(Solution) CIPD 5HR03 different types of benefits offered by organisations and the merits of each that might be applied to Body Image. (AC 1.4)


Employee benefits are forms of rewards that employee receive, but not in cash. The cash is catered by the employer, meaning the organisation will incur the costs (Cotton, 2022).

Car allowances – Body Image may provide car allowance when the job needs it or to recognise employee job status (Cotton, 2022). The merits of car allowance include saving employee travelling costs, fuel costs and maintenance costs. It is the company that can incur all these costs and not the employee. It can also motivate employee to work harder while feeling happy (Cotton, 2022). The demerit of car allowance is high cost to the employer. Employer is expected to incur more expenses that may affect productivity.

Profit sharing – Body Image can agree with employees to receive a profit share when the company reaches a specific profit target (Yan et al., 2020). It is a way of motivating employees to focus on organisational goals and objectives. Its key advantage is to ensure employees stay aligned with organisational purpose, goals and objectives. It can also be a retention strategy within Body image for a long-term. They are appropriate when employees and company are performing well. Its demerit is that workers to not see how their work impact profitability. It can also demotivate members when removed, thus employer need to specify that it is only offered when company earn more profit.

Pension schemes – Body Image can decide to pay employee a pension scheme once they retire from working. However, both employees and employers can contribute a specific amount to the pension plan. Its merit is sustaining individual’s standards of living after retirement. They also provide financial protection to employees. Its demerit is that employees do not have control over their money where it is invested (Xiang, 2021). Pensions are also non-transferrable.

The similarities employee benefits are attracting, retaining, motivating and improving employee wellbeing. Body Image can offer a wide range of benefit to attract and retain talents for long-term (Cotton, 2022). The difference is that car allowances improve employee travel while pension schemes provide financial support after retirement. Profit sharing also support employee financial wellbeing, but while working.

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