1.1. Background and Problem Statement

Employee welfare has evolved from a matter of basic regulatory compliance into a critical component of strategic human resource management. Modern organizations recognize that fostering a supportive work environment, one that extends benefits beyond minimum statutory requirement is essential for talent acquisition, retention, and organizational resilience. Contemporary research strongly advocates for a holistic approach to employee welfare, encompassing physical, mental, and financial health, as a foundation for achieving higher productivity and long-term organizational stability.

The relationship between welfare provision and organizational performance is generally acknowledged; however, a significant challenge remains in understanding the precise alignment between what employees deem important and what their employers currently provide.¹ A gap between employee expectations and actual satisfaction with existing provisions can negate the positive influence of even well-intentioned benefits. This investigation aims to quantify this critical mismatch using primary survey data.

1.2. Research Objectives and Significance

The primary objectives of this study are threefold:

1. To determine the variance in satisfaction with employee welfare measures across diverse demographic and employment groups;
2. To assess the correlation between the existence of a formal employee welfare policy and overall employee satisfaction;
3. To identify specific, high-priority areas for strategic welfare investment based on an analysis of the satisfaction-importance gap.

The findings derived from this detailed analysis provide evidence-based justification for Human Resource strategists and Organizational Development Leads to optimize resource allocation towards modern welfare benefits, such as flexibility and financial support, which directly address core employee needs. By focusing investment on identified deficiencies, organizations can maximize the perceived value of their welfare efforts, thereby enhancing organizational performance metrics such as retention and output.

The historical evolution of employee welfare measures reveals a shift from paternalistic benevolence to a more structured and legally mandated framework, particularly evident in developing nations where initial conditions for labourers were often dire . Consequently, the implementation of welfare provisions became instrumental in safeguarding workers’ rights and fostering a more equitable work environment, ultimately leading to improvements in worker productivity and overall economic output.

Employee welfare measures encompass a wide array of services, facilities, and benefits provided by employers to enhance the overall well-being and comfort of their employees. These initiatives are designed to improve employee’s health, efficiency, economic status, and social standing, ultimately fostering a more productive and engaged workforce. Such programs are increasingly recognized as crucial for organizational success, impacting everything from employee engagement and retention to overall productivity and organizational climate. The concept of employee welfare is dynamic, extending beyond basic provisions to encompass physical, mental, moral, and emotional well-being. Contemporary research consistently highlights that robust employee welfare programs are intrinsically linked to elevated employee engagement, enhanced productivity, and improved retention rates within organizations. This dynamic nature of employee welfare reflects socio-economic changes, underscoring its role in national prosperity through a productive workforce .Furthermore, these measures are not merely gestures of goodwill but rather strategic investments that contribute to maintaining high employee morale, which is essential for achieving administrative objectives and ensuring long-term organizational viability , Kahn's model delineates employee welfare schemes as interventions aimed at promoting the physical, psychological, and general well-being of the workforce, with a fundamental goal of ameliorating living and working conditions for employees and their families .

This research employed a quantitative, cross-sectional design, utilizing primary survey data gathered via a structured questionnaire to assess employee perceptions of welfare measures.  The methodology involved stratifying satisfaction scores across key demographics including gender, age, income, and employment sector to quantify variances in the impact of current provisions.  A critical component was the satisfaction and importance Gap Analysis, which compared mean facility satisfaction ratings with the perceived overall importance to pinpoint strategic organizational deficiencies. The data was collected from 90 respondents through a survey.

2. Theoretical and Empirical Foundations of Employee Welfare

2.1. Classical Theories of Labour Welfare

Employee welfare programs are conceptually grounded in several classical theories that define the motivation and obligation behind organizational provision.

2.1.1. Policing and Functional Theories

The Policing Theory - that the state must regulate employers to prevent the exploitation of workers, compelling organizations to provide minimum comforts and safety standards. The survey results confirm that organizations generally succeed in meeting these baseline requirements. Facilities related to basic physical infrastructure received high mean satisfaction ratings, such as clean washrooms with adequate water supply and Proper ventilated and comfortable work space This high satisfaction level for essential infrastructure suggests that compliance with statutory and foundational welfare requirements has been established as the normative standard in the surveyed population.

