Question

A leading newspaper company noticed that many of its talented editors were resigning despite being paid competitive salaries. On conducting an internal survey, it was revealed that employees were dissatisfied as they were not being offered benefits over and above the salary, like the employees of other competitive firms. Realising that such additional benefits play an important role in motivating employees, the management decided to provide car allowance, housing facilities, medical benefits, etc. to retain employees in the organisation and improve their satisfaction.
Identify the incentive that the newspaper company decided to provide to their employees :

• A. Bonus
• B. Retirement benefits
• C. Perquisites
• D. Profit sharing

Hint:

Remember: "Perks" (Perquisites) are non-cash benefits that have a financial value, like free housing or a company car.

Answer 1

The Correct Option is C

Step 1: Read the case carefully.
A leading newspaper company found that talented editors were leaving despite competitive salaries. An internal survey revealed that employees were dissatisfied because they were not getting benefits beyond the salary, such as car allowances, housing, and medical facilities. The management decided to provide these benefits.
Step 2: Identify the key phrase in the case.
The employees wanted benefits over and above the salary. The management decided to provide car allowance, housing facilities, and medical benefits. These are all non-cash benefits provided in addition to the regular salary, not a direct monetary payment.
Step 3: Recall the types of financial incentives.
Financial incentives include: Pay and allowances, Productivity-linked wage incentives, Bonus, Profit sharing, Co-partnership, Retirement benefits, and Perquisites (also called perks).
Step 4: Understand what Perquisites means.
Perquisites are fringe benefits provided to employees over and above the basic salary. They include benefits like company-provided housing, car allowances, free medical facilities, children's education allowances, and similar non-cash extras. They are designed to retain employees and improve their satisfaction and quality of life.
Step 5: Eliminate the other options.
Bonus is a lump-sum extra payment, usually linked to performance or a festive occasion. Retirement benefits include provident fund and gratuity payable after leaving the job. Profit sharing is a scheme where a portion of the company's profits is distributed to employees. None of these match car allowance, housing, and medical benefits.
Step 6: Conclude.
Car allowance, housing, and medical benefits are classic examples of Perquisites, the incentive the company decided to provide.
\[ \boxed{ \text{(C) Perquisites} } \]