In this article my main objective is to study the unusual expansion of the various supplementary compensation methods as fringe benefits in the United States of America and in Korea. The topics are discussed in the following order:
(1) Forming of new...
In this article my main objective is to study the unusual expansion of the various supplementary compensation methods as fringe benefits in the United States of America and in Korea. The topics are discussed in the following order:
(1) Forming of new concept of the wage.
(2) Varied concepts of fringe benefits.
(3) The background of the development of fringe benefits.
(4) The classification of fringe benefits.
(5) Employee's welfare work system and allowances as fringe benefits in Korea.
(6) Conclusion.
The author of "Health Plans and Collective Bargaining, 1960" Professor, Joseph W. Garbarino says that, now, in the United States of America, they use term of employee compensation instead of wage or pay because of increasing wage cost not directly connected with employee productive effort, performance, service or sacrifice.
Such supplementary compensation methods or indirect compensation has been variously indentified as by-products of compensation, employee benefits, employee services, hidden wages, hidden payroll, indirect payment plans, plus-wage benefits, social wages, supplementary incentives, welfare plans, none-wage benefits, supplementary employee remuneration, indirect payment practices, and fringes.
The most widely used terms are "fringes and fringe benefits" a catch-word attributed to a regional director of the War Labor Board during World War Ⅱ. Although the term fringe has found widse usage, agreement has not been reached on what it includes. Fringe has assumed many varied meanings because of their complexities and because of their being misunderstood. To some industrial relations practioners, "Fringe" denotes high labor cost without additional production. To others, like Michael, fringe means "procedures adopted to provide supplementary compensation which is over and above the agreed upon wage or salary rate and for which no additional productivity is required. The National Industrial Conference Board has defined the concept as, payments to workers over and above wages paid on the basis of time worked or production completed.
The United States Department of Commerce adopted the term as supplements to wages and salaries for national income purpose describing it as follow; Supplements to wages and salaries are the monetary compensation of employees not commonly regarded as wages and salaries. They consist of employer contribution for social insurance, employer contributions to private pension and welfare funds, compensation for in juries, pay of the military reserve, and a few other minor items of labor income. Other definitions include the following elements: (1) employer labor costs beyond wages and salaries, (2) compensation beyond wages and salaries requiring no additional productivity, (3) compensation, benefits or services not related to employee performance.
The term "fringe benefits" was unknown prior to world war Ⅱ. It is an outgrowth of the Federal Government's effort to curb inflation during the war by preventing employers from granting wage raises by means of paying new employees higher wage-base-rates and salaries. Some employers attempted to attract workers with compensations that the National War Labor Board regarded as more "timmings" at the periphery of direct wage and salary payments. Thus these compensations were named fringe benefits by the Board of Chairman. Fringe payments rapidly expanded from a few items of insignificant amounts to numerous benefits and services totaling many billions of dollars each year, affecting the entire economy, and raising the cost of production. when attempts have been made to arrive at a definition operationally by listing benefits to be included, wide differences appear. Such lists have varied from 20 items to over 100 items. For instance, in Dai-Han Coal Corporation in Korea, various allowances and welfare expanses include the most items of fringe benefits in the United States of America.
Many factors have been operating to bring about this fundamental change in the nature of compensation. One is changing nature of American economy as the results of continued industrialization. Increases in productivity have permitted the choices of the way in which the worker's share is distributed. Part of the productivity increase, for example, has been taken in increased leisure in the form of vacations and holidays as well as shorter hours.
Growing industrialization and changes in modes of living have brought new risks to employees and creates demands for methods of insuring against such risks. Some supplem entary compensations became monetary by reason of the workmen's compensation laws and the Social Security Act. Perhaps the strongest factor for growth in indirect compensation programs was government influence and union demands in the United States of America. But in Korea, major factors are to cover lowest wages by employers as well as government influences because of the weakness of unions. In reference to the past trend in the United States, union demands will serve to increase indirect compensation as the growth of industrialization and increasing productivity in Korea. we have to note the private pension system and social security system as a factor of accumulating capital which is most essential factor to develop our economy.