In contrast, the Functional Theory (or Efficiency Theory) adopts a commercial perspective, arguing that welfare measures should be provided explicitly to enhance worker efficiency and productivity, yielding rich dividends for the organization. The data reveals that facilities directly linked to functional efficiency and stress reduction such as Loans / Financial support at concessional rates (mean rating 2.50), Work from Home (mean rating 2.44), and Flexible Working hours (mean rating 2.89) were among the lowest rated. This low provision of high-impact, functional amenities suggests that many organizations are currently underutilizing the economic potential inherent in the Functional Theory. Addressing these gaps, as suggested by respondents who listed "Better productivity" and "Higher output" as employer benefits, offers a direct pathway to maximizing the return on welfare investment.

2.1.2. Social and Public Relations Theories

The Public Relations Theory frames welfare provision as a means of improving the company’s image, fostering loyalty, and attracting talent. This is directly supported by employee feedback, as respondents consistently identified employer benefits such as "Loyalty," "Goodwill," and "Stable labour force”.

The Social Theory extends this obligation, asserting that industrial establishments have an ethical responsibility to improve the general conditions of their employees and the society in which they operate. The concept of providing a "Friendly environment" and ensuring "well-being and security" highlights the importance of the relational and cultural aspects of welfare, which often transcend tangible benefits.

2.2. Contemporary Constructs of Employee Wellbeing

Employee welfare today is defined by a comprehensive, holistic scope that extends beyond mere physical amenities to include psychological, financial, and relational elements. Contemporary models, often informed by psychological theories, emphasize the importance of intrinsic motivation and autonomy.

For instance, Self-Determination Theory posits that fulfilling the basic psychological need for autonomy leads to a positive motivational state and enhanced well-being. This principle is empirically supported by the survey data, which shows that Staff performance is recognized and appreciated received a remarkably high mean satisfaction rating (4.39 out of 5). This facility, which relies on non-monetary recognition and affirmation, is perceived by employees as highly satisfactory, confirming that formal recognition programs, when personal and timely, act as powerful welfare tools that reinforce positive behavior and foster professional growth.⁹This psychological benefit complements the need for financial and flexible support, reinforcing the multi-dimensional nature of modern welfare demands.

3. Demographic Analysis of Welfare Satisfaction

To understand the differential impact of welfare measures, the satisfaction scores  were mapped numerically (Very Satisfied = 3, Satisfied = 2, Neutral = 1) and analyzed across key demographic and employment segments.

3.1. Analysis by Gender  and Age

A notable divergence in mean satisfaction scores was observed between genders. Female respondents reported a mean satisfaction score of 1.92, while male respondents reported a significantly lower mean score of 1.25. This pronounced difference suggests that the existing welfare provisions may be fundamentally misaligned with the specific needs or high expectations of male employees, who are often concentrated in high-pressure sectors such as Information Technology, Banking and Finance, and BPO , while work-life balance (WLB) and flexibility challenges are universal, the data implies that the deficient provision of measures like Work from Home and Child care facility negatively impacts employees across all genders who are managing complex work and family responsibilities.

When analysing satisfaction by age group, the 26 to 30 years cohort reported the lowest mean satisfaction score at 1.0. This age group, frequently characterized by early career establishment, high aspiration, and the beginning of significant financial commitments (e.g., family formation, housing), appears acutely sensitive to welfare gaps. The cohort’s dissatisfaction is likely exacerbated by the low ratings observed for Loans / Financial support (2.50 mean) and Financial assistance is available when required (3.00 mean). The data indicates a strategic necessity to tailor financial wellness support to this segment to prevent attrition and enhance commitment.³ Conversely, both the youngest group (21 to 25 years) and the oldest group (Above 60 years) reported relatively high satisfaction scores (Mean 2.0 or higher), suggesting that different life stages prioritize different welfare offerings.

Table 1: Mean Employee Welfare Satisfaction Scores by Demographic and Employment Subgroup

3.2. Analysis by Employment Sector  and Income

The nature of employment reveals significant differences in satisfaction levels. Employees in the Government and Semi-Government sectors reported the highest mean satisfaction score (2.5). This finding supports the Paternalistic and Social theories, which emphasize stability, security, formalized policies, and robust long-term schemes (such as welfare schemes for retired staff).

