This archive report was first published on 5 August 2019.
On August 5, 2019, a Human Resource Development Consultant emphasized the importance of developing a salary scheme to eliminate pay inequity in organizations.
Organizations that have not embraced best practices on remuneration often face thorny HR issues related to staff salaries and bonuses. In some cases, managers make reward decisions based on factors that cannot be justified, leading to unfair payment of staff.
However, organizations that have institutionalized policies and procedures for managing staff remuneration effectively have developed salary schemes that foster internal equity and external competitiveness. Here are six strategies that employers can use to ensure fair and equitable payment of staff salaries, bonuses, and other benefits:
- Establishing Clear Remuneration Policies: Employers should develop remuneration policies that provide guidelines for the development of reward schemes. These policies should include the development of salary structures, determination of annual salary increases, movements between salary scales, and payment of bonuses.
- Job Evaluation and Classification: Organizations should undertake a job evaluation exercise to create job groups and classify jobs according to their respective worth. This would reduce pay inequities between and among employees.
- Market Rate Comparisons: Progressive organizations undertake remuneration surveys to provide data and information for developing or adjusting salary scales. Salaries should be calibrated on or above market rates, taking into account affordability.
- Fair Bonus Payment: Bonus payment should be made to the whole workforce depending on both the overall company performance and individual employee’s performance appraisal rating. The criteria for bonus-sharing should be pre-determined to minimize staff discontentment.
- Collective Bargaining Agreements: Employers and trade unions should hone their negotiation skills to settle on collective bargaining agreements that are both fair and affordable. The Employment Courts have piles of unresolved salary disputes that would have been avoided had the concerned parties followed due processes.
- Room for Negotiations: Employers should provide room for negotiations between employees and management to settle on fair and affordable salary increments and bonuses.
Samson Osero is a Human Resource Development Consultant who can be reached at [email protected].
