Innovative businesses, which see the need to offer these programs to their employees, are instrumental in maintaining an edge during this digital GE of corporate competition. The health and welfare of these valuable employees becomes a key component toward corporate success. In the early 1 9005, the poor working conditions of American workers were exposed by labor unions, social advocates, and journalists. Economic instability of the 1 ass’s was a catalyst for the development of change which was to come.
The role of the worker became the foundation of business and the advancement of a democratic society as realized by multiple corporate executives. Corporate managers began to focus on the well-being of the employee which led to company loyalty, the discouragement of high employee turnover, and the development of a strong public image. The Ford Motor company spearheaded employee benefit change. In January 1914, Ford took steps to ensure its employees remained healthy, loyal, and above all, efficient.
Ford opened an infirmary and established the “Sociological Department” to both keep tabs on and look after the welfare of its workers. In 1922, Ford cut the work week from six days to five (Gross, 2013). Ford’s progressive ideology helped set the stage for a massive shift into lifer capitalism, where fringe benefits, retirement, insurance, and health plans became a common theme. The Ford Motor Company also took notice when its new model “T” automobiles became an affordable consumer product to its production line workers.
Along with pensions, sick pay, disability benefits, and stock purchase plans, workers in companies like Ford, Cornish Glass Works, and Western Electric could participate in a range of recreational and educational programs from running meets, tennis games, and baseball leagues to lunchtime concerts, beauty pageants, and evening classes. As socialist programs of the ‘ass began to rise, responsibility for the well- being of their employees became the primary concern for most corporations.
It was part of a grand bargain between labor, capital, and government that allowed for remarkable growth, innovation, and rising standards of living for decades (Gross, 2013). American workers began to realize a sense of stability and economic comfort which had not previously been known to them. In 1935, the Social Security Act proved paramount to the American corporate landscape. New legislation was established which insured the health and welfare of errors and offered more educational and training opportunities to minorities.
Changes to legislation like the Equal Rights Act of 1963, Medicare in 1 965, and the American’s with Disabilities Act of 1990 helped level the playing field for the under compensated and vulnerable groups of Americans whose cries for help were finally answered. It wasn’t until the sass’s where the American corporations faced stiff competition from international corporations which could employ cheap labor and had yet to adopt any principal aspects of welfare capitalism.
Even though corporations continued o innovate through the next half century and offer new and enticing programs, to recruit and retain top talent, the competition brought on by developing nations combined with the expansion of globalization forced many industries to cut or reduce employee benefits. In the past fifty years, programs have instituted benefits programs like 401 K retirement accounts, corporate health and wellness, medical, dental, and life insurance.
Corporations sough to protect the overall health and well-being of its most valuable assets, but now looked to take advantage of several government pondered tax breaks as well as to help recruit and retain the top talent in the industry. This overall popularity for workplace programs derives in part from the fact more than sixty percent of Americans get their health insurance coverage through an employer based plan, recognizing many employees spend the majority of their waking hours in the workplace, business also realized it was a natural venue for investments in health.
There are several reasons employers might benefit from investments in employee wellness. Programs might lead to reductions in health care costs and thus health insurance premiums. Healthier workers might be more productive and miss fewer days of work. Not only would implementing a wellness program promote a healthy work environment, but it could also result in a return on investment (Sauna, 2013). Several well-publicized case studies have suggested a positive return to employer investment in prevention. For every dollar invested in the program, the employer saves more than the dollar spent.
For example the Citibank Health Management Program reported an estimated savings of $4. 50 in medical expenditures per dollar spent on the program Alderman, 2009). This logical reasoning suggests corporations have even more incentive to not only look after the health and welfare of its employees and also save money on overhead costs. In the rapidly changing world of business today, the disparity of the benefits and compensation are offered between the high end information and technology firms to the low wages no benefits crowd who work in the food industry and retail environments.
Google employees are entitled to free rental cars if they need to run an errand, free gyms on campus, and some offices even offer on-site daycare Smith, 2013). Executives at the technology giant feel that it’s important their employees feel a sense of comfort and security at work, and the overall benefit gained far exceeds the operating costs of providing these luxury services at no cost. The fringe benefits and other programs offered by a corporation like McDonald’s are not quite as good. The average worker at McDonald’s might make $8. 5 per hour. For McDonald ;s, this wage is apparently a, ‘fair,’ one. Another good business practice for this corporation is to hire people for hours that are less than full-time, meaning the average rocker at McDonald’s will not find themselves working hours a week. The reason McDonald’s does this is because full-time workers get benefits. The fewer workers a corporation has working full-time, the fewer benefits It has to pay for (Weiss, 2013). McDonald’s only offers benefit packages to select employees, mainly those in management positions.
While corporations like Walter and McDonald’s don’t exactly have the fanciest compensation packages and health and wellness programs, what they do have is large overhead costs as a result of a high rate of employee turnover. While it’s obvious the executive leadership of both companies feel the high turnover is offset by the lower wages it offers, corporations should also weigh the lack of comparable employee wellness and benefit programs like 401 KS, health & dental insurance, and life insurance might actually have a deep impact in the employee turnover and retraining costs.
While corporations today spend billions of dollars in market research and risk management scenarios about how to get to, and remain at maximum operating efficiency, most are doing it by alienating its workforce at the prospect of retaining a few extra dollars in he short run. The fact several modern progressive companies like Apple, Faceable, and Google are posting record profit margins while maintaining a high end health and welfare employees packages is a testament to just how well these programs really work.
While small businesses today may not have the luxury of instituting such extravagant programs like a company like Google can, what they can do is work with their employees to offer a sound package of fringe benefits to take advantage of several government tax incentives which will have a minimal impact on their operating costs. Critics to lifer capitalism feel that there is no sense in offering such programs to their employees. They feel the free market is the basis for all employment compensation packages and unless mandated by the government, they don’t have to offer an employee one additional perk that is not required by law.
If history has taught us anything, it’s that people are always out there looking for greener pastures. Whether it means relocating, changing careers, or getting additional training needed to secure a more desired position, employees may ultimately seek a better offer. In the end, the costs of losing UT on top tier talent and increasing turnover rates will doom a corporation. In conclusion, the past century has witnessed massive improvements in terms of worker’s health and wellness programs positively impacting families and workers.
Labor unions and workers also lost their negotiating leverage over corporate America, thus losing some Of their fringe benefits and insurance plans. The competitive spirit of America as the leading democracy in the world, coupled with its tradition of innovation and technology, will help mold a new American economy. This new economy will reduce discrimination, increase social mobility, and offer a better quality of life to those willing to work for it. My recommendation would be for every employee to explore a perspective company prior to taking a job.