HRM3705/001/2022–2027

LESSON 03
Internal alignment
Contents Pages
3.1 Introduction 75
3.2 E-resources 76
3.3 Key concepts 76
3.4 Internal alignment 76
3.5 Achieving internal alignment 79
3.6 Consequences of a lack of internal alignment 88
3.7 Summary 89
3.8 Self-assessment 90
3.9 References 90

The mind map below will be repeated at the beginning of each workbook. The aim
of this mind map is to give you an indication of where you are in the process of
working through the study material. As indicated below, you are now busy with
lesson 03.

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In this lesson, I refer to chapter 2 in the prescribed book. You will also have to study some sections of
this lesson which are not available in the prescribed book. Use the lesson and the relevant chapters in
conjunction with each other. The study material for lesson 03 is illustrated as follows:

3.1 INTRODUCTION
An effective employee remuneration system must balance two factors, namely worker motivation and
labour costs. In designing an organisation’s remuneration plan, remuneration professionals should
consider both internal equity and external equity. In this lesson, you will be learning about the first step
that has to be carried out when designing a remuneration system, namely, internal alignment. The second
step, namely external equity (or external competitiveness), will be discussed in lesson 04.

I will start by introducing you to the concept of internal alignment. Once you understand what it is, you
will learn how organisations can ensure that their remuneration system is internally aligned. It is
imperative that pay within an organisation is fair as unfair pay decisions and relationships will result in an
unproductive and unprofitable organisation with unhappy and dissatisfied employees. As you have learnt
in lesson 01, internal alignment is the first building block in the remuneration framework as well as the
first step that is conducted when designing a remuneration system.

In chapter 2 of the prescribed book, read the introduction section.

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3.2 E-RESOURCES
Internet search/sources

The following additional sources are available should you wish to use them to
broaden your knowledge:

https://www.slideserve.com/jaclyn/defining-internal-alignment

https://www.youtube.com/watch?v=gyfQUduTB3Y

https://www.youtube.com/watch?v=enDer02UryY

https://www.youtube.com/watch?v=5ml7NX81ijg

If you have found other useful electronic sources that are not listed here, please
post the link on the appropriate discussion forum on the myUnisa page. In this way
we can all increase our learning scope.

3.3 KEY CONCEPTS

The key concepts for this lesson are as follows:

• internal alignment • job analysis • job description

• job evaluation • job hierarchy • job specification
• job structure

Please note that the terms “internal alignment”, “internal consistency” and
“internal equity” are often used interchangeably but they all mean the same
thing.

3.4 INTERNAL ALIGNMENT

We will start off by examining the concept of internal alignment more closely to enable you to gain a
better understanding of what it means. You will also learn how organisations determine internal
alignment.

In the study guide, study section 3.3, internal alignment.

In chapter 1 of the prescribed book, study the following section:

2.2 What is internal alignment?

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It should come as no surprise that different people earn different remuneration within the same
organisation. It is often a difficult task to determine these differences, but it is still a very important step
in creating a remuneration programme. Determining these differences is known as internal alignment.

Internal alignment deals with comparisons of rewards across different jobs within the same organisation.
It addresses the issue of the relative worth of, for example, an engineer versus an accountant working
for the same employer. Internal alignment pertains to the pay rates both for employees doing equal work
and for those doing dissimilar work (Newman et al, 2017). The whole issue of “income differentials” (in
terms of the Employment Equity Act [EEA]) is thus very relevant here. In short, internal alignment means
ensuring fairness in pay for employees working similar jobs (Kokemuller, 2021).

After you have studied the above-mentioned sections in your prescribed book and feel that you have
mastered the contents, you may continue to complete activities 3.1 and 3.2.

