Paycheck Plus :Gone is a packet of cash. Now, employees can get fringe benefits such as health insurance, and even massages at work

At the start of the 20th century, most workers felt lucky just to get steady pay. Today, at software developer Adobe Systems in San Jose, Calif., employees have learned to love on-site shiatsu massages, financial help for fertility treatment, and dining at the company cafeteria on a "warm chicken salad with roasted tomato vinaigrette, garnished with chiffonade of basil and pasta chips."

Compensation has come to mean much more than cash in hand. The Bureau of Economic Analysis estimates that in 1929 the value of supplements to wages and salaries accounted for just 1.4 percent of compensation. Today, it's about 16 percent. And some surveys, which also count time off, sick days, and other benefits, put the share at more than 25 percent--not counting lifestyle perks such as a nice place to eat.

Fringe benefits have become so important that the term "fringe" may be a misnomer for these often large and widely expected supplements. University of Michigan business Prof. John Tropman says many health, disability, and other plans mesh with Social Security and other government programs to provide a form of community welfare. "American society has chosen to run a large part of its welfare state through the workplace via fringe benefits," he says.

Cutting back. Yet these benefits aren't guaranteed to last forever. Financial strains are causing more firms to trim the extras through tighter caps on what they will spend and by requiring employees to shoulder more of the costs of such benefits as health coverage. Many lower-paid, part-time, and temporary workers, meanwhile, continue to get little.

The composition of cash pay is also changing. Employers now often prefer to make one-time payments that can boost a single year's pay but do not become part of the base upon which future raises compound. David Lewin, a professor of management at the University of California-Los Angeles, has chronicled a shift from fixed wages to variable compensation--from the factory floor to the executive suite. This takes the form of bonuses, profit sharing, stock options, productivity payments, performance rewards, and other add-ons to a smaller fixed base of compensation. In 1970, only about 5 percent of nonsales employees received some sort of variable pay, he says. Today it's about 70 percent. "A truly fixed wage or salary is now in the minority," he says. "In the 1990s everybody loved this because they got payoffs; today they don't love it because the payoffs are missing."

Perks, however, are an ingrained part of what many workers consider pay, though it took two Supreme Court decisions, a world war, and a change of heart by organized labor for benefits to become mainstream. Labor leader Samuel Gompers argued in the early 1900s that employer benefits erode workers' control over their lives and "weakens independence of spirit."

The Great Depression softened labor's attitude, and the enactment of Social Security introduced the first benefit to which employers were legally required to contribute. Then came government-imposed wage controls during World War II.

That provided an opening, with government blessing, for an expansion of noncash bonuses--better vacations, medical insurance, pensions--that were seen as less inflationary than cash and a boost to morale. Supreme Court decisions in 1948 and 1949, in effect, compelled companies to bargain with unions over retirement and health-insurance issues.

Following that, many employers embraced benefits as a way to build esprit de corps, but today companies are concerned that familiarity can indeed breed contempt. The ubiquity of benefits, and the fact that they are expected, means employers get less credit for them, consultants say. One attempt to make benefits more personal is flexible, or cafeteria, plans through which workers select from a menu--more medical coverage, perhaps, for a worker with a family, more time off for a single employee.

Lifestyle enhancements can also bolster employee attitudes, says Michigan's Tropman. "Some people want to take their dog to work; allowing that can be very important to them." That's a far cry from 1900.