Remuneration Practices in Star Industries: A Report

This report sheds light on the current remuneration practices in Star Industries and the negative impact it has had on employee turnover. It provides recommendations for implementing changes to regain quality staff.

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Name of the Student
Name of the University
Author Note

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Executive summary
This paper is a report on the telecommunication company, Star Industries. The paper sheds a
light on the current remuneration policies practiced by the company and provides a detail about
the gap between the practices followed by the company and by other companies that has had a
negative impact on the company leading to employee turnover. The paper will provide suitable
recommendation that will help the company in regaining their quality staff by implementing the
proposed changes.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Current remuneration practices in Star Industries.......................................................................3
Gap between remuneration practices in other companies and Star Industries............................3
Legislation and ethical practices which will impact remuneration policies................................3
Remuneration strategy.................................................................................................................4
Implications of FBT on the recommendation..............................................................................4
Monitoring and review methods..................................................................................................4
Communication plan....................................................................................................................4
Conclusion.......................................................................................................................................5

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Introduction
Star Industries is a telecommunication company based in Melbourne, Australia. Star
Industries was founded in the year 2007 in Melbourne and currently operates in different cities
within the country. Star Industries has been a very successful company since its inception
however the company has been facing problems initially because of the internal issues in the
company related to employee turnover. This paper is going to talk about the issues that the
company currently is facing and will provide suitable measures that will help in overcoming the
internal issues in the company.
Discussion
Current remuneration practices in Star Industries
Star Industries is a well known company in Australia and has a concrete structure. The
current remuneration practices that Star Industries follows has become a vital issue that has
negatively impacted the organization in recent times. Star Industries provides a basic wage to its
employees however the annual bonus is very low. The company does not provide any benefit
allowance however provides incentives to the employees on the basis of the feedback that the
company receives from the customers from the employees and on the basis of their sales results.
Gap between remuneration practices in other companies and Star Industries
The current trend that organizations are focusing on is on their employees, According to
scholars, employees are an important aspect of companies and organizations are ensuring to cater

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to the employees for fruitful productivity1. These days’ organizations have adopted certain
measures that ensure employee satisfaction in the company that proves to be beneficial for the
organizations. Companies these days provide employees with deferred compensation, basic
salary, annual increment, incentives and rewards, performance bonus and other benefit allowance
like health insurance, travel and expense and many more. Many scholars have stated that
providing employees with benefits lead to employee retention and motivation2. However Star
Industries have not considered these new methods and policies and follow the basic
remuneration policies where they only provide their employees with salary, annual bonus and
incentives. They have not yet considered the new policies that other organizations have been
following that have negatively impacted the company.
Legislation and ethical practices which will impact remuneration policies
The Australian government has set many rules and regulations and laws for the benefits
of the employees because of the unethical work practices that were observed before. According
to the ethics that has been presented by the Australian Community Workers Association, there
are certain ethics the organizations need to follow that are ethical practice, provision of support
and services, professional development, regulatory framework and many more 3. This will have
an impact on the remuneration policies that Star Industries currently practices because of the
1 Audenaert, M., George, B. and Decramer, A., 2019. How a demanding employment relationship relates
to affective commitment in public organizations: A multilevel analysis. Public Administration, 97(1),
pp.11-27.
2 Aguenza, B.B. and Som, A.P.M., 2018. Motivational factors of employee retention and engagement in
organizations. IJAME.
3 Acwa.org.au (2019). Code of ethics and Practice guidelines - Australian Community Workers
Association | ACWA. [online] Acwa.org.au. Available at: http://www.acwa.org.au/resources/ethics-and-
standards [Accessed 7 Jun. 2019].

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company do not currently follow all these and violation of this can negatively impact the
organization. The government of Australia has come up with Fair Work Act that regulates the
employment of the employees of Australia that are supplemented by state, territory and federal
legislative schemes related to the fields of health, safety and work. This law maintains and
ensures the safety of the employees and the safeguard the rights of the employees. If Star
Industries follow these laws and incorporate these within the organization then it will positively
impact the company and have employee retention.
Remuneration strategy
A new remuneration strategy needs to be introduced and implemented effectively in order
to change the current scenario of the organization. Star Industries need to provide employees
with a higher wage and provide annual appraisal that is going to be beneficial for them. Extra
money should be given for covering extra shifts and benefit allowance need to be provided like
health benefits for the employee as well as the family members. This will attract employees and
motivate employees to work in the organization. The organizations need to provide other benefits
like special leaves, travel leaves and parental leaves that will show the organization’s concern for
the employees. According to scholars benefits are becoming the key factor in attracting and in
retaining employees4. This provides a perfect work-life balance for the employees and this helps
in employees providing production that will be beneficial for the organization.
4 Iqbal, S., Guohao, L. and Akhtar, S., 2017. Effects of job organizational culture, benefits, salary on job
satisfaction ultimately affecting employee retention. Review of Public Administration and Management,
5(3).

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Implications of FBT on the recommendation
The recommended remuneration strategy provides a rule that suggests providing health
benefits to the employee and their family that falls under Fringe Benefit however the
management or the employers may claim a deduction on their income tax for the benefits
provided by them. They may claim GST credits for the benefits or services they have provided
their employees as fringe benefits.
Monitoring and review methods
The management and the committee need to hire employees in order to monitor and
evaluate whether the necessary changes proposed are working in the organization or not. Thus
the organization needs to monitor the workplace by making a data and analyzing and comparing
it with previous employee turnover. The company needs to conduct meetings to get understand
the issues the employees are facing and also take feedback from the employees that will help
them in monitoring and reviewing whether the proposal works or not. This method will help in
satisfying the employees in the company. However, this method may increase the budget as the
company may have to hire new employees for supervision.
Communication plan
Communication Medium Delivery Date Frequency
New remuneration
strategy and design will
be introduced to the
employees. The
Email, Verbally by
conducting a meeting
and by hard copy where
the information will be
01.07.2019 One-time

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schemes will be
discussed and will be
explained for the
convenience of the
employees.
provided.
Conclusion
Star Industries has been facing challenges in the workplace because of the internal issues
of the company due to staff turnover. This issue has escalated because of the remuneration
practices in the company which was provision of low wage, no benefits and proper leave
schemes and many over. However if Star Industries accepts the recommendations that have been
proposed and implements the proposed ideas then it may be beneficial for the company and help
in employee retention. This will be beneficial for both the employees and the organization that
will pave way for the overall success of the company in an ethical manner.

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Bibliography
Acwa.org.au (2019). Code of ethics and Practice guidelines - Australian Community Workers
Association | ACWA. [online] Acwa.org.au. Available at:
http://www.acwa.org.au/resources/ethics-and-standards [Accessed 7 Jun. 2019].
Aguenza, B.B. and Som, A.P.M., 2018. Motivational factors of employee retention and
engagement in organizations. IJAME.
Audenaert, M., George, B. and Decramer, A., 2019. How a demanding employment relationship
relates to affective commitment in public organizations: A multilevel analysis. Public
Administration, 97(1), pp.11-27.
Iqbal, S., Guohao, L. and Akhtar, S., 2017. Effects of job organizational culture, benefits, salary
on job satisfaction ultimately affecting employee retention. Review of Public Administration and
Management, 5(3).