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Benefit Administration Strategies Definition


According to Becker & Gerhardt (1963), benefit administration strategies can be defined as the ways through which organizations can use to pay and reward their employee’s contributions to the organization’s success. These benefit administration strategies enable organizations to retain a superior workforce hence reducing high labor turnover.

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Sharing of profit

Sharing of profit can be classified as one benefit administration which is an example of a variable pay plan which has an impact on overall organizational performance. It involves a company keeping aside a particular percentage of amount of money from the annual profits to be shared among the employees where low and high-income earners share the same amount since it sends a message of employees working together in a team. Therefore, each employee is seen having same goals and hence rewarded equivalently which reinforces shared service to customers and lack of competition with each other, eventually improving organizational performance.

Tuition assistance

Tuition assistance is also a major a benefits strategy provided by organization to its employees in order to win competent employees for the organization (Becker & Gerhardt, 1963). Organizations will take responsibility for providing tuition assistance to their employees by either paying all or part of an employee’s cost to attend college or university classes. This will enable employees to develop their professional skills and knowledge which fosters conducive work environment for employees hence increasing their output to the organization at the same time enabling employees to keep pace with changing demands of work environment. Also another strategy is to take Heartache Leave which is benefit plan that an organization uses to recognize customization needs of its workforce. Examples may include a company which offers a leave for its female employees at a time of Valentine’s Day or for time off for shopping sales each year. This is very attractive to the employee’s especially for female employee’s who will have time apart from work to spend with friends and relatives

Health Care Flexible Spending Plan

Health Care Flexible Spending Plan is another strategy of benefits administration. This plan that allows employees to pay for certain unreimbursed health care and dependent care expenses (Becker & Gerhardt, 1963). It provides better tax benefits to individual taxpayer employees. This enables employers to shift costs to employees in the form of higher co-pays, deductibles and out-of-pocket costs hence reducing expenses and increasing revenue. This plan is attractive since employees can freely spend traditionally holidays which are important for high employee morale and motivation. High morale and motivation contribute to team building and productivity. These productive teams will lead to increased production in an organization. Employee discounts also is another strategy of giving organization employee’s a chance to buy company products or services at a discount (Becker & Gerhardt, 1963). These discounts offered allow employees to make significant savings on day-to-day purchases, from weekly supermarket shopping and payment of utility bills, through to unbeatable discounts on fashion, travel, dining, financial and professional services, automotive, entertainment. This strategy retains competent workforce as they are able to save part of money that could be used on family purchases to use them on other family activities (Becker & Gerhardt, 1963).

Employee ownership through restricted stock

Another important benefit administration is employee ownership through restricted stock.

It is a motivation strategy where employee’s think and act like owners of the company hence when the a restricted award vests an employee who received the restricted stock then becomes the owner of the company this will enable the employee to own company objectives which makes them focused on meeting targets and goals.


Becker B , Gerhardt B. (1963). The impact of human resource on organizational performance: Progress and prospects. Academy of Management Journal, Academy of Management.

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