1. Strategic remuneration management
CHAPTER 12
Strategic remuneration management

2. Session objectives
Understand the nature of remuneration strategies and the decisions involved in developing a remuneration strategy
Understand the components of a remuneration management system
Understand the role of equity in designing a remuneration system
Discuss the purpose and strategic design of salary structures

3. Session objectives (cont.)
Discuss the use of salary packaging and benefits
Understand the use of variable reward programs
Be aware of current remuneration issues and trends in remuneration management

5. The most visible reward for work is monetary

6. Strategic objectives of remuneration
Reward past performance
Remain competitive in the labour market
Maintain salary equity among employees
Motivate future performance
Control wage and salary costs
Attract and retain good staff
Reduce unnecessary staff turnover

9. Job evaluation systems
Job ranking
Job classification
Point system
Factor comparison
Common methods of job comparison 5

10. The equity component
Internal
External
Individual
Process

11. Market relativities
The market places pressure on organisations to remunerate beyond scope of work value and salary ranges
Comparisons can be conducted by:
Matching jobs to those in surveys
Participating in a customised survey
Reading newspaper advertisements
Contacting employer organisations/ agencies

12. Salary packaging and benefits
A salary package can include:
Base salary
Employee superannuation contributions
Motor vehicle
Value of other fringe benefits

13. Variable rewards
Tie individual reward to organisational goals by making payment of the reward contingent on the success of the individual or group through:
Incentive plans
Bonus plans
Profit sharing
Sales commissions
Share purchase/ownership plans

14. Current issues in remuneration
Pay culture
Outsourcing
Remuneration differentiation
Paying premiums
Executive pay
Flexible work practices
Superannuation
Global pay

15. Future direction of salary structures
Increasing flexibility
Enterprise-level negotiation
Pay linking to performance management and development programs
Emphasis on non-cash components