TABLE OF CONTENT

1) INTRODUCTION [2]

1.1) DEFINITION OF FRINGR BENEFITS [2]

1.2) MEANING [2]

1.3) PERQUISITES [3]

2) OBJECTIVES [5]

3) TYPES OF FRINGE BENEFITS [6]

4) FRINGE BENEFITS – A WAY TO INCREASE EMPLOYEE

PRODUCTIVITY [8]

5) BEST WAYS OF DEALING WITH DIFFICULT EMPLOYES [9]

6) EMPLOYEE BENEFITS [10]

7) ADVANTAGES OF FRINGR BENEFITS [12]

7.1) ADVANTAGES FOR EMPLOYERS [12]

7.2) ADVANTAGES FOR EMPLOYEES [12]

8) DISADVANTAGES OF FRINGE BENEFITS [12]

9) LIVE EXAMPLE OF COMPANY [13]

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1. INTRODUCTION:

1.1Definition of Fringe Benefits:

As per Section 115WB (1) ,narrated in Column 1 of Part A, fringe benefits means
any consideration for employment provided by way of any privilege, service, facility
or amenity, directly or indirectly, provided by an employer, whether by way of
reimbursement or otherwise, to his employees.

1.2Meaning:
Fringe benefits are compensations made to an employee beyond the regular benefit of
being paid for their work.

Some fringe benefits are fairly standard, such as offering a few days of sick time
or paid vacation time. Others can be significantly greater, and rarer. Key executives in
large companies might also enjoy fringe benefits like use of time-
share condominiums, paid continuing education, use of a company jet, use of a
company credit card, discounted or free health club memberships, and a significant
amount of paid vacation.

1.3 Perquisites:

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 The term Perquisites 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. Perquisites, also known as “perks” are the extras that
frequently go with executive status. Used to supplement the basic benefit package,
perks range executive status.

Common perks are company cars, hotel stays, free refreshments, leisure
activities on work time (golf, etc.), stationery, allowances for lunch, Rent free
accommodation, Furnished accommodation, Accommodation at a concessional rate,
Gas, electricity, water supply provided free of cost, Free education, Free transport,
Free domestic servant, Employee stock options(ESOP’S), Interest free advance/loan,
Leave travel concession(LTC), etc.

 DIFFERENCE BETWEEN PERQUISITES AND FRINGE

BENEFITS:

FRINGE BENEFITS PERQUISITES

1. Expense done by employer on the
entertainment facilities of
employee counts under fringe
benefit
2. Fringe benefits are not clubbed
with the salary & the tax on the
same is paid by the employer
1. free education facility provided to
employee's children came under
perquisite
2. The perquisites are clubbed under
the head income from salary and
tax accordingly to employee

3. Fringe benefits are taxed in the
hands of employer
4. Calculation by IT dept for the
purpose of income tax for
deference amount as INCOME is
called fringe benefits.
3. The perquisites are in the hands of
employee himself
4. Perquisites are known as
subsidized facilities like housing,
schooling, conveyance etc, which
is offered by an organization to
their employees.

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Here is more information about fringe benefits.

Flexible benefits allow employees to pick benefits that most their needs. The
idea is to allow each employee to choose a benefit package that is individually
tailored to his or her own needs and situation. It replaces the traditional “one-benefit-
plan-fits-all” programs that dominated organizations for more than 50 years.

The average organization provides fringe benefits worth approximately 40%

of an employee’s salary. Traditional benefit programs were designed for the typical
employees of the 1950s - a male with wife and two children at home. Less than 10%
of employees now fit this stereotype. While 25% of today’s employees are single, a
third is part of two-income families with no children.

The three most popular types of benefit plans:

1. Modular plans: They are pre-designed packages of benefits, with each
module put together to meet the needs of a specific group of employees. So a
module designed for single employees with no dependents might include only
essential benefits. Another, designed for single parents, might have additional
life insurance, disability insurance, and expanded health coverage.

2. Core-plus plans: It consist of a core of essential benefits and a menu-like

selection of other benefits options from which employees can select and add to
the core. Typically, each employee is given “benefit credits,” which allow the
“purchase” of additional benefits that uniquely meet his or her needs.

3. Flexible spending plans: They allow employees to set aside up to the dollar
amount offered in the plan to pay for particular services. It’s a convenient
way, for example, for employees to pay for health-care and dental premiums.
Flexible spending accounts can increase employee take-home pay because
employees don’t have to pay taxes on the dollars they spend out of these
accounts.

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 Most companies realize that fringe benefits like health insurance contribute to
the well being of their employees. Whenever possible, they try to offer at least
partially discounted insurance to an employee, even if they are not legally required to
do so. Fringe benefits like sick or vacation time tend to be fairly standard as well,
even if an employee does not work full time. These paid days off do tend to have a
cap on them. For example, a new employee might get a week’s vacation time to start,
and eight to ten days of sick time for year. Employees entering higher-level positions
may be offered greater fringe benefits as incentive to join a company.

