Discretionary Benefits
Introduction
Currently, discretionary benefits show a significant cost to organizations. The management has realized that the motivation of employees leads to more productivity, increased loyalty, effective recruitment, as well as reduced labor turnover. For this reason, workers have realized that they need to provide discretionary benefits. There are different categories of discretionary benefits. According to, discretionary benefits are extra benefits not required legally that are provided by employers. Despite not being legally needed, there are regulations provided by the government for regulation for the provision of discretionary benefits. These government regulations ensure there is fairness, non-discrimination as well as continued benefits. For this reason, it is essential to analyze the categories of discretionary benefits and its benefits.
There are three types of discretionary benefits. First, there are protection program benefits that offer family benefits, promote wellness, as well as guard against loss of income that is caused by catastrophic factors such as disability, sickness, or death. Second, there is paid time off benefits that provide workers time off with wages for events such as vacations, volunteerism, and holidays. Third, there is are services benefit that provides enhancements in the form of tuition reimbursement as well as daycare support to workers as well as their families. Overall, all these types of discretionary benefits are essential to employers and employees.
Moreover, discretionary benefits have significant benefits. Discretionary benefits may contribute to an organization’s competitive advantage. Mainly this is because discretionary benefits may weaken the imperatives of planned compensation. More so, companies that offer discretionary benefits to workers are less likely to stimulate competitive advantage than firms that have designed discretionary worker benefits to suit the condition. As a result of companies enjoying comparative advantage, it sells more goods at a lower cost; hence there are increased sales.
Besides, managers may provide discretionary benefits to promote employee behaviors with value. For example, if workers benefit from reimbursement programs, as a result, they contribute to imperatives of product differentiation as well as cost reduction. Also, the knowledge gained from job-related education can enhance employee creativity as well as their capability to suggest cost-effective means of work. At the same time, deferred sharing profits can contribute to organizations’ imperatives through instilling ownership sense in employees as well as a drive to assist position the firm to have significant profits in the long run.
In addition, a firm may use discretionary benefits to differentiate itself from the competition. As a result, competitive benefits convey messages that the firm is the better place to work since it invests in employees’ well-being. Consequently, these lucrative benefits attract more applicants, such as high high-quality contestants allowing the firm to hire qualified employees. For this reason, discretionary benefits are advantageous as it helps companies to have the advantage of hiring skilled personnel.
Additionally, the tax advantage from discretionary benefits offers strategic value. For this reason, the tax advantage transforms into companies’ cost savings. As a result, these savings may be applied to stimulate competitive advantage. For instance, firms that pursue differentiation strategies can invest these savings into research as well as development programs and employee development. According to CITE, companies that seek lower-cost strategies can be in a better position for the competition since these savings can enable firms to lower products and services prices without reducing profits. Discretionary benefits help companies to have strategic values.
From the above analysis, there are different categories of discretionary benefits. There is a protection program, paid time off, and service benefits. The different categories of discretion benefits provide numerous benefits such as offering organization competitive advantage, promoting employee’s behaviors, offering strategic value, and helping the company to attract the application of qualified. I feel