Effects of Employee Benefits on Affective and Continuance Commitment during Times of Crisis

Abstract

Purpose: Employee benefits represent a large proportion of operational costs in most sectors, but discussions of their outcomes have been inconclusive. This paper attempts to decipher the effects of employee benefits on organizational commitment in a changing and largely uncertain environment. Design/methodology/approach: 3 repeated large-scale surveys in Greece during the recent recession are used (2012, 2013 and 2015, total N=3498). Findings: A new taxonomy of employee benefits based on employees’ subjective utility evaluations is developed and applied. Availability of benefits and changes in the allocation policies of benefits are found to significantly but not powerfully influence organizational commitment. The setting in which this exchange is realized is critical for the relationships developed. Research limitations/implications: The study is conducted in a single country during the recession and trough phases of the business cycle and employee benefit allocation is measured with employee perceptions. Future research is called to couple present findings with international research at diverse phases of the business cycle and objective or company-provided measures of employee benefits. Practical implications: Employers are advised to draft long-term employee benefit strategies, avoid frequent adjustments and provide multiple types of employee benefits, to increase affective organizational commitment. Originality/value: This is the first time employee benefits are treated as a whole, and effects of their allocation and of changes in their allocation are explored at the employee level.