Human resource management strategies have changed tremendously over the last few decades. Before, leaders and managers used to rely on organizational rules and policies to have their employees perform as required. Currently, managing team employees require much more than using the rules. There are more approaches used by leaders to get the best out of employees. Rewards and compensation are the most used strategies to motivate employees. The job market has got tighter, and companies are getting more flexible to accommodate the needs of their employees. As a result, there is a wide range of discretionary benefits that organizations offer to their employees. Discretionary benefits are not recognized by the law. The provision of such benefits is a decision that human resource departments or company leaders decide on. Also, these benefits are provided based on employees’ work experience, productivity, loyalty, and valuation in the company. Every organization has specific policies regarding discretionary benefits and how they are implemented. Walmart and Apple are two large companies with many employees and well-documented management practices. Examining their discretionary benefits systems will help to understand the trends.
Walmart
Walmart is one of the world’s leading retail companies. It operates stores and a chain of hypermarkets in several countries across the world. Sam Walton founded the Bentonville-based company in 1962 and got it incorporated in 1969 (Allen, 2018). Besides the documented employee benefits, Walmart also offers a range of discretionary benefits, which include healthcare benefits, insurance options, bonuses, an increase in wages, adoption services, and maternity and parental leaves. The company currently offers one-time bonuses to both fulltime and part-time employees. These bonuses are based on an employee’s length of services. For example, those who have worked in the company for at least 20 years automatically qualified for a bonus of $1000.
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To further motivate its employees, Walmart has expanded its United States-based parental and maternity leaves. It offers up to 10 weeks of paid maternity leave and an additional six weeks of parental leave. Besides, the company added adoption benefits where some form of financial benefits or assistance is given to the employees with adopted children. The benefits are based on the number of children adopted, whether the employee is part-time or fulltime, and the valuation by the human resource department (Eisenberger, Malone, & Presson, 2016). Finally, the company increased the wages of its employees based on performance, type of service offered working hours, and valuation by the company.
The company has also received a fair share of criticism in terms of how it handles the discretionary benefits. Late last year, Walmart announced that it would no longer provide insurance to its employees who were working below 30 hours per week. The company explained that there was a general increase in health care costs, and the company was reacting to keep its expenses in check. There was another complaint that Walmart eliminated holiday pay for a section of its employees (Allen, 2018). A company spokesman explained that the company did not eliminate the offer. Instead, the company’s workers are offered a paid day off for any holiday they work.
Apple
Apple is a leading global tech company. It is famous for producing highly valued IPhones, IPads, and MacBook. It also has thousands of employees with an elaborate employee management system. The company also offers discretionary benefits to its employees, which include a 25% discount when they purchase the company’s products. After every three years, the fulltime employees are eligible for a $250 discount on an IPad or $500 off when buying a MacBook (Adobor, 2019). Other benefits include paid four-week leave before giving birth and an additional 14 weeks after delivery. Like Walmart, there is a mandatory paid six-week parental leave. Other discretionary benefits Apple employees are eligible for include commuting bonuses, matching of 401K, health care benefits, and discounts for friends and families. Generally, Apple benefits are offered equally to all the employees (Bol, Hecht, & Smith, 2015). However, experienced workers, top performers, and highly valued employees, such as the product designers, have various undocumented discretionary benefits, including financial and non-monetary benefits.
Comparison
There are some similarities and differences in the way Apple and Walmart manage their discretionary benefits. Both companies have standard traditional benefits such as the health cover, paid holidays, and parental leaves. The forms of compensation and leave periods vary. Also, both companies offer these services based on the employees’ valuation in terms of productivity, commitment, years of service, and type of services offered (Bol et al., 2015). Apple is famous for the type of product discounts given to the employees, family members, and friends. A 25% discount for Apple products is a significant benefit (Adobor, 2019). Another significant difference is that Walmart values its employees based on whether they are full-time or part-time workers. The part-time employee’s benefits are reduced. An example is a move the company took to reduce the health benefits for employees working less than 30 hours per week.
How the benefits Impact Cost Effectiveness
The job market has changed such that companies are competing to hire and retain top talents. Workers also prefer to work for organizations with attractive discretionary benefits. It is common to find an employee choosing a company with lower wages but has good discretionary benefits. In reaction, several companies have revised their reward and compensation programs. Offering attractive discretionary benefits helps to retain top talents, thereby increasing the company’s productivity and reducing the costs of production (Eisenberger et al., 2016). The company would also reduce employee turnover rates, thus reducing the costs used in hiring employees.
The Trends
Recently, discretionary benefits have become one of the main attractive points for companies when looking for top talents in the job market. Organizations tend to list their discretionary benefits during advertisements to attract the quality of candidates they want. Secondly, there are some standard benefits that have become part of every organization’s discretionary benefits. Examples include health care benefits, paid holidays, and parental leaves (Bol et al., 2015). The difference is how individual organizations award these benefits and employee valuation. Some companies avail them of all the employees based on their measured productivity, while others prefer loyalty and experience.
Challenges of Maintaining the Benefits
There are several challenges companies face in implementing and maintaining effective discretionary benefits for their employees. Some of them include financial burden, employee valuation by the human resource departments, and maintaining equality among employees. To implement a good discretionary benefits program, an organization must incur additional expenses. Sometimes, the expenses might become excess affecting the organizations profitably. Secondly, many organizations offer these benefits to top-performing and highly valued employees (Eisenberger et al., 2016). In some cases, a section of the employees might feel that a reward system is biased. This may lead to staff unrest, affecting the working environment.
Conclusion
The job market is changing in such a way that employees value discretionary benefits than wages. Companies also compete based on the benefits offered to employees. There are some common discretionary benefits, such as health care covers, paid holidays, and maternity leaves. Others are organization-based. The difference is the methods used by these organizations implement the benefit programs. While some organizations strive for equality and fairness, others use the human resource benefit departments to rate the employees and reward them based on the ratings. Apple and Walmart are two top organizations with well-organized and documented employee-management systems. However, they have different methods of rewarding employees. In the end, they both achieve the desired purpose of attracting and maintaining top talents in the job market.
References
Adobor, H. (2019). Opening up strategy formulation: Benefits, risks, and some suggestions. Business Horizons , 62 (3), 383-393.
Allen, S. G. (2018). Retail Giant to Offer Online Degrees for Employees. Diverse Issues in Higher Education , 35 (11), 10-10.
Bol, J. C., Hecht, G., & Smith, S. D. (2015). Managers' discretionary adjustments: The influence of uncontrollable events and compensation interdependence. Contemporary Accounting Research , 32 (1), 139-159.
Eisenberger, R., Malone, G. P., & Presson, W. D. (2016). Optimizing perceived organizational support to enhance employee engagement. Society for Human Resource Management and Society for Industrial and Organizational Psychology , 2-22.
