What are the Principles and Administration of Fringe Benefits ?

Principles of Fringes :

The following principles must govern the administration of fringe benefits:

  1. Benefits and services need to be provided to the employees on the basis of a genuine interest in the protection and promotion of their well-being. The management should not feel that the fringes are trust upon them. Nor should the management feel that they are providing the benefits as a matter of charity. 
  2. The benefit need to satisfy a real need. Employees resist or are indifferent to any benefits which is not liked by them
  3. The benefits need to be cost-effective.
  4. The benefit needs to be as broad-based as possible.
  5. The wishes of employees as expressed by their union representatives and the bargaining power of the union need to be considered.
  6. Employees need to be educated to make use of the benefits.

Administration of Fringe Benefits :

Organizations fumble while administering employee benefits and services. Yielding to the pressure of unions, employees, demand or in deference to social response trends, companies have added newer benefits and services to the list, which is already lengthy. Organizations have seldom established objectives, systematic plans, and standards determine the appropriateness of the programs. This patchwork of benefits and services has caused several problems. These problems can be avoided if the following lines are taken while administration indirect remuneration. The steps are:

  1. Establishing benefit objective.
  2. Assessing environment factors.
  3. Assessing competitiveness : How should our benefits compare to our competitors.
  4. Communication benefit information.
  5. Controlling benefit costs and evaluation establishing benefits objectives.

HR-Professionals 12 Compensation 12


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