HRM3705 Remuneration Management - Exam Prep & Revision

Chapter 1: Remuneration Management Overview Remuneration Definition The financial & non‐financial extrinsic rewards provided by an employer for the time, skills & effort made available by the employee in fulfilling job requirements aimed at achieving organisational objectives. Remuneration includes both intrinsic & extrinsic rewards which employees receive for performing their jobs & both these elements encompass an organisations total remuneration system. Remuneration Components 1. Financial rewards  Refers to monetary forms of pay the employer provides employees  Funds are spent by the employer  It includes all cash payments such as: i. base salary ii. pay for performance iii. employee benefits that the employer pays on behalf of its employees  Direct remuneration i. Base Pay; Overtime ii. Pay–for–performance 1. Merit pay 2. Bonuses 3. Price rate pay 4. Commission 5. Team‐based pay 6. Gain sharing 7. Profit sharing 8. Stock options  Indirect Remuneration i. Legally required benefits 1. Annual leave 2. Sick leave 3. Maternity leave 4. Family responsibility leave 5. Unemployment insuranc