Abolish Extra Benefits And Cause Employee Dissatisfaction.

In the early summer of this year, Google (Google) changed its daycare policy and dramatically increased the cost of day care, according to an article published in the New York Times.

Professor Walton and welfare experts believe that Google's move is not very sudden.

Cancelling any form of fringe benefits may make employees feel betrayed or even retaliated.

However, under the influence of economic downturn, more enterprises may reduce the extra benefits of employees.

Google's baby day care cost rose from $1425 to $2500 per month, and child care expenses increased from $33000 to $57000 per year.

There were 700 people who had to wait in line for two years before entering the market. After the price increase, the figure dropped by more than half.

Google, once famous in the media, is now being called "clumsy" by the New York Times to reform the day care policy.

Professor Walton and welfare experts believe that the fierce reaction of Google to the daycare policy reflects the difficulty of abolition of employee benefits.

Walton, a professor of management at (Nancy Rothbard), said, "once you give employees benefits, take it away, it seems to be a violation of the psychological contract between you and your employees."

The extra benefits for employees include traditional car companies, private aircraft, plenty of retirement benefits, and some very personal benefits such as personal trainers, laundry services and pets.

In Google, parents can get 500 dollars for takeaway food in the first few weeks of their children's birth.

In 2006, the Securities Regulatory Commission issued stricter disclosure rules to curb excessive generous employee benefits, resulting in the gradual reduction of employee benefits.

The SEC issued the new regulations partly because of negative reports from the media about the divorce case of CEO Jack Welch Jack, including the handsome retirement benefits paid by the company, such as the Manhattan apartment with a monthly rent of $80 thousand and the best seat in the New York Knicks competition in New York.

Tyco's former CEO Dennis Kozlowski (Dennis Kozlowski) benefits include $2 million 500 thousand worth of apartments in the Trump building, New York, and a $15000 puppy modeling umbrella rack.

Even Warren Buffett (Warren Buffett) could not escape the custom.

He said the reason why the company bought him a plane was "untenable" and also told an Australian news media, "I write it in the annual report with the smallest typeface I can find."

The "economic benefits" of the "economic benefits" of my "welfare" are likely to trigger a new wave of "reduced benefits".

Peter Kapli, a professor of management at Peter, said: "the board of directors refute this practice because they believe that the reduction of benefits will harm the image of the company" (Cappelli).

But the question now is whether this practice is significant for recruitment and retention.

If the economic situation is relaxed, the tide of generous welfare will come back again.

We saw this in 2001 when the economy got better.

Kapli thinks that some low cost, or even no cost benefits, such as allowing employees to wear casual clothes to work, free coffee and discount food, may have little effect on improving morale and increasing productivity, but these measures will also not consume profits.

Enterprises must be very careful when reducing or eliminating benefits.

No matter what you want to cancel, you must explain to the employee the reason for cancellation.

If the reason is external factors, employees will be easier to understand.

In order to raise the share price and reduce welfare, we usually can not get everyone's understanding. "

Sigal Barsade, a professor of management at, agrees with Walton.

He said, "I do not recommend the company to cancel the benefits, but if the company has compelling reasons, the management must not forget that the abolition of employee benefits will make employees feel unfair."

Because they usually think that even smaller benefits are what they have.

Abolition of benefits is one of the most direct ways to irritate employees. Angry employees lose motivation to work hard and even generate reprisals.

Revenge can be psychological form, such as reducing enthusiasm for work, or behavior. For example, it is not as serious as before.

"If the management really chooses to cancel the benefits, they must explain the necessity of doing so very, very clearly to the employees, and explain them in a form that makes employees feel fair."

In the past, fringe benefits were usually distributed to senior managers, but Rothbard pointed out that when profits are good, corporate benefits will also benefit employees at lower levels.

Part of the problem with Google is that past day care services are available to many employees, or at least companies are provided for many employees, and now employees think that the price of day care increases sharply, reducing the number of people who can enjoy the benefits.

According to New York Times's article, Google first contracted a day care service through a company three and a half years ago.

A year later, the company opened another day care organization, which is more advanced than the first company and operated by Google itself.

Later, Google realized that it had to subsidize $37000 per day for the daily care of every employee, while the average subsidy of other Silicon Valley giants was $12000.

But instead of gradually reducing the cost to allow more children to attend, it chose to close the first relatively cheap day care centre and expand second expensive day care facilities, causing a sharp rise in prices.

Rothbard said, "it's hard to say that they are deliberately trying to shut down employees who are on a lower level.

I think they should want to emphasize quality, and hope to provide higher quality service to employees, but the price has gone up too. "

Julie Wulf, a business management professor at Harvard Business School, says that not all benefits cost a lot, and these benefits can also motivate employees and increase productivity of employees.

In 2006, when Julie was a professor at, he co authored with others, "is welfare only to meet the luxury needs of management?"

(Are Perks Purely Managerial Excess?)

This paper investigates more than 300 companies listed between 1986 and 1999, and finds that many welfare aims are to improve management performance and the performance of the company as a whole.

