Defining Employee Benefits: A Managerial Perspective

Abstract

“Benefits” are offered to employees because they promote job satisfaction and increase organizational commitment. They are generally defined as forms of indirect or non-wage compensation, conceptualizations that are principally useful for accounting and tax purposes. A definition of “benefits” from a managerial perspective can help to clarify how they can be used to achieve employee satisfaction and commitment. This article includes a brief history of benefits, an international comparison of their usage, and a review of their most widely accepted definitions. A new definition of employee benefits is proposed.