Theorizing the relationship between discretionary employee benefits and individual performance
Balkin, David B.; Werner, Steve. Theorizing the relationship between discretionary employee benefits and individual performance. Human Resource Management Review. Mar2023, Vol. 33 Issue 1, pN.PAG-N.PAG.ÌýÌýÌýÌý
The literature on compensation has devoted little attention to the relationship between discretionary employee benefits and individual performance, perhaps because benefits are allocated equally to large groups of employees, are not tied to individual performance, and are viewed as entitlements. Discretionary benefits include all the benefits an employer provides to employees voluntarily (i.e., not legally required). Employees can use internet search tools to make comparisons between focal and referent firms of their expenditures on discretionary benefits, which can symbolize employer support for employee well-being or invoke perceptions of equity. In our paper, we provide a novel insight into the relationship between discretionary benefits and employee individual performance through a theoretical lens that combines insights from organizational support theory and equity theory shaped by perceptions of social and economic exchange relationships. In our conceptual model we develop theoretical logic that explains that perceived discretionary benefits, moderated by benefits satisfaction and mediated by perceived organizational support and perceived equity, are linked to individual performance. The paper concludes with a discussion of the theoretical implications and directions for future research. • Employees use internet search tools to find the comparative value of their discretionary employee benefits among peer firms. • An organization's contribution to employees' discretionary benefits symbolizes care and support for their well-being. • Discretionary benefits are positively related to perceived organizational support positive and individual performance.ÌýÌýÌýÌý
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