Journal of Managerial Psychology

An examination of traditional versus non-traditional benefits

Lori A. Muse Lori L. Wadsworth

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Lori A. Muse Lori L. Wadsworth, (2012),"An examination of traditional versus non-traditional benefits",
Journal of Managerial Psychology, Vol. 27 Iss 2 pp. 112 - 131
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JMP
27,2

An examination of traditional
versus non-traditional benefits

112

Department of Management, California State University, Fullerton, Fullerton,

California, USA, and

Lori A. Muse
Lori L. Wadsworth
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Romney Institute of Public Management, Brigham Young University, Provo,

Utah, USA
Abstract
Purpose The purpose of this paper is to investigate how the perceived value of traditional versus
non-tradition benefits may be related to the employee-employer relationship, and how the perception of
that relationship might be linked to job performance and turnover intentions.
Design/methodology/approach Multi-source data were collected from a random sample of
employees and their supervisors at a healthcare organization (n 457).
Findings Non-traditional benefits have a positive direct relationship with perceived organizational
support (POS), whereas traditional health and financial benefits are not related to POS. The
relationships between benefits perceptions and POS are moderated by marital status, but not gender.
In addition, POS had a strong negative relationship with turnover intentions, and a positive
relationship with task performance, job dedication and interpersonal facilitation.
Research limitations/implications Whereas data collected were multisource in nature, data
were collected at the same point in time; therefore the authors could not test causality. Moreover,
females were over-represented in the sample, limiting generalizability.
Practical implications Managing benefits costs is one of many challenges facing human resource
managers in the current economy. This study provides a better understanding of the relationship
between employee benefits and important outcomes. The papers findings emphasize the importance
of assessing employees perceived value of benefits when human resource managers are making
decisions about benefit programs.
Originality/value This study contributes to the literature in several ways. First, this study offers
evidence to solve past conflicts regarding the existence and nature of the relationship between benefits
and POS. Second, this research contributes to the need to document potential work outcomes of benefit
packages. Third, it distinguishes among different kinds of benefits (traditional vs non-traditional), and
shows that non-traditional benefits can signal to employees how much they are valued by the
organization.
Keywords Human resource management, Benefits management, Job satisfaction, Employee benefits,
Perceived organizational support, Employee-employer relationship, Job performance,
Contextual performance, Employees turnover
Paper type Research paper

Journal of Managerial Psychology

Vol. 27 No. 2, 2012
pp. 112-131
q Emerald Group Publishing Limited
0268-3946
DOI 10.1108/02683941211199527

There has been much discussion in the popular press about organizations cutting
employee benefits to reduce costs and survive the recession (Curran, 2009). Yet
others contend that benefit programs are important enough to employees to be
linked to their attitudes and behaviors in the workplace (Lambert, 2000; Muse et al.,
2008). Given the price associated with offering a diverse range of benefits, it is not
surprising employers would look to reduce this expense, especially in poor economic

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times (Pudlowski, 2009). The cost of employee benefits to organizations in the US

has risen from 3 percent of employers payrolls in 1929 to 44 percent in 2005 (US
Chamber of Commerce, 2007). With the steep price tag associated with such benefit
programs, the study of their relationship with employee attitudes and behaviors in
the workplace is important to practicing human resource managers. As Dreher et al.
(1988, p. 251) noted, compensation managers are ultimately interested in the
affective and behavioral consequences associated with changes in benefit system
components.
Despite the considerable cost and vital importance to human resource
decision-making, minimal knowledge exists regarding the connection between
different types of benefit programs and employee behaviors (Casper and Buffardi,
2004; Eby et al., 2005). In fact, in a recent review of the benefits literature, Dulebohn
et al. (2009, p. 101) concluded that the dearth of research on employee benefits has led
practitioners to make their way by trial and error.
Thus far, researchers have established that a primary reason why employers adopt
certain benefits is to strengthen recruitment and retention (Galinsky and Stein, 1990).
At the micro level, one of the primary areas within benefits research is that of benefit
use. Studies have found support linking employee use of benefits to positive outcomes
such as job satisfaction (Breaugh and Frye, 2007; Grover and Crooker, 1995), higher
organizational commitment and reduced turnover intentions (Allen, 2001; Eaton, 2003;
Grover and Crooker, 1995). Experts in work-family culture, however, caution
employers that simply offering family-friendly benefits will not lead to enhancing
organizational outcomes if the utilization rate is low, due to a lack of a supportive
culture (Andreassi and Thompson, 2008). Consequently, an emerging area of research
with respect to benefits is that of perceived benefit value (Lambert, 2000; Muse et al.,
2008). Weathington and Tetrick (2000) argue that employee perceptions of benefit
importance are crucial to understanding the relationships benefits have with employee
behavior. Employees may differ as to the value they assign various benefits due to
their personal situations and needs, and these variations in benefit value may be
associated with relational ties between the organization and its employees (Lawton and
Chernyshenko, 2008; Tetrick et al., 2010). A positive connection with the employment
relationship may exist in the form of positive employee behaviors. Given these possible
relationships, it becomes important to study how perceptions of benefit value are
related to the employment relationship and how this relationship is connected to work
behaviors.
The current study seeks to examine the above relationships, using perceived
organizational support (POS) to represent the employment relationship, and a
variety of frequently researched behavioral work outcomes (i.e. task performance,
contextual performance, and turnover intentions). Specifically, our study asks two
questions: is perceived value of different types of benefits (traditional vs.
non-traditional) associated with the employee-employer relationship, and if so, are
there types of benefits that are better predictors of POS. Finally, building on the
suggestions of Weathington and Tetrick (2000), we also investigate if POS is
directly related with work behaviors. The model containing the hypothesized
relationships is presented in Figure 1.

