HR Practice For Payroll Practitioners

HR Practice for Payroll Practitioners

Employee benefits

This is an indirect form of remuneration and may not involve a direct payment of cash to the employee but it still has a cost to the organisation.

Deciding what benefits to provide

Like rewards and pay methods, there is also a cost involved with any benefit provided for employees.

Key points in deciding to use benefits are:

Do not have too many

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• Discover how they are viewed by employees • Try to offer what employees want

Do not have too many

This is basically common sense. The more benefits you have, the more complex it is to manage them. That means a higher cost and a decrease in the value employees see in them. Keep to some basic benefits and if there are already a number of them available think about reducing them by cashing up (by agreement with employees). As stated above, too many benefits can diminish their worth in the eyes of employees. The other side to this is how employees see the benefit in the first place. If the employee does not see a monetary advantage in the benefit or an actual positive payback to them they may have little interest in it and the employer’s desired outcome will not be achieved. So the benefit, to be effective, has to be seen by employees as giving them a meaningful advantage (to either themselves or their family, e.g. medical insurance). How they are viewed by employees

Offer what employees want

Benefits can be very individualised to suit the employee who wants them. This means a range of benefits will cover the needs of most employees, when some only want certain benefits but are not interested in others.

© New Zealand Payroll Practitioners Association, Sep 2024, Ver 12

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