Remuneration Management: STAR

Running head: REMUNERATION MANAGEMENT
Remuneration Management: STAR
Name of the Student
Name of the University
Author’s Note:

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REMUNERATION MANAGEMENT
Table of Contents
1. Introduction............................................................................................................................3
2. Discussion..............................................................................................................................3
2.1 Results of the Current Remuneration Practices of STAR................................................3
2.2 Significant Gap between Current External Practices and Current Practices at STAR....4
2.3 Legislation and Ethical Practices for Guiding and Impacting the Remuneration Policy.5
2.4 Suitable Recommendation for a New Remuneration Strategy for Two Positions in
STAR with Relevant Details..................................................................................................7
2.5 Major Implications of Fringe Benefits Tax or FBT on the Proposal...............................8
2.6 Description of Mechanism for Regular Monitoring and Reviewing of Stakeholder
Satisfaction, Required Level of Competitiveness and Impact on Budget..............................8
2.7 Process of Communicating the New Strategy to the Organization..................................9
3. Conclusion............................................................................................................................10
References................................................................................................................................11

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REMUNERATION MANAGEMENT
1. Introduction
Remuneration can be defined as the payment as well as any other compensation that is
being provided in the exchange for the major services performed by employees1. STAR
Industries is a popular and significant Intranet service provider in Australia that has providing
services to their customers for several years. Moreover, they have proved as the best service
provider of Intranet and also a greater management to the employees, working in that
particular organization. The management of STAR always focuses on the remuneration
practices for providing motivation to the staff. However, currently the General Manager has
noted that several people are leaving the organization and it is required to change the
remuneration practices. The following report will be outlining a detailed description on the
requirement of changing the current remuneration practices within the organization with
major details.
2. Discussion
2.1 Results of the Current Remuneration Practices of STAR
STAR Industries has appointed a new General Manager for their organization and
also to enhance the overall production of the company2. However, when the new GM
checked for the previous years’ records, he observed that numerous employees have left the
company within 1 year, which also included few of the most tenured employees. After
analysing, he understood that the current remuneration practices are required to be changed.
The current remuneration practices of STAR is done after discussion with GM, FM, CEO and
Human Resources. There are three levels of management in the organization. The level 1
1 Bussin, Mark. Remuneration and talent management: Strategic compensation approaches for attracting,
retaining and engaging talent. Knowres Publishing, 2014.
2 Guillen, Jordi, Claire Macher, Mathieu Merzéréaud, Jean Boncoeur, and Olivier Guyader. "Effects of the share
remuneration system on fisheries management targets and rent distribution." Marine Resource Economics 30,
no. 2 (2015): 123-138.

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REMUNERATION MANAGEMENT
managers are general managers of sales and manufacturing department and that of level 2 are
general manager of finance and administration and IT services managers. The level 3
managers are generals of human resources and marketing departments and area sales
managers. Level 1 managers get salary between 74000 dollars to 104000 dollars, whereas
level 2 managers get salary between 63000 dollars to 80000 dollars3. The final level
managers get salary between 55000 dollars and 63000 dollars.
The annual bonuses of the level 3 managers are between 1000 dollars to 3000 dollars
per annum and that of level 2 managers is between 3000 dollars and 6000 dollars. Finally, the
annual bonus of level 1 manager is between 6000 dollars to 10000 per annum. The
commission of level 3 managers is .003% of net sales over target and that of level 2 managers
is .005% of the net sales over target. The commission of level 1 managers is .009% of the net
sales over target. The management benefits of STAR Industries allow a full car allowance.
These company vehicles are being depreciated for four years and the estimation of value of
per annum. The level 3 managers get car that has price until 34500 dollars and that of level 2
managers get car, which price to 44500 dollars4. For the level 1 managers, the car allowance
is provided to 64500 dollars.
2.2 Significant Gap between Current External Practices and Current Practices at STAR
There is a significant gap between current external practices and current practices at
STAR Industries. After analysing the remuneration strategies of different Australian
organizations, it was being observed that the current remuneration practices at STAR are not
same as in various other organizations, these practices are divided into four parts, which are
3 Star. Accessed from https://sielearning.tafensw.edu.au/toolboxes/V5_hr/shared/intranet/documents.htm
[Accessed on 04 August 2019].
4 Lišková, Stanislava, and Pavel Tomšík. "Competency-based approach to human resources
management." Agricultural Economics 59, no. 11 (2013): 496-504.