per the terms of the company

2. Earned Leave or Privilege Leave: The type of leave which the employees earn
as they work for an organisation for a specified number of days. The privilege leave is
sanctioned to the employees without any salary deductions. This type of leave requires
prior approval from the employer except in cases of emergency. The employees are
usually allowed to accumulate their privilege leaves and even encash them in case they
are not availed. The number of privilege leaves admissible may vary on the basis of
industry and region.
3. Casual Leave: The type of leave that is granted for short durations and can
ordinarily be taken with prior information to the employer except in cases when
informing the employer is not possible. Across industries and organizations, there are
different rules for the number of days that casual leaves can be taken at a stretch
varying between three to five to seven days. As a rule, official holidays are not counted
when calculating the number of casual leaves if they fall during the period of casual
leave.
4. Sick Leave or Medical Leave: An employee can call in sick if he is not in a state
to come to office for work. Usually, an employee is entitled to sick leave only after a
stipulated period of employment in an organization. The number of sick leaves
permissible may vary from organization to organization and as a matter of fact, no prior
intimation is required for availing this type of leave. A medical certificate from a
registered medical practitioner may be required to testify the sickness if the sick leave is
being extended for a long period of time.
5. Maternity Leave: This provision is especially available for those women
employees who plan to have a baby. The duration of paid maternity leave is 26 months
and this can be further extended with 16 months of unpaid leave. No deductions can be


made from the leave account of the female employee. This type of leave can also be
taken in case of miscarriage or abortion but the leave limit in such cases is shorter.
6. Quarantine Leave: This type of leave is granted to an employee only if there is
an infectious disease in the family or household of the employee that can be hazardous
to the health of other people in the organization.
7. Half Pay Leave: Generally available to government servants only, this type of
leave is credited to the leave account only after the completion of one year of service in
the organization. As the name suggests, the employee is entitled to half of a days
salary during such a leave.
8. Study Leave or Sabbatical Leave: An employee may be granted a study or
sabbatical leave to enable him to update his knowledge and experience in a way that he
will be of greater use to the Institute after re-joining.
Apart from the various leaves mentioned above, certain sectors and industries also
have provisions for commuted leave, leave not due, paternity leave, extraordinary leave,
childcare leave, hospital leave, special disability leave, and child adoption leave. The
duration of all these types of leaves and the circumstances under which they become
due are subject to specific company policies.



Health & Safety

Employees safety and health should be taken care of in order to protect the employee
against accidents, unhealthy working conditions and to protect workers capacity. In
India, the Factories Act 1948, stipulated certain requirements regarding working
conditions with a view to provide a safe working environment. These provisions relate to
cleanliness, disposal of waste and effluents, ventilation and temperature, dust and
fume, artificial humidification, overcrowding, lighting, drinking water, public utility and
spittoons. Provisions relating to safety measures include fencing of machinery, work on
or near machinery in motion, employment of young persons on dangerous machines,
striking gear and devices for cutting off power, self-acting machines, easing of new
machinery, probation of employment of women and children near cotton openers, hoist
and lifts, explosive or inflammable dust, gas, etc. Precautions in case of fire, power to
require specifications of defective parts to test of stability, safety of buildings and
machinery, etc.
Medical Checkups : organizations provide free medical checkups to their
employees in various fields like complete medical checkup, dental checkup,
cholesterol and blood pressure check etc.
Yoga : Companies provide training in yoga to the employees so that they can
handle the stress involved the job effectively. This is typically done for employees
in high pressure jobs like sales and customer grievance.
Gym and Spa : Many companies have inhouse gym for the staff members where
they can exercise and stay fit if it is difficult for them to go to a gym outside the
office hours. Many companies also provide spa facilities to the employee to help
them relieve stress and tension
Maternity Assistance: Certain companies provide special gynecologist
assistance to the pregnant employees during their maternity leaves. They ensure
that the health of the employee and the child is safe. This may even extend
beyond the birth of the child through regular health checks


Insurance

While all employees serve an important function in the businesses where they work,
certain key employees are vital to business success. Businesses often purchase
insurance to cover the loss of these employees. Loss can occur as a result of death,
disability or certain illnesses. Business owners think of purchasing key employee
insurance as a type of risk management. Banks often require businesses purchase key
employee insurance before granting loans. If the business loses the key employee, it
may not recover the loan money.

