Managing Remuneration

Managing remuneration

Remuneration policies – internal considerations        

Organisational mission and strategies Nature and situation of organisation Business life cycle Type of organisation Organisation culture Trade union roles Employee attitudes Existing rewards system

Remuneration policies – external considerations  Labour markets  Comparable rates  Economic and industrial change  Pay differentials  Changes in the labour force  Decline in union power  Government policy

Remuneration policies – other issues  Simple and rigid?  Complex and flexible?  Harmonisation?  Public attitudes  Remuneration mix  Remuneration administration

Job evaluation  Process of assessing relative size or importance of jobs  Concerned with job, not job holder  Systematic rather than scientific  Produces hierarchy of job values, not hierarchy of pay rates  Not negotiation, but study of job facts

Job evaluation: uses  Eliminate pay structure discrepancies  Help develop pay grading systems  Ensure equal opportunities through establishing comparable worth  Define and clarify jobs  Support organisational analysis and design

Job evaluation: benefits  Fair pay structures  Unified pay structures for all levels  Proprietary systems available  Easily adapted, or used for external comparisons  Clarify roles  Ensure people paid appropriately

Job evaluation: drawbacks  Expensive to introduce and maintain  Can cause disruption, especially if expectations raised or unrealistic  Can lead to disputes over evaluations  Can be manipulated  Employees may be suspicious

Selecting job evaluation system  Appropriate  Accurate  Consistent  Time frame  Maintenance

Remuneration design steps 1. Rank jobs by size or importance 2. Decide whether to pay on individual points values or job groups 3. Decide how to group jobs 4. Define differentials for groups or scales 5. Define width of each pay scale 6. Assign dollar values to scales or points