Activity 3.1

Read the following job advertisements and answer the question that follows:

Director: Internal audit Deputy director: Internal audit

Salary: R1 100 000 per annum Salary: R900 000 per annum

Duties: Conduct annual risk Duties: Document organisational

assessments. Develop annual internal processes or systems and controls.
audit plans and update internal audit Identify and assess risks. Develop
charter. Plan audit assignments audit or review procedures, perform
including development of audit/review audits and prepare internal audit
procedures and assign appropriate reports including recommendations
audit personnel. Review the work of for improvement in controls. Identify
subordinates and ensure that the assignment scope and implications.
review meets quality assurance Review the work of subordinates and
standards. Manage and facilitate staff ensure that the review meets quality
learning, training and development as assurance standards. Play a role in
well as provide clear guidance to staff training and development and
subordinate members of the audit provide clear guidance to subordinate
project or engagement team. Serve as members of the audit project or
a reliable communication channel engagement team. Serve as a reliable
between all stakeholders. Ensure work communication channel between all
is done on all internal audit stakeholders. Ensure work done on all
assignments and meets the applicable internal audit assignments meets the
International Standards for the applicable International Standards for
Professional Practice of Internal the Professional Practice of Internal
Auditing promulgated by the Institute of Auditing promulgated by the Institute
Internal Auditors. of Internal Auditors.

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 (1) Based on the above advertisement, would you say that internal alignment exists
in the organisation that advertised these positions? Give reasons for your
answer.

Feedback on activity 3.1

From the job advertisements you will have identified that there is internal alignment
in the organisation that advertised these positions. Internal alignment is based on
the pay relationships between different jobs in an organisation and the two
advertisements clearly illustrate a job structure that recognises differences in job
characteristics. Based on what you have learnt about internal alignment, you will
have realised that different position levels have different salary levels – these are
based on the job characteristics of a position. It is evident from the titles of the two
positions that the director position is on a higher level than the deputy director
position. Internal alignment exists within this organisation because the two positions
are remunerated differently – the director receives a higher salary. Although the
two positions are quite similar, there are differences in the duties that these
positions have to perform, with the director having more responsibility than the
deputy director – hence the difference in remuneration.

Activity 3.2

Given what you have learnt about internal alignment, answer the following
questions:

(1) Why is internal alignment so important for organisations and employees

alike?
(2) What are the potential consequences for organisations of having a
remuneration system that is not internally aligned?

In order to do this activity, go to the Discussion Forum tool on the HRM3705

myUnisa module site and access Forum 3: Lesson 03, Activity 3.2. Complete this
activity by sharing your answers with your fellow students online.

Although no formal marks will be allocated for your participation in this

activity, you should reap the benefits of participating by gaining a deeper
understanding of this aspect. Feedback on this activity will be provided on
the Discussion Forum once the activity has been completed.

Advantages of internal alignment in a remuneration plan

There are some advantages to considering internal alignment and these are briefly discussed below
(Kokemuller, 2021):

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• Perception of fairness. Organisational culture is an important strategic factor to business success.

If an organisation wants to develop and maintain a culture of fairness, they need to factor in internal
alignment. If employees look at others in similar jobs and see equal pay, they will like the
organisation and consider its leaders as fair.
• Reduces exposure to discrimination. An emphasis on internal alignment offers protection
against discrimination lawsuits. If an organisation pays different wages to employees in the same
role, they run the risk that one is a member of a protected class and sues for wage discrimination.
As discussed in lesson 02, the EEA aims to achieve equity in the workplace by promoting equal
opportunity and fair treatment in employment through the elimination of unfair discrimination. By
ensuring internal alignment, an organisation mitigates this risk.
• Consistent standards. When an organisation pays employees on a consistent scale, they can
maintain consistent performance standards. When conducting a job analysis and developing a job
description, an organisation establishes the abilities, duties and responsibilities required for a
position that earns a certain amount of pay. If one employee falls short of the standards and
production of colleagues, you have more tangible justification for a demotion or termination. By
paying fairly, an organisation limits the worker’s ability to claim unfair treatment or limits their lack
of motivation for poor performance.
• Team structure. Internal alignment is particularly important in an organisation built on a team
structure. Members of a work team can more effortlessly work together when they earn similar
remuneration as peers. Equitable remuneration protects against a natural barrier that can hinder
cohesiveness in a work team.