Life Insurance:
Key employees contribute talent and knowledge to their companies that do not have a
clear monetary value. Because of this, insurance companies employ one of three
methods for determining the amount of life insurance necessary to cover a key
employee in the event that he dies. The replacement cost method takes into account
the total cost of replacing the employee, including costs associated with decreased
profits, hiring and training, and his current salary. The contribution to earnings method
determines the percentage this key employee contributes to gross earnings of the
business. The simplest method, called the multiples of income method, simply multiplies
the employees current salary five or seven times. If his salary were $200,000 per year,
the business would need to purchase $1 million of life insurance to cover him.

Disability Insurance:
When a key employee becomes disabled due to injury or other traumatic event and
cannot work, the business is likely to suffer. Key employee disability insurance covers
expenses, such as rent or mortgage on the business, employee salaries and benefits,
utilities, taxes, legal fees, maintenance fees. The coverage lasts 12 to 18 months;
enough time to locate, hire and train a replacement. Insurance companies determine
the amount of monthly coverage by analyzing the direct monetary benefit the employee


brings the company and the cost to find a replacement.
Health Insurance:
Many businesses purchase health insurance for all employees, but smaller start-up
businesses, or those with tight budgets, may only be able to afford health insurance for
key employees. Business owners may wish to purchase specialized health insurance
for a key employee that covers only catastrophic illness. This type of insurance does not
cover preventive health doctor visits, prescriptions or other conditions that traditional
insurance covers, so may cost less. It only covers devastating illnesses, such as
cancer, AIDS and other conditions that require very expensive treatments. Business
owners may still choose to purchase traditional insurance for all employees, but add this
catastrophic illness insurance for key employees for added risk management.



Retirement Benifits

Pension:
The minimum eligibility period for receipt of pension is 10 years. A Central Government
servant retiring in accordance with the Pension Rules is entitled to receive
superannuation pension on completion of at least 10 years of qualifying service.
In the case of Family Pension the widow is eligible to receive pension on death of her
spouse after completion of one year of continuous service or before even completion of
one year if the Government servant had been examined by the appropriate Medical
Authority and declared fit for Government service.

W.e.f 1.1.2006, Pension is calculated with reference to average emoluments namely,
the average of the basic pay drawn during the last 10 months of the service or last
basic pay drawn whichever is beneficial. Full pension with 10/20 years of qualifying
service is 50% of the average emoluments or last basic pay drawn whichever is
beneficial. Before 1.1.2006, for qualifying service of less than 33 years, amount of
pension was proportionate to the actual qualifying service broken into completed half-
year periods. For example, if total qualifying service is 30 years and 4 months (i.e. 61
half-year periods), pension will be calculated as under:-

Pension amount = R/2(X)61/66
where R represents average reckonable emoluments for last 10 months of qualifying
service or the last pay drawn as opted by the govt servant.



Minimum pension presently is Rs. 3500 per month. Maximum limit on pension is 50% of
the highest pay in the Government of India (presently Rs. 45,000) per month. Pension
is payable up to and including the date of death.

Commutation of Pension
A Central Government servant has an option to commute a portion of pension, not
exceeding 40% of it, into a lump sum payment with effect from 1.1.1996. No medical
examination is required if the option is exercised within one year of retirement. If the
option is exercised after expiry of one year, he/she will have to under go medical
examination by the specified competent authority.

Lump sum payable is calculated with reference to the Commutation Table constructed
on an actuarial basis. The monthly pension will stand reduced by the portion
commuted and the commuted portion will be restored on the expiry of 15 years from the
date of receipt of the commuted value of pension. Dearness Relief, however, will
continue to be calculated on the basis of the original pension (i.e. without reduction of
commuted portion).

The formula for arriving for commuted value of Pension (CVP) is
CVP = 40 % (X) Commutation factor* (X)12

* The commutation factor will be with reference to age next birthday on the date on
which commutation becomes absolute as per the New Table as Annexure to this
Deptt's O.M. No. 38/37/08- P&PW(A) dated 2.9.2008

Death/Retirement Gratuity

Retirement Gratuity:


This is payable to the retiring Government servant. A minimum of 5 years qualifying
service and eligibility to receive service gratuity/pension is essential to get this one time
lump sum benefit. Retirement gratuity is calculated @ 1/4th of a months Basic Pay plus
Dearness Allowance drawn before retirement for each completed six monthly period of
qualifying service. There is no minimum limit for the amount of gratuity. The retirement
gratuity payable is 16 times the Basic Pay, subject to a maximum of Rs. 10 lakhs.

