Strategic Compensation: A Human Resource Management Approach, 9/e

Origins of Discretionary Benefits

1. 1 Discuss the origins of discretion­ary benefits.

In the past several decades, firms have offered a tremendous number of both legally required and discretionary benefits. In Chapter 10, we will discuss how the growth in legally required benefits from a select body of federal and state legislation developed out of social welfare philosophies. Quite different from these reasons are several factors that have contributed to the rise in discretionary benefits.

The rise of retirement plans, in particular, pension plans, appeared as one of the first signs in the use of discretionary benefits. According to the Employee Benefit Research Institute,² the first pension plan in the United States was established in 1759 to ...