Analysis
Employee benefits refers to the benefits that the employees receive from the companies that they are working for. Employee benefits can be both cash and kind and can be related to various long term and short-term needs to the individuals who work in an organization. It is important that proper accounting and disclosure of employee benefits is done as they form a major part of the expenses for the company. Thus, management needs to state the various disclosures related to the same and should make it apparent on how they are presenting their data for the company. Employee benefits helps in keeping the management satisfied and motivated. If they get good returns for the work that they do, they would also do the same and put the maximum efforts for the organization. Employees are the biggest asset of any company and management should always remember the same (Abdullah & Said, 2017). Various elements of employee benefits would include fringe benefits, sick benefits, gratuity, provident fund, wages, bonus etc. In this assignment we have selected two articles that discusses the various elements that are related to employee benefits and helps in analyzing the various elements which are related to them.
The two articles that have been selected are – Benefit System effects on Employees’ Benefits knowledge, use and Organizational Commitment” by Robert R Sinclair of Portland State University, Michael C. Leo of Oregon Health and Sciences University and Chris Wright (Sinclair, et al., 2007); secondly, “Disentangling the Effects of The Employee Benefits on Employee Productivity” by Dong Ug Kang of Korea National University, Gun Jea Yu of Hongik University and Sang-Jik Lee of Hoseo Universuty (Kang, et al., 2016).
Three reasons why these articles have been selected-
- Both the articles highlight the importance of employee benefits both for the employees and the organisation
- Both the articles highlight the positive and negative impact that employee benefits have on the performance of the employees.
- Both the articles highlight the need for employee disclosure in the annual report of the company
In the first journal the different features of a benefit system are discussed with more focus on how these affect the employer-employee relationship, the overall quality of the communication and the quality of the system is also discussed. It is very important that employees should get their dues as and when needed because a lack of a proper employee benefit system might cause the employees to leave the organization and search for better opportunities. Hence it is comprehended that a strong system of employee benefits should be developed. With times not only this has become an important part of the overall financials of the company but it has also increased the overall complexities that are involved with the administration of the same. As per the author, the overall rate of employee benefits has increased from 3% to 2&% from 1929 to 2001 (Boghossian, 2017). There are various reason and factors that affects the overall employee benefits and that includes increase in costs like health care, standard of living, cost of living, increased competition in the market, increasing population etc. have all contributed in the growth of the complexity that is related to employee benefits. As the rate of inflation increases the rate of employee benefit cost also increases (Pamela & Tamara, 2013). It is important that maximum benefits should be derived from the policies made by the company in this aspect and it is important that better quality should be maintained. There should be defined structure as per which people should be paid based on their position in the organization and the kind of work that they do and there should not be any compromise or biasness in this.
Purpose of the Research Studies and Research Questions
The second journals describe the effect that employee benefits and its policies have on the overall productivity of the employees. It affects both the individual and the organization on different levels. It has both positive and negative impact on the productivity of the employees of the company. There are multiple views that have been stated in respect of this which includes both positive and negative impact of this. On one end the authors have stated that employees are very much concerned about their own benefits and they would like to invest their time and efforts for organizations that provide them best results and the next view has been that since employees are a group that requires money to work and hence even though they get long term or short term benefits they would keep working for the company (Cayon, et al., 2017). There is a very close relationship between employee benefits and the overall productivity of the organizations. The employer tries to retain the employees and retain them in the organizations and hence they provide them with more benefits and better returns. Every organization needs skillful employees and management provides them the same. There are two sections in which the employee benefits can be segregated into two sections which includes labor embodied and capital embodied. In this journal the organization have done a survey in the Korea and the labor system over there and have shown the same in charts (Charles H, et al., 2015). It shows that impact of benefits on the productivity of the employees which was negative and the impact of the employee satisfaction of the positive. Hence, we see that in case the employees are not satisfied a company would be affected and they would not get that results which they want and the employees wont function based on that (Cundill, et al., 2017).
Similarities and differences between the findings of the 2 studies
The major similarities between the two studies are-
- Both the journals are focusing on the importance of the employee benefits and the affect that it has on the productivity of the company and how both are related to each other.
