EMPLOYEE BENEFITS

Today’s HR professionals are expected to measure the success or failure of HR practices based on the achievement of organizational outcomes. Brand identity, bottom-line profitability, employee job satisfaction, and increased management focus are all outcomes that can be achieved in part through an organization’s total rewards program.
This case examines a fictitious M. K. Makey organization and how it aligns its total rewards programs with its organizational goals and values.
Read the The Makey Case.

You have been asked to write an opinion piece for a local newspaper in which you address the following:

  1. Analyze the practice of companies offering their own products to enhance the total compensation of its employees.
  2. Is this a common practice in U.S. organizations? Give real-life examples (employers by name). In your educated opinion, do you think this is a good idea? Why or why not?
  3. Make recommendations regarding an expansion of the benefits programs offered at Makey’s. Justify your recommendations with outside sources.
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Sample Answer

 

 

 

 

 

 

Opinion Piece: Beyond the Paycheck – The Strategic Value of Comprehensive Total Rewards

By [Your Name/Title], Division Controller, TransGlobal Airlines

In today’s fiercely competitive business landscape, the role of Human Resources has evolved far beyond mere administration. HR professionals are now strategic partners, keenly focused on measuring the success of their practices against tangible organizational outcomes. Brand identity, bottom-line profitability, elevated employee job satisfaction, and a sharper management focus are all critical objectives that can be significantly influenced by an organization’s total rewards program. The case of M. K. Makey, a fictitious organization, provides a valuable lens through which to examine how companies align their compensation and benefits with their core goals and values.

Full Answer Section

 

 

 

 

 

 

The Strategic Edge of In-Kind Benefits

 

One fascinating aspect of total compensation, as exemplified by organizations like M. K. Makey, is the practice of offering a company’s own products or services to enhance employee rewards. This isn’t just a simple perk; it’s a nuanced strategy that, when executed thoughtfully, can yield multiple benefits.

At its core, providing in-kind benefits leverages a company’s inherent assets. For businesses with high production capacity or services that incur low marginal costs, offering these to employees can be a more cost-effective benefit than a direct cash equivalent. Beyond the financial efficiency, this practice serves as a powerful internal brand-building mechanism. When employees regularly use and genuinely appreciate the company’s products or services, they transform into authentic brand ambassadors. Their firsthand experience fosters a deeper understanding of the customer journey, provides invaluable informal feedback, and cultivates a sense of pride and loyalty that extends far beyond the workplace. This direct connection can lead to continuous product improvement and enhanced service delivery. Furthermore, it can profoundly reinforce company culture and identity, particularly for organizations whose offerings are central to their mission or lifestyle, such as outdoor gear manufacturers or innovative tech firms.

However, this approach is not without its complexities. The perceived value of such benefits can be highly subjective. An employee who has little use for the company’s specific product might view it as less valuable than a more flexible cash bonus or a universally applicable benefit. There’s also the potential for perceived lack of choice or over-saturation, where employees might prefer a broader array of benefits tailored to their individual needs rather than being tied to company-specific offerings. Crucially, if the product or service is not genuinely high-quality or desirable, offering it as a benefit could inadvertently undermine employee morale and even tarnish the company’s brand internally.

 

A Common Practice with Caveats

 

This practice is, in fact, a common and often highly valued component of total rewards in many U.S. organizations, particularly within industries where the company’s offerings are integral to daily life or aspirational.

Real-life examples abound:

  • Technology Giants (e.g., Google, Meta): These companies are renowned for offering extensive on-site amenities like free gourmet meals, fitness centers, transportation, and even access to cutting-edge internal technologies or premium subscriptions to their own services. These perks aim to create a seamless, supportive environment that fosters innovation and reduces daily stressors.
  • Retailers (e.g., Starbucks, Gap Inc.): Employees (often called “partners” or “associates”) frequently receive significant discounts on company products, free beverages, or even allowances for merchandise. This encourages product familiarity and creates a direct connection between the employee and the customer experience.
  • Automotive Industry (e.g., Ford, General Motors): Employees often benefit from substantial discounts on vehicle purchases or leases, directly linking their labor to the tangible output of their company.
  • Hospitality & Travel (e.g., Marriott International, Delta Air Lines): Discounted hotel stays, free or reduced-fare flights, and other travel perks are common, allowing employees to experience the services they help deliver firsthand and often providing significant personal value.

In my educated opinion, offering company products or services as part of total compensation can be an excellent strategic move, provided it is implemented thoughtfully and as part of a balanced benefits strategy. When the product or service genuinely resonates with employees and adds real value to their lives, it fosters a unique sense of belonging and pride. It transforms employees into authentic advocates, leveraging their personal experience to enhance brand perception both internally and externally.

However, this approach is most effective when it complements, rather than substitutes, a competitive base salary and a robust core benefits package (e.g., health insurance, retirement plans, paid time off). The best programs offer these in-kind benefits as a bonus or an added layer of value, ensuring that employees still have access to the essential, flexible benefits that meet their fundamental needs. If the benefit feels like a forced consumption of company goods or a way to reduce cash compensation, it can quickly erode trust and morale. The key is perceived value and choice, ensuring employees feel genuinely rewarded.

 

Recommendations for Expanding Benefits at Makey’s

 

Assuming M. K. Makey currently utilizes some form of product-based compensation, I recommend expanding their benefits programs to create a more comprehensive, competitive, and employee-centric total rewards package. This expansion should focus on areas that demonstrably enhance employee well-being, professional growth, and financial security, aligning with modern HR best practices.

  1. Robust Health & Wellness Ecosystem:
    • Recommendation: Beyond standard health insurance, Makey’s should introduce a holistic wellness program. This includes subsidized access to fitness facilities or wellness apps, comprehensive mental health support services (e.g., Employee Assistance Programs offering confidential counseling and therapy referrals), nutritional counseling, and stress management workshops.
    • Justification: The American Psychological Association’s annual “Work and Well-being Survey” consistently highlights that workplace stress and mental health challenges are significant drivers of burnout, absenteeism, and decreased productivity. Investing in holistic well-being demonstrates genuine care for employees, which, according to research by the Society for Human Resource Management (SHRM), is directly linked to higher job satisfaction, improved retention, and reduced healthcare costs. Companies like Johnson & Johnson and Microsoft are leaders in integrating comprehensive wellness into their corporate culture, recognizing that a healthy workforce is a productive one.

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