Employee Remuneration

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What is employee remuneration in Human Resource Management?



Maicibi (2005) defined remuneration as a pay or reward given to individuals for work done. He  further  identified  the  indicators  of  remuneration  composed of :  basic  salary,  wages,  health schemes,  pension  schemes,  transport  allowances  overtime  allowances  and  responsibility allowances. 


Remuneration is one of the general factors known to many as to have an effect on the performance of employees in any given set-up (Baron &Armstrong, 2007).This has to a certain extent created a perception among the human resource professionals that employees consider pay to be the most important factors in their career.


Video 1: Employee remuneration
 When employees are motivated through attractive remunerations, their performance of work tremendously increases (Bohan, 2004).Well remunerated employees are more likely to work towards organizational objectives with minimal resistance. Employee satisfaction of work depends on expectations and the environment in which they work. Employees with favorable pay structures are motivated to produce more while low pay leads to low motivation that translates to low performance.

The importance of Employee Remuneration 




Remuneration is one of the most important components in  HRM functions. It can help to reinforce the organization’s key culture and key values and to facilitate the achievement of its strategic business objectives (Stone, R. 2008).Compensation of employees is thus an efficient and effective tool for motivating the employees and obtaining a higher level of job performance as well as enhancing the organization’s overall effectiveness.



However, remuneration of employees is a factor that is always not beneficial or even feasible for the human resource department and has its cons. For instance, It is a method of compensation in which remuneration is paid on the basis of units or pieces produced by an employee. In this system emphasis is more on quantity output rather than quality output. The drawback of this system is that it is not easily computable, leads to deterioration in work quality, wastage of resources, lesser unity of employees, higher cost of production and insecurity among the employees. (Siengthai, S. 2008). 





The time rate method on the other hand, under which remuneration is directly linked with the time spent or devoted by an employee on the job leads to tight supervision, indefinite employee cost, lesser efficiency of employees as there is no distinction made between efficient and inefficient employees, and lesser morale of employees (D. Welch. 2008). Illustrating the other employee remuneration systems such as the group incentives, it’s considered unfair and is less motivating for the higher producer and additionally the organizational incentive plan in which misunderstandings and employee rancor can arise over the question of what is a “normal” ratio (Dowling, P. & Schuler, R. 1994). Nevertheless, all these incentives give scope to an employee to perform better and enhance improvement and job efficiency in the long run.


Remuneration is thus a very critical part of the strategic HRM. The policies and practices should be able to reinforce the behaviors of employees that will help achieve the organization’s strategic business objectives as well as implement the desired culture. Though differences can arise due to remuneration and employees in some circumstances may lose morale, there is may not be a specific system for remunerating employees which is perfect as it deals with the human judgment and may vary in different workplace situations.

Nevertheless, a systematic approach to remuneration helps to attract and retain the employees as without it an organization will have difficulty monitoring cost-effectiveness, legal compliance, pay equity etc. (Stone, R.J. 2008). In conclusion, rewarding human resource through the medium of employee remuneration is a very vital instrument of influence as it is possible for the HRM to determine the future goals of an organization with regard to proportional increase in productivity and above all can be of great significance in an employee’s career.



References -

  • UKEssays.com. (2010). Employee Remuneration in Human Resource Management. [online] Available at: https://www.ukessays.com/essays/business/role-of-employee-remuneration-in-human-resource-management-business-essay.php 
  • Ojeleye, Y. and Calvin (n.d.). THE IMPACT OF REMUNERATION ON EMPLOYEES’ PERFORMANCE (A STUDY OF ABDUL GUSAU POLYTECHNIC, TALATA-MAFARA AND STATE COLLEGE OF EDUCATION MARU, ZAMFARA STATE). Arabian Journal of Business and Management Review, [online] 7(2). Available at: https://www.arabianjbmr.com/pdfs/NG_VOL_4_2/4.pdf [Accessed 11 Nov. 2019].·  

  • Video 1: Employee Remuneration[Online].Available at:https://www.youtube.com/watch?v=pSTBiOpB2As[Accessed 24th Oct 2018
  • Kenyatta, J. (2017). EMPLOYEE REMUNERATION DETERMINANTS AND PERFORMANCE OF MICROFINANCE INSTITUTIONS IN KENYA JEMIMA KERUBO OMBONGI DOCTOR OF PHILOSOPHY (Human Resource Management). [online] Available at: https://pdfs.semanticscholar.org/d1a2/aad975f06bce724e19c187276e6873d92598.pdf

Comments

  1. Yohan MBAOctober 25, 2019 at 6:08 AM

    Good effort well done Thilina

    ReplyDelete
  2. sanjayaOctober 25, 2019 at 9:20 AM

    Good start.keep it up thilina

    ReplyDelete
  3. AnonymousOctober 25, 2019 at 9:30 AM

    Good job thilina you have briefly explain about ememploye remuneration. Excellent.

    ReplyDelete
  4. Pubudu RajapakshaOctober 31, 2019 at 6:10 AM

    Good Insights and great video as an example!

    ReplyDelete
  5. Mufthas RasikimNovember 1, 2019 at 6:11 PM

    You have discussed one of the important topic. That is remuneration. You have clearly explained your view. Well done.

    ReplyDelete
  6. Kavishka GalagodaNovember 22, 2019 at 6:23 AM

    Good Article Thilina. Well done.

    ReplyDelete
  7. Sameera Madhawa Thalakotune January 9, 2020 at 5:22 PM

    Employee Remuneration is a crucial aspect for good HRM and so, as the HR manager, you need this deck of specially designed Employee Remuneration Management Slides. This pack of work performance rewards slides covers all important aspects of a compensation report namely, employee compensation layout, compensation structure, list of employee benefits, benefit criteria, concepts and employee benefits survey. With this employee remuneration template you can motivate the company’s workforce as it attracts them to work better. These remuneration themed slides can also be helpful to the rewards manager of a company who is constantly looking for ways to boost the energy of the workforce

    ReplyDelete
  8. Yohan RatnayakeJanuary 9, 2020 at 11:18 PM

    This was a pretty decent lesson except that it leaves out a few critical aspects of employee motivation. Employees can come to the job motivation but their behavior would be the dependent variable in the situation. The independent variable is the leader and their leadership style. A highly self-motivated individual can decrease in productivity, morale and satisfaction if the leadership style they work under is toxic.

    ReplyDelete
  9. Sanjeewa GamageJanuary 10, 2020 at 4:06 AM

    Remuneration provides basic attraction to a employee to perform job efficiently and effictvely great briefing ..

    ReplyDelete
  10. Sandeep WarakagodaJanuary 11, 2020 at 3:28 AM

    Well explained about employee remuneration! good article brother!

    ReplyDelete
  11. Rasika MBA January 11, 2020 at 8:03 PM

    Employee remunaration plays vital role in employee rewards and beasically as value appreciation of the employee! This must be come through Job design perspective and organizational cultural perspectives ! Good literature have been brought up to justify the context

    ReplyDelete
  12. Sajith AbeyrathneJanuary 14, 2020 at 9:29 AM

    Good explanation regarding employee remuneration.

    ReplyDelete
  13. Dr Amila Shashanka RatnayakeJanuary 15, 2020 at 9:00 AM

    I cannot believe that employee remuneration is affecting the performance long term all the time. It definitely effective initially and other strategies would become more important in long run. Evidence has to be investigated for a particular context.

    ReplyDelete
  14. Lasitha IndrapalaJanuary 18, 2020 at 9:22 AM

    agreed with Dr.Amila,is it relationship with your organization?

    ReplyDelete

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