I.            Monetary Bonuses and Paid Time Off

According to Taylor, “Time, not money, seems to be the more precious commodity.” (9) Taylor was asking his audience what they would rather receive- wage rise, more free time or one month sabbatical, and just 20% responded to the higher wage. (These people spent on average more than 9 hours a day working.) However, even though priorities of people are changing, and they want more from life than just work, money still remains one of the best motivators and attracting aspects of a job.

A.   Monetary bonuses
Money being one of the best ways of attracting people, it is a good idea to include extra pay as a bonus. This could be for additional assignments, swift completion of task, perfect attendance, extreme customer satisfaction, extra working time or long-time employment. Even wage could be set based on performance, with a set base and variable add-ons. Monetary bonuses, however, can get really costly, as the cost is always clear to the employees and an employer can not make it look better than it is, as is possible with other benefits. With uncertainties about the ability to pay a set sum, profit sharing can be introduced. It both gives the employees more money, and motivates them to work better, as their benefit depends on their performance.

B.   Paid Time Off
Most employees require some time off from their work for which the employer will pay. These include vacations, sick leave and personal time away from work. These times are used for the employee to rest and find new energy to do his/her work. Several studies showed that a person who is relaxed will have better working results. For this purpose vacation times were introduced.

Sick leave is important to help ill employees cure and prevent the illness from spreading (and thus prevent losses in productivity). Sick leave is a necessary benefit for all employees. In terms of money, paying for one person’s sick leave is cheaper that having to find substitutes if more people got sick and were away from work.

To cut costs, some companies have decided to combine sick leave, personal time, and vacation into one “unileave.” (8) This creates more freedom over the use of their time for employees and helps regulate time-off abuse.

If a company offers educational benefits (as many do, paying or subsidizing the education costs) it usually will offer paid time off to study. It also may have a policy of giving studying employees a day off before examinations, or at least a few hours off. Even though this benefit is quite costly, it will pay off in a better educated workforce and therefore higher profits.

C.    Bereavement Leave
Many companies choose to offer paid leave when a death occurs in the employee’s immediate family. Up to four days may be offered, but the amount varies with the size of the company, location and specialization. The meaning of this leave is to give employees space to come over the emotional shock, and thus be in a better mental state when he/she comes back to work. Offering this type of time off might significantly reduce on-job mistakes from the emotional shock.

I.           Retirement benefits

Retirement benefit plans provide employees with a guaranteed retirement income. The earnings from the benefit are determined by the employee’s length of service, pre-retirement earnings and retirement age. Offered employer-sponsored retirement plans can be in general categorized as defined benefit and defined contribution. Under defined benefit, the employer will pay a specified amount to retirees based on length of service and retirement-age average income. In defined contribution the employer makes a set contribution to an employee’s savings, and the employee does not receive a sum known in advance. The most often used defined contribution retirement plan in USA is a so called 401(k) plan. It allows employees the make pre-tax contributions, which go to a savings account and are invested to earn an income for the employee. Employers often make an equal or partial contribution for the employee.

Under the 401(k) plan employees can choose into how many investments they want to put their money. Appendix IV, Figure 4, shows the distribution of investment choices among full-time employees in private industry in 2000.

The cost if providing retirement benefits depends on the agreement with employees, as there can be a high employer contribution to the plan, but the employer can also provide only a few percent of the employee’s payment.