Remuneration strategy is the strategy that aims at recruiting right people with correct combination of skills so as to ensure the organization is able to meet its objectives. In order for a company to achieve a good remuneration strategy they need to balance the following thing: The values as well as needs of an organization, aspirations and needs of employees, inside connection between positions and roles and outside market proficiency needed and lastly importance of the positions
This case study is based in Malaysia in order to assess four multination chemical industries so as to find out if the remuneration strategy applied is cohesive with global ways. Another focus was to find out if globalised foreign owned Multinational companies in Malaysia are more likely to support their remuneration policies with global trends fairly than with the ways used by locally owned multinational companies. The name of this case study is Research and Practice in Human Resource Management, June, 2008 by Hooi Lai Wan.
Remuneration strategy used by MNC’s in Malaysia are such as cash compensation which can be referred to essential or basic pay, housing and survival allowances, other miscellaneous allowances such as living cost allowance, exceptional and motivation or incentive payments as well as bonuses just a few to mention. When looking at the four companies from the case study the results show that, all the four companies’ emphasis on pay for performance as well as provision of better gains or benefits.
Referring to (Mc Adams, 1988) the findings show the same results as the four companies. In this particular remuneration strategy the employers focus on the competence of the employees to achieve the companies’ goals or objectives at the end of the year and not seniority. The other remuneration strategy used by these companies is incentives of employees. These companies tend to put more emphasis on this strategy . This is possible due to the fact that it provides great productive benefits as well as to attract workers satisfaction (Kaufman 1992, et al 1996).
Examples of incentives that are offered by these companies are living cost, gas, laundry, food, coverage of shift etc. Contribution to employee provident fund is the strategy whereby ,the findings show that all companies except one show that their contribution is based on higher percentage for those employees who has work for the companies for many years therefore the higher number of years an employee work for the company the higher percentage on payments.
Overtime can be referred to the extra time that workers continue to work after the normal or proposed hours. When looking at overtime, only one company tend to offer more payments than the one put by law where as the rest do offer the normal payment for overtime put by law, but it’s possible that the employees may not start seeing salary increases as well as bonus payments sooner compared to past years.
Effectiveness of remuneration strategy used by the companies are, firstly it’s, provision of better heath care whereby due to the healthcare policies applied by these companies through remuneration strategy, they are able to provide a reasonably good health care scheme to all the employees, and they still put more emphasis in giving even best health benefits to all the employees so as to avoid having unproductive employees.
Secondly, it’s appropriate strategies, whereby Remuneration strategy has succeeded to apply appropriate strategy for their companies as a result they are able to put strategies according to specific objectives of the companies as well as the context in which they operate. For example the specific strategy put for the old workers meaning workers who have been working for them for many years get a very attractive compensation package for them so as to retain them but also to the rest of the employees as well.
Not only that but also getting it right, as we can see, the companies have been able to get the correct ways or means of applying remuneration strategy as a result they are able to achieve their objectives as well as maintenance of the companies. If this was not done they would not be able to achieve their goals. For example, the learn , unlearn and relearn strategy where by all employees are suppose to continue learning, unlearning as well as relearning so as to get the job done in the most qualifies means.
In conclusion, when looking at the four companies we can conclude that, all the companies’ determination of initial pay is reliant on related issues. Their descriptions are possibly to be revealed as such as lowest qualifications academically, appropriate working skills, rate of entry job position as well as market. When you look at other companies, you will find out that, the very last drawn pay is taken into thoughts.
Possible applicants can discuss for the starting pay, but it is usually in the pay scope considering the grade of job that she or he enters. As a result, applicants applying for works that are in demand are capable to talk for a better remuneration package. Some workers tend to look upon the value of qualifications in the determination of their pay and having spent time and money obtaining an extra qualification, workers feels necessary that they have to be given an advanced remuneration.
So many employees have opted for self progress, and for those companies that would not identify this situation are possibly to lose even more trained workers to their competitors. Adding up, for those employees with more appropriate job familiarity and advanced responsibilities anticipate for better payments.