Total Remuneration
The critical tool by which organisations attract, engage and retain human capital
Total Remuneration is a critical tool by which organisations attract, engage and retain human capital. Remuneration is not only about how much to pay, but also about driving the implementation of a strategy.
Total Remuneration is a critical tool by which organisations attract, engage and retain human capital. These are essential input criteria to the psychological and contractual agreement formulated between employers and employees, in return for the latter’s time and efforts in advancing the interests of the organisation.
Total Remuneration is not the only means as there are many other aspects to an employee value proposition, but it is certainly the ticket to the game. Total Remuneration spans all components of remuneration from guaranteed pay and benefits through to short- and long-term incentives. The mix of remuneration paid to an employee or executive is widely recognised as the total rewards mix.
Khokhela understands the key role that this remuneration mix plays in driving balanced behaviour that aligns with the shareholders’ and stakeholders’ objectives. Khokhela works closely with its clients to design customised Total Remuneration solutions that drive value-creating behaviour.
These solutions range from drafting of job descriptions, job grading, remuneration benchmarking, pay structuring, cost-to-company conversions through to the design of variable pay solutions.
Khokhela Remuneration Advisors is a member of the South African Reward Association.
How does Khokhela help you formulate a Total Reward strategy?
Remuneration Policy and Strategy
Developing remuneration policies and strategies which align with the business strategy. This is one of the most important aspects of remuneration which is often overlooked or not developed properly.
Remuneration Benchmarking
Benchmarking of executive, board and general staff pay against appropriate markets.
Executive remuneration
Executive remuneration is designed with the focus on performance and with the purpose of attracting, retaining and incentivising executives.
The total remuneration for the CEO and executives is heavily weighted towards the long-term incentive, this is to ensure the executives drive the long-term strategic objectives and performance of the organisation. The remuneration for executives is made up of three elements namely:
- Total Guaranteed Package
- Short-term Incentives
- Long-term Incentives
Khokhela is able to assist organisations with ensuring that the total guaranteed packages are benchmarked correctly to the market, the short-term and long-term incentive schemes have been designed in a way that ensure alignment with the business strategy and that shareholder requirements are met and that the pay mix for the executives is correct.
Non-executive Director Fees
Khokhela has an extensive database of NED fees. We are able to provide benchmarks for NEDs serving on the Board, and committees of the Board. We provide advice on how best to structure the fees for NEDs in line with King III recommendations and taking into account market practice.
Remuneration Committee Assistance
The Remuneration Committee plays an extremely important role in ensuring that the remuneration of an organisation, specifically that of the executives is fair and responsible and is aligned with the company strategy and shareholder requirements.
Khokhela is able to provide assistance with the following:
- Remuneration Committee mandate
- Provision of an expert independent advisor to the Remco to ensure adherence to good corporate governance
Variable Pay Scheme Design
Designing, drafting, and modelling of short-term, long-term, production bonus and sales incentive schemes to motivate and reward participants to achieve goals which are aligned with the strategy and objectives of the organisation. Scheme`s should align with and link into the performance management system.
Long-term incentive schemes are an essential component of executive remuneration and due to the long-term nature and the amounts involved, need to be designed and modelled and drafted very carefully. The process of obtaining approval is also critical. Experience is essential to ensure the consequences of any design are in line with shareholders objectives.
Well-designed sales schemes can change the behaviour and align sales peoples’ behaviour with that of the company’s objectives.
When designing production bonus schemes, line of sight is critical as well as ensuring that the bonuses are paid for value adding activities.
Job Descriptions/Job Profiles
Drafting of job descriptions / job profiles based on one-on-one interviews with the job incumbent and their direct manager/supervisor. Also available is a one-day in-house job description writing training programme.
Paterson Job Evaluation
Implementation and grading of positions using the Paterson Job Evaluation System. Also available is a two- day in-house training course in the use of the Paterson Job Evaluation System. The workshop covers the rules of the system as well as practical exercises.
Pay Modelling & Analysis
Development of pay models according to client specific needs. e.g., against national / target markets. Providing guidance to clients in the identification of critical / key skills and key talent. Comparison of individual pay against the pay structures and providing of recommendations as well as modelling of different increase scenarios.
Equal Pay for Work of Equal Value
Pay gap analysis which includes but not limited to gender, race and top to bottom analysis. Highlighting of potential risks and assisting in resolving pay issues.
Cost to Company Conversions
Conversion from basic salary and benefits to cost to company. Providing full costing of transition to cost to company based on different scenarios. Conducting communication sessions with employees on the effects of changing to cost to company.
Customised Surveys
Surveys are customised according to client specific needs, and are used to benchmark select positions against the market. The commissioning company chooses the participants, the positions to be surveyed as well as the format in which to present the results.
Find out how Khokhela can assist your business with designing remuneration solutions that engage talent and enhance productivity.