PEOPLE.IDEAS.PERFORMANCE

106 (03/2<(( %(1(),76 0$1$*(0(17 (;3(5,(1&( )520 0$/$<6,$ +DELEDK 72/26 'LDUD 0' -$', $USDK $%8 %$.$5 Universiti Utara Malaysia Malaysia ,1752'8&7,21 Employee benefits (EB) is defined as anything of value received by an employee other than wages (Dorfman & Cather, 2013).EBhas undeniably been an important element of employee compensation package. EB indeed plays an important role in relation to not only workers, but also to their families.Employee use employee benefits to create an appropriate balance of wage and non-wage compensation. A well-designed employee benefits program is a central strategy in attracting and retaining employees. An attractive employee benefits package is widely known to attract best-qualified employees. This is supported by Chiu, Tang, and Luk (2001) who claimed that EB have been used to attract, retain, and motivate employees and achieve organizational goals.Despite the importance of employee benefits, this segment of compensation packages is not very well understood, mainly because of the vast array of regulations that govern employee benefits practices (Martocchio, 2014). In addition, many employers tailor benefits to the needs and preferences of their workforces, making it difficult to stay abreast of the best practices. Further, employee benefits historically were treated as a response to government regulations. Companies might alsooffer benefits because their competitors do. Except for government- mandated benefits, companies offer many benefits to receive favourable tax treatment by reducing taxable income, and to avoid competitive disadvantages by attracting and retaining the best-qualified employees (Martocchio, 2014). Providing benefits to employees enhances the image of the organization in the eyes of the people in general and the consumers in particular. In a highly competitive global employment market, talent retention and recruitment is a growing challenge. Thus, it places greater pressure on EB managers. The main objective of the EB plan is to make the company attractive as an employer so that they can attract, recruit and retain talent, whilst working within specified financial limitations. The EB policy might be used specifically to retain top workers as well as win out over competitors. The EB plans must be robust if they are to withstand a chance of attracting and retaining talent. But, providing a comprehensive global benefits package comes with many risks and is a costly investment. For most companies, EB plan represents a significant financial investment. The cost of EB, health insurance in particular, have significantly increased over the last decade. EB costs usually comprise of one third and one quarter of total personnel compensation and the costs of EB have escalated at an annual rate of 6.2%, easily outpacing the inflation rate (Ghio, 2002). This chapter focuses discussion on designing and implicating policies for the employers/human resource in managing their employee benefits package for their company.