THE HIDDEN PAY CHECK A CASE STUDY ON COMPANY BENEFITS AND ITS IMPLICATIONS FOR COST AND EMPLOYEE SATISFACTION

Abstract

This thesis analyses the key problem in benefit theory and design, namely the potential tension between employee benefit satisfaction and cost of offering benefits by the employer. The problem is rooted in the fact that the benefit component of compensation is usually an undervalued and forgotten item. This thesis provides an integrative treatment of the tensions that are involved in the interaction between cost containment and designing an appropriate benefit offer.

Further, a discussion on how these problems may be kept at bay by plausible managerial communication and other mechanisms is included. The framework is then applied to an analysis of the managerial choice between traditional benefit administration and new compensation forms, specifically cafeteria-style benefit systems. Thus, the framework adds to the understanding of the costs and benefits of alternative administrational forms.