Death Gratuity:
This is a one-time lump sum benefit payable to the widow/widower or the nominee of a
permanent or a quasi-permanent or a temporary Government servant, including CPF
beneficiaries, dying in harness. There is no stipulation in regard to any minimum length
of service rendered by the deceased employee. Entitlement of death gratuity is
regulated as under:
Qualifying Service Rate
Less than one year 2 times of basic pay
One year or more but less than 5 years 6 times of basic pay
5 years or more but less than 20 years 12 times of basic pay
20 years of more Half of emoluments for every completed 6
monthly period of qualifying service
subject to a maximum of 33 times of
emoluments.

Maximum amount of Death Gratuity admissible is Rs. 10 lakhs w.e.f. 1.1.2006

Service Gratuity:
A retiring Government servant will be entitled to receive service gratuity (and not


pension) if total qualifying service is less than 10 years. Admissible amount is half
months basic pay last drawn for each completed 6 monthly period of qualifying service.
There is no minimum or maximum monetary limit on the quantum. This one time lump
sum payment is distinct from and is paid over and above the retirement gratuity.

Issue of No Demand Certificate:
Dues owed by the retiring employees on account of Licence Fee for Government
accommodation, advances, over payment of pay and allowances are required to be
assessed by the Head of Office and intimated to the Accounts Officer two months in
advance of the date of retirement so that these are recovered from retirement gratuity
before payment. For this purpose the Licence Fee for those in occupation of
Government accommodation is taken into account up to the end of the permissible
period for which accommodation can be retained after retirement under the Rules on
normal rent. The recovery of Licence Fee beyond that period is the responsibility of the
Directorate of Estates. If, for any reason final dues cannot be assessed on time, then
10% of gratuity is withheld from gratuity

General Provident Fund and Incentives:
As per General Provident Fund (Central Services) Rules, 1960, all temporary
Government servants after a continuous service of one year, all re-employed
pensioners (Other than those eligible for admission to the Contributory Provident Fund)
and all permanent Government servants are eligible to subscribe to the Fund. A
subscriber, at the time of joining the fund is required to make a nomination, in the
prescribed form, conferring on one or more persons the right to receive the amount that
may stand to his credit in the fund in the event of his death, before that amount has
become payable or having become payable has not been paid. A subscriber shall
subscribe monthly to the Fund except during the period when he is under suspension.
Subscriptions to the Provident Fund are stopped 3 months prior to the date of
superannuation. Rates of subscription shall not be less than 6% of subscribers
emoluments and not more than his total emoluments. Rate of interest on GPF


accumulations with effect from 1.4.2009 is 8% compounded annually and the rate of
interest will vary according to notifications of the Government. The Rules provide for
drawal of advances/ withdrawals from the Fund for specific purposes.

Deposit Linked Insurance Revised Scheme:
Under the GPF Rules, on the death of subscriber, the person entitled to receive the
amount standing to the credit of the subscriber shall be paid an additional amount equal
to the average balance in the account during the 3 years immediately preceding the
death of the subscriber subject to certain conditions provided in the relevant Rule. The
additional amount payable under that Rule shall not exceed Rs. 60,000/-. To get this
benefit, the subscriber should have put in at least 5 years service at the time of his/her
death.

Contributory Provident Fund:
The Contributory Provident Fund Rules (India), ,1962 are applicable to every non-
pensionable servant of the Government belonging to any of the services under the
control of the President. A subscriber, at the time of joining the Fund is required to
make a nomination in the prescribed Form conferring on one or more persons the right
to receive the amount that may stand to his credit in the Fund in the event of his death,
before that amount has become payable or having become payable has not been paid.

A subscriber shall subscribe monthly to the Fund when on duty or Foreign Service but
not during the period of suspension. Rates of subscription shall not be less than 10% of
the emoluments and not more than his emoluments. The employers contribution at that
percentage prescribed by the Government will be credited to the subscribers account
and this is 10%. Rate of interest with effect from 1.4.2009 is 8% compounded annually.
The Rules provide for drawal of advances/ withdrawals from the CPF for specific
purposes. As in GPF Rules, the CPF Rules also provide for Deposit Linked Insurance
Revised Scheme.


Leave Encashment:
Encashment of leave is a benefit granted under the CCS (Leave) Rules and not a
pensionary benefit. Encashment of Earned Leave/Half Pay Leave standing at the credit
of the retiring Government servant is admissible on the date of retirement subject to a
maximum of 300 days. There is no provision under the Rule for payment of interest on
delayed payment of Leave Encashment.