In contrast, the Private Sector reported the lowest mean satisfaction score (1.62). Although private sector compensation is often competitive, the lower satisfaction score suggests a deficiency in the quality and consistency of the welfare services, failing to match the perceived stability and comprehensive benefits offered by the public sector.

An analysis of income stratification revealed that dissatisfaction disproportionately affects the middle-income groups (e.g., INR 2,50,001 to INR 5,00,000, Mean 1.0) While the highest earners may benefit from customized packages and greater intrinsic motivation , and the lowest earners may place high value on foundational, compliant benefits (Policing Theory) , the core salaried professionals in the mid-range experience the greatest mismatch between their evolving expectations and the actual benefits provided. This cohort's acute dissatisfaction emphasizes the need for targeted welfare strategies that address their specific financial and professional development concerns.

4. Efficacy of Formal Welfare Policies

4.1. Policy Presence and Satisfaction Correlation

The analysis confirms a strong positive correlation between the existence of a formal Employee Welfare Policy (Q12) and overall employee satisfaction of the respondents whose workplace reported having a policy, 80% (8 out of 10) reported being "Satisfied" or "Very Satisfied." Conversely, where no formal policy was reported, satisfaction was only evenly split between "Satisfied" and "Neutral" (2 responses each).

Formalizing welfare through a written policy contributes significantly to the employees' Psychological Safety. This documented commitment provides assurance and transparency, reinforcing the principles of Paternalistic and Public Relations theories Organizations operating without a formal policy risk fostering an environment of uncertainty, which demonstrably correlates with lower reported satisfaction, regardless of the informal benefits offered. Furthermore, the overwhelming majority of respondents (12 out of 16) explicitly stated that they believe having an Employee Welfare Policy is helpful , validating the importance of documentation and clear communication in the welfare framework.

4.2. Perceived Employer Return on Investment

Employee perceptions of the benefits accrued by the employer strongly align with the Functional and Public Relations theoretical frameworks, providing a clear justification for strategic investment. These perceived benefits fall into three primary categories:

1. Retention, Productivity, and Profits: Employees recognize that welfare measures lead to tangible business outcomes, citing that attrition is reduced, leading to better productivity and profits, and noting the importance of highly motivated staff.⁴ This confirms that staff view welfare as a direct driver of organizational success.
2. Employee Commitment and Engagement: Welfare is seen as crucial for building deep commitment. Feedback frequently emphasized securing a stable labour force, encouraging active interest in jobs, and fostering loyalty.⁴ This reinforces the Public Relations goal of cultivating a positive long-term relationship with the workforce.
3. Staff Well-being and Security: Beyond transactional benefits, employees noted that welfare ensures they are protected from exploitation and provides a mechanism for their overall well-being. This validates the Social and Paternalistic objectives of organizational welfare.

The employees' understanding of this symbiotic relationship that their welfare secures the employer's success is strategically important. This feedback provides HR leaders with the language and metrics necessary to reposition welfare expenditures as strategic investments rather than administrative costs.

5. Assessment of Existing Welfare Facilities and Critical Gaps

This section conducts the critical analysis of the satisfaction levels for specific welfare components and compares them with the overall importance rating to identify strategic gaps.

5.1. Facility Rating Interpretation

The mean satisfaction ratings for the 22 welfare facilities reveal a distinction between essential, mandated provisions and complex, contemporary needs.

5.1.1. Top Satisfactory Facilities

The highest-rated facilities focused primarily on basic hygiene, workspace comfort, and psychological recognition:

1. Clean washrooms with adequate water supply: Mean 4.44
2. Staff performance is recognized and appreciated: Mean 4.39
3. Proper ventilated and comfortable work space is available: Mean 4.33

The high satisfaction with basic physical infrastructure demonstrates effective compliance with the Policing Theory, establishing a necessary but insufficient foundation for modern welfare. Importantly, the strong satisfaction with non-monetary recognition (4.39 mean) underscores that affirmation and appreciation are highly valued psychological benefits that drive engagement, confirming the principles of Self-Determination Theory.

