You are on page 1of 16

HRM Principles & Practices (Second Edition)

Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 1

CHAPTER

BENEFITS AND REWARDS

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 2

PREVIEW

The reasons why employers offer benefits to


employees.

The statutorily required benefits.

Some common non-statutory benefits.

The various methods of rewarding employees.

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 3

WHY PROVIDE BENEFITS?


Many benefits are compulsory under the
following laws:

Employment Act

Sabah Labour Ordinance

Sarawak Labour Ordinance

Employees Provident Fund Act

Employees Social Security Act

Workmens Compensation Act

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 4

WHY PROVIDE BENEFITS


(cont.)
Benefits can:

Help attract staff to join the organization

Help retain existing employees

Increase morale of employees, which may


lead to higher productivity

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 5

STATUTORY BENEFITS

Maternity leave

Sick leave

Annual leave

Paid public holidays

Contribution to Employees Provident Fund

Contribution to Employees Social Security


Organization or Purchase of insurance policy

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 6

NON-STATUTORY BENEFITS
Time-off payments:
Marriage
Birth of a child (paternity leave)
Personal emergencies
Pilgrimage
Studies
Death of a relative
HRM Principles & Practices (Second Edition)
Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 7

NON-STATUTORY BENEFITS
(cont.)
Health care:

Payment of medical bills

Hospitalization benefits

Payment of optical bills

Payment of dental bills

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 8

NON-STATUTORY BENEFITS
(cont.)
Other benefits:

Insurance (other than SOCSO)

Financial services

Discounted goods/services

Retirement benefits

Educational assistance

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 9

FLEXI-BENEFITS/
CAFETERIA BENEFITS

Employees may be offered a menu of


benefits from which to choose. Limits will be
set for different groups of employees.

The package of benefits is thus customized


by each employee for his personal needs
and can be changed as his needs change.

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 10

REWARDS
Incentives and rewards:

Drive behaviour to higher levels

Create competition

Help to retain the best performers

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 11

REWARDS (cont.)
To be effective, reward schemes must:

Allow many employees to be winners

Be perceived as fair

Drive suitable behaviours

Be perceived as attractive

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 12

FINANCIAL REWARDS

Wage increments

Bonuses

Profit-sharing schemes

Commissions

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 13

NON-FINANCIAL REWARDS

Performance awards

Letters of appreciation

Long service awards

Sponsorship to attend conferences

Award ceremonies

Tokens of appreciation

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 14

TUTORIAL Discussed next


Monday

Why do employers offer benefits to


employees?

Briefly explain the statutory benefits that


must be provided to employees (statutory
benefits)

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 15

REVIEW

The reasons why employers offer benefits to


employees.

The statutorily required benefits.

Some common non-statutory benefits.

The various methods of rewarding employees.

HRM Principles & Practices (Second Edition)


Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 6 16

You might also like