Central Government Employees Group Insurance Scheme:
A portion of monthly contributions paid while in service is credited in a Saving Fund, on
which interest accrues. A Government servant while entering service has to apply in
Form No. 4 of the above Scheme to the Head of Office, who shall issue a sanction for
the payment of subscribers accumulation in the Savings Fund segment together with
interest and arrange for its disbursement, soon after retirement. Payments under this
Scheme are made in accordance with the Table of Benefit which takes in to account
interest up to the date of cessation of service. Insurance cover benefit under this
Scheme is available to the family in the event of death of the subscriber. No interest is
payable on account of delayed payments under this Scheme.

Superannuation:
An organizational pension program created by a company for the benefit of its
employees.
Also referred to as a "company pension plan". Funds deposited in a superannuation
account will grow typically without any tax implications until retirement or withdrawal.



Voluntary Retirement Scheme (VRS)

In the present globalised scenario, right sizing of the manpower employed in an
organisation has become an important management strategy in order to meet the
increased competition. The voluntary retirement scheme(VRS) is the most humane
technique to provide overall reduction in the existing strength of the employees.

It is a technique used by companies for trimming the workforce employed in the
industrial unit. It is now a commonly method used to dispense off the excess manpower
and thus improve the performance of the organisation. It is a generous,tax-free
severance payment to persuade the employees to voluntarily retire from the company. It
is also known as 'Golden Handshake' as it is the golden route to retrenchment.
In India, the Industrial Disputes Act,1947 puts restrictions on employers in the matter of
reducing excess staff by retrenchment, by closures of establishment and the
retrenchment process involved lot of legalities and complex procedures. Also, any plans
of retrenchment and reduction of staff and workforce are subjected to strong opposition
by trade unions. Hence, VRS was introduced as an alternative legal solution to solve
this problem.
It allowed employers including those in the government undertakings, to offer voluntary
retirement schemes to off-load the surplus manpower and no pressure is put on any
employee to exit. The voluntary retirement schemes were also not subjected to not
vehement opposition by the Unions, because the very nature of its being voluntary and
not using any compulsion. It was introduced in both the public and private sectors.
Public sector undertakings, however, have to obtain prior approval of the government
before offering and implementing the VRS.
A business firm may opt for a voluntary retirement scheme under the following


circumstances:-
Due to recession in the business.
Due to intense competition, the establishment becomes unviable unless
downsizing is resorted to.
Due to joint-ventures with foreign collaborations.
Due to takeovers and mergers.
Due to obsolescences of Product/Technology.
Though the eligibility criteria for VRS varies from company to company, but usually,
employees who have attained 40 years of age or completed 10 years of service are
eligible for voluntary retirement.The scheme applies to all employees including workers
and executives, except the directors of a company. The employee who opts for
voluntary retirement is entitled to get forty five days emoluments for each completed
year of service or monthly emoluments at the time of retirement multiplied by the
remaining months of service before the normal date of service,whichever is less.
Along with these benefits, the employees also get their provident fund and gratuity
dues. Compensation received at the time of voluntary retirement is exempt from tax
under section 10 (10C) of the Income Tax Act, 1961 upto the prescribed amount upon
fulfilling certain stipulated conditions. However,the retiring employee should not be
employed in another company or concern belonging to the same management.
The companies can frame different schemes of voluntary retirement for different classes
of their employees. However, these schemes have to conform to the guidelines
prescribed inrule 2BA of the Income-tax Rules. The guidelines for the purposes
of section 10( 10C ) of the Income-tax Act have been laid down in the rule 2BA of
the Income-tax Rules. The guidelines provide that the scheme of voluntary retirement
framed by a company should be in accordance with the following requirements,
namely :
It applies to an employee of the company who has completed ten years of


service or completed 40 years of age
It applies to all employees (by whatever name called), including workers and
executives of the company excepting Directors of the company
The scheme of voluntary retirement has been drawn to result in overall reduction
in the existing strength of the employees of the company
The vacancy caused by voluntary retirement is not to be filled up, nor the retiring
employee is to be employed in another company or concern belonging to the
same management
The amount receivable on account of voluntary retirement of the employees,
does not exceed the amount equivalent to one and one-half months salary for
each completed year of service or monthly emoluments at the time of retirement
multiplied by the balance months of service left before the date of his retirement
on superannuation. In any case, the amount should not exceed rupees five lakhs
in case of each employee, and
The employee has not availed in the past the benefit of any other voluntary
retirement scheme.

