Employee Reward System involving Company’s Products to Employees
Introduction
Organizations depend on several types of stakeholders to survive and thrive competitively in the market. The most common stakeholders include customers, investors, suppliers, retailers, and employees, among others. This article focuses on employees with a critical emphasis on organizations’ practice of offering their own products or services to their employees freely or at a subsidized price or cost. This practice is contained within the category of fringe benefits, which fall under the broader category of total employee compensation. The paper reviews literature regarding this type of employee benefits, provides examples of U.S. companies that practice it, and offers some recommendations to M. K. Makey organization.
Offering company’s products to employees
The practice of offering the company’s own products or services to employees freely or at discounted prices is classified under the category of fringe benefits, which constitutes total employee compensation. Total employee compensation refers to the routine salaries and wages and any other form of benefit to the employee (Biswas, 2012). On its part, fringe benefits depict a wide range of services and benefits accorded to employees as part of indirect compensation, which is provided due to the status of being an employee and not linked directly to the employee’s performance (Saranya, 2017). This means while the former encompasses all forms of employee compensation, the latter entails indirect non-monetary benefits. Examples include health insurance, recreational trips, and offering the organization’s products or services to the employees. As Saranya (2017) elaborates further, fringe benefits are given to employees either in whole or part. This means the employer may pay the full cost of the product or service or require the employee to contribute a subsidized amount. For instance, a shoe company may provide free shoes to employees or a 50 percent discount. Fringe benefits involving the provision of company’s product to employees have advantages for both the employer and employee. According to Osborne & Hammoud (2017), it makes employees more satisfied with their jobs, which increases their commitment and productivity, leading to greater returns for the employer.
U.S. companies engaged in the practice
Numerous U.S. companies and corporations engage in the practice of offering their products to their employees, either freely or at reduced prices. Examples include In-N-Out fast-food chain and Sandals Resorts International. According to Glassdoor (2017), In-N-Out offers free meals consisting of French fries and Double-Double Burger to its employees in each shift. On its part, Sandals Resorts International, a hospitality company, offers a 65 percent discount on all lodging and services offered at the company’s establishments (Corporate Shopping, 2020).
Offering employees fringe benefits in the form of free or price-subsidized products is a well-informed business strategy because of three key positive outcomes. First, employees desire to feel as satisfied as their customers do (Subramanian, 2018). Fringe benefits make employees feel appreciated by the firm, enhances their job satisfaction, and increases their loyalty (Subramanian, 2018). This assists the company to retain its employees and talents. As such, offering company’s products to them increases their commitment while reducing the desire to work for the competitors. Secondly, increased loyalty and job satisfaction motivate employees to perform better (University of Saint Mary, 2019). This leads to greater returns for the employer while enhancing competitiveness. Thirdly, this practice can help develop a brand name. For instance, an apparel company that offers free company branded t-shirts to its employees can use them as marketing agents. Employees market the company’s brand unknowingly when they wear branded clothing in public.
Recommendations for M. K. Makey
Currently, M. K. Makey provides several forms of employee benefits under its total compensation strategy. Nonetheless, it can expand these benefits to include two more tactics. The current employee benefits include annual bonuses, allowing employees to participate in environmental preservation activities, protecting employees’ rights as per labor laws and rights, charitable contributions to groups important to its employees (e.g. the United Way), employee recognition, health care, discounts, access to company’s gear and equipment, retirement packages, commuter and housing subsidies, and recreational trips.
- K. Makey can institute two new fringe benefits for its employees. First, the company should provide free products to employees in addition to discounted prices. The free products should be given routinely or occasionally. For instance, the company can provide branded sports shoes and t-shirts to its employees. This would motivate the employees as well as assist in marketing the company’s brands. As Subramanian (2018) observes, the marketing of a brand can be strengthened through visual presentation and messages in public. M. K. Makey’s employees would wear these t-shirts in public and further help market the company. In addition, the use of the company’s products by employees could make the public view the company’s employees as people who are proud of their company or employer. Secondly, the company should allow family members to participate in recreational trips and camping activities. They, too, should receive branded apparel to market the company further.
Conclusion
Offering free or discounted company’s products and services to employees is a form of fringe benefits, which fall under the concept of a total employee compensation system. This practice has advantages for both the employer and employee. Employees feel more valued and experience higher job satisfaction levels while the employer benefits from enhanced loyalty and increased performance. M. K. Makey should resolve to provide free branded clothing to its employees and immediate family members to assist in its products and brands’ visual marketing.