Discounts On Company Products Sold To Employees

Abstract

Fringe, or “non‐wage”, benefits typically form an important part of the compensation package provided for employees, having grown considerably during the 20th century. One of the more traditional types of benefit, of interest in this article, is the provision of goods and services to employees at a price below that which they would normally expect to pay. More specifically, we are interested in the sale, at a discount, of a company's own products, rather than the provision of other goods and services, such as meals or private health insurance, at low rates made possible by company subsidy or the exploitation of its buying power or facilities. While a company may sometimes sell discontinued lines or damaged stock to its employees, our focus is on the sale of normal products. Our primary purpose is to show how, with an understanding of cost and revenue relationships, the problem of setting the rate of discount can be approached. The analysis draws on and extends previous work on shareholder concessions.

Citation

Cowton, C.J. and Wirth, A. (1988), "Discounts On Company Products Sold To Employees", Personnel Review, Vol. 17 No. 5, pp. 33-36. https://doi.org/10.1108/eb055599

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