Remuneration is generally understood to mean payment of wages or salary to an employee for work performed by that employee.
- Wages: Generally paid on an hourly basis. Can change depending on the number of hours worked and whether overtime or penalty rates are included.
- Salary: An annual amount commonly paid either fortnightly or monthly. In most instances, the rate of pay does not change even if hours worked in a particular week vary.
How an organisation pays and rewards its people has a big impact on its ability to attract the best people, ensure that they are challenged and motivated and whether or not they will stay with your organisation.
One of the first steps in making this happen is to develop a remuneration strategy. The objective of a remuneration strategy is to support the overall organisation strategy, the HR strategy and the desired organisational culture.
DETERMINING WAGE AND SALARY LEVELS
The most fundamental stage in the overall management of wages and/or salaries is to ascertain what is an appropriate rate or amount to pay employees, and to ensure that this process is fair and objective.
Some things to consider when developing salary or wage scales are:
- Any modern award, enterprise agreement or individual agreement condition that may apply
- Market competitiveness
- Fairness and objectivity
- Market availability of relevant skill sets
- Whether or not an organisation wants to link pay to performance.
EQUAL EMPLOYMENT OPPORTUNITY (EEO)
Ensuring that pay structures are fair and equitable for everyone is essential to ensure your organisation is not breaching any EEO laws. For more information regarding EEO and gender equity, please refer to the Fair Work Ombudsman website for tips on gender pay equity best practice.
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