Magazine article New Zealand Management

No Single "Ideal Salary": But Five Ideas to Help Create One

Magazine article New Zealand Management

No Single "Ideal Salary": But Five Ideas to Help Create One

Article excerpt

No one salary structure fits all executives. This is the stark and simple finding of a year-long search by remuneration consultants Higbee-Schaffler and Management magazine to find the "ideal salary package". But there is a lot more to it than that so, read on for a summary of our findings and five great suggestions about how to get the best return on the salary bill.

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Salary packages must be bespoke; tailored carefully to the individual executive's motivational and aspirational needs.

Last year Management magazine teamed up with Auckland-based remuneration consultants Higbee-Schaffler to survey executives in a range of industries and career stages to see if we could find an "ideal salary structure". More than 500, mostly managers and senior executives, responded.

The responses highlighted both the variety of remuneration practices in New Zealand and the diversity of opinion about what constitutes an "ideal salary". The research clearly shows that no one salary structure will effectively motivate all employees and support the organisation's strategy. For some, cash is king. For others, the status symbols of benefits such as cars are the key to turning people on to their job.

The survey, conducted through Management magazine over the 2004 year, questioned reader attitudes toward company cars, incentives, annual leave, performance pay and non-monetary rewards.

The detail that came from respondents allowed Higbee-Schaffler to suggest the approach employers should take when formulating remuneration packages. There are, says director Helene Higbee, five key steps to ensuring an organisation gets the greatest return on its salary bill:

1 Tailor your approach to remuneration and rewards to meet both the organisation's and the employee's needs. One size does not fit all! Policies, systems and practices should flow from your remuneration philosophy which supports or reinforces the organisation's raison d'etre. This may include remunerating different employee groups through different means depending on what you are trying to achieve.

Use remuneration as a support mechanism to reinforce the organisation's goals and achievements. While pay does not provide the complete picture on reward and recognition, it definitely sends a message as to what is important.

2 Review the structure/components of your remuneration packages. Are the benefits provided valued by staff? Do they reinforce the culture that you are trying to create? What role does variable pay (incentives/bonuses) play in your organisation? …

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