Assignment on Wages and Compensation

Find the attached assignment document "Compensation and Rewards" scope document

Wages and Compensation
SystemJP
2/16/2020

Introduction
Wages distribution is very challenging task in an organisation, in business economics wages
ratio is related to the balancing of the salaries paid to the higher authorities like CEO or
senio0r management and to the bottom employees. Equal pay for the equal work was very
famous concept leading to make gender justice in the organisation, but when it comes to the
higher earning by the senior managers and CEO in the top most authority it kept confidential.
Salaries ratios were higher than the average salaries paid to a bottom worker hence clarity in
the payment system to the CEO was needed because it falls in the ethical dimensions of the
corporate world. This debate will represent the changes took place in the wages ratio
regulation and why this change was necessary for the organisations in the present challenging
world.
Discussion
Some European companies in the public sector has introduced the cap over the maximum
earning of the top authorities with the ratio of the wages earned by the employees, this
debate support the changes in the wages ratios and payment system to reveal the
remuneration of the senior management and CEO. Post of the CEO in an organisation is
responsible for the overall development and issues in an organisation, people holding senior
post in an organisation are very talented and quick to take attractive decision for the
management and profit of the organisation (Aguinis, Joo & Gottfredson, 2013). Hence, they
are highly paid than the others in an organisation, question in the ethical manner about the
remuneration payment to a CEO and Senior management is not related to the amount they
get, but how that amount is collected and distributed in them.
Rewards and compensation are not only monetary value given to the employees in exchange
of their services but this is related to their sentiments and emptions as well, that represent

their worth in an organisation. Equality to all for the equal work avoid discrimination on the
basis of gender, religion, and any other basis (Bunderson & Thompson, 2009).
Confidentiality of the CEO and Senior manager’s earning put many questions in ethical and
legal manner and on code of the conduct of an organisation (Kerr, 1975).
ANZ New Zealand Bank, disclosed the remuneration of the CEO in its annual report for the
year 2019, and promised to disclose it in every year based on the decision taken in the AGM
meeting in the year 2018 (Marasi & Bennett, 2016).
Changes to the CEO and disclosed executives’ remuneration agendas made in 2019
The following changes were made to the CEO and Disclosed Executives’ payment agendas
for 2019:
• Four-year delay: The rescheduling and performance period for the performance rights
(excluding the CRO who receives deferred share rights) has been extended from three years
to four years. This provides an additional year for the performance rights to remain at risk
(subject to mauls) and for the performance hurdles to be measured.
• For the CRO: The number of deferred share rights presented will be resolute using the face
value (previously fair value),
The differing remuneration structure for the CRO is designed to preserve the independence of
the role and to minimise any conflicts of interest in carrying out the risk control function
across ANZ. As a result of these changes, 68% of variable remuneration (AVR plus LTVR)
for the CEO, 53% of VR for Disclosed Executives (other than the CRO) (Mitra, Tenhiälä &
Shaw, 2015).

41% of Valuable Remuneration for the CRO will be deferred for at least four years, noting
that this is in excess of the BEAR minimum deferral requirement of 60% for the CEO and
40% for Disclosed Executives (Tenhiälä & Laamanen, 2016).
Changes in the policies of disclosing the remuneration policies of the employees and other
top management authorities represent the fair treatment of the compensation and salaries in
the organisation. Fare and equal treatment in the organisation in form of working procedures
and compensation is essential (Tenhiälä & Laamanen, 2016). In Canada, the Wage mark
foundation is an non-profit organisation making efforts to create an international wage
standards with a wage ratio of 8:1 or lower than it. In Germany, a company with more than
2000 employees need to have a supervisory board to decide the wages ratio (Mitra, Tenhiälä
& Shaw, 2015). In the UK, the leader of the Jeremy Corbyn proposed a new wages law for
the ratio of 20:1 remuneration. The ex-president Barack Obama presented the United States, a
new act naming Dodd–Frank Wall Street Reform, Consumer Protection Act aimed to change
the rules of CEO remuneration and disclosure rules for the shareholders, and this act was
implemented in the year 2017.
Wages are right of the employees in the exchange of their services and disclosing the ratio to
the employees falls in the ethical and legal manner of the organisation, a fair treatment is
right of all employees and hidden clause may put question to the organisational policies.

References
Aguinis, H., Joo, H., & Gottfredson, R. (2013). What monetary rewards can and cannot do:
How to show employees the money. Business Horizons, 56(2), 241-249. doi:
10.1016/j.bushor.2012.11.007
Bunderson, J., & Thompson, J. (2009). The Call of the Wild: Zookeepers, Callings, and the
Double-edged Sword of Deeply Meaningful Work. Administrative Science
Quarterly, 54(1), 32-57. doi: 10.2189/asqu.2009.54.1.32
Kerr, S. (1975). On the Folly of Rewarding A, While Hoping for B. Academy Of
Management Journal, 18(4), 769-783. doi: 10.2307/255378
Marasi, S., & Bennett, R. (2016). Pay communication: Where do we go from here?. Human
Resource Management Review, 26(1), 50-58. doi: 10.1016/j.hrmr.2015.07.002
Mitra, A., Tenhiälä, A., & Shaw, J. (2015). Smallest Meaningful Pay Increases: Field Test,
Constructive Replication, and Extension. Human Resource Management, 55(1), 69-81.
doi: 10.1002/hrm.21712
Tenhiälä, A., & Laamanen, T. (2016). The Contingent Effects of Strategic Orientation and
Pay System Design on Firm Performance. Academy Of Management
Proceedings, 2016(1), 15599. doi:10.5465/ambpp.2016.15599abstract