Integrating Employee Benefits and Competitive Strategy

As the costs of employee benefits have escalated, labor cost control to enhance product market competitiveness has become a more critical organizational concern. However, benefits which are an element of compensation have remained a relatively neglected topic in the area of strategic human resource management. This paper explores the role of employee benefits in effective strategy implementation. Three core characteristics of employee benefits practices: timing, benefit level and employee-employer relationship, are described on continuum of choices. Examples of various employee benefits practices are linked to low-cost leadership and differentiation strategies.