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Figure 1.
Hypothesized benefit
value model

Literature review
Benefit value
There has been a growing interest in the area of total rewards, both in research
(e.g. Gross et al., 2011; Tornikoski, 2011; Vandenberghe et al., 2008) and in practice
(e.g. Black, 2007; Kaplan, 2007). Total rewards is a term that has been used in the HR
field for many years to incorporate the idea of a total compensation package, including
all compensation and benefits (Gross et al., 2011). As organizations continue to struggle
with ways to cut costs, a total rewards package becomes more meaningful to
employees and potential applicants (Black, 2007) and a way that organizations can
distinguish themselves from other organizations (Vandenberghe et al., 2008). Much of
the research on total rewards recommends that organizations do a better job of
leveraging the employer-provided benefits, by communicating the value of their total
rewards package to employees and to carefully consider the value that employees place
on different components of the total rewards package (Gross et al., 2011; Sinclair et al.,
2005). The current study attempts to assist organizations in leveraging benefits by
examining possible relationships between different types of benefits and the level of
support employees feel from the organization.
Studies examining possible attitudinal and behavioral outcomes of benefits have
focused primarily on benefit satisfaction, examining its relationship with affective
commitment (Birdi et al., 1997; Harris, 1993; Lane, 1993), job satisfaction (Birdi et al.,
1997; Williams et al., 2002), turnover intentions (Lane, 1993; Metlife Incorporated, 2011),
and organizational citizenship behaviors (Harris, 1993; Lambert, 2000). However, a
concern about the construct of benefit satisfaction is that it is not clear if the satisfaction
of the respondents is based on actual use of the benefits or their perceptions about the
value of the benefits offered (Lambert, 2000). Thus, the benefit satisfaction construct may
confound different sources of satisfaction, leading to unclear results.
To address this issue, Lambert (2000) conducted a study which distinguished
between actual benefit use by the employee and perceived benefit usefulness, defined as
how valuable employees determine a benefit to be, either to themselves personally or
professionally, or in terms of helping family members. She relied heavily on arguments
made by Gouldner (1960), who posited that differences in individual value systems might
cause the same organizational action to create different responses. Lambert interprets

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Gouldners statement as suggesting that the same benefit program used by two
employees could create two entirely different responses based on the individuals values.
Based on Lamberts work, we have chosen to focus on perceptions of benefit value in the
current study. We believe that perceived benefit value, as opposed to actual use, will be a
more appropriate predictor of subsequent employee work behaviors, as explained next.

Traditional vs
non-traditional
benefits

Benefit value and perceived organizational support

Research on employee-employer relationships frequently relies on social exchange theory
(Blau, 1964), psychological contract theory (Rousseau, 1990), and the norm of reciprocity
(Gouldner, 1960) to explain how positive employer inducements like promotions and
benefits can lead to subsequent employee contributions such as improved work attitudes
and performance. Perceived organizational support is highly identified with social
exchange theory (Bal et al., 2010; Byrne et al., 2011; Coyle-Shapiro et al., 2006; Eisenberger
et al., 1986; Jawahar and Carr, 2007; Suazo and Turnley, 2010). Defined as the extent to
which employees perceive that their contributions are valued by their organization and
that the firm cares about their wellbeing (Eisenberger et al., 1986; p. 500), POS typically
represents the employees opinion concerning the level of quality in their employment
relationship with their work organization (Aube et al., 2007; Watt and Hargis, 2010). Past
research suggests that organizations may strategically use benefit packages to send
signals to their employees regarding this employment relationship (Casper and Harris,
2008; Eisenberger et al., 1986). For example, a competitive benefit package might inform
employees how much the company values and cares for them whereas a benefit package
that is below market could potentially send the signal that the organization cares more
about cutting costs than satisfying employee needs. Therefore, the value employees place
on benefits may be extremely important in developing perceptions about how supportive
the organization is toward employees, as indicated by POS.
Lambert (2000) and Muse et al. (2008) appear to have been the only researchers to
empirically study this potential relationship between benefit value and POS. Lambert
found a positive association between employees perceptions of benefit usefulness and
POS. Building on Lamberts work, Muse et al. (2008) found benefit use and perceived
benefit value to have differential relationships; benefit use was positively related to
affective commitment, whereas benefit value was related to POS. These findings
emphasize the need to consider employee perceptions of benefit programs because they
reveal that employee perceptions of benefits are important in the workplace, regardless
of benefit use. However, both studies examined a general perception of value across all
types of benefits, as opposed to exploring the perceptions associated with specific
kinds and categories of benefits. In the current study we build on the results of
Lambert (2000) and Muse et al. (2008), by examining if different types of benefits send
different messages to employees, and therefore, have differential relationships with
POS. We do this by distinguishing between traditional benefits, such as medical
insurance and retirement plans, from non-traditional types of benefits, which may
include employee in crisis programs, cancer plans and scholarship/tuition plans.
We are not the first to make the distinction between different kinds of benefits. For
example, Blau et al. (2001) separated employee benefit satisfaction into traditional and
career enrichment categories. They define traditional benefits as those that are related to
safety and security-related needs (e.g. medical and life insurance, retirement benefits),
whereas career enrichment benefits are those that focus on retaining employee
employability and skill development (e.g. training programs, tuition reimbursement).

