Employee Benefit Package for Employees Based On Maslow's Hierarchy Of Needs

Employee Benefit Package for Employees Based On Maslow's Hierarchy Of Needs

Introduction

The manner in which employees develop opinions and attitudes about an organization is a complex and multifaceted process. One factor which appears to influence employee attitudes is the perception of the benefits offered by the organization. Little empirical research, however, has been conducted dealing with benefits relative to the amount of research that has examined other forms of compensation. This is surprising given that the vast majority of organizations provide not only monetary compensation but also benefits to their employees (Goodale 2001).

Compensation is an important factor in the design, implementation, and maintenance of both organizations and the workforce. Employee compensation is not only a motivating force for employees, it is often the single largest expense incurred by organizations. Despite the obvious influence of compensation on the corporate bottom line, research suggests that employers often underestimate the significance that individuals place on different aspects of compensation. Accordingly, it is important to take into account the fact that compensation includes not only the wages paid to employees but also factors such as fringe. A recent review of the practitioner literature dealing with compensation found that almost half of the published articles dealt with benefits. In the psychological literature, however, considerably less attention has been devoted to benefits and employee reactions to them.

In terms of both absolute value and as a percentage of payroll, the money spent to provide benefits has increased steadily since the early 1900s. While in the early part of the twentieth century benefits accounted for approximately 3% of total wages, they now account for as much as 50% of payroll costs in some organizations. In fact, the U.S. Department of Labor reported that benefits represented an average 27.6% oftotal compensation costs paid by organizations during 2002. This escalation in money spent on benefits cannot be explained simply in terms of an increase in the cost of existing benefits; there has been a corresponding increase in the variety of benefits offered. Suggested reasons for this increase in both cost and variety of offered benefits include the tax-free status of many benefits, the increased presence of employee bargaining units during the early and mid 1900s, increased government legislation increased competition to attract and retain qualified employees (Parus, 1999), and the historical use of wage and price controls.

Maslow's Hierarchy of Needs

Maslow (1954, 1970, and 1976) proposed an eclectic, multi-component motivation theory that built upon some of the classical psychologies, such as functionalism, depth psychology (psychoanalysis), Gestalt psychology, Goldstein's organismic psychology, and, to some extent, drive theory. The overarching philosophy of his theory, that human nature is inherently good and that man strives toward an ultimate purpose, guided by intrinsic, universal (ergo, good) values, can be traced to the thinking of Rousseau and to the Greek philosophers (i.e., Socrates, Plato. Aristotle) . Maslow's theory is also discordant with the positivistic, value-free, reductive-analytic science endorsed by the scientific community of the mid-twentieth ...