Designing benefits for employees

Having in mind the importance of small and mid-size companies in the global scale but also the importance in emerging economies, it is crucial to plan and design benefit programs which would create an environment of growth and satisfaction as for the employees and for the company as well. This is a demand of the neoliberal economic environment that companies have to fulfill in order to stay competitive in the fast changing environment. The rapid growing number of companies frames a competition for attracting good employees whereby companies have to answer the question: what makes them attractive to good employees? The second question that companies need to answer is why should a good employee stay?   A good designed benefit program can attract, further develop and keep good employees. Such programs are based on a holistic approach of analysis that investigate motivation factors, but also the market to see what other companies offer to their employees. Employee benefits may be required by law, depending on potential health risks associated with the job or industry and the laws of the country where the job done or provided voluntarily by the employer.          Moreover, it’s important to specify which employee benefits are mandatory for an employer to provide to an employee. The regulations in Bosnia and Herzegovina differentiate according to the location where the business is maintained. In general a packet of health care benefits is compensatory, as well for the lunch break and payed annual leave in the Federation of Bosnia and Herzegovina up to 20 working days per year. Adjustments in regards to the minimum wage and annual leave have been made for the COVID-19 situation which is worsen the position of workers. Strong workers councils for those employed by the government (administrative workers and employees in government owned companies) are negotiation changes in the regulation every year.

From an employee’s point of view, a good package of benefits can increase their trust, loyalty towards the company and motivation. Beside that a good benefit strategy respond to their needs contributing to their working life and their own health and that of their family. Additionally from an employer’s point of view, benefits help staff remain happy and committed, reducing the chance of them leaving.

Benefit programs relay on theories which explain human motivation.  Motivational theories provide basic knowledge about workers behaviors and relevant variables which influence such behavior. There are many theories which describe work related motivational factors who contribute to the achievement of organizational goals and job satisfaction. Some of the theories emphasis on physical and social needs of the employees who are looking for opportunities for personal growth and in the end a good carrier in the field of their interest. One of the prominent theory is the “Herzberg’s two factor theory” which focuses on the relation between job so called motivators and hygiene factors. Whereby hygiene or maintenance factors are those external factors which contribute to job dissatisfaction. Motivators are those intrinsic factors which contribute to job satisfaction and enhance work performance.  This theory looks into job satisfaction and dissatisfaction not like the where two sides of one continuum but rather to different dimension.

Figure 1: Overview of Herzberg’s Motivators and Hygiene Factors[1]

Figure 1 displays some motivators and hygiene factors and we can observe that the hygiene factors act as launch pad.  An benefit program which is influenced by Herzberg’s theory would emphasize on the motivators in order to raise production and workers satisfaction level. Having in mind characteristics of mid-size nonproduction companies a strong emphasize would be on the need of achievement, personal growth and the perception that a work is meaningful.


[1] Scource : https://www.businessballs.com/herzbergdiagram.pdf visited May 17, 2020

Author: Irma Sarać-Hukanović

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