Remuneration important for worker loyalty
PACKAGE: MUST COVER ALL THE EMPLOYEE’S FINANCIAL BENEFITS
Different to a salary package, which only details cash as wages, it clearly outlines your business’ policies.
Running a business entails creating and managing several tasks that allow the whole to function. One such function that is usually overlooked but is of vital importance is creating and managing employee remuneration packages. It might seem like an easy task but it’s far from it.
I have listed a few tips that should help any business owner create remuneration packages for their employees.
Remuneration policies
First and foremost you must draft policies that will guide your business on how to create and manage employee remuneration packages.
These policies must be clear and understandable to the point that anyone can read, understand and follow instructions on implementation.
These policies should include items such as a bonus policy, commission policy, salary increase policy, severance package policy, salary payment dates policy and overtime policy, to name a few.
Remuneration package
You want to focus on creating a remuneration package and not a salary package.
What is the difference? A remuneration package comprises all the financial benefits an employee can or will receive.
This could entail bonuses, commission, medical aid, a travel allowance, company vehicle, salary and sometimes even share options.
A salary package would only detail cash as wages.
Within the law
Fortunately, the government doesn’t leave the task of creating fair remuneration packages to employers. I can only imagine the abuse that would take place if employers were left to dictate remuneration.
The Employment Equity Act is a key piece of legislation in ensuring fair remuneration practices are upheld.
There are penalties for non-compliance.
Hourly, weekly or monthly rate
Both the specific industry and more importantly the employee position play a determining role in which rate to offer.
A petrol attendant would probably be on an hourly rate, while the petrol station manager on a monthly salary.
Each specific industry can dictate rates, especially those that have bargaining councils.
A ractive package
Top talent doesn’t come cheap and if you want to attract hard-working, motivated, loyal, honest employees then you must be willing to pay a premium.
Incentives are important in motivating employees and must be included.
Financial burden
You do not want to overburden the business with packages that could put a financial strain on it. Therefore, you must fully understand the business’ financial position first, including forecasting 12 to 24 months ahead. A failure to do so could result in making decisions that could be catastrophic to the business.
Munya Duvera is chief executive at Duvera Elgroup