Question 1
____________ is the perceived fairness of the procedures used to determine the full mix of rewards
employees receive.
1 Equity
2 Procedural justice
3 Internal alignment
4 Distributive justice
With procedural justice, employees are concerned about the fairness of the procedures used to determine
the amount of rewards they receive. Equity/fairness is one of the most important remuneration objectives
because employees’ perceptions of equity/inequity can influence their work behaviour, performance,
productivity, motivation and commitment. Employees will determine the fairness/equity by comparing their
remuneration to that of their co-workers and other employees holding comparable jobs in competing
organisations. Internal alignment addresses the relationships among different jobs within a single
organisation. It refers to the relationship between the pay structure and the design of the organisation and
the work. Distributive justice relates to the amount that is distributed to employees. As per equity theory,
perceptions of fairness depend on the amount of remuneration actually received.
Question 2
Read the paragraph on the next page and answer the question that follows.
Daniel and his colleagues are starting up a new business. They realised that they need to plan and ensure
that their remuneration practices are aligned with both their business goals and employee values.
Therefore, they are focusing on setting a remuneration strategy that should enable their business to
differentiate itself from other competitors. Í
Daniel and his colleagues can use ____________ to set their business apart from other competitors.
1 alignment
2 differentiation
3 value-added
4 external competitiveness
Alignment is the extent to which the remuneration strategy is aligned to the organisational strategy, the
organisation's external market and other functions within the organisation will determine the
competitiveness of the remuneration strategy.
1
, Differentiation, the remuneration strategy should enable the organisation to differentiate itself from other
competitors. Value-added, remuneration specialists should consider the value the remuneration strategy
adds to the overall effectiveness of the organisation. External competitiveness involves the comparison of
the organisation’s pay levels with pay levels paid by competitors in the same industry. Comparisons are
made with other organisations that employ people
with similar skills, responsibilities and education
Question 3 .
Study the following payslip and answer the question that follows.
Company XYZ
10 Church street, Milnerton, 0181
Name of Employee: Sibongile Malema
Designation: Quality Surveyor Date: 31 August 2019
Description Earnings Deductions
Basic Pay 25 000.00
Cellphone allowance 1 000.00
Travel allowance 1 500.00
Medical aid 2 200.00
Pension fund 2 500.00
Commission 3 000.00
Tuition bursary 500.00
Unemployment insurance 152.88
Tax – regular earnings 7 598.95
Tax – fringe benefits 359.66
31 000 12 811.49
Net pay 18 188,51
Identify the legally required benefit in Sibongile’s package.
1 Basic pay
2 Medical aid
3 Travel allowance
4 Unemployment insurance
Commission is an example of incentive pay, a direct form of remuneration on the pay slip. Commission is
often more of an incentive/variable payment where an employee will receive a cash payment that is added
to base pay upon the achievement of pre-determined objectives. Medical aid, pension fund and travel
allowance are examples of indirect remuneration and are classified as discretionary benefits. The employer
can decide to offer these types of benefits over and above the typical benefits offered by competitors.
2
____________ is the perceived fairness of the procedures used to determine the full mix of rewards
employees receive.
1 Equity
2 Procedural justice
3 Internal alignment
4 Distributive justice
With procedural justice, employees are concerned about the fairness of the procedures used to determine
the amount of rewards they receive. Equity/fairness is one of the most important remuneration objectives
because employees’ perceptions of equity/inequity can influence their work behaviour, performance,
productivity, motivation and commitment. Employees will determine the fairness/equity by comparing their
remuneration to that of their co-workers and other employees holding comparable jobs in competing
organisations. Internal alignment addresses the relationships among different jobs within a single
organisation. It refers to the relationship between the pay structure and the design of the organisation and
the work. Distributive justice relates to the amount that is distributed to employees. As per equity theory,
perceptions of fairness depend on the amount of remuneration actually received.
Question 2
Read the paragraph on the next page and answer the question that follows.
Daniel and his colleagues are starting up a new business. They realised that they need to plan and ensure
that their remuneration practices are aligned with both their business goals and employee values.
Therefore, they are focusing on setting a remuneration strategy that should enable their business to
differentiate itself from other competitors. Í
Daniel and his colleagues can use ____________ to set their business apart from other competitors.
1 alignment
2 differentiation
3 value-added
4 external competitiveness
Alignment is the extent to which the remuneration strategy is aligned to the organisational strategy, the
organisation's external market and other functions within the organisation will determine the
competitiveness of the remuneration strategy.
1
, Differentiation, the remuneration strategy should enable the organisation to differentiate itself from other
competitors. Value-added, remuneration specialists should consider the value the remuneration strategy
adds to the overall effectiveness of the organisation. External competitiveness involves the comparison of
the organisation’s pay levels with pay levels paid by competitors in the same industry. Comparisons are
made with other organisations that employ people
with similar skills, responsibilities and education
Question 3 .
Study the following payslip and answer the question that follows.
Company XYZ
10 Church street, Milnerton, 0181
Name of Employee: Sibongile Malema
Designation: Quality Surveyor Date: 31 August 2019
Description Earnings Deductions
Basic Pay 25 000.00
Cellphone allowance 1 000.00
Travel allowance 1 500.00
Medical aid 2 200.00
Pension fund 2 500.00
Commission 3 000.00
Tuition bursary 500.00
Unemployment insurance 152.88
Tax – regular earnings 7 598.95
Tax – fringe benefits 359.66
31 000 12 811.49
Net pay 18 188,51
Identify the legally required benefit in Sibongile’s package.
1 Basic pay
2 Medical aid
3 Travel allowance
4 Unemployment insurance
Commission is an example of incentive pay, a direct form of remuneration on the pay slip. Commission is
often more of an incentive/variable payment where an employee will receive a cash payment that is added
to base pay upon the achievement of pre-determined objectives. Medical aid, pension fund and travel
allowance are examples of indirect remuneration and are classified as discretionary benefits. The employer
can decide to offer these types of benefits over and above the typical benefits offered by competitors.
2
