According to the broad definition of employee benefits, they include such legally required social insurance payments, payments for private retirement and insurance plans, payments for time not worked, extra payments to employees and services to employees. Importance of employees benefits and, therefore, their significance is predetermined by the fact that employee benefits serve as a specific tool for employees’ labour and social rights protection. Moreover, in case a person chooses among several potential employees, he/she will definitely choose the one, who offers higher employees’ benefits. So, providing employees with extra benefits is vital for employers in terms of dealing with competition and retaining employees. Employees’ benefits are especially important for HRM, as they can be used to influence employees’ motivation and stimulate them to work more efficiently. Employee benefits have a potential of letting an employee know that an employer accepts him/her, appreciates his/her efforts and, therefore, take care on his/her safety and health. Thus employee benefit plans can exert significant impact on employees’ morale and productivity. Clear employee benefit plans let companies decrease turnover rate and build trustful relationships between employees and management.
Strategic importance of employee benefit plans is also associated with growing importance of strategic HRM, so, employee benefit plans can also influence long-term people issues, and, by-turn, macro-concerns about organizational structure, performance, culture and values.
Both Gegentech and Zappos are recognized as leading providers of employee benefits. According to Gegentech’s HRM strategy, employee is what matters the most. Employee benefits, offered by Gegentech address not only an employee himself/herself, but employee’s eligible dependents. Eligible dependents include spouses or domestic partners and children. As Gegentech is extremely interested in employee’s motivation, it provides employees with extra competitive benefits along with health and financial ones. Getting these extra benefits depends on person’s contribution into company’s performance. People, who achieved extraordinary success on the way to reaching company’s strategic goals, are awarded cash bonuses, called Genenchecks. Senior management of the firm claims that financial bonuses are to be viewed as a form of partnership between an employee and employer.
Furthermore, the company does everything to let employees not get distracted from work by some other issues, providing them with a wide range of services.
Zappos considers company’s managers and employees to be a family. So, it does not want anyone to leave the family. Therefore, the company provides employees with multitude of various benefits. Most unusual ones are those related to lifestyle (e.g., free smoking cessation classes, biometric screenings with private health consultants etc.) Moreover, employees have access to free fitness, healthy food options on site, pet insurance etc. Employee benefits are designed, so that the company gets a healthy satisfied employee, who is motivated to work as he/she feels company’s care for him/her and does not want to lose the workplace.
Usage of incentives like those, offered by Gegentech and Zappos, is possible within different companies. Nonetheless, using such a wide range of services is possible only in case the company has lots of employees and is profitable enough to spend quite a significant amount of money on extra benefits. The thing is that current legal framework obliges employers to provide employees with quite a significant quantity of benefits, so, modern employer is obliged to spend significant amount of profits on providing employees with all legally required benefits even without adding some extra ones to the package. In other words, only large and rich companies can afford themselves to widen the package of benefits for employees. Moreover, not all the companies are interested in avoiding turnover. In case the company is not interested in avoiding turnover, it is not beneficial for it to add extra benefits for employees as, considering current situation at the labour market, it will easily hire new ones even if it does not provide them with extra benefits. Using Gegentech& Zappos experience will be of use for companies, which are interested in having the same employees. (e.g., those, which elaborate on innovations)