5.1.2. Least Satisfactory Facilities (Strategic Gaps)

The lowest-scoring facilities represent critical organizational deficiencies that are most out of sync with contemporary employee needs. These strategic gaps are found in areas of financial security, flexibility, and physical wellness:

1. Fitness facilities for staff (Gym/sport): Mean 2.22
2. Scholarship/Freeships is offered to your children: Mean 2.44
3. Work from Home: Mean 2.44
4. Loans / Financial support at concessional rates: Mean 2.50

5.2. Identification of Critical Welfare Gaps

The analysis of the gap between provision (Q14 satisfaction) and perceived importance is crucial. A large majority of respondents (13 out of 18) rated the importance of welfare facilities as "Very Important”, given this universal acknowledgment of importance, the lowest-scoring facilities (Table 2) represent the most critical deficiencies.

The facilities rated lowest (Financial Support, Work from Home, Fitness) are core pillars of holistic modern wellness programs. Their poor ratings, despite the high perceived overall importance of welfare, demonstrate a clear strategic lag. Organizations are still focused on fulfilling foundational standards while failing to deliver the efficiency-boosting and retention-focused benefits required to successfully implement the Functional Theory in a post-pandemic environment.

Table 2: Facility Satisfaction Analysis and Strategic Gap Identification

6. Future Priorities: Mapping Needs and Trends

6.1. Qualitative Needs Assessment

The specific needs identified by respondents in the open-ended question (Q15: "Mention any welfare facilities which needs to be provided") strongly reinforce the quantitative gaps identified in Q14.

Requests for Financial Security included Loan facility/Advance Salary, Financial assistance, and demands for an increased salary scale and reimbursement of travelling expenses. This perfect alignment validates the finding that financial stress is a top concern among employees, mirroring current industry trends emphasizing financial wellness as a key retention strategy

Similarly, requirements for Flexibility —such as Flexible working hours and Work from Home—were reiterated multiple times. The repeated qualitative demand confirms that the low quantitative satisfaction scores for these items (2.44 for WfH) represent a critical and immediate organizational deficit that must be resolved to meet contemporary workforce expectations.

Demands for Holistic Health and Wellness included Gym Facilities, Free therapy, and comprehensive Medical Checkups. These qualitative needs align with the lowest scores for Fitness facilities (2.22 mean) and the moderate score for Counselling (3.50 mean). The synthesis of quantitative deficiency and qualitative demand confirms the need for proactive investment in integrated mental and physical health programs.

6.2. Unique and Innovative Welfare Offerings

The unique or special welfare facilities mentioned demonstrate organizational attempts to innovate beyond minimum compliance, aligning with the Paternalistic and Social theories.⁴Examples provided included high-end amenities like a Gourmet Restaurant and a Game Zone, alongside crucial developmental opportunities such as Company sponsored certification/higher education and Job rotation.

The inclusion of Job rotation is particularly insightful, as it reframes professional development and continuous learning as a welfare benefit. Such offerings address the psychological need for growth and skill mastery, proving that innovative welfare measures can serve both the employee's career progression and the organization's need for workforce adaptability. These unique offerings set benchmarks for personalization and comprehensive employee engagement.

6.3. Benchmarking Against Current Industry Trends

The identified strategic gaps align precisely with three dominant global HR trends:

1. Mental Health and Emotional Wellbeing: Industry data highlights the significant productivity and financial losses associated with poor mental health.³ The need for Counselling/Mental Wellbeing Sessions (Q14 mean 3.50)  and Free therapy (Q15 suggestion) ⁴ is critical for mitigating burnout and enhancing psychological safety.
2. Hybrid Work and Flexibility: Flexibility is no longer a perk but a foundational retention strategy.² The extremely low satisfaction score for Work from Home (2.44) confirms that surveyed organizations lag significantly behind best practices in this area, risking attrition, especially in sectors like IT and BPO.
3. Financial Wellness: With financial stress impacting employee focus ³, organizations must prioritize economic welfare.¹¹ The acute low scores in financial support (Loans/Scholarships) necessitate urgent implementation of programs that address employee financial security, thereby improving concentration and efficiency (Functional Theory).

7.1. Summary of Key Research Findings

The research paper conducted data analysis on employee welfare measures, revealing a dichotomy in organizational provision. While compliance with foundational physical needs and the utilization of non-monetary recognition mechanisms are highly satisfactory, a critical strategic deficit exists in contemporary, high-impact welfare areas.

