Case Study: Carter Cleaning Company

“When employees and employers,

have a commitment to one another,

everyone benefits.”

Presented By:
Sumit Singal
3129
INTRODUCTION
Management is concerned with
 Attracting and keeping employees, whose performance meets at least
minimum levels of acceptability.
 And at keeping absenteeism and turnover to tolerable levels.
 The provision of benefits and services can be and are important in
maintaining the employees.
 It helps in reducing or keeping the absenteeism and turnover low
 Financial incentives are paid to specific employees whose work is above
standard.
 Employee benefits on the other hand, are available to all employees
based on their membership in the organization.
 Meaning
 These benefits are usually known as Fringe Benefits.

 The International Labour Organization has defined fringe benefits as “

Wages are often augmented by special cash benefits, by the provision
of medical and other services, or by payments in kind that form part of
wage for expenditure on the goods and services.

 In addition, workers commonly receive such benefits as holidays with

pay, low-cost meals, low rent housing, etc.
Features of Fringe Benefits
 Fringe Benefits are those payments or benefits which a
worker enjoys in addition to the wages or salaries he
receives.
 Offered to them to stimulate their interest in their
work and to make their job more attractive and
productive
 Represents a labour cost to employer.
 It is never a direct reward geared to the output.
 It is enjoyed by all the employees.
Objectives
 To keep in line with the prevailing practices of offering
benefits which are given by similar concerns.
 To recruit and retain the best personnel.
 To foster good morale.
 To improve and furnish the organizational image.
 To provide for the needs of the employees and protect
them against certain hazards of life.
 To comply with benefits regulations.
Factors Determining Fringe Benefits
 Cost
 Ability to pay
 The needs of the employees
 The bargaining strength of the Trade union
 Public relations
 Social responsibility
Classification of Fringe Benefits
Fringe Benefits

Employee Payment for

Bonus and
Security Time Not
Awards
Payments Worked
Contd…..
Employee Security Payments
These include:-

 Payments under the Workmen’s Compensation Act.

 Accidental Insurance.
 Pensions.
 Contributions to saving plans and health and welfare
funds.
Contd….
Payment for Time Not Worked
These include:-

 Rest Period
 Holidays
 Vacations
 Sick Leave
 Severance Pay
 Leave of absence
Contd….
Bonus and Awards
These consist of financial amenities and advantages such
as:-
 Holidays
 Over time and shift premiums
 Attendance bonus
 Diwali Bonus
 Profit-sharing bonus
 Suggestion Awards
 Year end Bonus
Employee Services
These services are usually provided by the organization at no cost to the employee
or at a significant reduction from what might have to be paid without the
organization’s support.
These services include:-
 Eating facilities
 Transportation facilities
 Child care facilities
 Housing services
 Financial and legal services
 Purchasing services
 Recreational, social and cultural programmes
 Educational services
 Medical services
 Flexitime
Problems raised by Benefit Programmes
 Change of Paternalism
 Excessive Expenditure
 Fads become Fashionable
 Maintenance of the least productive workers
 Neglect of other personnel functions
Case Study: Carter Cleaning Company
 It has traditionally provided only legislatively required
benefits for its employees.
 At present Jennifer can see several potential problems with
the company’s policies regarding benefits and services, such
as:
 She wants to know, what the other companies are providing
to their employees.
 High labour turnover
 Low productivity
 Dissatisfaction among the employees
 No formal policy or inconsistent policy
Recommended Policy Statement
The Employee Benefit and Service Plan should include:-
Benefits:-
1. Insurance- Accidental, life and health
2. Pension Scheme after retirement
3. Rest period at regular intervals
4. Paid vacations of 12 days per year
5. Sick leaves
6. Severance pay
7. Bonus on different occasions and year end bonus
Contd….
Services:-
There should be a provision for:-
1. Company restaurants, cafeterias, canteens etc.
2. Parking lots and bus services.
3. Day care centers for children
4. Company owned housing and subsidized housing.
5. Loan funds, income tax service, legal aid, saving plans.
6. Company operated stores and discounts on company
products.
7. Clinics and hospitals.
8. Flexitime.
Advantages
 Turnover will be reduced
 Enhancement of morale
 Employee commitment will be more.
 Increases the productivity
 Goodwill
 Employees will be more satisfied
Disadvantages
 Company’s cost will increase
 Employees will demand more what they are getting
now, or in short, they will expect more and more.
 The employees who are not productive, they are given
these benefits which are not needed.
 If benefits are given in excess, then the employees will
start thinking that these benefits are their right..
How Jennifer can determine that the company
should have Day Care Centers or not
Jennifer can determine that is there any need of day care
center or not in the following ways:-
 She can go for a Questionnaire and ask for the feedback
from the employees. In this way she will come to know
about what employees need.
 If the other companies in the same industry are
providing these centers then it is advisable that Jennifer
should also provide this service to her employees.
 She should also take into consideration the company’s
ability to pay for day care centers.
Thank You