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116

Lineberry and Trumble (2000) also chose to distinguish between traditional

benefits, which they defined as those that are consistently offered across organizations,
and are therefore often expected by employees (e.g. health insurance, leave time, and
retirement programs), and non-traditional benefits, which are those not typically
offered by many organizations, and therefore are not expected by employees
(e.g. employee assistance programs, scholarship programs, and cancer care plans). We
believe that this classification is useful for this study, since it allows for inclusion of
newer and more unique benefit programs recently developed. We suggest that
employees will attempt to ascertain signals about the employee-employer relationship,
as represented by POS, from both traditional and non-traditional benefits that
employees individually value. Therefore, we hypothesize that:
H1. Perceived benefit value for traditional and non-traditional benefits will be
positively associated with POS.
Relative contribution of traditional and non-traditional benefits
Rhoades and Eisenberger (2002) used social exchange theory and organizational
support theory to argue that high-discretion treatment by the organization is perceived
by employees to be more indicative of POS than treatment that is dictated by external
constraints. In the context of the current research, non-traditional benefits may be
viewed by employees as more discretionary, and therefore more reflective of the
organizations positive regard for employees, than traditional benefits, suggesting that
non-traditional benefits may result in higher levels of POS than traditional programs.
Moreover, the novelty of non-traditional benefits makes them more salient to
employees, so that they are less likely to take these benefits for granted and more likely
to consider them as indications of POS.
One perspective that might add some understanding to this discussion is Herzbergs
(1962) two-factor motivational theory. Herzberg suggests that certain factors in the
workplace (i.e. salary, security, working conditions) serve as hygiene factors, meaning
that the presence of these factors is not related to employees level of motivation, but
the lack of these factors might lead to dissatisfaction with the organization. In contrast,
motivation factors (i.e. recognition, accomplishment, responsibility) are related to
increased satisfaction with the organization. The hygiene factors are necessary to
avoid dissatisfaction, but motivation factors are needed to actually increase employee
satisfaction. Despite the lack of strong empirical support for Herzbergs two-factor
theory, the application of his descriptors provides a helpful illustration of our
discussion of traditional and non-traditional benefits. Using this analogy, traditional
benefits might serve as the hygiene factors, necessary to avoid dissatisfaction with the
organization, but non-traditional benefits are also needed in order to increase the
employees perception of organizational support.
Previous research has linked work-life benefit packages (which would be considered
non-traditional) to POS (Casper and Buffardi, 2004); other researchers suggest that
benefits available to all employees of an organization (i.e. traditional benefit packages)
would not be associated with POS (Shore and Shore, 1995). Based on the empirical and
theoretical evidence, we hypothesize that:
H2. Non-traditional benefit value will be a stronger predictor of POS than
traditional benefit value.

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Research questions
Previous research suggests that demographic differences may influence the
importance that employees place on different types of benefits. In the current study,
we look at two demographic variables that might moderate the relationship between
perceived benefit value and POS, namely gender and marital status.
Previous research on gender differences in benefit preferences suggests that women
place a higher value than men on company-paid health insurance premiums and
cafeteria plan options (Tocher et al., 2006), and vacation and leave policies (Waner et al.,
2007). The results of a meta-analysis on gender differences in job attribute preferences
bear out these findings (Konrad et al., 2000). The results of that meta-analysis suggest
that benefits are significantly more important to women than to men. Based on the
previous research, we will examine if the relationships in hypotheses one and two
differ between men and women.
Another demographic of interest is marital status. Garcia et al. (2010) found that
married applicants valued benefits in general more than the applicants who were not
married. In addition, the married applicants found greater value for benefits that were
above and beyond those required by law. Similarly, Lawton and Chernyshenko (2008)
suggest that married employees are more likely to report preferences for insurance
(medical and life) and savings opportunities as part of their benefit package, while
other research found that married respondents placed greater value on having a
defined contribution plan than their non-married counterparts (Tetrick et al., 2010).
Therefore, we will also examine if the results of hypotheses one and two differ between
those who are married, compared to their single counterparts.
POS and work behaviors
Empirical relationships between perceived organizational support and various work
behaviors are well documented in past research. Specifically, POS has been positively
linked to attendance (Eisenberger et al., 1986), in-role performance (e.g. Eisenberger
et al., 2001; Settoon et al., 1996), employee commitment (Aube et al., 2007), and
extra-role performance (e.g. Randall et al., 1999; Shore and Wayne, 1993), and
negatively associated with turnover intentions (e.g. Wayne et al., 1997) and withdrawal
behaviors (Eisenberger et al., 2001). Moreover, Rhoades and Eisenberger (2002) found
support for many of these relationships in their meta-analysis. Most of these
researchers have relied on social exchange theory (Blau, 1964) and the norm of
reciprocity (Gouldner, 1960) to hypothesize and explain their findings. The social
exchange rationale predicts that employees will feel obligated to reciprocate for
support granted to the employees by the organization (Byrne et al., 2011; Coyle-Shapiro
et al., 2006; Shore et al., 2009), and one way for the employees to reciprocate is to exhibit
positive work behaviors. Similarly, organizational support theory suggests that as
employees feel valued by their organization, they reciprocate by increasing their own
levels of performance (Rhoades and Eisenberger, 2002).
In the current study, we chose well-researched work behaviors (performance and
turnover intentions) associated with the employee-employer relationship as potential
outcomes of POS. In keeping with suggestions from previous research (Carlson et al.,
2008; Jawahar and Carr, 2007; Saari and Judge, 2004), we have broadened the measure
of performance to include both task and contextual performance.

