Question

1. Discuss the reasons that employers provide their employees benefits (health insurance, life insurance, pension benefits) in addition to monetary compensation.

Answer 1

Employee is an asset for an employer. If employee faces an health issue or any family members health issue then the productivity of that employee would be decreased. So, they give medical insurance.

The family member should of an employee is dependent on him. In case of death of the employee they will be in uncertainty. Life insurance gives mental as well financial coverage for the family of the employee and so for the employee himself.

There may be some uncertainty in employee's mind that what will be his future after retirement. Pension benefits is given to remove the uncertainty. Without this uncertainty employee can work without pressure and his motivation would higher.

There are some companies which gives bonus or ESOP to motivate employee and also to reduce attrition rate. When an employee feels he is protected under the company his motivation will be higher and attrition rate will also be lower.

So, that's why company gives such benefits.