# Benefits

## Overview

What benefits do you get from working? Obviously, you receive some benefits from actually doing your job - pay, for example! But in addition to that, you might find you receive other 'benefits' which go with the job. A bus driver, for example, might get free travel (or a discount) on the company's buses. A retailer might get a shop discount on personal purchases.

Here is some more information about benefits.

### Kinds of benefits

Benefits are a measurable part of total remuneration. They can include annual leave, sick leave and special allowances.

Other benefits include private use of motor vehicles, staff buying privileges, cheap loans, subsidised superannuation, and health insurance. These are called fringe benefits - hence, Fringe Benefit Tax. The popularity of fringe benefits as a means of rewarding people tends to fluctuate as it is largely a reflection of tax policy. There may be tax disincentives for rewarding people through fringe benefits, which make it cheaper for employers to provide extra salary rather than benefits.

Benefits should not include what used to be regarded as 'perks', where an employee might take something from work and regard this as a legitimate benefit.

#### Example: difficult times at Trader

Morale was low in Trader and staff turnover was high. The chief executive decided to use a job satisfaction survey to get a better idea of what was going on. One of the questions in the survey was:

How satisfied are you with the link between performance and pay?

1. Very dissatisfied.
2. Somewhat dissatisfied.
3. Neither satisfied nor dissatisfied.
4. Somewhat satisfied.
5. Very satisfied.

Most staff answered (a). A few answered (b). Nobody answered (c), (d) or (e).

The chief executive and managers decided the best way to address the problem was to introduce a performance bonus system. This would provide cash rewards for good performance. After extensive consultation, a system was proposed to staff. A new performance review process would be a key aspect of the system, and it would provide a platform for determining good performance.

Staff reaction to the proposal was uniformly hostile. Managers were perplexed. 'They say there is no link between performance and rewards, but when we try to fix the problem, they don't like it.'

The managers decided to call in a consultant, Brandy, to assess the situation and provide independent advice. Brandy found that staff and managers had quite different understandings of the word 'performance.' In essence, staff felt performance was about quantity - the amount of work they did. Managers felt performance was about quality - the standard of work.

A typical staff comment was, 'They want us to do more work for a little bit more pay. We are already doing much more than we were a year ago and this improved performance has not been recognised in our pay. I work at least five more hours each week but I have not had a pay rise for three years. For more work, we want more base pay. We're not interested in at-risk pay determined through some fancy performance review system that we don't understand. It's a rip-off. And, a lot of our work is in teams. It wouldn't be fair to reward people individually.'

[back to top]