Meaning, need for Employee Welfare

Employee welfare means anything done for the comfort and (intellectual or social) improvement of the employees, over and above the wages paid.

In simple words, it means “the efforts to make life worth living for workmen.” It includes various services, facilities and amenities provided to employees for their betterment. These facilities may be provided voluntarily by progressive entrepreneurs, or statutory provisions may compel them to provide these amenities; or these may be undertaken by the government or trade unions, if they have the required funds.

According to ILO, “Employee welfare should be understood as such service, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale”.

The objectives of employee welfare are to improve the life of the working class, to bring about holistic development of the worker’s personality and so on. Employee welfare is in the interest of employee, employer and the society as a whole. It enables workers to perform their work in healthy and favorable environment.

Hence, it improves efficiency of workers and keeps them content, thereby contributing to high employee morale. It also develops a sense of responsibility and dignity amongst the workers and thus makes them good citizens of the nation.

Apart from the wages and salary, anything done by the organization to improve the living standard of employees and keep them contented comes under the realm of employee welfare. All those services, benefits and facilities offered to employees by the employer to make his life worth living, are included in employee welfare.

According to ILO, “Employee welfare should be understood as such service, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale”.

Employee welfare is for the betterment of the workers. It involves adjustment of an employee’s work life and family life to the community and social life. Welfare measures may be both voluntary and statutory (prescribed under labour laws).

The need and importance of employee welfare is being increasingly appreciated throughout the civi­lized world. The concept of welfare is a dynamic one and has different connotations in different countries and at different times in the same country, according to the prevailing value system, social institution, degree of industrialization, and the general level of social and economic development.

Some describe employee welfare or labour welfare as ‘an attitude of mind’ while others merely catalogue the schemes and measures which should be included in labour welfare. There are some who emphasize the voluntary nature of measures and include the measures that are undertaken by the employers beyond what is required by law. Some interpret labour/employee welfare measures to mean only measures which are legally obligatory.

International Labour Organization (ILO) defines welfare as:

According to the ILO, ’employees’ welfare should be understood to mean such services, facilities, and amenities which may be estab­lished in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and congenial surroundings, and provided with amenities conducive to the good health and morale.’

Welfare work is the task to be done by the employer voluntarily for the intellectual, physical, moral, and economic betterment of employees, over and above which is laid down by law, or what is expected as a part of contractual benefits for which the employee may have bargained.

Thus, under this definition we may include housing, medical and educational facilities, nutrition, facilities for rest and recreation, cooperative societies, day nurseries and creches, provision for sanitary, accommodation, holidays with pay, social insurance measures undertaken voluntarily by the employers, and would also include schemes like provident fund, gratuity, and pension etc. The term welfare is thus very flexible.

In India, which has embarked upon a vast programme of industrialization, the need for labour welfare is all the more important because it creates a healthy atmosphere in the work place, keeps the labour force stable and contended, and helps in maintaining industrial peace, thereby improving productive efficiency of the workers.

It is in recognition of this need that under successive five year plans, and also in the industrial policy statements, welfare measures had been accorded a due place. The agencies responsible for administering welfare measures are the Central Government, State Government, employers and their organizations, work­ers’ organizations, and Statutory Welfare Funds.

To supplement the efforts of the employees and the State Governments in providing welfare amenities to the workers, welfare funds have been set up in coal, mica, iron ore, manganese ore, limestone and dolomite mines, and in the beedi industry.

The principal activities financed out of the fund include general welfare such as medical facilities, water supply, education and recreation, and housing. The funds have been created by the levy of the cess on production or consumption or export of the minerals and, in the case of beedi, on the manufactured beedis.

Employee welfare concept

The terms ’employees’ welfare’ and ‘workers’ welfare’ are used interchangeably to denote various services provided by the employers to the employees in addition to wages. According to Arthur James Todd, “Employee welfare means anything done for the comfort and improvement, intellectual or social of the employees over and above the wages paid which is not a necessity of the industry”.

According to a publication of ILO, Employee welfare should be understood as meaning with services, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale”.

Employee welfare is a dynamic concept as new welfare measures are added to the existing ones along with social changes. It is also a comprehensive concept. The modern concept of employee welfare entails all those activities of the employers which are directed towards providing the employees with certain facilities and services in addition to wages or salaries.

These are not a form of employers’ goodwill or charity to the workers, but are facilitative services to build and maintain the morale of the workers to achieve the objectives of the organisation. It is not only in the interest of the employees to provide them with necessary medical benefits, recreation facilities, retirement benefits, etc., but also in the interest of the organisation itself.

The employees feel satisfied if they are provided with such services and they also feel committed to the organisation. Though welfare services are merely maintenance factors and not motivators, yet they are necessary for the health of the organisation since they bear close connection with the productivity of the employees.

The basic features of employees’ or labour welfare are as follows:

(i) Labour welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status.

(ii) Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining.

(iii) Labour welfare measures are flexible and ever-changing. New welfare measures are added to the existing ones from time to time.

(iv) Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency.

(v) The purpose of labour welfare is to bring about the development of the whole personality of the worker to make him a good worker and a good citizen.

Employee Welfare Objectives

The objectives of employee welfare are discussed below:

(i) To enhance the level of morale of employees.

(ii) To create a loyal, contented workforce in organization.

(iii) To develop a better image of the company in the minds of the employees.

(iv) To enable the workers to live comfortably and happily.

(v) To develop efficiency of the workers.

(vi) To reduce influence of trade unions over the workers.

(vii) To expose philanthropic and benevolent activities of the company.

(viii) To make the workers know that the company takes care of them.

(ix) To develop positive attitude towards job, company and management.

(x) To reduce tax burden.

(xi) To develop a feeling of satisfaction of employees with the company.

(xii) To develop a sense of belonging to the company.

(xiii) To retain skilled and talented workers.

(xiv) To develop better human relation.

(xv) To prevent social evils like drinking, gambling through improvement of working conditions, cultural activities and social conditions.

Employee welfare work assumes great importance because of the following reasons:

1. Lack of strong trade union movement: In the absence of strong trade unions and effective leaders, welfare work helps the workers in the industry to stand on their own feet, think properly and systematically of their interests, progress hand in hand and participate in the nation’s development.
2. Poverty: Poverty is one of the main reasons behind the provisions of labour welfare activities. Indian workers in majority are poor, and are, therefore, unable to provide a healthy living for their families and good education for their children.
3. Illiteracy: In India, the number of educated workers is low. Being illiterate, they are unable to receive advanced industrial training, understand the problems in industries, and understand their own interests and those of nations.
4. Low level of health and nutrition: Due to poverty and illiteracy, the Indian workers remain unhealthy and ill fed. This reduces their productivity and efficiency.
5. Lack of healthy recreation: Due to lack of healthy recreation, the workers indulge in crime and other wrong activities. The employer should provide means of healthy recreation in order to maintain their efficiency.
6. Lack of training: The number of trained workers in India is very low. Thus, it is necessary to have training facilities for such a vast workforce.