Confirming theoretical pay constructs of a variable pay scheme
- Authors: Ncube, Sibangilizwe , Bussin, Mark H.R. , De Swardt, Lukas
- Date: 2013
- Subjects: Compensation management , Performance awards , Wage payment systems
- Type: Article
- Identifier: uj:5518 , http://hdl.handle.net/10210/13791
- Description: Orientation: Return on the investment in variable pay programmes remains controversial because their cost versus contribution cannot be empirically justified. Research purpose: This study validates the findings of the model developed by De Swardt on the factors related to successful variable pay programmes. Motivation for the study: Many organisations blindly implement variable pay programmes without any means to assess the impact these programmes have on the company’s performance. This study was necessary to validate the findings of an existing instrument that validates the contribution of variable pay schemes. Research design, approach and method: The study was conducted using quantitative research. A total of 300 completed questionnaires from a non-purposive sample of 3000 participants in schemes across all South African industries were returned and analysed. Main findings: Using exploratory and confirmatory factor analysis, it was found that the validation instrument developed by De Swardt is still largely valid in evaluating variable pay schemes. The differences between the study and the model were reported. Practical/managerial implications: The study confirmed the robustness of an existing model that enables practitioners to empirically validate the use of variable pay plans. This model assists in the design and implementation of variable pay programmes that meet critical success factors. Contribution/value-add: The study contributed to the development of a measurement instrument that will assess whether a variable pay plan contributes to an organisation’s success.
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Drivers of wage demands in a low-inflation and recessionary environment
- Authors: Mmolaeng, Makgotla
- Date: 2012-10-25
- Subjects: Recessions , Inflation (Finance) , Wage payment systems , Pay equity , Labor unions
- Type: Mini-Dissertation
- Identifier: uj:10437 , http://hdl.handle.net/10210/7903
- Description: M.Comm. , According to Seboni (2007), narrowing the wage gap is a key concern for the trade unions and the linch pin on which many of the current negotiations have been based. Attempts to find a negotiated settlement to the wage dispute between the employer organisations and trade unions in various sectors are more often than not protracted leading to threat and ultimately strike actions by unions and their members. On the other hand Statistics South Africa (StatisticsSA) (2010) has indicated that inflation is down, spending is down, and economic confidence is at its lowest ebb for years. As businesses face up to their most challenging conditions for some time, the pressure on Human Resource (HR)to act is immense because jobs must be cut, wages frozen and recruitment stopped(Charman, 2008). This would not augur well with the unions within the South African environment where there are continuous endeavours to protect jobs, increase wages and a quest to get more unemployed into the job market.The current global economic meltdown requires of all role players to act cautiously in order for organisations to stay competitive whilst at the same time riding the storm. For the purposes of this study, remuneration includes components such as base pay, fringe benefits and perks, short and medium term incentives as well as long term incentives.
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Confirming theoretical pay constructs of a variable pay scheme
- Authors: Ncube, Sibangilizwe
- Date: 2012-10-24
- Subjects: Compensation management , Performance awards , Wage payment systems
- Type: Thesis
- Identifier: uj:10432 , http://hdl.handle.net/10210/7897
- Description: M.Phil. , Purpose: The purpose of the research was to evaluate the extent to which the constructs and dimensions identified by De Swardt (2005) are valid in describing and predicting the outcome of a variable pay plan. The following secondary research questions were therefore asked: What is the reliability of the eleven dimensions and three constructs? What are the statistical characteristics of the 11 dimensions and 3 constructs, and can they be used to benchmark new variable pay plans? How reliable are the 78 items as test criteria for the 11 dimensions and 3 constructs? Motivation for study: The primary rationale for this study was the unavailability of empirically tested models and the lack of validated variable pay instruments that evaluate the outcome of any variable pay scheme. Design/Methodology/Approach: The study followed a quantitative research methodology, with the primary objective of assessing outcome similarities through Structural Equation Modelling (EQS) factor analysis. Both exploratory and confirmatory factor analysis were performed to the sample data to measure correlations. Findings: The findings of the research highlighted that there were minimal differences between De Swardt’s variable pay models. Differences were identified by analyzing the reliability statistics and factor analysis rules of assessing model fit. Following certain research limitations, the research questions were further refined for use in future studies. The research findings confirmed De Swardt’s (2005) theoretical model of predicting variable pay outcome. Research limitations: Although the study was conducted amongst a wider population group, individual organisation feedback from the selected participants was not balanced. A considerably larger portion of the feedback was obtained from the company with which the researcher was employed. Practical implications/Value-add: The outcome of this research confirms the commercial applicability of the instrument in identifying potential flaws in any variable pay scheme during the early stages of implementation. This will have a positive impact on an organisation’s bottom line. Additionally, quantifying the impact of variable pay plans will not only enhance HR’s credibility with regards to the broader organisational goals, but will encourage a well-structured, performance-linked variable pay system based on tested models.
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