Page 142 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes 9.13 Fringe Benefits

Fringe benefits, which do not bear direct relationships to job performance, range from 25-40 per
cent of the total sales compensation package. Fringe benefits, like monetary compensation, are
not motivating factors. In Maslow's hierarchy, fringe benefits contribute to fulfillment of safety
and security needs, although some (such as payment of country club dues) contribute to fulfillment
of esteem and other higher order needs.
As the variety of fringes has expanded, individual fringes have been added that appeal more to
some groups than others - people with bad teeth are the ones most interested in dental insurance
while those with children are the ones most interested in plans for paying education and tuition
fees for dependants. An increasing number of companies offer a "cafeteria" approach to fringe
benefits.

Table 9.3: Fringe Benefits – A Compendium of Types Available to Sales
Personnel in some companies

Time Organisation's dues
Holidays Trade association
Vacations Civic clubs
Sick leave Country clubs
Personal leave Professional association
Sabbaticals
Pregnancy leave
Automobile
Retirement Programme Miscellaneous
Social security (mandatory) Use of vacation spot
Pension plan Parking
Profit sharing Dry cleaning and laundry
Salary reduction plans Lunches (all or part)
Employee stock purchase plan Secretarial services
Company-provided housing
Insurance and Medical Legal services
Physical examinations Financial counselling
Medical payments and reimbursements Tuition for continuing education
Hospitalisation insurance programmes
Dental insurance Financial support for dependants
Disability insurance education
Life insurance Credit unions
Travel insurance Discounts for purchases of company
Accident insurance products
Worker's compensation (mandatory) Child care payments
Unemployment insurance (mandatory) Matching funds to charities and schools
Cancer insurance Company social events
Psychotherapy expense Company sports tournaments
Payment of moving expenses

Source: Developed at a Shirt-sleeve Seminar, Atlanta Chapter, Sales and Marketing Executives International.
In this approach, the company offers a core of basic benefits – the benefits required by law plus
other traditional benefits, including paid vacations, medical, disability, and death benefits and
a retirement programme. Employees then use credits (based on age, pay, family status and years
of company service) to obtain optional benefits not included in the core; this lets employees
select those benefits that best fit their needs. Also, because of changing needs employees are
given opportunity to change their choice. Companies using the cafeteria also have "awareness
programmes" aimed at making employees aware of the benefits available.

136 LOVELY PROFESSIONAL UNIVERSITY