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

The benefits and costs of Legally Required Benefits

1. 5 Discuss the main benefits and costs of legally required benefits.

Employee benefits are unlike most bases for monetary compensation (e.g., merit, pay-for-knowledge, and incentives). Under these programs, the amount of compensation employees receive varies with their level of contributions to the company. Instead, benefits tend to emphasize social adequacy. Under the principle of social adequacy, benefits are designed to provide subsistence income to all beneficiaries regardless of their performance in the workplace.¹⁸ Thus, although humanitarian, legally required benefits do not directly meet the imperatives of competitive strategy. Legally required benefits, however, may contribute indirectly ...