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Motowidlo et al. (1997, p. 75) define task performance as work behavior associated
with . . .the organizations technical core, either by executing its technical processes or
by maintaining and servicing its technical requirements, whereas Van Scotter and
Motowidlo (1996) argue that contextual performance behaviors are common to many
jobs within the organization, and are thought to encompass two distinct dimensions:
(1) job dedication; and
(2) interpersonal facilitation.
Job dedication is considered to be self-disciplined behaviors, such as taking the
initiative to solve a problem, working harder than required, and following rules.
Interpersonal facilitation includes positive behaviors that assist in building
cooperation, expressing consideration of others, and helping others (Carlson et al.,
2008; Jawahar and Carr, 2007). Turnover intentions have previously been found to be
negatively related to social exchange (Shore et al., 2009), such that employees who feel
high levels of social exchange in their employee-organization relationship are less
likely to report an intention to leave the organization.
The inducement and contribution theory proposed by Barnard (1938) and extended by
March and Simon (1958) can be used to explain how perceptions of organizational support
may serve as an inducement for employees to enhance their contribution to the
organization in the forms of greater levels of task and contextual performance, and
decreased turnover intentions. Similarly, the concepts of mutuality (MacNeil, 1980) and
reciprocity (Gouldner, 1960) suggest that employees who perceive support from their
employer are more likely to exhibit behaviors beneficial to the organization (Coyle-Shapiro
et al., 2006; Dabos and Rousseau, 2004). In the context of this study, mutuality and
reciprocity suggest that, as employees see support from the organization, they will increase
both task and contextual performance and will be less likely to leave the organization.
To summarize, there appears to be both theoretical and empirical evidence to
support strong relations between POS and work behaviors. Consistent with the
empirical research and theories presented above, we contend that, based on social
exchange arguments, POS will result in positive employee work behaviors. Therefore,
we hypothesize that:
H3. Perceived organizational support will be positively associated with: a) task
performance; b) job dedication; and c) interpersonal facilitation.
H4. Perceived organizational support will be negatively associated with employee
turnover intentions.
POS as a potential mediator
Whereas some have speculated that employee benefits may be directly related to
employee behaviors (Mobley, 1982), there does not appear to be strong theoretical
reasoning to expect such a direct relationship. Moreover, Carraher and Buckley (2008)
tested perceptions of benefits and their relationships with job performance,
absenteeism and turnover on a sample of nurses, finding only weak relationships
with turnover. Their findings led them to conclude that we should look elsewhere to
explain turnover, absenteeism, and performance (Carraher and Buckley, 2008, p. 102).
We argue that perceived organizational support could be the missing piece of this
puzzle. Essentially, applying social exchange theory, we do not expect a direct

