REMUNERATION SYSTEMS-Rewards Employees Seek

REMUNERATION SYSTEMSINTRODUCTIONWe have seen from the 2008/2009 crisis that the more the executives receive, the more they want. The adage "the sky is the limit" does not appear to apply to the growing ranks of people who keep wanting more.For Organizations, how much to pay has always been a difficult task because they must have salary systems which must be equitable and their salary administration policies and practices are fairly administered.They exist to make a profit and be good...
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REMUNERATION SYSTEMSINTRODUCTIONWe have seen from the 2008/2009 crisis that the more the executives receive, the more they want. The adage "the sky is the limit" does not appear to apply to the growing ranks of people who keep wanting more.For Organizations, how much to pay has always been a difficult task because they must have salary systems which must be equitable and their salary administration policies and practices are fairly administered.They exist to make a profit and be good corporate citizens. Yet! They must retain talent.....but at what price? The Obama Administration in the U.S.A. has attempted to place a lid on the maximum salaries (including bonuses) payable but we continue to read in the media of the résistance to this.Why? The answer is "because if we do not reward them well, they will leave for greener pastures."Employees want to be rewarded for their work; if they work harder, they want to be paid more. How much is sufficiently attractive to retain good/talented employees is a difficult task because the question of how much to pay continues to be affected by the demand and supply of labor, competitive salaries, cost of living, produvtivity, the company's financial capacity to pay as well as it's philosophy of compensation payments, not to mention the employee's own performance as well as his or her potential. On the other hand, the Employer has to be prudent in how he rewards his employees lest his compensation system outpaces the productivity of his employees. You would have encountered situations where your job-colleague.in the same job grade as you receives $5.00 per month salary increment more than you, and this is enough for you to declare war on the company! If you are the Chief Executive Officer, you may become depressed when the CEO of another company, in your industry, receives more remuneration than you. Finally, the top men or women working in multi-national companies now expect to be paid competitively, not just in the work place of his/her country but globally!The DILEMMA: how much compensation is enough for a person to be motivated?In keeping with our Company's objective, this book is written from the Employer's perspective. The Employer generally wants a fair, transparent Compensation policy and practices, whereby there is internal equity between the job grades and external equity to ensure your Salary and Benefits package to your employees is competitive to attract, retain and motivate your employees whereby they contribute their best towards meeting the Organization's Objectives. To ensure their employees are paid equitably, the book goes on to show:* How to conduct a Salary & Benefits Survey* How to ensure the salary grades are well designed so that the salaries in the grades are in accordance with your philosophy on Compensation i.e. whether you want to be just competitive or be a market leader* The different ways of rewarding employees* The incentives and how to apply these e.g. productivity and sales incentives* Rewarding those who excel in their performance.The Employer's objective should be to pay for performance; to set up the systems based on Key Results Areas and Key performance Indicators. If some employees are an asset to the Organization, then the profit sharing formulae should be applied so that the employee knows what he will receive if he meets or exceeds his KPL's. There is no perfect Compensation/Remuneration system...there are too many variables.However,if you follow the systems outlined in this book, you can be certain that you are rewarding employees, using the best systems - best for the employee as well as your Organization.LSOM