Page 140 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes 3. Satisfy employee objectives
4. Promote recruitment
5. Minimize turnover
6. Reduce overtime costs

Finance Act 2005 was introduced for the financial year commencing
from April 1, 2005. The fringe benefit tax was abolished in the Finance
Bill of 2009 by Finance Minister Pranab Mukherjee.

Principles of Fringe Benefits
There are few factors that must be considered while determining the fringe benefits, which
must be provided to the employees of a company. They are:
1. Benefits and services must be provided to the employees of a company to provide
them better protection and encourage their welfare. The top management should not
feel as if it is doing some charity by giving incentives to their employees.
2. The benefits that are provided to the employees should fulfill the real life requirements
of the employees.
3. The benefits and services should be cost effective.
4. Fringe benefits should be monitored with proper planning.
5. While determining the fringe benefits, the requirements of employees that are
communicated by union representatives must be, considered.
6. The employees of a company should be well informed so that they can make better
utilization of fringe benefits.

Table 6.1: Examples of Monetary Benefits

Benefits Example

Legally requited payments Old age; survivors and health insurance
Worker’s compensation
Unemployment compensation.
Dependent and long term Pension plan
benefits Group life insurance
Group Health insurance
Prepaid legal plans
Sick leave
Dental benefits
Maternity leave

Payments for time not worked Vacations
Holidays
Voting pay allowance
Other benefits Travel allowance
Company car and subsidies
Child care facilities
Employee meal allowances
Moving expense

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