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The Importance of Benefits Appraisals

By: J.A.J Aaronson - Updated: 8 Nov 2010 | comments*Discuss
The Importance Of Benefits Appraisals

Every company will have a different set of reasons for establishing an employee benefits scheme. Amongst the most common of these are the necessity to fulfil legal obligations (for example to provide a pension benefits scheme), or a desire to increase cohesion and loyalty amongst the workforce. However, any benefits scheme can represent a significant investment on the part of the company and, however altruistic they may be, it is likely that the business will want to see some return on their investment. It is important, therefore, for your company to keep a close eye on the success of your scheme. The most effective method by which this can be achieved is the use of benefits appraisals.


When establishing an employee benefits scheme it is important that, from the outset, you are clear about the aims of the scheme. For example, are you introducing a private healthcare scheme in order to reduce the amount of sickness absence suffered by your company? Or are you, for example, introducing an incentives scheme to encourage employees to meet or exceed their sales targets? Regardless of the individual aims, it is vital that everyone concerned is aware of them. You may wish to use the SMART system of target setting. This requires a target to be Specific (that is, they must not be too vague), Measurable (it must be possible to quantify your success in meeting them), Appropriate (they should have some obvious advantage for your company and workforce), Realistic (they should not be so ambitious that they are unattainable), and Time-bonded (you should set time limits within which you aim to meet the targets).

Having set up your employee benefits scheme, you should subsequently subject it to regular and rigorous appraisals. The way in which your benefits scheme is appraised will depend on the nature of the benefits being offered and the aims upon which you decided at the outset. This is clearly easier in some cases than others; for example, if your goal was to reduce sickness absence then your appraisals may consist of a regular review of average attendance for your workforce. If absence has fallen to the level stated in your initial target (and, indeed, by the time at which you intended) then the employee benefits scheme is meeting its objectives. If you miss your target, you should look at ways in which you can alter the scheme to make it more successful.

Abstract Advantages

There are a number of circumstances in which benefits appraisals can be more difficult. Frequently a company's objectives in this area are not as tangible as an increase in sales figures or a reduction in absence. For example, the purpose of the employee benefits scheme may be to create a better working environment, and encourage a sense of loyalty amongst the workforce. This cannot be plotted on a graph, but appraisals still have a significant value in these circumstances. In such cases, your appraisals might consist of regular consultation with your staff. You should investigate whether or not the benefits offered are appreciated by the workforce, and you should ask general questions regarding their thoughts on working for the company. You may find that you are more likely to receive honest, useful answers if you offer staff the chance to respond anonymously.

Regardless of the nature of your aims, it is important that you keep a close eye on the continued success of your employee benefits scheme. Carrying out regular appraisals is an important part of this process.

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