The lingo in the HR sphere can become a little tangled at times. For instance, ‘perks’, ‘benefits’ and ‘employee rewards’ can seem like synonyms, which, in essence, they are.
In the end, it all falls under the heading of ‘good stuff employees enjoy’. However, when you dig a little deeper and peek beyond the surface of things, these three extrinsic motivators are actually quite different and distinct.
Here’s a handy breakdown of the definitions, uses and advantages of each:
Perks, benefits and employee rewards defined and explained:
Benefits explained
What are employee benefits?
Benefits are non-wage compensation provided to employees in the form of paid leave, supplementary pay, retirement and insurance contributions, as well as other legally required benefits such as UIF contributions.
DID YOU KNOW? In South Africa, employers are also expected to pay towards the COIDA fund. The Compensation for Occupational Injuries and Diseases Act, No 130 of 1993 (COIDA) provides for compensation for disablement caused by occupational injuries or diseases sustained at or during the course of work.
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What are the uses of benefits?
Employer-funded benefits provide employees with support in areas of their lives that they would have to fund themselves if the company did not. This includes medical aid, retirement savings, paid time off, maternity/paternity leave, life insurance, etc.
What are the advantages of benefits?
While a grownup can technically choose to live without these safeguards, it’s pretty dicey to do so. Think of benefits as the indicators, seat belts and airbags of a car – a vehicle can be driven without it, but it’s very unsafe to operate that way.
By providing employees with financial assistance in this regard, employers help them to plan for the future and have a safety net in place in case the unexpected should happen. This type of stability makes for a much
Perks explained
What are employee perks?
Perks can be defined in a number of ways. Some people see it as circumstantial ‘nice to haves’ that distinguish one place of work from another, e.g. a shorter commute, the opportunity to work under a major player in their field, etc.
However, among HR professionals the technical definition of a perk is something that encourages employees to perform their job more effectively. This includes things like a company car, discounted travel fares, access to premium accommodation when travelling for work, gym memberships (healthy bodies = healthy mind), golf memberships (hello, networking!) and even smaller things like healthy food and standing desks in the office.
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When are the uses of perks?
Perks make it more convenient and rewarding to work at a given company. These lifestyle-related benefits make it easier and more enjoyable for an employee to fulfill their daily tasks.
FUN FACT: Studies show that student loan and tuition assistance rank among the top-rated perks for up-and-coming job seekers. It’s no wonder – looking at the top universities in South Africa (determined from various global rankings), students from eight institutes owe R711 million+ on tuition fees and loans.
What are the advantages of perks?
Perks are a great way to improve employee experience in a way that speaks to the needs and preferences of your workforce in particular. Since it is not governed or sanctioned by any government agency or laws, it can be offered at the discretion of each employer individually. Think of these extrinsic motivators as racing stripes, fancy mags and other optional add-ons to a car.
Employee rewards explained
Here’s where things get a little murky. Perks and rewards can seem pretty similar, and to be honest they are – the difference lies in the intent behind the giving of the thing in question.
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What are employee rewards?
While perks are par for the course in a given environment, rewards are meted out when an employee meets or exceeds their performance goals, at the discretion of their employer. This is often done with the help of a formal employee recognition and reward program that is aimed at motivating employees individually or as part of a group. It is separate from salary, but could be monetary in nature or otherwise have a cost to the company.
Read more: 8 Types of rewards your employees will love
What are the uses of employee rewards?
When rewards are used in the right way, it brings employee behaviour in alignment with company goals by shining a spotlight on the type of individual attitude and conduct that benefits the business as a whole.
Read more: Employee rewards really do boost productivity. Here’s how
What are the advantages of employee rewards?
Employee rewards hold countless benefits, including increased job satisfaction, a more robust employer brand that attracts top talent, supercharged employee productivity, a happier, more positive workspace, decreased employee turnover, and a boosted bottom line.
Did you know? Findings by HR heavyweights show that employee recognition and rewards are the simplest ways to improve morale and boost productivity. In fact, 40% of respondents say that they would put more energy in their work if they knew that they would receive recognition for their contribution.
Read more: Employee rewards have never been easier than with bountiXP. Take a look
There you have it – the definitions, uses and advantages of perks, benefits, and employee rewards respectively.
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