The basic elements of labor welfare measures are:
- Labor welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status;
- Welfare measures are an addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining;
- Labor welfare schemes are flexible and ever changing. New welfare measures are added to the existing ones from time to time;
- Welfare measures may be introduced by the employers, government, employees (trade unions) or by any social or charitable agency.
- The purpose of labor welfare is to bring about the development of the whole personality of the workers to make a better workforce, improve the lot of the working class and thereby make a worker a good employee and a happy citizen; and
- Employee welfare is an essential part of social welfare. It involves adjustment of an employee’s work life and family life to the community or social life.
The most important characteristics of employee benefits are:
- They are not directly related to merit but they often improve with status and length of service;
- They do not necessarily benefit all employees e.g. a person who has good health will not benefit from medical schemes;
- They are not universal. Large company’s usually have a wide range of fringe benefits while small company’s tend to have very few or none at all;
- Once established they are difficult to abolish and become accepted by the employees as a normal condition of service rather than a benefit;
- They do not necessarily attract candidates to an organisation but it is possible they discourage employees from leaving; and
- They probably increase job satisfaction but will certainly bring dissatisfaction if they are inconsistently and carelessly administered.
Importance of Welfare Schemes
The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labor force for the organization. The purpose of providing such facilities is to make their work life better and also to raise their standard of living.
The important benefits of welfare measures can be summarized as follows:
- To provide better physical and mental health to workers and thus promote a healthy work environment;
- Facilities like housing schemes, medical benefits, and education and recreation facilities for workers’ families help in raising their standards of living which makes workers to pay more attention towards work and thus increases their productivity;
- Workers take active interest in their jobs and work with a feeling of involvement and participation resulting to a stable labour force.
- In addition, employee welfare measures increase the productivity of organization and promote healthy industrial relations thereby maintaining industrial peace and to a greater extent reduce social evils prevalent among the labors such as substance abuse, etc.
The objectives of the employee benefits policies and practices of an organization are to:
- Provide an attractive and competitive total remuneration package which attracts and retains high-quality employees; provide for the personal needs of employees;
- Increase the commitment of employees to the organization; and
- Provide for some people a taxefficient method of remuneration.
Normal benefits provided by a business seldom make a direct and immediate impact on performance. They can, however, create more favourable attitudes towards the business which can improve commitment and organizational performance in the longer term.