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relationship to exist between benefit perceptions and performance and turnover, but
we do expect a direct relationship between benefit perceptions and perceived
organizational support. According to Kenny et al. (1998), the first condition for
mediation is for the initial variable (i.e. benefit value) to be significantly related to both
the outcome variables (i.e. performance and turnover) and the mediator (POS). Given
that direct relationships between benefit value and performance are not expected
theoretically, POS is not hypothesized as a mediator.
Method
Sample and procedure
We collected multiple-source data using a voluntary employee questionnaire and a
supervisor evaluation of employee task and contextual performance. Surveys were
distributed to a random sample of 1,000 employees of a southeastern hospital via the
organizations internal mail system. Employees were allowed to complete the
questionnaire during work hours; the organization also reminded employees of the
survey deadline with posters throughout the organization, an article in the
organizational newsletter, and announcements at departmental meetings. Participants
mailed completed surveys directly to the researcher. A total of 54 surveys were returned
as undeliverable; 539 completed surveys were returned for a response rate of 57 percent.
Performance evaluation surveys were then distributed via internal mail to the
supervisors of the 539 participants. A total of 457 completed supervisor surveys were
received for an overall employee response rate of 48 percent. We then used the 457
employee participants with responding supervisors to conduct the analysis. Of the 457
employee participants, 51 percent were under the age of 40, 83 percent were female, 68
percent were Caucasian, 27 percent were African American and 5 percent reported
other when asked about race.
Non-response bias. To test for non-response bias from the employees, demographics
of the respondents were compared with organizational data available for all employees
on race and gender. A review of the data revealed the sample mirrored the actual
employee population with respect to ethnicity, expected and actual percentages of
Caucasians were both 68 percent. However, females (85 percent of respondents versus 78
percent of the employee population, x 2 1; n 535 8:97; p , 0.01) were more likely
to respond. In sum, men were underrepresented in this sample. To test for response bias
from the supervisors, means for all three benefit variables (traditional financial,
traditional health, and non-traditional) and POS were compared between the employees
with a supervisor evaluation and the employees without one. Results indicated
non-significant differences in the means for these variables (traditional financial p ,0.25;
traditional health p ,0.32; and non-traditional p ,0.37; POS p ,0.28).
Nesting effects. To investigate possible nesting of supervisor evaluation of
performance we:
.
reviewed the number of evaluations performed by each supervisor noting that
each supervisor completed between 1 and 12 performance evaluations mean
4:34; and
.
reviewed correlations between the number of evaluations completed by each
supervisor and the three performance measures (r with task performance
0:02; r with job dedication 0:01; r with interpersonal facilitation 0:02 to
examine possible nesting of performance scores, noting all to be non-significant.

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120

Therefore, we conclude that nesting of performance evaluations within supervisor did

not impact the results.
Measures
Performance. Supervisors assessed task performance using a seven-item scale
developed by Williams and Anderson (1991). A sample includes Fulfills
responsibilities specified in job description a 0:96: Contextual performance, as
represented by both job dedication and interpersonal facilitation was assessed by
supervisor evaluation using a 15-item scale developed by Van Scotter et al. (2000).
Supervisors were asked, How likely is this person to do the following: with responses
anchored at1 unlikelyto 5 extremely likely. Examples from the interpersonal
facilitation subscale include Praise co-workers when they are successful and Treat
others fairly. Examples from the job dedication subscale are Work harder than
necessary and Take the initiative to solve a work problem. Coefficient alphas for job
dedication and interpersonal facilitation in this study were 0.94 and 0.93, respectively.
Turnover intentions. Turnover intent was measured using a five-item measure used
by Wayne et al. (1997). Sample items included I am seriously thinking about quitting
my job and As soon as I can find a better job, Ill leave (company name) a 0:83:
Perceived organizational support (POS). Consistent with prior research on POS, (Bal
et al., 2010; Lynch et al., 1999; Webster and Adams, 2010), the eight-item shortened
version of the 36-item POS scale developed by Eisenberger et al. (1986) was used.
Example items include My company cares about my wellbeing and My company is
willing to help me when I need a special favor a 93:
Perceived benefit value. Perceived benefit value was assessed by asking: How
valuable do you think each of the benefits below is or could be in the future to you and
your family? followed by a list of all benefits offered. The response scale ranged from
1 not valuable at all to 5 very valuable. A similar approach has been used in
previous research (Sinclair et al., 2005). Benefits programs provided included all
benefits offered by the organization (i.e. employee assistance program, cancer plan,
employee in crisis program, scholarships, employee credit union, medical insurance,
prescription plan, dental insurance, vision plan, long-term disability insurance,
supplemental life insurance, discounts on home owners and auto insurance, retirement
plan, and a vacation, sick and personal leave bank).
Control variables. Consistent with the job performance and POS literatures,
organizational tenure (e.g. Wayne et al., 1997; Webster and Adams, 2010), age
(e.g. Webster and Adams, 2010), gender (e.g. Hochwater et al., 2001), marital status and
job type (Byron, 2005) were included as control variables. Organizational tenure (less
than 1 year 0, 1-5 years 1, 6-10 years 2, 11-15 years 3, 16-20 years 4,
greater than 20 years 5) and age (under 21 1; 21-29 2; 30-39 3; 40-49 4;
50-59 5; 60-69 6; 70 and older 7) were measured using 6 and 7 categories
respectively. Gender (male 0; female 1) and marital status (0 single;
1 married) were dichotomous variables. Job type was measured with two
categories (1 hourly, 2 salary).
Analysis
To assess potential benefit categories, an exploratory factor analysis with varimax rotation
was performed on fourteen benefit value items; the results are presented in Table I. Three

Factor 1
Factor 2
Factor 3
Non-traditional
Traditional
Traditional health
benefits
financial benefits
benefits
(eigenvalue 6.29; (eigenvalue 1.07; (eigenvalue 1.74;
39.3% of variance) 6.72% of variance) 10.9% of variance)

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Factor loadings
Health insurance
Prescription plan
Dental plan
Vision plan
Leave bank
Supplemental life insurance
Long-term disability insurance
Retirement plan
Employee credit union
Discount on home and auto insurancea
Employee assistance program
Employee in crisis program
Scholarship program
Cancer plan

