Remuneration System | Essay

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Remuneration system
[Type the document subtitle]
3/31/2020
student name

Remuneration system 1
Remuneration system
Remuneration as per the literature reflects financial compensation offered to the
employees in exchange of their services provided to the organisation. There are number of
complimentary benefits that are added as part of remuneration mechanism. This is one of the
component that reflect reward management, every organisation consider different form and
approaches for rewarding, rating an employee. Some organisation consider Remuneration
system to be based on person who is attaining the job profile and other organisation may take
performance system based on the position at which an individual is being performing
(Akkermans, Brebbibkmeijer, & Blonk, 2015). This literature will consider the case of
O’Meara electronic company.
The company has been operating since last 20 years in general electronics sector of
Australia with the subsidiaries in formations. The company has been offering various
products like semi-automated factories, electronic technicians, electronic engineers who have
been helping the organisation in order to acquit meant designing, telephones, digital cameras
and television designing (Schaufeli & Taris, 2015). The company employee various staff
members for production, development, dispatch department, storage and marketing
department along with human resource, General administration and accounting department.
This reflects that the company has been employing more than thousand staff members
associated.
The question to be analysed is the remuneration system of the company. As this is one
of the critical aspects to consider by the company due to large employment opportunity. In
2016 the crisis arises for the company that declined the profitability of the company and
reduce the market position. However company needs to consider performance management

Remuneration system 2
and need to revise remuneration management strategy so as to effectively make the staff work
with cost effective ways as well.
There are two alternative options for the company to consider that this position base
remuneration system which the company has already adopted since day one and another is
performance-based remuneration system. Through position base remuneration system it is
reflected that the job based pay will be acknowledged for every individual. Jobs
specialisation reflected the depth of related knowledge, expertise and experience which
reflect employee to conduct a task. Every employee is found to be specialist in their own
work which reflects that the designated task is as per the performance of the person. It has
been analysed that the position pays compensation method has improve the performance of
the employees and motivate them to perform better as they have to rank up to another
position (Gordon, 2012). Some of the advantages of this method of position system include
structural based structure off pay scale based on hierarchy in organisation (Fang & Gerhart,
2014). Other than this, it is found that this system is simpler as person-based system on the
contrary would be to analyse various constraints in the organisation that is to identify the
knowledge, competencies and skills on the basis of some benchmark for which the revert will
be provided. Other than this the advantage also reflects that the pay structure considering this
system has been adopted by most of the companies which reflect that the competitive
comparison could easily be done. This system also creates an illusion within the organisation
towards the career path and promotion possibility for which the people are considered to
perform better (Bombiak, 2018).
However the system has various disadvantages as well, to critically analyse it can be
said that the system reinforces the bureaucracy and hierarchy. Moreover, this is found to be
less compatible with the incentive and team-based structures. Another disadvantage is that a
job holder or the position holder may not be enough competent as per the position in the