HR & Labour Law Specialists



The determination of fair and market related remuneration for an organisation’s personnel, requires a systematic and thorough evaluation.

Remuneration is recognised as an important method for reinforcing corporate culture and promoting the right behaviours while also supporting the achievement of the organisation’s strategic objectives.

Objectives of a remuneration strategy:

Employer-driven reasons that a remuneration strategy is designed may include to:

  • Attract and retain talented employees within the business
  • Promote and reward the right behaviours within the business that drives a high performing organisational culture
  • Ensure that remuneration is fair and equitable for employees across the organisation
  • Motivate employees to increase their productivity and continually improve their performance and output
  • Control employee remuneration costs across the business
  • Comply with workplace laws and regulations.

From an employee’s perspective, the development of a remuneration strategy can also be beneficial because:

  • It should enable equitable treatment between the employee and their peers across the organisation
  • It will allow the employee to assess their value to the organisation’s strategic objectives and compensate them accordingly
  • It encourages management and employees to meet and complete performance reviews which should identify and improve employee performance and productivity.

Remuneration mix:
The reward mix reflects the relative proportions of remuneration represented by guaranteed and variable pay, and will be meaningfully linked to job type and the nature of expected outcomes.

Purpose of each component of remuneration:

  • Guaranteed Pay (in the form of total cost to company) –
    – Attraction and Retention of talented, high-performing people.
  • Variable Pay (Short- and Long-Term Incentive Schemes) –
    – Attraction, Retention and Alignment with shareholder thinking and strategy i.e., toward achievement of annual strategic goals.

Role of HR Support
HR Support can assist Employers as follows:

  • Phase One: Assist with a job analysis which requires the identification and description of jobs to ensure that the desired organisational structure is achieved. This will include tasks such as developing job descriptions, creating job titles and establishing performance standards for each of the identified roles.
  • Phase Two: Evaluate jobs to determine the importance of the specific roles within the organisation and establish relativity between jobs. This will include going through a process of job ranking/grading to understand where roles stand in the hierarchy of the organisation.
  • Phase Three: Establishing external equity by performing surveys and benchmarking against the labour market. The aim of this step is to ensure that employees are fairly remunerated for their services and work.
  • Phase Four: This stage generally requires a match between the internal and external value of the role taking into consideration the job evaluation worth and the labour market worth. This allows the organisation to establish accurate pay ranges for the required roles. Further, it provides an opportunity to determine how an employee can move through the various pay ranges.
  • Phase Five: Prepare an annual increase schedule.

Impact on employees with and without fair remuneration practices