0.86
0.80
0.76
0.71
0.57
0.16
0.25
0.33
0.24
0.00
0.12
0.19
0.19
0.19

0.17
0.18
0.16
0.21
0.34
0.78
0.69
0.62
0.56
0.50
0.17
0.20
0.12
0.26

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121

0.13
0.13
0.29
0.33
0.01
0.24
0.36
0.08
0.14
0.48
0.85
0.81
0.72
0.68

Notes: All items began with the following stem: How valuable do you think each of the benefits
below is or could be in the future to you and your family? Primary loadings appear in italics;
Retained in final analysis due to fit with other items and reduced reliability if removed

Table I.
Results of exploratory
factor analysis of
perceived benefit value
items

clear factors (traditional health, a 0:85; traditional financial, a 0.75; non-traditional

benefits, a 0:83 emerged. The total variance in benefit value explained by the three
factors was 57 percent. To further analyze the factor structure, a confirmatory factor
analysis was performed comparing the factor structure that emerged from the exploratory
analysis to both a one factor model, loading all benefits on one factor, and a two-factor
model loading all traditional benefits on one factor and all non-traditional benefits on a
second factor. As is presented in Table II, chi-square difference tests (one-factor model
compared to three-factor model x 2 (2, n 457) 585.74, p ,0 .001; two-factor model
compared to three-factor model x 2 (2, n 457) 180.07, p , 0.001) along with the fit
indices (CFI 0.95 compared to 0.71 and 0.88, three-factor, one-factor, two-factor
respectively; IFI 0.93 compared to 0.59 and 0.82, three-factor, one-factor, two-factor
respectively; and RMSEA 0.06 compared to 0.15 and 0.11, three-factor, one-factor,
two-factor respectively) indicate that the three-factor model fit the data best. Hu and
Bentler (1999) suggest that the optimal combination of fit indices to minimize combined
type I and type II errors are an RMSEA value of 0.06 and below, and CFI and IFI values
greater than or equal to 0.95. Therefore, the three benefit categories were retained in the

1. Benefit factor model

2. Benefit factors model
3. Benefit factors model

x2

d.f.

x 2 diffa

CFI

IFI

RMSEA

770.33
364.66
184.59

65
64
63

585.74
180.07

0.71
0.88
0.95

0.59
0.82
0.93

0.15
0.11
0.06

Note: N 457; aAs compared to the three-factor model

Table II.
Measurement model
comparisons

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122

structural equation analyses to examine their relationships with POS, and its subsequent
relationship with task and contextual performance and turnover intentions. Descriptive
statistics are presented in Table III.
Structural model. Manifest indicators were created for each latent variable by
averaging the items for each scale (Kenny, 1979). Error variances for all scales were
constrained to the product of one minus the reliability of the scale and its variance
( Joreskog and Sorbom, 1982). Paths from each latent variable to its indicator were
constrained to the square root of the scales reliability (Joreskog and Sorbom, 1982).
Results
Hypothesis testing
The model revealed only non-traditional benefits as having a significant positive
relationship with POS (non-traditional assistance b 0:25; p , 0.001; health benefits;
b 0:06; ns; financial benefits, b 20:04:ns: These findings provide full support
for H2 (non-traditional benefit value will be a stronger predictor of POS than
traditional benefit value), but only partial support for H1a (perceived benefit value for
both traditional and non-traditional benefits will be positively associated with POS).
POS was found to have a significant positive relationship with task performance,
job dedication and interpersonal facilitation (task performance b 0:13; p , 0.01; job
dedication b 0:13; p , 0.01; interpersonal facilitation b 0:19; p , 0.001),
providing full support for H3. Finally, H4 (POS will be negatively related to turnover
intentions) also received full support b 20:62; p , 0:001: These significant
relationships are modeled in Figure 2.
Fit indices suggest the model fit the data well; root mean square error adjusted
RMSEA 0:05; comparative fit index CFI 0:97; incremental fit index IFI
0:97 and Tucker-Lewis index TLI 0:91 (see Table IV). As was mentioned earlier,
experts suggest RMSEA values less than 0.06, and CFI, IFI and TLI values greater
than 0.95 indicate a good fit (Hu and Bentler, 1999).
Research question analyses
With respect to the research questions investigating if the results related to hypotheses
one and two differed by gender and marital status, analyses revealed differences by
marital status, but not gender. Married participants linked only non-traditional benefits
with POS (non-traditional assistance b 0.32, p , 0.001; health benefits; b 0:004; ns;
financial benefits, b 20:07:ns; while their single counterparts connected only
traditional health benefits with their feeling of POS (non-traditional assistance b 0:14;
ns; health benefits; b 0:28; p , 0.05; financial benefits, b 20.07.ns).
Discussion
The current study contributes to the literature in three ways, first, by identifying how
benefit value, as perceived by employees, is related to the employee-employer
relationship; second, how the perception of that relationship is linked to work
behaviors, and third, whether demographic variables moderate the connection between
benefit value and the employee-employer relationship. Implications of these findings
are discussed in more detail below.
First, corporations offering non-traditional benefits that are valued by their
employees will generally also find greater levels of POS among their employees.

