What are the Advantages of Offering Discretionary Benefits in the Workplace?
Discretionary benefits offer an organization several advantages such as providing competitive ability over other businesses. A company that practices discretionary benefits such as pension plans, life insurance, maternity and paternity leave is most likely to attract qualified candidates for employment hence increasing the company effectiveness since workers are the critical determinants of success. A positive relationship builds between the employer and the employees through the provision of discretionary benefits which help to create peaceful workplace and increase efficiency. Most qualified candidates prefer to work in an environment that is peaceful and promote their physical and mental health (Van Rekom, Berens, and Halderen, 2013). The productivity of employees who are physically and mentally healthy is high since they place their interest and mindset in working rather than worrying about the expenses they need in treatments. Qualified candidates will also prefer companies that consider personal development provided as a discretionary benefit.
What are the Costs Associated with Discretionary Benefits?
The act of providing discretionary benefits in itself is an expense since the company will require to set aside some of its funds to implement the optional activities leading to low revenues and profit. Provision of services such as employee development, mental and physical health care, pension plans, and tuition assistance can result in the use of substantial funds that may have been put to other productive uses. Qualified employees who are after earning huge salaries will not prefer companies that provide discretionary benefits due to the low wages and salaries paid as compared to other organizations (Smeaton, Ray and Knight, 2014). In many cases, the costs of providing such services are deducted from the employees' salaries which lead to a reduction in wages. Not providing such services can also result in labor turnover and loss of skilled workers, and the qualified candidates will be discouraged to seek the job in such a company.
Reference
Smeaton, D., Ray, K., " Knight, G. (2014). Costs and benefits to business of adopting work life balance working practices: A literature review.
Van Rekom, J., Berens, G., " Van Halderen, M. (2013). Corporate social responsibility: Playing to win, or playing not to lose? Doing good by increasing the social benefits of a company’s core activities. Journal of Brand Management, 20(9), 800-814.
