Background
Perquisites, often shortened to “perks,” are non-wage benefits provided by employers to employees. These can range from standard benefits such as company cars and health insurance to more unique perks like access to company-owned entertainment venues.
Historical Context
The concept of perquisites dates back to the early stages of industrial organizations, where employers provided certain benefits to attract and retain talent. Over time, these perks have evolved in both their variety and their significance within compensation packages.
Definitions and Concepts
Perquisites are essentially payments in kind attached to jobs. They encompass various forms of company-provided benefits, including but not limited to:
- Company Cars: Vehicles provided for personal and professional use.
- Company Sports Facilities: Gyms and other sports amenities available for employee use.
- Company Medical Facilities or Insurance: Health services or health insurance plans provided by the employer.
- Unique Perks: Such as company boxes at the opera, which are rare and often tailored to the specific culture of the company or its leadership.
Some of these benefits are openly offered and may be subject to taxation, while others sporadically attract attempts by tax authorities to impose taxes on their monetary value.
Major Analytical Frameworks
Classical Economics
Classical economics mainly focuses on monetary wages and sees perquisites as secondary. Classical economists might argue that perquisites could distort labor market negotiations.
Neoclassical Economics
Neoclassical economists view perquisites as part of the overall compensation package. They help explain job choices under utility maximization frameworks, where non-monetary benefits are factored into employees’ utility functions.
Keynesian Economics
Keynesian economics pays less attention to perquisites explicitly but might consider their role within overall labor compensation and consumption.
Marxian Economics
Perquisites in Marxian economics could be interpreted as tools for maintaining workforce complacency under capitalism, serving to obscure the exploitation that comes with wage labor.
Institutional Economics
Institutional economists analyze perquisites as part of the organizational culture and structures that affect employee behavior and efficiency.
Behavioral Economics
Behavioral economists look into how perquisites shape employee satisfaction, motivation, and productivity beyond conventional financial incentives.
Post-Keynesian Economics
This school of thought considers perquisites as part of labor market rigidities, influencing aggregate supply and demand.
Austrian Economics
Austrian economists might focus on the bargaining process that leads to perquisites, emphasizing the role of individual preferences and negotiations.
Development Economics
In developing economies, perquisites can be crucial for employee retention and welfare, especially where formal social security systems are lacking.
Monetarism
Monetarists seldom focus on perquisites directly but might consider their impact on employee consumption patterns within the overall money supply framework.
Comparative Analysis
Comparatively, perquisites can vary significantly across different economic systems, industries, and organizational cultures. For example, high-tech companies in Silicon Valley are infamous for providing extensive perks which might be uncommon in more traditional industries like manufacturing.
Case Studies
- Google: Known for campus amenities like gyms, gourmet cafes, and nap pods.
- John Lewis Partnership (UK): Provide annual profit-sharing bonuses and significant staff discounts.
Suggested Books for Further Studies
- “Work Rules!” by Laszlo Bock
- “Drive: The Surprising Truth About What Motivates Us” by Daniel H. Pink
- “The Compensation Handbook” by Lance A. Berger
Related Terms with Definitions
- Fringe Benefits: Various additional benefits provided to employees.
- Compensation: The total of all remuneration and benefits provided to an employee.
- Benefits: Non-wage compensations provided to employees beyond salaries.
- Allowances: A portion of the total salary allocated for specific expenses.
- In-Kind Payment: Non-cash payments received for work performed.
