HRM3705 EXAM
Analyzing the current situation at Zonke engineering
A remuneration strategy is a codified statement which looks at how the organization plans to
reward and remunerate individuals. This strategy will focus on the actions and strategies of the
organisation. It assists with the management of an organisations in establishing a framework for
the design of an organisation.
When is analysing the current situation, factors in the business environment need to be analysed
to determine to what extent factors contribute to the success of the organisation. The factors that
play a role in the success of the organisation include the competitive environment, social and
political context within which business conducts its context.
A Pay system reflects the value and reputation of an organisation, some organisations usually
market leaders have a rewarding pay structure for instance Eskom which is known to have higher
salaries than Zonke Engineering Systems. Some organisation are exploitative and pay a meagre
salary, characterised by poor employee benefits.
The political context in which Zonke Engineering includes Government type and stability,
Freedom of press, rule of law and levels of bureaucracy and corruption Regulation and de-
regulation trends social and employment legislation, Tax policy, and trade and tariff control,
environmental and consumer-protection legislation and likely changes in the political
environment. Population growth rate and age profile Population health, education and social
mobility, and attitudes to these Population employment patterns, job market freedom and attitudes
to work are some of the social factors.
Employee preferences at Zonke Engineering are best catered for by flexible pay plans. Employee
demographics such as gender, age, dual career families, race and marital status influence
employees' preferences and thus the remuneration package. Older; highly paid employees might
prefer to invest a greater portion of their income in a retirement plan' Employees with children at
, pre-school age might prefer day care allowances or a flexible work schedule while employees with
children at post-school age might prefer bursaries or low interest loans for studies.
The nature of the union-management relationship will have a significant impact on pay decisions.
Trade unions are very protective of retirement and health plans, job security and across-the-board
pay increases. These interests might not be in line with a remuneration strategy that aims to
improve performance by means of a performance related pay system'
However; ignoring the demands of trade unions could become a costly exercise taking into
consideration the negative effects of industrial action such as strikes.The remuneration offered by
Zonke engineering has a significant impact on the organisation,s
ability to attract top performers and to retain the services of these employees. Whenever
retention becomes a problem in terms of highly specialised positions, organisations may
opt to add a professional fee to the basic salary of such a position.
2.1 Identify [1 mark] and discuss [3 marks] Naledi Manufacturing’s pay policy. Your answer
should reflect an understanding of the theory and practical application to the case study [4
marks].
Market lead policy is being used by Naledi manufacturing pay policy.
In this policy, a company sets pay rates above market rates for benchmark jobs. A firm may pursue
this strategy to attract the most experienced and qualified employees. Firms pursuing a lead the
market strategy often have less turnover, but experience greater overall payroll costs. A lead pay
policy may be most appropriate in a highly competitive labor market. Few firms can afford to
implement this policy for all positions, but many will use this policy for a job group or sometimes
individual jobs.Such a policy enables a company to to attract and retain the best talents and
promote employee satisfactory.
Application:
“Several new competitors entered the marketplace. They paid lower wages than Naledi
Manufacturing, so they were more profitable.”
“Manufacturing had to charge more for its products to maintain the remuneration system’s
above-average pay strategy”
Analyzing the current situation at Zonke engineering
A remuneration strategy is a codified statement which looks at how the organization plans to
reward and remunerate individuals. This strategy will focus on the actions and strategies of the
organisation. It assists with the management of an organisations in establishing a framework for
the design of an organisation.
When is analysing the current situation, factors in the business environment need to be analysed
to determine to what extent factors contribute to the success of the organisation. The factors that
play a role in the success of the organisation include the competitive environment, social and
political context within which business conducts its context.
A Pay system reflects the value and reputation of an organisation, some organisations usually
market leaders have a rewarding pay structure for instance Eskom which is known to have higher
salaries than Zonke Engineering Systems. Some organisation are exploitative and pay a meagre
salary, characterised by poor employee benefits.
The political context in which Zonke Engineering includes Government type and stability,
Freedom of press, rule of law and levels of bureaucracy and corruption Regulation and de-
regulation trends social and employment legislation, Tax policy, and trade and tariff control,
environmental and consumer-protection legislation and likely changes in the political
environment. Population growth rate and age profile Population health, education and social
mobility, and attitudes to these Population employment patterns, job market freedom and attitudes
to work are some of the social factors.
Employee preferences at Zonke Engineering are best catered for by flexible pay plans. Employee
demographics such as gender, age, dual career families, race and marital status influence
employees' preferences and thus the remuneration package. Older; highly paid employees might
prefer to invest a greater portion of their income in a retirement plan' Employees with children at
, pre-school age might prefer day care allowances or a flexible work schedule while employees with
children at post-school age might prefer bursaries or low interest loans for studies.
The nature of the union-management relationship will have a significant impact on pay decisions.
Trade unions are very protective of retirement and health plans, job security and across-the-board
pay increases. These interests might not be in line with a remuneration strategy that aims to
improve performance by means of a performance related pay system'
However; ignoring the demands of trade unions could become a costly exercise taking into
consideration the negative effects of industrial action such as strikes.The remuneration offered by
Zonke engineering has a significant impact on the organisation,s
ability to attract top performers and to retain the services of these employees. Whenever
retention becomes a problem in terms of highly specialised positions, organisations may
opt to add a professional fee to the basic salary of such a position.
2.1 Identify [1 mark] and discuss [3 marks] Naledi Manufacturing’s pay policy. Your answer
should reflect an understanding of the theory and practical application to the case study [4
marks].
Market lead policy is being used by Naledi manufacturing pay policy.
In this policy, a company sets pay rates above market rates for benchmark jobs. A firm may pursue
this strategy to attract the most experienced and qualified employees. Firms pursuing a lead the
market strategy often have less turnover, but experience greater overall payroll costs. A lead pay
policy may be most appropriate in a highly competitive labor market. Few firms can afford to
implement this policy for all positions, but many will use this policy for a job group or sometimes
individual jobs.Such a policy enables a company to to attract and retain the best talents and
promote employee satisfactory.
Application:
“Several new competitors entered the marketplace. They paid lower wages than Naledi
Manufacturing, so they were more profitable.”
“Manufacturing had to charge more for its products to maintain the remuneration system’s
above-average pay strategy”
