Employee welfare entails everything from services, facilities and benefits that are provided or done by an employer for the advantage or comfort of an employee. It is undertaken in order to motivate employees and raise the productivity levels.

In most cases, employee welfare comes in monetary form, but it doesn’t always bend that way. Other forms of employee welfare include housing, health insurance, stipends, transportation and provision of food. An employer may also cater for employees’ welfare by monitoring their working conditions.

Importance of employee welfare

Employee welfare raises the company’s expenses but if it is done correctly, it has huge benefits for both employer and employee. Under the principles of employee welfare, if an employee feels that the management is concerned and cares for him/her as a person and not just as another employee, he/she will be more committed to his/her work. Other forms of welfare will aid the employee of financial burdens while welfare activities break the monotony of work.

An employee who feels appreciated will be more fulfilled, satisfied and more productive. This will not only lead to higher productivity but also satisfied customers and hence profitability for the company. A satisfied employee will also not go looking for other job opportunities and hence an employer will get to keep the best talents and record lower employee turnover.

During employment, the offered benefits will determine whether an employee commits to an organization or not. As such, good employee welfare enables a company to compete favorably with other employers for the recruitment and retention of quality personnel.

Legal requirements

For employers, compliance to the law requires the extension of certain benefits to the employees. Some include matching the amount expended by the workers for Social Security taxes and instituting an insurance policy for worker’s recompense.

Types of employee welfare

Employee welfare can be categorized as statutory or non-statutory, meaning as required by the law or by the will of the management respectively. Welfare activities can also be classified as either intra-mural (inside the workplace) or extra-mural (outside the workplace).

Intramural welfare facilities are those within the working environment and include condition of the working environment (safety, cleanliness, and safety measures), employee convenience (bathrooms, drinking water), health services (first aid and treatment center, ambulance, counseling) and women and child welfare (family planning services, maternity aid).

Extramural welfare activities are diverse with many of them being sponsored by government acts. Some include comfortable residences, proper roads and infrastructure and sanitation while constitutional acts such as the factories act of 1948 and contract labor act of 1970 are examples of governmental welfare activities.