- Both the journals are focusing on the effect that employee benefits have on the personal grounds of the employee, how they work and what they deliver to the organisation. It has both positive and negative impact and that has been mentioned in these articles clearly.
The major dissimilarities between the two studies are –
- The first journal focuses on the various factors that affects employee relationship and the overall efficiency and effectiveness based on the same. The second article discusses the effect of employee benefits on the productivity of the employees and they have both positive and negative impact of that (Johan, 2018).
- The first journals discuss the positive impact of employee benefits on both employees and employer and the organisation that they are working for. On the other hand, they second journal focuses on both positive and negative impact of employee benefits and their disclosure in the annual report of the company.
Specific outcomes and relevant learnings from the research findings
There are various outcomes that have been stated from the two journals with respect of few specific professionals that are mentioned below:
- The accountants can understand how they should employee benefits in the annual report of the company and the overall accounting related to that.
- The accountants will be able to understand how companies are calculating the wages and benefits that they are paying and its disclosure in the annual reports of the company.
- They will understand whether proper rules and regulations have been followed by the companies on disclosing employee benefits in the books of their company.
- The accounting regulators would understand benefits that employees are getting and not unbiased and they are eligible to receive such benefits (Kang, et al., 2016).
- The shareholders can understand that the increase in the employee benefits are scientific and not arbitrary and there is no mismanagement in that.
- It is also stated in the journal that employee benefits will have impact on the shareholders of the company and the shareholders should analyse the same by checking their books of account. Shareholders need to understand what is the basis on which the compensation is decided and given.
The findings from the second journal has been stated-
- The accountants will understand the employee benefits and effect on the productivity of the company.
- The accountants will understand whether proper regulations have been followed.
- The accounting regulators can understand whether proper disclosures have been provided in the books of the company.
- The regulators should understand whether they are in sync with the provisions of Australian standards.
- The shareholders can analyse whether the impact of employee benefits have been positive or negative.
- The shareholders should check the trends with respect to employee compensation of the company (Sinclair, et al., 2007).
Conclusion
Based on the overall analysis it can be said that employee benefits are an important part of the financials of the company and there is a direct correlation between employee relations and employee benefits and the compensation paid. Thus, companies should analyze all these angles and based on take such decisions which would help the management of the company.
References
Abdullah, W. & Said, R., 2017. Religious, Educational Background and Corporate Crime Tolerance by Accounting Professionals. State-of-the-Art Theories and Empirical Evidence, pp. 129-149.
Boghossian, P., 2017. The Socratic method, defeasibility, and doxastic responsibility. Educational Philosophy and Theory, 50(3), pp. 244-253.
Cayon, E., Thorp, S. & Wu, E., 2017. Immunity and infection: Emerging and developed market sovereign spreads over the Global Financial Crisis. Emerging Markets Review.
Charles H, C., Giovanna, M., Dennis M, P. & Robin W, R., 2015. CSR disclosure: the more things change…?. Accounting, Auditing & Accountability Journal, 28(1), pp. 14-35.
Cundill, G., Smart, P. & Wilson, H., 2017. Non?financial Shareholder Activism: A Process Model for Influencing Corporate Environmental and Social Performance. International Journal of Management Reviews, 20(2), pp. 606-626.
Johan, S., 2018. The Relationship Between Economic Value Added, Market Value Added And Return On Cost Of Capital In Measuring Corporate Performance. Jurnal Manajemen Bisnis dan Kewirausahaan, 3(1).
Kang, D., Yu, G. & Lee, S., 2016. Disentangling the effect of the employee benefits on the employee productivity. The Journal of Applied Business Research, 32(5), pp. 1447-1458.
Pamela, K. & Tamara, Z., 2013. Attaining legitimacy by employee information in annual reports. Accounting, Auditing & Accountability Journal, 26(7), pp. 1072-1106.
Sinclair, R., Leo, M. & Wright, C., 2007. Benefit System Effects on Employee Benefits Knowledge, Use, and Organizational Commitment. Journal of Business and Pyschology, 20(1), pp. 3-32.
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