Some companies offer very attractive package of benefits to the employees who opt for
VRS. For example, the VRS scheme may also include providing counselling to
employees about their future managing of funds received under the scheme; offering
rehabilitation facilities to them etc.
A company may make the following announcements while implementing a voluntary
retirement scheme:-
The reasons behind downsizing the organisation.
The eligibility criteria for voluntary retirement scheme.
The age limit and the minimum service period of employees who can apply for
the scheme.
The benefits that are offered to the employees who offer to retire voluntarily.
The rights of the employer to accept or reject any application for voluntary


retirement.
The date up to which the scheme is open.
The income tax benefits and income tax incidence related to the scheme.
It should also indicate that the employees who opt for voluntary retirement and
accept the benefits under such scheme shall not be eligible in future for
employment in the organisation.
Voluntary Retirement Schemes have been legally found to be giving no problem to
employers, employees and their unions. But, the retrenchment plans of an organization
must be compatible to its strategic plans. Its procedure and reasons for introduction
must be discussed with all management staff including top management. One need to
identify departments or employees to whom VRS is applicable and thereby formulate its
terms and conditions and also state the benefits that would be available to those who
took VRS.
Such information should be made available to every employee of the organization,
mentioning the period during which the scheme will be open. Also,existing employees
might face insecurity because of fear of losing their job too. One of the possible
drawback of the VRS is that the efficient employees would leave the company while the
inefficient may stay back. Thus it is the /responsibility of the employer to motivate them
and remove their apprehensions and fears



Employee Welfare Benefits

1. Travelling Allowance : The company reimburses the travelling expenses of the
employees as per the company policy. (maximum 800 Rs per month) For
managers at the higher level of the hierarchy, the company usually provides for a
car allowance and even for company cars. The fuel and the driver expenses in
these cases is paid up by the company as per its policies and is included in the
CTC of the employee. The organization can even provide pick and drop services
for employees. Generally major organizations provide these services to the
women in the organization in case they are needed to work till late in the office.

2. Employee meal allowance : The company reimburses the amount spent on
refreshment and snacks upto a certain limit. For employees who are on sales
call, the company usually reimburses all their expenses spent towards client
management which will include the amount spent on any meetings etc.

3. Residential allowance : The company can offer residential quarters for its
employees and its family to recide. The company also provides for rent for the
accommodation of the employee. Many a times, domestic help is also provided.
This facility is typically provided for outstation employees to ensure that the
change in the location of residence is not a thing to worry about.

4. Child Care Benefits : Many companies ensure that they provide special
importance to the development of the kids of their employees. Starting right from
educational loans to special areas for child recreation within the office areas,


companies do ensure that the concerns regarding the children isnt a reason for
good employees for leaving their organization.

5. Loans : inhouse loan facilities are given to the employees at a subsidized rate of
interest. The loans can cover various needs that requires high investment like
cars, marriage, education, etc. The loans can be given on either advanced salary
basis or the principal amount can be deducted on a monthly basis from the salary
of the employee over a certain period of time.

6. Employee Counseling: Organizations provide counseling service to the
employees regarding their personal problems through professional counselors.
Employee counseling reduces absenteeism, turnover, tardiness etc. They even
provide guidance in identifying the key competencies of employees and thus in
their overall career development.

7. Holidays and vacations: As a measure of staff welfare and in pursuance of
governments policy, a few large organizations established holiday homes at a
number of hill stations, health resorts, and other centers with low charges of
accommodation, so as to encourage employees use this facility for rest and
recuperation in a pleasant environment.

8. Education and Study benefits: Major companies provide further education to
their employees and sponsor it. The executive MBA programmes of various
companies is well known. The company stipulates the minimum number of years
an employee needs to work in the organization before he can avail of this benefit.
In majority of firms, the duration is 5 years.



Ethical Implications of an Employee Incentive Program.

A well-built incentive program motivates employees to accomplish organizational
objectives by rewarding them in ways beyond just salary. For example, offering
employees a commission on the sales they make pushes them to maintain high sales
revenue, benefiting employees and the business as a whole. But incentive programs
also introduce a host of ethical issues that businesses must consider.

Manipulative Programs
An employee incentive program requires funds or resources, so an obvious ethical
concern is whether those funds and resources might serve employees better if the
organization chose a different means of rewarding staff. For example, instead of funding
an incentive program, a company might give its employees an across-the-board raise.
In other words, a companys use of employee incentives might be, or appear,
manipulative rather than mutually beneficial.

