Abstract
The aim of this study is to develop an in-depth understanding of the relative importance of the factors driving change to remuneration policy decision making and the impact on organisations. A triangulated approach involving qualititative and quantitative analysis was adopted to derive answers to 5 main research questions.
The study was split into 2 phases, namely a qualitative and quantitative phase. A qualitative study was undertaken to explore and identify key assumptions and characteristics identifying the main factors driving change to remuneration policies (Phase 1). The outcome of the qualitative phase formed the basis for the quantitative phase in which statistical analysis was used (Phase 2). Data from 148 organisations were analysed and subjected to rigorous statistical analysis. Sense was made of these resulting in answers to the research questions.
The findings closed gaps in current knowledge and provided insight into the most powerful drivers of remuneration policy as well as the extent of change on each component of remuneration policy. How each component impacted on organisations is now understood and remuneration decision-makers are able to make more informed decisions based on empirical evidence.
The results show that the most potent drivers of remuneration policy are retention of key staff, financial results and organisation strategy. The greatest changes to remuneration policy were in the areas of variable pay, merit/ performance related pay, market position, total package and job evaluation/ broadbanding policy. A strong correlation was found between the extent of change and impact on the organisation. This suggests that the greater the change the greater the impact on the organisation.
There are distinct differences in the extent of change and impact across organisation structure and industry sector.
Dr. Deon Huysamen