Assignment task:
Please site textbook: Martocchio, J. (2020). Strategic Compensation: A Human Resource Management Approach (10th ed.) Pearson. And outside source:
Please response to both discussions below regarding the following case views about whether discretionary employee benefits should be an entitlement or something earned based on performance.
NG1...To determine whether discretionary employee benefits should be considered entitlements or linked to performance, it's essential to first define what discretionary benefits are and their significance. These benefits can be categorized into three main types: protection benefits, paid time off (PTO), and services (Martocchio, 2020). Protection programs provide financial support for unforeseen events and wellness initiatives for families. PTO allows employees to take paid time away from work, helping them balance their professional and personal responsibilities. Services encompass a wide range of employee interests, which allow organizations to maintain a competitive advantage. Overall, discretionary benefits aim to enhance work-life balance and improve both professional and personal experiences.
Imagine the resentment and inequities that could arise if only some employees received PTO or vacation time while others did not. This demonstrates why discretionary benefits should be considered entitlements rather than performance-based rewards. While it may be reasonable for employees to earn a percentage of a retirement match based on performance, withholding essential benefits like family assistance programs from those who need them most is highly unfair.
From personal experience, not all performance evaluations are conducted fairly or impartially. Making access to discretionary benefits contingent on performance evaluations can lead to injustice. Furthermore, issues such as preferential treatment and nepotism can create barriers, making it challenging for employees to earn benefits based on performance. To promote equity and inclusion, organizations must ensure that all employees have access to certain discretionary benefits (McGrath & Rocchi, 2024).
Ultimately, discretionary benefits function like welfare practices by enhancing employees' comfort and growth, both intellectually and socially (Martocchio, 2020). Since these benefits can significantly improve employees' quality of life-financially, mentally, and intellectually-they should be considered entitlements for all employees. Additionally, providing these benefits can boost productivity and foster loyalty (Higginbotham, 2021).
Discretionary benefits are also vital for attracting talent. A recent survey revealed that 60 percent of respondents see employee benefits as a key factor in their decision to accept a job offer (Martocchio, 2020). By offering an inclusive and comprehensive discretionary benefits package, organizations can effectively distinguish themselves in a competitive job market.
In conclusion, discretionary employee benefits play a crucial role in fostering a supportive work environment and enhancing overall employee well-being. Given their significance in promoting work-life balance and improving the quality of life for all employees, these benefits should be treated as entitlements rather than performance-based rewards.
References:
Higginbotham. (2021, October 1). Discretionary employee benefits 101.
McGrath, L., & Rocchi, V. (2024, July 16). Building an inclusive benefits program for your employees.
Strategic Compensation: Martocchio, J. J. (2020). Strategic compensation: a human resource management approach (10th ed.). Hoboken, NJ: Pearson Education, Inc. ISBN: 9780135192146
GJ2).My point would be that this is a debatable question. Whether discretionary employee benefits should automatically come as an entitlement or be performance-based are valid 'for' and 'against' arguments. However, in my opinion, the factor is situational and depends upon the nature of the benefit and the goals of the organization.
Entitlement Benefits: It is also desirable that some discretionary benefits should be granted as an entitlement to all employees, inasmuch as these would contribute to employee welfare and productivity. Health insurance, wellness programs, and paid time off are just a few of the most meaningful benefit resources in maintaining a healthy and engaged workforce.These benefits build job satisfaction, fewer absences from work, and a sense of equitability and security. Once everyone has all these basic benefits, this builds a positive work environment that will attract and retain the best.
Moreover, offering certain benefits to all employees, regardless of performance, can promote equity and inclusiveness. Employees from different backgrounds and with varying personal circumstances may have different needs, and offering these benefits universally can help create a more supportive workplace. For example, providing child care assistance or mental health resources benefits everyone, not just high performers, and it helps address personal barriers that could affect job performance.
Performance-Based Benefits: On the other hand, linking some benefits to performance will encourage employees to aim for excellence. Performance-based benefits might include such things as bonuses, stock options, or additional time off. These types of benefits reward employees for exceeding expectations within their job roles and contribute to the success of the company. These benefits align directly with individual and organizational goals-rewarding high performance and encouraging a results-oriented culture. Those who contribute more may feel that they deserve more, and this fosters a culture of meritocracy.
However, there is another side of the coin to making benefits performance-based. This system may breed an environment where only star performers get benefits, and the rest may be demotivated, especially in cases where the performance indicators are not well spelt out or transparently measured. Secondly, it could alienate those employees who function in support capacities and lack as much scope for standout performance in such measurable areas of performance.
A Hybrid Approach: My view is that the optimal approach is a hybrid approach. Health insurance, wellness programs, retirement contributions, and other forms of basic discretionary benefits are viewed as entitlements given to all employees, since these forms of perks are very significant in fostering a care-oriented and enabling work environment and guaranteeing the overall welfare of employees.
At the same time, organizations can offer performance-based benefits as incentives for employees who go above and beyond. This could include additional bonuses, career development opportunities, or even access to higher-tier benefits, such as extra paid leave or flexible working arrangements.
This caters for equity and fairness, while at the same time providing motivation through performance-based rewards. It makes sure that all are taken care of, while at the same time creating room for the top performers to be recognized and rewarded for their contribution.
In other words, discretionary employee benefits should combine elements of both entitlements and performance-based rewards. Only if major benefits are provided to everyone, while others are performance-based, could an organization succeed in creating a work team that is motivated, inclusive, and productive.
References
Balkin, D. B. (2023). Theorizing the relationship between discretionary employee benefits and individual performance. Human Resource Management Review, Issue 1.
Martocchio, J. (2020). Strategic Compensation: A Human Resource Approach. Boston: Pearson Education.
Miller, E. (2024). Discretionary benefits. Retrieved from AIHR
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2022). Fundamentals of Human Resource Management (9th ed.). McGraw-Hill Education.
"Discretionary benefits are instrumental in not only attracting and retaining employees but also in fostering loyalty and commitment, especially when aligned with company values and employee needs" (Noe et al., 2022, p. 344).
Dessler, G. (2023). Human Resource Management (17th ed.). Pearson Education.
"When discretionary benefits are tied to performance, organizations can better align their compensation strategies with corporate objectives, ensuring that high performers are rewarded for their contributions" (Dessler, 2023, p. 291).