REFLECTION

After studying the relevant sections on internal alignment in your prescribed book
and after completing activities 3.1 and 3.2, you will have realised just how important
internal alignment is. How would you feel if you found out that your colleague
working next to you and performing the same job was earning more than you? If
organisations are faced with such questions, they need to be able to answer them
and, hence, the importance of conducting sound HR practices such as job analysis
and job evaluation when determining internal alignment. I am also sure that you
can see how internal alignment contributes to the objectives of remuneration.
Organisations will not be able to attract, retain or motivate employees if their
remuneration practices are not fair or perceived as fair by employees.

Once you have completed this section, you can move on to section 3.4 where we will discuss how internal
alignment is achieved. You should now be familiar with the concept “internal alignment”. Our discussion
will now focus on how to achieve internal alignment.

3.5 ACHIEVING INTERNAL ALIGNMENT

To achieve internal alignment, an organisation’s employees must believe that all jobs are paid what they
are “worth”. In other words, they must be confident that the organisation’s pay rates reflect the overall
importance of each person’s job to the success of the organisation. Because some jobs afford a greater
opportunity than others to contribute, those holding such jobs should receive greater pay. Internally
aligned pay systems clearly define the relative value of each job compared to all other jobs in an

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organisation. This ordered set of jobs represents the job structure or job hierarchy that: (a) supports
organisation strategy; (b) supports the workflow; and (c) motivates the behaviour of employees. Deciding
how much to pay employees at different levels thus creates a pay structure (Coetzee, Bezuidenhout,
Furtak & Lee, 2016).

In the study guide, study section 3.4, achieving internal alignment.

In chapter 2 of the prescribed book, study guide the following section:

2.3 Achieving internal alignment

There are two ways in which internal alignment can be achieved, namely by means of job analysis and
job evaluation. First, I will discuss job analysis, followed by a discussion on job evaluation. It should be
noted that the discussion will focus on how job analysis and job evaluation fit into the remuneration
context and not within HRM in general.

3.5.1 Job analysis

Have you noticed that job analysis examines all the tasks and sequences of tasks necessary to perform
the job? It also looks at the knowledge and skills needed for the position. One could say that job analysis
measures the effectiveness of the job and the contribution of the job to the organisation; thus, depicting
the job’s worth. Job analysis provides an objective picture of the job, not the person – performing the job,
and as such, providing fundamental information to support all subsequent and related HR activities.

Why is job analysis important?

Job analysis forms the cornerstone of all other HR functions and the information obtained from this
analysis forms the basis of several interrelated HR management activities. An internal structure based
on job-related information provides both managers and employees with a work-related rationale for pay
differences. Employees who understand this rationale can see where their work fits into the bigger picture
and can direct their behaviour toward organisational objectives. Job analysis data also help managers
defend their pay decisions when challenged. If jobs have equal content, then in all likelihood the pay
established for them will be equal (unless they are in different locations). If, on the other hand, the job
content differs, then the differences, along with the market rates paid by competitors, are part of the
rationale for paying jobs differently (Newman et al, 2017). While job analysis alone does not offer absolute
protection against discriminatory and unfair treatment in the workplace, it is a key part of designing HR
systems that can stand up to legal challenges (Painter, 2016).

Legal considerations for job analysis

Competition and equal employment opportunity legislation have made job analysis a mandatory
consideration in all organisations. The myriad of laws, guidelines and court decisions concerning equal
employment opportunities also makes job analysis necessary. One way to protect businesses against
legal issues related to unfair labour practice is to conduct job analysis and prepare job descriptions.
Conducting a job analysis increases the chance that employment decisions will be based solely on
pertinent job requirements. The EEA indicates that organisations must justify pay differences between
men and women who perform equal work. Different job titles are not an adequate form of justification.

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Instead, organisations must demonstrate substantive differences in job functions. Job analysis helps HR
professionals to decide whether substantive differences exist between job functions.

