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Does Your Organisation's Remuneration Plan Need an Intervention?

Ever wondered how your employee's are faring on the ground? What more can You do to enable better work satisfaction and performance from your team? In the following article, Prof. Dr. Mark Bussin highlights why your organisation's remuneration plan could be a huge factor in this matter and what you can do to improve it.


Article by Prof. Dr. Mark Bussin

There comes a time when you discover your Remuneration plan is out of sync with the organisational objectives or with the market at large. Maybe your Remuneration plan is not achieving the results or behaviour you had intended for it to achieve. Possibly it is not retaining or engaging your employees…

Unhappiness with one’s Remuneration plan isn’t quite an uncommon occurrence. In fact, approximately a third of companies have displayed dissatisfaction with their Remuneration programs. David Cichelli, vice president of the Alexander Group (a consulting firm that focuses on revenue growth), stressed the urgency for sales leaders to gain an intimate understanding of the true functioning of Remuneration plans. He stated, if your organisation has an inadequately-designed Remuneration plan, it will work… but it will work against your organisation’s larger goals.

Where are you going wrong?

First-off, a diagnosis is important. Where are the problem areas in your Remuneration plan? What is kicking the system out of balance? Where does one start looking? Here are the typical areas of diagnosis that might help you uncover the problem:

  • Low morale among employees: have your employees been disengaged, with Remuneration being the chief perpetrator?

  • High turnover: Has staff turnover moved at an alarming rate? We’re not speaking about retired employees or other such natural occurrences… rather, we are speaking about the unexplained.

  • Difficulties in recruitment: Has it become increasingly difficult to attract key staff? Has anyone pointed out that your pay scales aren’t competitive against market rates?

  • Payroll: Is your payroll cumbersome? Your cost of labour too high?

  • Are employees thinking of equal pay for work of equal challenges?

These are not the only challenges your Remuneration program may be facing, but they are generally the common suspects. After poking and prodding at the exoskeleton of your organisation and coming to find that the problem lies a little deeper, you will need to get under its skin.

How can one do this?

Employees, more often than not, will avoid going to the boss and telling him/her what they are doing wrong. As a general rule of thumb, this isn’t quite a clever idea. It is therefore your calling to take the initiative and find out for yourself. Consider this- have you ever watched an episode of ‘Undercover Boss’? If you haven’t seen it, Google articulately summarises it as follows:

“High-level corporate execs leave the comfort of their offices and secretly take low-level jobs within their companies to find out how things really work and what their employees truly think of them. This Emmy-winning reality series utilises hidden cameras to provide an authentic view of executives' journeys as they are immersed in the day-to-day operations of their organisations. In the process of this undercover mission, they learn of the perceptions about their companies, the spirit of their work forces and -- maybe -- something about themselves as well.”

These high-level corporate execs are usually disguised with an authentic-looking wig, contact lenses, an altered skin tone, a very street-wear dress-sense or the likes. Seemingly, this is a great idea to uncover inside information as to the functions of your company.

Or you could just ask.

Why not involve all the stakeholders in the process? Gauge what your employees value most. Prod around at key management personnel and interrogate them about the reward programs. Ask questions that will uncover whether reward programs are achieving the desired outcomes, whether they are sluggish or efficient and whether they could be improved.

Another suggestion is to consult your Remuneration metrics. The figures can tell you:

1) How competitive your salary ranges are (a salary survey like RewardOnline can tell you this)

2) Whether the grade and title are causing over-inflation without value-add

3) What the average performance rating is

4) Whether you are getting a good return on your incentive schemes

5) Is your remuneration policy aligned to the strategy of the organisation

You can also differentiate between employee groups and their Remuneration since employee’s value varies at different rates.

Based on your prying- with employees and leadership- you can now take action.

The intervention

  • It is important to ensure that your salary structure is up to date. If your structure comprises grades with salary structures or you have an array of structures, these need to be continually updated to make sure they fit in with the market as it changes.

  • Create an easy-to-understand, easy-to-follow hymn sheet for management. They can follow this document reliably to ensure fairness in the process. All employees can thus be treated equally.

  • Allocate a portion of the organisation’s budget towards the process. Perhaps management needs training on implementing or updating the system. Perhaps they need training to really understand how a Remuneration system works and the importance it contributes to the overall goals of the organisation.

After an intervention has been decided on, it is important to let employees in on the loop without tarnishing employee perception.

The most important thing is for employees not to forget what they are actually receiving from the organisation. You can remind them. For instance, bring up the Friday afternoons they get to leave early; the dinners paid for by the organisation; the benefits; the tertiary education reimbursement; the courses they get to take, paid for by the company… all of these add up to ensure that employees do not feel like they are being taken for a ride and possibly allow them to realise that they are more valued than they had perceived themselves before. Furthermore, employees should be let in on the loop as to when they are being paid competitively- else it is a waste. They should understand that they are being valued as talent and therefore should step up to their title as talent.

Thus, it is never too late to fix a drowning Remuneration strategy. Simply have a look at the obvious suspects that may be dragging your Remuneration strategy down. If there are deeper reasons for a failing Remuneration plan, become active and interactive, speaking to management and employees to uncover where the problem lies whilst analysing your metrics. Intervene by updating your Remuneration scheme. Make sure that everyone is on board and that an objective measure is used so you have a leg to stand on when someone confronts you. And lastly, relay your message in a way that employees understand that they are not being undervalued.

Follow these steps for a dream Remuneration scheme.


Does reading this prompts you to reflect on your organisation's remuneration plan? Kickstart your own intervention by finding out more about Prof. Dr. Mark Bussin's online series on Remuneration for HR here!

Alternatively, you can click here to sign up now!


About Prof. Dr. Mark Bussin, BSc, HDPM, MM, M.Com, D.Com GRP CCP FIoD

Mark is an experienced Remuneration and management consultant and business owner, and is an academic at 6 different universities. He is an Adviser to the Government of South Africa and Kenya, and he continues to serve on and advise numerous Boards, Audit and Compensation Committees (including Impala Platinum Holdings Limited, a listed company and second largest platinum mine in the world) and Standard Bank, to name a few. With a firm understanding of business, management, and board level decision making, Mark is a practicing consultant whose services are engaged by government and corporate entities. Previously, he was an ex-shareholder of Price Waterhouse London, and has held management roles in MNCs in Resources, FMCG and Financial Services industries.

As the Chairman of 21st Century (Pty) Ltd, one of the largest Remuneration and HR consultancies in Africa, he leads a team of more than 60 specialists, serving over 1700 clients – including non-profit organisations, private companies, government, parastatals and over two thirds of the companies listed on the Johannesburg Stock Exchange.

Mark supervises and lectures to MBA, Master’s and Doctoral thesis students in the area of Leadership, Strategy, HR, Reward, Compensation and Performance. He is also an author of several books (some prescribed by universities) and has published or presented 65 academic articles and over 450 popular papers. He is often sought by the media to appear on television, radio, and in the press for expert views as he was a commissioner in the Presidency.

He has been visiting Singapore and Asia over the past 10 years to speak at conferences, and to facilitate several courses and Masterclasses. He is also a board and faculty member for WorldatWork USA, and is certified as a Global Reward Professional (GRP) and Certified Compensation Professional (CCP).

Catch his LinkedIn profile here!

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