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Are You Getting the Best Benefit From Your Benefits?

Benefits Overview
From Brooks C. Holtom, Ph.D., for About.com

Is your benefits package giving you the payback you deserve in increased employee appreciation and satisfaction? Chances are, it’s not. On average, organizations spend 41 cents for benefits for every dollar of payroll. That’s 29 percent of the total employee compensation package. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68 percent of the cost or market value of the benefits they receive.

Employees undervalue their benefits for many reasons including: employers communicate the value of the benefits poorly, the employees have little or no choice in benefits packages or options, and the employees misunderstand the market value of benefits.

Maximize the Value of Benefits Expenditures
Employers can overcome these factors by allowing employees to make choices and by providing lots of information. You can jump start the education process by providing paycheck inserts that detail your cost for each employee benefit. Other ways to get employees to think about the value of their benefits include interactive computer quizzes, benefits fairs, telephone hot lines, workplace posters and video tapes or television.

Firms that wish to maximize the value of their benefits expenditures need to survey their employees to ask them what they value and how much. Benefits surveys or focus groups are important first steps in understanding employee preferences. Relevant questions might include the following.

    * What benefits are most important to you?
    * If you could choose one new benefit, what would it be?
    * If you were given X dollars for benefits, how would you spend them?

Follow-up research about the cost of the benefits employees desire can help you determine which programs will provide the most “bang for the buck.” On the basis of the data developed, you can adapt your benefit offerings or provide choices consistent with organizational objectives such as employee retention or performance.

The variety of benefits offered today is immense. Some benefits, such as medical and retirement benefits, are almost institutionalized or expected in the United States. However, others are not—and these are the benefits that set companies apart. Organizational values are often manifest in the benefits organizations offer. Thus, they help to establish an organization’s positive reputation in the marketplace.

So, isn't it about time to reconsider the benefits package your company offers? Following is a long list of benefits that are offered across hundreds of U.S. firms. The cost of these benefits varies as do employee and employer perceptions about the value they deliver. The key for organizations looking for a competitive edge is to determine what benefits you can provide that are most valued and useful to employees. Hopefully, these benefits will approach a 1:1 cost to perceived benefit ratio!

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Brooks C. Holtom is an Assistant Professor of Organizational Behavior at Marquette University. He teaches graduate and undergraduate courses in Organizational Behavior and Strategic Human Resource Management. Professor Holtom’s research focuses on employee retention and performance. His research has been published in the Academy of Management Journal, the Academy of Management Executive, the Journal of Managerial Issues and Human Resource Management Review. Contact him at: brooks.holtom@marquette.edu2.

http://humanresources.about.com/od/benefits/a/bestbenefits.htm

Source : About.com
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