1.86
3.41
0.60
0.85
1.31
4.53
4.12
3.90
3.44
2.09
4.30
3.96
4.00

1. Organizational tenure
2. Age
3. Marital status
4. Gender
5. Job type
6. Health benefits
7. Financial benefits
8. Non-traditional benefits
9. POS
10. Turnover intent
11. Task performance
12. Job dedication
13. Interpersonal facilitation

1.41
1.16
0.46
0.49
0.16
0.23
0.35
0.07
0.04
0.58
0.09
0.17
0.73
0.05 20.03
0.86
0.08
0.02
1.06 20.07 20.07
0.77 20.06
0.07
0.81 20.05 20.18
0.55
0.14
0.15
0.75
0.06
0.05
0.73
0.05
0.10

SD

10

11

12

0.01
0.19 2 0.04
20.10
0.05
0.01
(0.85)
20.12
0.04 2 0.07
0.51
(0.75)
20.10
0.09 2 0.03
0.46
0.52
(0.83)
20.02
0.02
0.17
0.14
0.14
0.22
(0.93)
0.10 2 0.07 2 0.18 2 0.10 20.15 20.12 20.56
(0.83)
0.15
0.06
0.16
0.10
0.03
0.03
0.13 20.11 (0.96)
0.12
0.02
0.24
0.11 20.01
0.00
0.14 20.16 0.75 (0.94)
0.16
0.05
0.15
0.04 20.01
0.04
0.18 20.14 0.62 0.79 (0.93)

Notes: Coefficient alphas are on the diagonal. Tenure and age were measured using 6 and 7 categories respectively; marital status 1 married,
0 other; gender 1 female; job type 1 hourly, 2 salary; remaining variables on a five-point scale. Correlations of 0.10-0.12 are significant at the
0.05 level under a two-tailed test. Correlations of 0.13 or more are significant at the 0.01 level n 457: POS Perceived organizational support

Mean

Variable

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Table III.
Means, standard
deviations, and
correlations for all
variables

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124

Figure 2.
Benefit value standardized
structural model results

Model
Table IV.
Overall fit indices for the
benefit value model

Benefit value model

x2

x 2/df

RMSEA

IFI

CFI

TLI

69.07

0.000

2.66

0.05

0.97

0.97

0.91

Note: RMSEA root mean square adjusted; IFI Incremental fit index; CFI Comparative fit
index; TLI Tucker-Lewis Index; n 457

However, the finding that traditional benefits were not related to POS is also
important. This is consistent with the arguments of Shore and Shore (1995), who
stated that traditional benefits should not be related to POS because they are not
discretionary and are offered to all employees of the organization. Thus, companies
who strategically want to build positive employment relationships with their
workers should signal to them that their welfare matters to the organization by
offering benefits beyond that typically offered by most firms. According to social
exchange theory (Blau, 1964), employees will feel obligated to reciprocate for this
support through subsequent greater task and contextual performance, and reduced
turnover intentions.
Second, our findings support a direct positive relationship between POS and
important work behaviors, specifically, task and contextual performance, and turnover
intentions. This pattern is consistent with previous research (Eisenberger et al., 2001;
Settoon et al., 1996) and provides support for social exchange theory (Blau, 1964; Shore
et al., 2009) and psychological contract theory (Dabos and Rousseau, 2004; Rousseau,
1990) by suggesting that employees who feel valued by their organizations are more
likely to participate in positive work behaviors that will be of benefit to the employee
and to the organizations.
And third, this study provides some interesting findings regarding demographic
factors. Surprisingly, gender did not moderate the relationship between perceived
benefit value and POS. Very little research has been conducted on the differences
in benefit preferences by gender, and much of the research that has been conducted

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is based on responses from students, rather than employees in the workplace

(e.g. Tocher et al., 2006; Waner et al., 2007), suggesting that these differences might
be related to projected, rather than actual, benefit value. A notable exception found
no significant gender differences on the impact of benefits during the recruitment
process (Garcia et al., 2010). In contrast, marital status does moderate the
relationship between perceived benefit value and POS, but only for non-traditional
benefits. This finding might be a result of the increasing number of dual career
couples in the workplace (Abraham and Royalty, 2005), thereby decreasing the need
for both spouses to receive traditional benefits through their employment. One of
the spouses can then focus on benefits above and beyond the traditional health and
financial benefits. It would then follow that their single counterparts might have not
have any other means of receiving health or financial benefits (Abraham and
Royalty, 2005); if so, more traditional benefits would be more likely to resonate with
them.
Strengths and limitations
This study has a number of strengths that help distinguish it from previous
research. First, this study offers evidence to solve past conflicts regarding the
existence and nature of the relationship between benefits and POS (Grover and
Crooker, 1995; Lambert, 2000; Shore and Shore, 1995; Wayne et al., 1997).
Examining perceived benefit value, rather than benefit use, highlights the
importance of considering employees opinions about various benefits instead of
assuming that all benefits hold similar value to employees. Additionally, it
distinguishes among different kinds of benefits (traditional vs. non-traditional), and
shows that this distinction matters when predicting feelings of organizational
support. A further distinction of traditional health and traditional financial benefits
is also important, as the outcomes for employees also differ. Similarly, this research
contributes to the need to document potential work outcomes of benefit packages
(Casper and Buffardi, 2004; Dulebohn et al., 2009; Eby et al., 2005). The current
research includes several work behaviors (task performance, contextual
performance, and turnover intentions) as a response to Jawahar and Carrs (2007)
call to include a broad range of outcome variables of POS. Finally, the study uses
supervisory reports of performance, rather than relying on self-reported performance
measures. This is in response to Bal et al.s (2010) call for research to rely on
outcome measurements from other sources, including direct supervisors or
coworkers.
We must also consider the limitations of this research. Since all data were collected
at a single point of time, we cannot assess causality. However, based on the theoretical
arguments and the structural equation analyses, we strongly believe that the variables
are appropriately modeled. In addition, one scale was used to assess benefit value both
currently and for the future. Future research could further refine our measure of benefit
value by distinguishing between the perceived current value and the perceived future
value of each benefit. Another potential weakness is the generalizability of the
findings, given that the sample is strongly female and exists in a health-care setting.
Perhaps a more male-oriented sample, or a sample from a different industry, would
result in different findings.

