"Chapter 11:Rewardinghuman resources Presentation prepared by Troy Fuller Edith Cowan University © John Wiley and Sons AustraliaLearning outcomes • On successful completion of this slide set, you will beable to: – Explain the need linking remuneration policies andpractices with an organisation’s strategic businessobjectives – Identify key objectives of employee remuneration – Explain mechanics of job evaluation systems – Describe the concept of incentive remuneration andwhy its use is spreading – Explain why an organisation provides benefits to itsemployees. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlFastFacts • In Australia, the average gender pay gap is 18%. • In the US, the average CEO earns 183 times the averagewage. In Australia, the ratio is 135:1, in Hong Kong it is160:1 and in Germany it is 148:1. • According to National Centre for Economic and SocialModelling and AMP, Australian men have the potential toearn $2.4 million over a lifetime compared to a womanwho will earn nearly $1.4 million. • Australians receive two months leave each year - 4 weeksannual leave, 2 weeks public holidays and 2 weeks sickleave. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlDefinitions • Remuneration – What employees receive in exchange for their work.Includes pay and benefits (total remuneration) orjust pay (cash remuneration). • Strategic remuneration – Involves remuneration practices being aligned withthe achievement of the organisation’s strategicbusiness objectives. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlTypes of employee rewards © John Wiley and Sons AustraliaRemuneration policy • A remuneration policy should: – reflect the organisation’s strategic businessobjectives and culture – articulate the objectives that the organisation wantsto achieve via its remuneration programs – be communicated to all employees – provide the foundation for designing andimplementing remuneration and benefit programs. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlRemuneration program objectives– for the organisation • Attract and keep desired quality/mix of employees • Ensure equitable treatment • Motivate employees to improve their performance • Reinforce organisation’s key values, desired culture• Drive and reinforce desired employee behaviour • Ensure remuneration is maintained at the desiredcompetitive level • Control remuneration costs • Ensure optimum value for each remuneration dollarspent • Comply with legal requirements. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlRemuneration program objectives– for the employee • Ensure equitable treatment • Accurately measure and appropriately rewardperformance and contribution to the achievement ofthe organisation’s strategic business objectives • Provide appropriate remuneration changes based onperformance, promotion, transfer or changingconditions • Provide regular remuneration and performancereviews. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlAgency theory and remuneration objectiveand policy setting • Owners or shareholders of the company (the principals)are reliant on managers (the agents). This relationship isdefined as agency relationship. • There is no guarantee that goals and interests ofshareholders and managers will be same. • To avoid agency cost, organisations should provideincentives to reward behaviours and results that are inthe best interests of the shareholders. • Moral judgements became the focal point after the globalfinancial crisis as managers acted immorally and tookexcessive risks. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.htmlJob evaluation • Job evaluation– The systematic determination of the relative worthof jobs within an organisation. – Concerned with ‘how big’ or ‘how small’ a job is. – Aim is to ensure that jobs of different sizes orrelative worth attract the appropriate paydifferentials. – Basis for establishing the organisation’s job hierarchyand associated pay structure. Purchase your textbook here: http://au.wiley.com/WileyCDA/WileyTitle/productCd-EHEP002727.html"