“Thinking carefully through the methodology that is used is critical because the remuneration policy and implementation need to be defensible. It should further be noted that because there are so many factors involved, as well as the need to exercise judgement, that no formula can simply be applied. At the same time, remcos and reward professionals should be aware that the executives will, of course, be advocating metrics and criteria that would favour higher rewards for themselves. Remuneration policies and strategies need to be robust.
The following guiding principles should inform the remuneration strategy and its implementation:
- Tie pay as directly as possible to performance and value delivered to the company;
- Use market norms as much as possible, they are a valuable benchmark. However, as noted above, it is necessary to think deeply about what market norms to use in the context of the company’s business; and
- Impeccable governance is absolutely essential”.
Remuneration governance in SA on par with global standards: Mark Bussin, an executive committee member of the South African Reward Association and chairperson of 21st Century Pay Solutions, in BusinessLive on 17 October 2016 published by Business Day.