Care should be taken that job descriptions do not discriminate against people with disabilities. What is
important is that as long as the disabled employee can perform the essential functions of a job with
reasonable accommodation, organisations should not discriminate against these employees by paying
them less than other employees performing the same job. HR professionals use job analysis to define
essential job functions systematically. The steps in the job analysis process are standard but the targeted
outcomes are informed by the need for fairness, inclusion and opportunities for people with disabilities.
Remember, job analysis is about the JOB and NOT the person!

Once you have worked through this section in the prescribed book and understand what job analysis
entails, you may complete the activity below.

Activity 3.3

(1) Define the process of job analysis and identify the information that can be
obtained from conducting job analysis.

(2) Discuss the importance of job analysis within the remuneration environment.

(3) What is the legal consideration for conducting job analysis?

Feedback on activity 3.3

(1) Job analysis is defined as a systematic way to gather and analyse

information about the content, context and the human requirements
of a job. Information that can be obtained from job analysis is for
example the knowledge, skills, abilities and qualifications required to
perform a job. Other information is that a job description provides
specific detail about the position such as the job title, the salary
range and the section or department the job fits into.

(2) The importance of job analysis within the remuneration context is

that it provides both managers and employees with a work-related
rationale for pay differences. Job analysis data also help managers
defend their pay decisions when challenged. If jobs have equal
content, the remuneration of these jobs should also be equal.

(3) It provides an organisation with a defensible mechanism as to why

there may be pay differences within the organisation. Job analysis
helps HR professionals to decide whether substantive differences
exist between job functions. Job analysis provides an objective
picture of the job, not the person – performing the job, and as such,
providing fundamental information to support all subsequent and
related HR activities.

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As you will note from the prescribed book in figure 2.2, the job specification and job description are the
end products of the job analysis process. As can be clearly seen from the discussion in the prescribed
book, a job description is a detailed summary of the tasks, duties and responsibilities of the job
concerned. A job specification, on the other hand, indicates the type of person to be appointed
(qualifications and experience). Information on both the job description and job specification is generally
used in the recruitment advertisement. There are, however, a few do’s and don’ts that need to be
considered in compiling a job description. For more information regarding the do’s and don’ts in compiling
a job description, click on the web links below.

https://www.inspiringinterns.com/blog/2019/01/dos-donts-of-writing-captivating-
job-specifications-advice-for-employers/

https://hrdailyadvisor.blr.com/2009/02/02/8-do-s-and-don-ts-for-job-descriptions-
in-09/

https://www.theoverturegroup.com/blog/the-dos-and-donts-of-writing-an-
effective-job-description/

If you have found other useful electronic sources that are not listed here, please
post the link on the appropriate discussion forum on the myUnisa page. In this way
we can all increase our learning scope.

What data gathering methods can be used to collect job analysis information?

It is the HR manager’s task to determine the most suitable method for his or her organisation. The data-
gathering method to be used, depends on the organisation’s unique needs and circumstances. As you
will note from the prescribed book, there are several job analysis methods that can be used. Figure 3.1
summarises these methods.

Interviews Observation

Employee
Structured
diary and
questionnaires Job logs
analysis
methods

Figure 3.1: Job analysis methods

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Have you noticed that there are a variety of methods available to collect information about a job? The
most general methods include a site observation, interviews, questionnaires and diaries. Do you
understand what each method entails? If so, continue with activity 3.4. If you are unsure why these
methods are used in job analysis, refer back to section 2.3.1.1 in the prescribed book. It is important that
you understand each method, because as a remuneration professional you need to apply these methods
to collect information about the different jobs in your organisation. Now that you have a good
understanding of the different data gathering methods, complete the following activity.

Activity 3.4

Assume that you are employed as the HR manager at a large financial institution in
South Africa. You and your team of HR experts are in the process of conducting a job
analysis of the following positions:

• cleaning lady
• receptionist
• accountant
• financial manager

Which of the above-mentioned job analysis methods would you use to collect
information about the jobs? Motivate your answer.

