Managing Human Resources, Eight Edition

An Overview of Benefits

Employee benefits are group membership rewards that provide security for employees and their family members. They are sometimes called indirect compensation because they are given to employees in the form of a plan (such as health insurance) rather than cash. A benefits package complements the base-compensation and pay-incentives components of total compensation. According to the U.S. Bureau of Labor Statistics, benefits cost U.S. companies about $19,947 per year for the average employee.6 Figure 12.1 shows how the benefit dollar is divided in the average firm.

employee benefits or indirect compensation

Group membership rewards that provide security for employees and their family members.

Employee benefits protect ...