In fields where there is a high demand for workers, such as nursing and
teaching, some unusual fringe benefits may be offered to attract employees. Small
school districts have gotten quite creative in this respect, since teacher salaries are still
relatively low. A few unusual fringe benefits offered by school districts have been
paid housing or use of private lakes for fishing. More likely are paid incentives for
joining a teaching staff such as hiring bonuses, offers to fund continuing education so
teachers get higher degrees and thus higher pay, or offering mentor programs for new
teachers.

Sometimes the fringe benefits turn out to be greatly needed. For example, the
rising cost of private health insurance often makes obtaining a job with a good health
plan highly desirable. Where job compensation is not commensurate with money
needed to live comfortably, housing allowances, or company housing can often make
the difference between being able to take a job and looking elsewhere.

Some companies also pay fringe benefits for those who work night or swing
shifts. These fringe benefits may be in the nature of a 10—30% increase of base
pay for working a non-standard shift. This is called a shift differential and is quite
common in the medical field and in manufacturing.

2. OBJECTIVES:

The view point of employers is that fringe benefits form an important part of
employee incentives to obtain their loyalty and retaining them. The important
objectives of fringe benefits are:

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1. To create and improve sound industrial relations.
2. To boost up employee morale.
3. To motivate the employees by identifying and satisfying their unsatisfied needs.
4. To provide qualitative work environment and work life.
5. To provide security to the employees against social risks like old age benefits
and maternity benefits.
6. To protect the health of the employees and to provide safety to the employees
against accidents.
7. To promote employee’s welfare by providing welfare measures like recreation
facilities.
8. To create a sense of belongingness among employees and to retain them. Hence,
fringe benefits are called golden hand-cuffs.
9. To meet requirements of various legislations relating to fringe benefits.

3. TYPES OF FRINGE BENEFITS:

Organizations provide a variety of fringe benefits. The fringe benefits are classified
under four heads as given here under: 

a. For Employment Security:

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Benefits under this head include unemployment, insurance, technological
adjustment pay, leave travel pay, overtime pay, level for negotiation, leave for
maternity, leave for grievances, holidays, cost of living bonus, call-back pay,
lay-off, retiring rooms, jobs to the sons/daughters of the employees and the
like. 

b. For Health Protection:

 
Benefits under this head include accident insurance, disability insurance,
health insurance, hospitalization, life insurance, medical care, sick benefits,
sick leave, etc. 

c. For Old Age and Retirement:

 
Benefits under this category include: deferred income plans, pension, gratuity,
provident fund, old age assistance, old age counselling , medical benefits for
retired employees, travelling concession to retired employees, jobs to
sons/daughters of the deceased employee and the like. 

d. For Personnel Identification, Participation and Stimulation:

 
This category covers the following benefits: anniversary awards, attendance
bonus, canteen, cooperative credit societies, educational facilities, beauty
parlour services, housing, income tax aid, counselling, quality bonus,
recreational programs, stress counselling, safety measures etc.

The fringe benefits are categorized as follows:

a) Payment for Time not worked: Benefits under this category include: sick leave
with pay, vacation pay, paid rest and relief time, paid lunch periods, grievance time,
bargaining time, travel time etc.

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b) Extra Pay for time Worked: This category covers the benefits such as: premium
pay, incentive bonus, shift premium, old age insurance, profit sharing, unemployment
compensation, Christmas bonus, Deewali or Pooja bonus, food cost subsidy, housing
subsidy, recreation.

4. FRINGE BENEFITS - A WAY TO INCREASE

EMPLOYEE PRODUCTIVITY

Many people believe that increasing fringe benefits, or benefits that are not mandated,
establishes loyalty and boosts production among employees. Some argue these beliefs
are incorrect, but many others support them.

It would be difficult to examine the effects of all possible fringe benefits, but looking
at a few can give employers a sense of how employee productivity might be increased
by offering fringe benefits.

Some countries offer free healthcare, but in other countries, people need to buy
insurance. Offering health insurance is a fringe benefit, and the quality of it could be
directly tied to employee productivity. In general, sick employees are not productive
employees, and any insurance offered to workers should be affordable and offer
reasonable amounts of coverage. Affordability should additionally take into account
things like copayments and deductibles.

As great as fringe benefits may be when it comes to increasing employee productivity,

they aren’t too helpful under bad working conditions. Employees deserve basic rights,
like being treated with respect by supervisors and being paid fairly for their work. All
the benefits in the world may not make up for consistently poor management skills or
under-market pay.

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5. BEST WAYS OF DEALING WITH DIFFICULT
EMPLOYEES:

There are several types of difficult employees who can make the work
environment miserable and unproductive for everyone in the workplace. The
personalities involved may be varied, but there are basic actions helpful in diffusing
most situations. These include acknowledgment of the problem, listening to all
concerns and identifying the problem, and providing constructive feedback when
dealing with difficult employees.

Some people feel if the problem is ignored, it will go away. The simple truth is, like
most problems, ignoring the issue of dealing with difficult employees often leads to
more problems. The best course of action is to acknowledge there is a problem and
implement a plan to ease concerns. Getting to the bottom of the issue as soon as
possible can lead to a smooth and swift resolution.

