Basis of remuneration is a hot topic, and one that we get asked about all the time.
- What is a ‘Total Cost to Company Compensation Package’?
The concept of a Total Cost to Company Package is an alternative way of viewing remuneration. It moves away from the traditional, ‘add-on’ approach of determining a basic pay to which a number of benefits are added. With a Total Cost to Company Compensation Package, the starting point is the Total Cost to Company remuneration figure from which employees have a choice to exchange cash for benefits relevant to their circumstances, and within current legislation.
- Why change the way the employer manages pay?
The change will ensure:
- Remuneration is fair and equitable
- Remuneration based on market rates as a package
- More effective recognition and rewards for individual performance
- Employer is better positioned to attract and retain critical employees
- Improved market intelligence
- How do employees benefit from this approach?
- Transparency in full employment costs
- Structuring of Total Cost to Company Compensation Package to meet personal needs and circumstances, within current legal limits
In other words, employees benefit by being able to use the flexible structure to optimise their take-home pay both today and in the future, while at the same time meeting their lifestyle requirements, e.g. a person may wish to increase their pension fund contributions (within the existing rules of the fund) once their medical aid dependents decrease.
If you require more clarity, please contact Dave on 031-5827410 or [email protected].