Page 141 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Unit 6: Compensation and Rewards

Types of Fringe Benefits Notes

As we have discussed in the concept, fringe benefits can be of two types. One that can be
measured in terms of money value and the other that cannot be measured in terms of money
value. Fringe benefits such as medical insurance and holiday pay that can be associated with
money value are known as monetary benefits whereas benefits such as company newspaper
and company service that cannot be associated with any money value are known as non-
monetary benefits.

Table 6.2: Examples of Non-monetary Benefits

Benefits Example

Treats Free lunch
Coffee breaks
Picnics
Birthday treats
Dinner for the family
Knick-Knacks Company watches
Desk accessories
Wallets
T-shirts
Diaries and planner

Important Fringe Benefits
Some important fringe benefits are:

• Payment for the time during which employees have not worked
• Insurance benefits
• Compensation benefits
• Pension plans

Payment for the Time Employees have not Worked
This fringe benefit forms an important benefit for the employees of company. Mostly every
company provides the payment for time not worked benefit to its employees. Payment for
time not worked benefit can be of two types, on-the-job free time payment and off-the-job
free time payment. On-the-job free time includes lunch periods, coffee breaks, rest periods,
get-ready times and wash-up times whereas off-the-job free time includes vacations, sick
leave, public holidays and casual leave.
Insurance Benefits

Insurance benefits are also an important fringe benefit for the employees of a company.
Nowadays, every company provides its employees with the facility of chasing insurance
policies at a price, which is much less than the cost the employees would have to pay if they
were to buy insurance themselves.

Compensation Benefits
Companies also provide compensation benefits to its workers against some disability or
injuries to the employees or their family members. Other employees of the company
contribute to the funds that are collected for the ill or injured employees. All these
compensation benefits form a part of the Workmen’s Compensation Act.

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