A supervisor or manager should research the problem personally instead of relying on

the word of another employee. Listening skills are very important at this stage to get
the full story and to understand exactly what the issues are. The manager should
address the problem calmly, allowing the employee time to respond. Clear examples
of the problems experienced should be provided, remembering to address the actions
and not the personal aspects of the person involved.

Identifying the personality of the employee in question is a key component to dealing

with difficult employees. Perfectionists will often take criticism personally, whereas
unproductive employees may not acknowledge constructive criticism at all unless
clear examples and expectations are shown. Documentation and follow-up are also
important when dealing with difficult employees, especially if termination is
considered.

Termination is an option, but research has shown it is more cost effective to try and
resolve difficulties in the workplace rather than hiring and training a new employee.
Some coaching may be required in order to help the employee in identifying the
problem and to give them tools to change their behaviour. When dealing with difficult

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employees, managers should remember that everyone can occasionally have a bad
day. It is when the bad days become a pattern and affect the productivity of others that
actions need to be taken.

Although many people may feel defensive when problems are addressed, providing
constructive feedback can help the employee improve his or her work performance.
Patience and feedback can help the employee to get back on track and become more
productive. This in turn will serve as an example to other supervisors or managers
seeking ways in dealing with difficult employees.

6. EMPLOYEE BENEFITS:

Employee benefits are the extras or perks a person receives from his employer. These
perks are in addition to the basic pay an employee receives in exchange for his work.
For example, some common employee benefits include vacation pay and personal
leave. Some types of employee benefits are required by law while others are optional.
The list of legally required employee benefits varies from place to place.

In many places, employers are required to provide certain employee benefits. For
example, employers in some places are required to pay certain taxes for the benefit of
their employees. Often, employers are required by law to carry certain types of
insurance as well.

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An employer may be required to have insurance that provides coverage if an
employee is hurt on the job, for instance. Sometimes employers are also required to
carry disability insurance to provide at least some income for employees who become
disabled, even if the disability is not the result of a work-related injury.

Often, employers provide employee benefits that are beyond those required by law.
Employers often do this because good benefit packages help them attract qualified
employees.

For example, a person may receive similar job offers from two different companies. If
the pay is about the same, the job candidate may choose the company that provides
the best benefit package. In some cases, employee benefits are seen as so important
that a job applicant may consider taking a lower-paying job if the employee benefits
are very attractive.

For many people, health care coverage is among the most desirable benefits. There
are countless people who do not have medical coverage and have to pay out of pocket
for doctor and dentist visits. A single hospitalization, even for something relatively
minor, has the potential to cost an uninsured person a great deal in medical fees.

If an individual has a family to care for, the potential costs may be even higher. As
such, companies that offer generous medical coverage benefits may have an easier
time attracting and keeping employees.

Another in-demand employee benefit is vacation time. Many companies offer paid

vacation days for employees who have worked for them for a significant period of
time.

These days can be used for any purpose the employee sees fit. He may use them to
travel around the world or even to simply loaf at home in his pajamas. Some
companies offer each employee a set number of days, while others increase vacation
time as employees gain seniority.

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7. ADVANTAGES OF FRINGE BENEFITS:

7.1 ADVANTAGES FOR EMPLOYER

1. Improves efficiency and productivity as employees are assured of security for
themselves and their families.
2. Premiums are tax deductible as corporation expense, which means savings
with quality coverage.
3. Helps attract and retain better qualified employees.
4. Provides high risk coverage at low costs easing the company’s financial
burden.

7.2 ADVANTAGES FOR EMPLOYEES

1. Employees with personal life insurance enjoy additional protection.

2. Confidence in company’s schemes boosts staff morale and pride in company.
3. Employees enjoy cheaper rates negotiated through their employer than they
could obtain as an individual.
4. Peace of mind leading to better productivity as employees are assured of
provision for themselves and families in any mishap.

8. DISADVANTAGES OF FRINGE BENEFITS:

While giving fringe benefits will have significant advantages to employers and
workers, these are some of the drawbacks according to an employment attorney: 

1. For small employers, fringe benefits will cost more. Also, they have less choice
in drafting their worker’s retirement or health plan because of administrative
costs. 

2. The cost of health insurance coverage is steadily rising in the US, making it less
affordable to most employers especially in tough economic times. 

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3. The more benefits a company will provide, the higher the administrative fees
will cost.

4. Employers may face lawsuit (usually on the basis of discrimination) if they fail
to provide fringe benefits to all workers or exclude someone from receiving this.

9. LIVE EXAMPLE OF COMPANY:

 FRINGE BENEFITS IN WIPRO :

1. Cash compensation.

2. Social security and well-being.

3. Development and education.

4. Employee stock purchase program.

5. 5% discount of WIPRO stocks (up to 10% of salary payments)

6. Leave of absence programs (sabbaticals etc.)

7. Relocation program.

8. Railway half-fare season ticket.

9. Family Service: Support in the areas of Childcare

10. Homecare and Eldercare.

11. Bonus for recommending new employees.

12. Special conditions for insurance.

13. Sickness and accident income plan.

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