How to Add Fringe Benefits to Your Employee Plan

Employee Benefits Administration - Maine Small Business Administration

Fringe benefits and employee perks in form include different kinds of monetary compensations offered to workers as well as their regular salaries or wages. For example, there are the cash compensations or payments given in lieu of certificates, which are also known as incentive pay. Other instances where an individual exchanges salary for any other type of benefit is commonly known as a “cash-value” or “pay for performance” scheme. Under this concept, companies or organizations may compensate their workers for their efforts instead of simply paying them for their salaries.

This allowance is one of the most contentious fringe benefits in the workplace. Employees are usually uneasy about receiving such payments as their contributions or efforts may not be well valued by the company. Many employees feel that such payments encourage their co-workers to acquire additional benefits so that they too can enjoy the same monetary benefits. Consequently, some employees may not be really keen on receiving fringe benefits at all. Their resistance toward this perk can be attributed to the fact that these perks, unlike regular wages and salaries, cannot be traded back or traded in the event that they become unwanted.

Nevertheless, some employers continue to resort to this practice despite the uneasiness among employees. In such cases, there are several reasons why employees may not want to sell out such benefits. One reason is that they may feel it is unfair that those who are paid for services they render should get more than the people who do the same job but are paid for lesser service. Another is that they may not like the idea of their performance enhancing benefits becoming trade-offs from their regular wages or salaries. In any case, there are several ways to make employee fringe benefits more attractive than regular ones.

One way to make these perks more appealing to employees is to provide them with multiple options. Instead of offering the same benefits to all employees, a company can offer them to all employees, but require them to turn in specific performance records in return for their fringe benefits. In some cases, the company may offer employees incentives to turn in excellent performance records or higher bonuses if they perform exceptionally well. The idea is that if the employee is willing to take the risk and try to achieve higher bonus or wage, then his chances of achieving these objectives will rise accordingly.

Another way to make fringe benefits more attractive to employees is to make them readable. Instead of tying employees to their benefits for a fixed period of time, companies can give them stock options instead. This option allows employees to exchange their fringe benefits for stock options once they reach a certain age or if they attain certain occupational qualifications. Stock options, however, should be treated as an added incentive. It is not guaranteed means of making employees take up these plans, but if they value their stock options highly enough, they may be more willing to sign up for a plan.

It would be best to consult with your human resources or payroll department when deciding how to implement this plan. They will know the benefits and risks to the company, and the best way to go about implementing a plan that will satisfy both parties. However, it is possible for you to incorporate fringe benefits into your benefits package, even if you are not particularly into them. Just make sure to weigh the costs and benefits to ensure that you are not signing up for something that will negatively affect your business.