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Practical, theoretical and societal implications

There are many practical implications of our findings for human resource managers.
Primarily, it suggests managers planning benefit packages should ideally include both
traditional and non-traditional benefits that will be valued by employees. Traditional
benefits will be expected by employees, and thus must be part of the benefit bundle in
order to maintain competitiveness in the labor market, but these benefits do not
directly lead to perceived organizational support. Instead, the way to facilitate a
positive relationship with the employees is through offering additional non-traditional
benefits like employee-in-crisis programs, scholarship programs, and other non-typical
offerings that employees will find valuable to their personal and professional lives.
Our findings also identify areas for theoretical development and future research.
Researchers have questioned if the theoretical foundation for POS would preclude
employee benefits from being connected with POS, as benefits are often offered to all
employees (Sore and Shore, 1995; Wayne et al., 1997). This study provides empirical
support that due to differential value that employees assign to different types of benefits,
they can in fact be related to POS. In addition, our findings that the relationship between
benefit value and POS was moderated by marital status adds credence to Dulebohn
et al.s (2009) argument that benefit preferences could be more attributable to life stage
than generation. With respect to future research, designing multi-industry studies,
which use diverse, perhaps even international samples, would allow insight into how
different types of employees value various kinds of benefits, and what the potential
outcomes of those opinions may be. For example, whereas traditional benefits in the
United States (e.g. health care, retirement) may be taken for granted by US workers,
employees in other countries may find them extremely valuable, and thus these benefits
may facilitate better employment relationships with those employees. Similarly,
differences in value and outcome might also occur in other industries. Future researchers
may also design longitudinal studies to explore possible changes in employee behaviors
when changes are made to benefit programs to assess causality.
The implication for society from this study is that a business case for
non-traditional benefits could continue to convince organizations to either begin to
or continue to offer such programs as opposed to cutting them as a cost cutting
measure (Curran, 2009). If this were to happen over time, perhaps it could become more
commonplace for organizations to demonstrate a humanistic approach to employee
benefit decision making.
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About the authors

Dr Lori A. Muse is an Associate Professor of Management at California State University,
Fullerton. After practicing as a CPA with Arthur Andersen and Co., she received her doctorate in
Human Resource Management and Organizational Analysis and Change from Auburn
University. She teaches undergraduate and graduate courses in human resource management
and organizational behavior. Her primary research interest focuses on the employee-employer
relationship, including work-family conflict, work-life benefits and the development of
managerial interpersonal skills. Dr Muse is a Sloan Institute Work Family Early Career Scholar.
Her research has been published in the Journal of Organizational Behavior, Journal of Vocational
Behavior, Human Performance, Journal of Managerial Issues, Journal of Small Business
Management, Small Business Economics, Family Business Review, International Journal of
Commerce and Management, Journal of Corporate Accounting and Finance and Work and
Family Encyclopedia. She received a Best Paper award from Emerald Group Publishing in
August of 2009 and is a member of the Sloan Networks Whos Who in Work and Family
Research. Dr Muse is part of a research team at California State University Fullerton that
received a $100,000 grant from the Graduate Management Admissions Council to develop a
measure of interpersonal skills. Lori A. Muse is the corresponding author and can be contacted
at: lmuse@fullerton.edu
Lori L. Wadsworth (PhD, University of Utah) is an Associate Professor in the Romney
Institute of Public Management at Brigham Young University. Professor Wadsworths research
focuses on work-family interaction, particularly how organizations can assist employees in
balancing their work and family life. Within this general theme, her research includes flexible
benefits, alternative work schedules, social support, and mentoring. Her research has been in
Public Administration Review, Review of Public Personnel Administration, Connecticut Law
Review, Journal of Family and Economic Issues, Journal of Managerial Issues, and Work and
Family Encyclopedia. She teaches Human Resource Management and Business Ethics. Professor
Wadsworth is a member of the Academy of Management and the American Society for Public
Administration, and is listed in the Sloan Foundations Whos Who in Work and Family
Research.

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Traditional vs
non-traditional
benefits
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