Wolf said, "we find that although welfare is in the eyes of people to satisfy the luxury needs of managers, our conclusion shows that although some extreme cases give management benefits really extravagant, there is also evidence that the purpose of corporate welfare is to improve their productivity."

According to the analysis of Towers Perrin, an executive compensation and welfare consulting firm, 11% of Fortune 500 companies revealed that they cut their benefits in the proxy signed by shareholders in 2007. The biggest reduction was corporate car use, followed by club memberships, financial planning services, insurance benefits and security measures.

The new regulations of the SFC require companies to disclose additional allowances and personal benefits of a total value of more than $10000.

Additional allowance exceeding $25000 (or exceeding 10% of the total value disclosed) must be specified in footnotes.

In addition, the SFC has defined the definition of temporary allowance or personal benefits, that is, to grant direct or indirect benefits to any individual, even those related to business.

Paula Todd, executive compensation and welfare consultant at Stanford, Connecticut, points out that most companies have "cancelled" some unnecessary additional allowances.

Sometimes companies need to report extra benefits as personal benefits for senior executives, but such allowances are not what employees want or want.

For example, some companies often hold boards of directors abroad, asking executives' spouses to participate in helping to host some social activities.

If their spouses travel on the company's plane, then the cost of this part of the aircraft must be disclosed.

"Many spouses don't think such a trip abroad is a holiday," she said.

Frankly, there are many SFC called "extra benefits" benefits, but people who accept benefits do not think it is a welfare, they say, "thank you, but I don't want it."

Another common example is the company's personal safety to protect senior executives, or the high cost security system installed in their homes to protect the company's business safety.

Todd said, "the cost of the security system is not bad, but these executives think," thank you, I prefer cash. "

On the other hand, the reasonable allowance is "value for money".

She has seen some executives refusing cash benefits, hoping to get the company to send a car, although the value of the car is much less than that of the cash benefit. The reason is that he or he has an emotional connection with this extra fringe benefit.

There are secrets to choosing reasonable fringe benefits.

Todd pointed out that the call for additional benefits is becoming increasingly strong because the senior management team is becoming more diverse.

"The former executives were all white men, and they liked the same things.

Now some of the executives are young, and they prefer the day care service provided by the company to the club members.

Rothbard believes that employees and companies often set up their own "personal welfare plan", that is, the employees need to provide additional benefits.

"Usually these plans are not advertised, because they will compare each other and feel that their welfare is not as good as others," she said.

For employees or companies, this personalized welfare plan is much more tempting than "providing everyone with exactly the same benefits".

Creating a family atmosphere in the workplace is an important tool for attracting employees and improving productivity.

Despite the recent negative reports about Google by the media, Google has launched many welfare measures aimed at making employees feel at ease, such as installing wireless Internet ports on the commuter shuttle bus, so that employees can continue to work on the bus, and there are 24 hours of open cafes to serve the overtime workers.

Silicon Valley's high-tech companies have always been at the forefront of providing innovative benefits, because Silicon Valley's competition is very intense, and the two-way flow between employees and companies is frequent.

Food, flowers and telephone Perkspot.com is a company that manages employee preferences in Chicago. Its CEO Chris Hill (Chris Hill) points out that some companies are offering their own extra benefits plan by employees themselves.

Cell Phone Corps, local restaurants, flowers and gifts company 1-800-FLOWERS and other enterprises hope to offer discounts to enterprises, and then pfer these preferences to their employees.

In this way, a win-win can be achieved. For an enterprise, welfare can be provided to employees without any cost, and they can attract new customers to sellers.

"Now there are more and more enterprises offering voluntary benefits.

With the increase in the cost of traditional benefits such as medical insurance, companies are looking for benefits that do not cost money but enjoy employees' interests. "

Joseph Golaks, Joseph Gerakos, wrote in his Walton doctoral dissertation that in fact, executives are willing to pay their salaries for retirement benefits.

He is a professor of accounting at University of Chicago. In 2005, he conducted a sample survey of CEO of 500 companies in the standard & Poor's company, and found that these people earned 48 dollars in salary for an additional 1 dollars in retirement benefits.

In addition, he found that compared with executives with less control of the board, executives who had great influence on the board of directors had less salary in return for more retirement benefits.

"We should consider the extent to which employees are willing to exchange wages for benefits.

In the absence of tax benefits, employees may prefer to raise wages instead of welfare. They may be willing to take less than $1 in welfare or pay less than $1. "

Rothbard also mentioned another reason why companies are unwilling to cancel extra benefits: they want to be rated as the best employer.

"Companies that do not provide fringe benefits are not on the list of the best employers."

But she also believes that "welfare is not the only weapon of the company."

Google has been elected "best employer" in Fortune magazine for two consecutive years.

Kapli believes that although the abolition of extra benefits takes risks, some managers want companies to do so.

He said most of the fringe benefits were determined by the company's top executives, but the front-line managers needed to monitor the benefits.

"Frontline managers usually want more direct control of their employees. They do not like this.