A well-structured remuneration package is essential for attracting and retaining employees in today’s competitive workforce.
To create remuneration that motivates your employees to remain efficient, you need to balance market competitiveness, legalities, and financial sustainability. In this article we’ll cover types of remuneration, key considerations, and how to craft your remuneration structure.
What is Remuneration?
Remuneration refers to the total compensation an employee receives in exchange for their work. It includes both monetary and non-monetary factors.
Key Considerations for Remuneration
1. Compliance with Employment Laws
In New Zealand, there are a few employment laws that employers must adhere to. These laws include:
- Minimum Wage Act 1983 – All employees must earn (at least) the current legal minimum wage.
- Equal Pay Act 1972 – Maintaining gender pay equity.
- Holidays Act 2003 – Providing correct entitlements for annual leave, public holidays, and sick leave.
- KiwiSaver Act 2006 – Making employer contributions (typically 3%) for employees.
Complying with these laws is the first step in offering an attractive base salary/rate.
2. Competitive Benchmarking
To attract top talent, consider aligning salaries with existing industry standards. This includes:
- Reviewing salary surveys and guides from national organisations.
- Reviewing government and industry reports.
- Analysing competitors’ pay scales to ensure market alignment.
Having a data-driven starting point can help with comparison and contrast when crafting a remuneration package.
3. Base Pay and Incentives
An effective remuneration package includes:
Base Salary – A competitive fixed salary or hourly wage aligned with industry standards and a candidate/employee’s individual experience.
Performance-Based Incentives – Bonuses, commissions, or profit shares to drive productivity can also be implemented.
Stock Options or Equity – This is particularly useful in start-ups and high-growth businesses.
4. Non-Monetary Benefits
Competitive remuneration extends beyond salary, and includes:
Flexible Work Arrangements – Hybrid work models, compressed workweeks, or remote work options.
Health and Wellbeing Benefits – Private health insurance, gym memberships, and mental health support.
Learning and Development – Training, professional courses, and career progression opportunities.
Additional Leave Benefits – Paid parental leave, volunteer leave, or additional annual leave options.
5. Communicating and Reviewing Remuneration Strategies
A successful remuneration strategy requires transparency and regular review:
Clear Communication – Employees should understand how their pay is structured, and what factors influence salary progression.
Regular Pay Reviews – Annual or bi-annual evaluations to adjust salaries in response to market trends and employee performance.
Employee Feedback – Regularly gathering insights from employees about benefits and incentives, to enhance your strategy moving forward.
The Conclusion
In a competitive job market, remuneration strategies must be dynamic, competitive, and legally compliant.
By offering a mix of fair wages, performance incentives, and meaningful benefits, you can attract and retain top talent, while fostering a motivated and satisfied workforce. Additionally, regular benchmarking will ensure remuneration strategies remain effective and sustainable in the long term.
Need some Advice?
At People Associates, we develop effective, competitive remuneration structures. We’ll work closely with you to understand your company culture, values, and long-term goals, ensuring that your remuneration package is the right fit for your organisation and employees.
Want a free consultation?
Flick us a message here – or contact Lisa Oakley at lisa@peopleassociates.nz or on 027 573 5483.
For more amazing tips and insights – follow us! Instagram | LinkedIn | Facebook