Compare the different types of benefits offered by organisations and the merits of each. (AC 1.4)

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Businesses provide a wide range of benefits to their employees in an effort to draw in, keep, and inspire talent. These advantages typically fall into one of three main categories:

Financial Benefits

The term “financial benefits” describes monetary compensation that is provided to employees directly. Salary, commissions, bonuses, profit-sharing, stock options, and retirement plans are some examples of these forms of compensation (Nayak & Narayan, 2019).

Advantages of Monetary Benefits

  • Bonuses provide a clear and immediate financial benefit
  • The potential for earning additional income motivate employees

Disadvantages

  • They can sometimes encourage short-term thinking and behaviour

Non Financial Benefits

As non-cash benefits, employees receive intangible rewards. Payroll-based time off, adjustable work hours, remote work choices, and subsidised health insurance are a few potential perks.

Advantages

  • They foster employee loyalty and dedication to the company, lowering stress levels, and promoting work-life balance (Nayak & Narayan, 2019).
  • They can be extremely important in luring and keeping top personnel, particularly from those who place a higher priority on work-life balance than monetary rewards.

Overall Judgment

Both financial and non-financial benefits play essential roles in attracting, retaining, and motivating employees. Financial benefits like bonuses offer clear, immediate incentives for performance, while non-financial benefits like flexible working hours enhance overall employee satisfaction and work-life balance. A balanced approach, incorporating both types of benefits, can ensure a motivated and loyal workforce, driving long-term organizational success.

Other HR03 Assignment Assessment Criteria’s

  • Assess the contribution of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance. (AC 1.5)
  • Assess the business context of the reward environment (AC 2.1)
  • Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight. (AC 2.2)
  • Explain how organisations use insight to develop reward packages and approaches. (AC 2.3)
  • Explain the legislative requirements that impact reward practice. (AC 2.4)
  • Assess different approaches to performance management. (AC 3.1)
  • Review the role of people practice in supporting line managers to make consistent and appropriate reward judgements. (AC 3.2)
  • Explain how line managers make reward judgements based on organisational approaches to reward. (AC 3.3)

References 

Ahmad, S., 2015. Green human resource management: Policies and practices. Cogent business & management, 2(1), p.1030817.

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