Negative Effects
Potential negative consequences are also an ethical concern. For example, suppose an
employee incentive program designates a performance threshold -- such as a sales
number -- above which an employee will earn significantly more money in bonuses.
Striving to meet that threshold might be a constant source of stress for employees --
especially if the base take-home pay is low. The unintended result is lower worker
morale, which undermines the purpose of the employee incentive program. While no
company can predict all the outcomes of an incentive program, careful analysis on a


periodic basis allows a company to adjust the program as necessary to minimize
negative effects.

Fair Distribution
Another ethical problem arises if an employee incentive program doesn't distribute
benefits fairly. For example, the nature of some employees responsibilities might make
it easier for them to earn rewards. Other employees never get the chance to gain similar
benefits, so resentment builds and morale plummets. For this reason, a business must
carefully evaluate its incentive program to ensure all workers have equal access to
potential benefits.

Gaming the System
Unethical employees might find ways to game the system. For example, if the program
rewards production numbers rather than quality, some employees might cut corners to
boost their rewards. Careful design of a program can forestall obvious forms of abuse,
but sooner or later, loopholes will emerge, requiring the business to reevaluate and
perhaps overhaul its program.



Trends



Employee Best Practices
SAS:
While its long been debated whether happy workers are indeed more engaged and
productive than their discontented comrades, and whether organizations that invest
themselves in more generous practices get rewarded with greater profitability, SASs
performance provides irrefutable proof that it does. Some of the most distinguished
employee benefits include
1. Massive gymnasium featuring tennis and basketball courts, a weight room, and a
heated pool
2. An on-site health care clinic, staffed by physicians, nutritionists, physical
therapists, and psychologists also is entirely free
3. Deeply discounted child care is available, in addition to no-cost work-life
counseling which helps employees more effectively manage the stresses of
everyday life
4. Common work areas are routinely filled with snacks and treats.
5. Maternity consultations
6. Baby sitting

Google
Over years, the technological giant has been rated as the best employer in the world.
The reason for that lies not just in the pay structure of the company but also in the way
the company pampers its employees to work effectively. With employee benefit
schemes that reflect innovation and understanding the psyche of customers, google has


undoubtedly become the dream organization for all employees. Certain schemes
include:
1. Cafeterias with free meals
2. Gym and spa
3. Music instruments
4. Cycles and electric scooters for moving within the huge campus
5. Personalized work stations (employees can even get their pets to office)
6. Grooming facilities in campus
7. Outdoor and indoor games
8. Swimming pools
9. Family rooms
10. On site health care



Annexure
Leaves & Holidays
1. What are the various types of leaves that your employees are entitled for?
2. Do you provide for option to carry forward or encash those leaves?
3. Is any overtime allowance given to employees?
4. Is there an annual leave calendar for planning leaves in advance?
5. Is there any form of encouragement given for low absentism?
6. Are there any paid holidays for the employees and their family?
7. Is there provision of company guesthouse or tie-ups with holiday resorts for
subsidized travel options?
8. Are there company picnics & recreation trips?
9. How do you tackle problem of employees extending their leaves or taking
additional leaves?
Provident fund
1. What type of provident fund options do you have for your employees?
2. What is the percentage of company and the employee contribution towards the
same?
Health and safety standards
1. What is the additional coverage/compensation for on-the-job accidents or health
hazards related to occupation?
2. Does the company have in-house medical facilities?
3. Do you provide gym or club memberships or in-house gym & yoga facility?


4. Are there health & safety workshops conducted?
Insurance related
1. Do you provide insurance benefits? If yes, what all type of insurance?
2. Does the company provide group or individual schemes?
3. Does the company charge the contribution of the insurance premium from the
employees salary?
4. Are the insurance benefits such as health and medical benefits extendable to the
family members of the company?
Retirement options
1. What steps does your company take to provide social security for the employees
after retirement?
2. What are the various retirement benefits given to them?
3. Do you provide gratuity for loyal employees?
4. Does your company provide VRS option?
5. What are the VRS benefits offered to them?
Fringe Benefits
Do you provide any fringe benefits?
Concluding question
If we were to ask your employees what 3 things they love that the company does
for them, what would be the most likely answer?



Bibliography
Human Resource Management K. Aswathappa
Personnel and Human Resource Management by P. Subba Rao
Human Resource Management by Gary Dessler
Managing Human Resources by Luis R. Gomez-Mejia, David B. Balkin, Robert L. Cardy
http://www.ashokpiramalgroup.com/
http://www.fastcompany.com/3004953/how-sas-became-worlds-best-place-work
http://computer.howstuffworks.com/googleplex4.html

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