July may have bought respite from the business pressures leading up to financial year end, but by August most companies should be considering how to improve performance this year. Smart remuneration should be considered in this context.
Smart remuneration is about many things. These include sharing the business rewards between employer and employees, linking and bonding employees through values such as shareholder focus; and building productivity through key performance indicators such as profit, safety and client service.
Smart remuneration is pivotal to attracting and retaining key employees and aligning the interests of boss and worker.
But as with all multi-dimensional tools, it is critical to match the remuneration program to the need. My following comments may help to achieve this aim.
Old concept, new rules
Robert Menzies spoke of the potential for full employment being obtained through profit sharing in his election campaign in 1949. But despite half a century or so of government support for the concept, a wide gap has evolved between "big end of town" executive option packages and shop-floor participation in employee share ownership plans. There is still very low takeup of the latter.
Smart remuneration, or incentive, programs sit above fixed remuneration and rewards. As with most aspects of remuneration, understanding the taxman's role is the key …