In the workplace, there are various ways to motivate staff, where not everything is remunerative, strictly salary. And although economics is very important to motivate staff, from a certain minimum threshold, there are other mechanisms to achieve greater performance and productivity of workers, such as recognitions, awards, training plans, benefits for the family group, etc. The so-called flexible benefit packages appear within this group of alternatives, that is, a mechanism that exceeds simple monetary motivation.
For the vast majority of theorists, the important thing about a good personnel motivation system is to be able to go beyond the strictly economic-salary and through extra-salary mechanisms, to be able to align the expectations of the employee with those of the company, so that they both have a win-win relationship. In this way, People Management experts have devised numerous extra-salary alternatives, such as recognition programs, participation programs, payment plans for skills-abilities, and flexible benefits, among the main ones.
Going on time to flexible benefits, they allow employees to choose from a menu of benefit options. The idea is to allow each employee to choose a package tailored to their needs and particular situation, replacing the old “omnibus” benefit programs (an equal program for all), which did not recognize the differences in performance and needs among staff..
Flexible benefits are usually divided into:
- modular plans: a set of different benefits, or different levels of benefit coverage, designed for different groups of employees.
- Plans with additional options to the exchanges: a core set of basic benefits and a wide range of additional benefit options that employees can add to the exchanges.
- flexible spending accounts: individual accounts for each employee, financed by the employer, the employee or both.
What features are typically included in these flexible packages?
- dental, eye or medical insurance in addition to the basic ones required by labor legislation;
- variety of investment plans to manage family savings;
- Life and retirement insurance in addition to the basic ones required by labor legislation;
- Holidays in addition to those required by labor law;
- savings programs for children's university studies;
- days off additional to those established by law;
- flexible working hours;
- nurseries for children (inside or outside the company);
- permits to attend school ceremonies;
- etc.
Among the advantages that are usually attributed to flexible benefits are:
- Employees and their families are motivated by seeing that they can choose customized packages, which results in family loyalty with the company, and not only with the worker;
- companies are able to meet the changing needs of a changing workforce;
- By being flexible, these plans make it less expensive (low marginal cost) to introduce new benefits, since the new option is only added as one more element among the great variety that can be chosen;
Intranets are especially useful for the development of these plans (in medium and large companies), since through them, employees are informed about each of the benefits included, their coverage, costs, etc.; said employees being able to carry out simulations and suggest changes or alternative benefits to include. Finally, through the intranet, the system will collect the choices of each employee and thus the flexible benefits process will be administered.
Disadvantages of flexible benefits
- from the point of view of the organization
Due to the great variability of alternatives to choose from, they are much more difficult to supervise than traditional "buses", or similar for all. Additionally, it is more expensive to administer them (with respect to the traditional ones), since it requires having specific personnel to monitor said plans. It is also likely that, in some cases, they are not superior, in terms of motivation, to other less complex motivational alternatives, such as recognition programs, certain participation programs, and certain skill-skill payment schemes.
- from the employee's point of view
Certain employees are not entirely familiar with "choosing from too many alternatives", and would perhaps prefer simpler questions, as for some "greater diversity means greater problems". Additionally, it is likely that the different alternative packages sometimes do not adequately reflect the different levels of productivity.and skill of different groups of workers, and thus, the most competent, or those who contribute the most to the value chain, consider their alternative packages to be relatively unfair versus those available for the rest of the areas. Finally, and in the opinion of many experts, these programs still have much to improve, since there are still significant conflicts between employees' work and family life (people worry at home about their work problems and at work about their family problems, generally economic), conflicts whose moderation has, among its main objectives, flexible benefit programs. That's why many flexible benefit packages often include family day care, flexible work days, fewer work-related trips,family picnics, use of sports facilities, programs to pay for children's university, etc., since they directly aim at solving sources of family arguments.
In summary
Flexible benefit programs are interesting and modern alternatives to motivate staff, respecting the diversity of needs and productivity of an organization's workforce. However, over time, these programs will have to be polished more and more, since they add some administrative complexity to the company that administers them, some increase in costs and some complexity to the choice of the worker, who in some cases would prefer methods simpler.