Key findings include:

• The presence of a formal Employee Welfare Policy strongly correlates with higher employee satisfaction, reinforcing trust and psychological security.
• The private sector exhibits significantly lower mean satisfaction (1.62) compared to the government/semi-government sector (2.5), suggesting a stability and quality deficit in private benefits.
• The most significant strategic gap is concentrated in facilities related to Financial Support, Work Flexibility (Work from Home), and Physical Fitness. These lowest-scoring items directly correspond to the highest qualitative demands articulated by the workforce.
• Dissatisfaction is most acute among male employees and the middle-income demographic (INR 2.5L to 5L), indicating a specific need for tailored benefits targeting these highly productive groups.

7.2. Actionable Policy Recommendations (Tiered Strategy)

Based on the quantitative gaps and qualitative demands, a tiered investment strategy is recommended to maximize the return on organizational welfare efforts, aligning provision with the principles of the Functional and Social Theories.

7.2.1. Tier 1: Immediate Structural Enhancements (Policy and Trust)

It is crucial to leverage the positive correlation observed between policy formalization and employee satisfaction. Organizations must formalize their commitments, ensuring transparent communication and regular review of welfare policies. Furthermore, given the high satisfaction rating for recognition (4.39 mean), organizations should maintain best practices to ensure recognition programs are timely, personalized, and aligned with core organizational values to maximize their motivational impact.

7.2.2. Tier 2: Short-Term Investment (Addressing Critical Gaps)

Investment must be strategically redirected toward the low-scoring, high-importance areas:

• Implement Robust Financial Wellness Programs: Address the lowest satisfaction scores for Loans / Financial support (2.50) and Scholarships (2.44). This requires introducing or expanding concessional loan facilities, offering emergency financial assistance, and providing financial literacy training, particularly to the sensitive middle-income and younger cohorts.³
• Formalize Flexible Work Policies: Close the significant Work from Home gap (2.44 mean).⁴ Establishment of clear, equitable hybrid or flexible working hour models is essential, especially within the IT, BPO, and Banking sectors, where the demand for WLB is highest.

7.2.3. Tier 3: Long-Term Strategic Development (Holistic Wellbeing)

A sustained long-term focus must be placed on holistic health and career development:

• Prioritize Holistic Health: Address the lowest satisfaction rating for Fitness facilities (2.22) and improve the Counselling/Mental Wellbeing Sessions (3.50).
•  Organizations must integrate fitness amenities or subsidized memberships and ensure easy access to confidential, professional Employee Assistance Programs (EAP) to combat burnout.
• Enhance Career Development Welfare: Expanding welfare to include development opportunities such as Job rotation and company-sponsored certification aligns benefit provision with efficiency and skill improvement, ensuring organizational adaptability.

Table 3: Strategic Recommendations by Gap Area

7.3. Implications for Future Research

The strategic insights generated from this analysis highlight critical avenues for future research. Longitudinal studies are required to track the direct return on investment (ROI) resulting from targeted investments in financial wellness and flexible work models, correlating these changes to retention rates and productivity metrics. Further qualitative investigation is also recommended to specifically isolate the complex factors contributing to the acute dissatisfaction observed among male employees and the core middle-income groups within the private sector, allowing for the creation of highly specialized welfare interventions.

1. BharatSure. (2025). Top 5 wellness trends Indian employers are embracing in 2025
2. Buchanan, K. (1974). The recognition of contributions towards the organization has a positive relationship towards increasing the commitment of the employee
3. Keitany, A. (2014). Employee welfare comprises diverse services, facilities, and amenities offered to enhance the well-being of employees.
4. Minneapolis Fed. (2022). Higher wages, more flexible schedules, better benefits: Employers desperate for workers seek the right mix of incentives.
5. O.C. Tanner. (n.d.). Keep recognition personal and timely: Best practices for recognition programs.
6. Onsurity. (2024). Employee well-being is essential: Flexibility is no longer a luxury; it's a retention strategy.
7. Primary Data Source. (2024). Data collected via confidential survey on Employee Welfare Measures.
8. Texas A&M University. (n.d.). Employee Recognition Program Guidelines: Steps for recognition program development.
9. Theories of Employee Welfare. (n.d.). (Policing, Functional, Paternalistic, Public Relations, and Social Theories).
10. Urbanski, D. (2024). The positive effect of empowerment on employees' work motivation can be explained by self-determination theory.