Week 7: Discretionary Benefits

As important as discretionary benefits are for a company, it can be far too costly to try to implement too many. When ranking the discretionary benefits in order from “most likely to eliminate” to “least likely to eliminate,” I came up with this list: Tuition reimbursement programs, transportation services, financial education programs, wellness programs, outplacement assistance, employee assistance programs (EAPs), life insurance, family assistance programs, disability insurance, all PTO that is not already legally required, and retirement programs.

I believe that when candidates are looking at discretionary benefits offered by a company, they are drawn most to the insurance they receive, the amount of PTO available, and the retirement programs offered. Therefore, I would like to make sure that much of the costs of discretionary benefits are directed toward these types of benefits. I believe that the service benefits are not utilized as much in companies, however, I do believe that family assistance programs are valued very highly by those who are either parents or have other family affairs that need their attention. I think family assistance programs show a candidate that you care about both them and their family’s well-being. I would be most likely to eliminate tuition reimbursement, because I think that this would be incredibly costly I have seen many businesses function perfectly without this benefit.

One factor that might influence the benefit packages offered is the general age group that is hired into the business. If a business is mostly looking for younger, entry level candidates, they may be more inclined to emphasize retirement plans and PTO, rather than benefits that would be more appealing to older generations such as life and disability insurance. Another factor that might influence the benefits package is the working conditions. A company with more hazardous working conditions would be more likely to offer disability and life insurance.

The benefits offered to employees could impact employee behavior in a variety of ways. Employees who do not think they are being given the discretionary benefits that they deserve might behave with resentment. They might be less productive workers, have a negative attitude, and/or even look for other jobs. Employees who are receiving benefits that they see fit will have higher levels of job satisfaction, may work harder, have a positive attitude, and be as productive as they can. This is a difficult situation to navigate because some employees do receive very good benefits, but have an entitlement mindset and do not appreciate them as much as they should. This can sometimes be avoided with communication, however, it is not easy to please everyone.


Chapter 9 of Strategic Compensation

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