The Concept of Employee Welfare and Benefits

Definition of Welfare

Employee welfare measures are also known as fringe benefits and services. The International Labour Organization (ILO) defines labour welfare as a term which means services, facilities and amenities as may be established in or outside the vicinity of undertakings to enable the persons employed in them to perform their work in healthy, congenial surroundings and to provide them with amenities conducive to good health and high morale. Employee Welfare can also be defined the efforts to make life worth living for workmen and is provided over and above the wages. According to Todd “employee welfare means anything done for the comfort and improvement, intellectual or social, of the employees over and above the wages paid which is not a necessity of the industry.

Welfare services may be provided for matters concerning employees which are not immediately connected with their jobs although they may be connected generally with their place of work. These matters will include individual services relating to employees’ welfare such as private help with counselling on personal problems, assistance with problems of health or sickness and special services for retired employees. Group services may include the provision of social and sporting activities and restaurants. Child-care facilities may be provided for individual employees but on a collective basis.

Objectives of Employee welfare

Objectives of Employee Welfare Employee welfare is in the interest of the employee, the employer and the society as a whole. These objectives of employee welfare are: To provide better life and health to the workers; To relieve workers from industrial fatigue and to improve intellectual, cultural and material conditions of living of the workers; It reduces labor turnover and absenteeism; Welfare measures help to improve the goodwill and public image of the enterprise; It helps to improve industrial relations and industrial peace; It helps to improve employee productivity; and It improves the loyalty and morale of the employees

Theories of Employee Welfare

There are several theories relating to welfare. These include:

The Police Theory

This theory is based on the contention that a minimum standard of welfare is necessary for labourers. Here the assumption is that without policing, that is, without compulsion, employers do not provide even the minimum facilities for workers;

The Religious Theory

The religious theory is based on the concept that man is essentially a religious animal. The Philanthropic Theory based on man’s love for mankind; Trusteeship Theory also called the Paternalistic Theory of Labour Welfare which is based on the fact that the industrialist or employer holds the total industrial estate, properties, and profits accruing from them in a trust.

The Placating Theory

This theory argues that timely and periodical acts of labour welfare can appease the workers. They are some kind of pacifiers which come with a friendly gesture.

The Public Relation Theory

This theory provides the basis for an atmosphere of goodwill between labour and management, and also between management and the public, labour welfare programmes. Under this theory, work is viewed as a sort of an advertisement to help an organization to project its good image and build up and promote good and healthy public relations.

The Functional Theory

This is also called the Efficiency Theory, and it is based on the fact that welfare work is used as a means to secure, preserve and develop the efficiency and productivity of labour, It is obvious that if an employer takes good care of his workers, they will tend to become more efficient and will thereby step up production.

Types of Employee Welfare Schemes

Welfare services fall into two categories: individual or personal services in connection with sickness, bereavement, domestic problems, employment problems, and elderly and retired employees; group services, which consist of sports and social activities, clubs for retired staff and benevolent organizations.

Whether individual or group, employee services will either be intramural or extramural; or statutory or voluntary.

Intramural services are provided within the organization like Canteen, Rest rooms, Uniform etc. Extramural are provided outside the organization like Housing, Education, Child welfare, Leave travel facilities, Interest free loans etc.

Statutory welfare services are those provided for in various pieces of labor legislation. While Voluntary welfare services includes those activities which are undertaken by employers for their voluntary work.

The statutory welfare schemes include provision of:

  • safe Drinking Water at all the working places
  • Facilities for sitting; First aid appliances
  • adequate Latrines and Urinals
  • proper and sufficient Lighting
  • adequate Washing places
  • adequate Changing rooms
  • Rest rooms
  • Harassment Policy as well as Maternity & paternity Leave.

Non statutory welfare schemes include:

  • Personal Health Care (Regular medical check-ups) provided by some companies
  • Flexi-time that provide employees an opportunity to work with flexible working schedules
  • Employee Assistance Programs like external counseling service so that employees or members of their immediate family can get counseling on various matters
  • Medical Insurance Scheme
  • Employee Referral Scheme to encourage employees to refer friends and relatives for employment in the organization and Canteen facilities.

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