Feedback on activity 3.4

There are definite advantages and disadvantages associated with each job
analysis method. You should use the method that is best suited to the different jobs
in the organisation.

You can also consult the sources at the links below to understand why some methods are more suitable
for some positions than others.

https://www.scribd.com/doc/35609661/Advantages-and-Disadvantages-of-Job-
Analysis-Methods

https://www.yourarticlelibrary.com/social-research/data-collection/advantages-
and-limitations-observation-method-for-data-collection/64507

https://blog.careerminds.com/job-analysis-methods

Activity 3.5

(1) Job analysis has been considered the cornerstone of human resources
management. Precisely how does it support managers making pay decisions?
(2) What does job analysis have to do with internal alignment?
(3) Distinguish between the different job analysis methods.

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 In order to do this activity, go to the Discussion Forum tool on the HRM3705
myUnisa module site and access Forum 3: Lesson 03, Activity 3.5. Complete
this activity by sharing your answers with your fellow students online.

Although no formal marks will be allocated for your participation in this

activity, you should reap the benefits of participating by gaining a deeper
understanding of this aspect. Feedback on this activity will be provided on
the Discussion Forum once the activity has been completed.

After the job analysis has been carried out, the next step is to conduct a job evaluation. The job evaluation
will result in a job hierarchy which will then form the basis of a pay structure.

Before we start, consult the sources at the links below to understand what job evaluation entails.

HR basics: job evaluation: https://www.youtube.com/watch?v=Jjgy67XI4V0

Job evaluation: https://www.youtube.com/watch?v=IMNyyIO-85k

What is job evaluation? https://www.youtube.com/watch?v=Ybhoe2A8uZE

3.5.2 Job evaluation

Job evaluation can be defined as a process whereby jobs are placed in a rank order according to overall
demands placed upon the job holder. It refers to the techniques used by organisations to establish the
internal alignment of jobs within an organisation. Important to note is that job evaluation is conducted on
the job itself, as opposed to looking at the person who holds the job (Carbery & Cross, 2019). The primary
purpose of a job evaluation is to establish a job hierarchy to which an equitable pay structure can be
attached. If done properly, the hierarchy should be felt fair. A well-conceived and constantly applied job
evaluation system provides strong defence against legal challenges to pay practices (Carbery & Cross,
2019). Figure 3.2 illustrates the job evaluation process.

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Job evaluation Job analysed

Job descriptions written

Factors identified:
Weighting/ Salary • skill
job value structure • effort
• responsibility

Salary of Jobs evaluated

employee Job structure developed

Pay rates assigned

Figure 3.2: Job evaluation process

Source: Cotter (2015)

Once you have worked through this section in the prescribed book and understand what job evaluation
entails, you may complete the activity below.

Activity 3.6

(1) Define the process of job evaluation and indicate why pay inequalities are
eliminated through job evaluation.

(2) Discuss how job evaluation contributes to internal alignment.

(3) Why is it important to “get job evaluation right”?

Feedback on activity 3.6

(1) Job evaluation is a systematic process for assessing the relative value of the
job in relation to other roles in an organisation. Since jobs are placed in a
hierarchy, the difficulty, value and importance of each job enable employees to
understand how jobs relate to one another and why certain jobs are paid more
or less than others. Since pay is based on a rational and legally defensible
structure, pay inequalities are eliminated.

(2) There are various ways through which job evaluation contributes to internal
alignment. One of the key criteria in the evaluation is the added value of the job

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 to the organisation. Based on this evaluation, the job is added to the job
structure. The resulting structure ensures pay transparency and equity between
gender and minorities. Differences in the rates paid for different jobs and skills
influence how fairly employees believe they are being treated. Job evaluation
minimises subjectivity and enables rational, consistent, and transparent
decisions to be made about roles. Information and facts about the job are all
evaluated in the same way within established parameters. Decision making is
grounded in facts, the system is designed to be logical and there is a consistent
methodology. Transparency is achieved because employees and managers
know and understand how decisions are made.

(3) If applied correctly, using a non-discriminatory analytical job evaluation scheme

to evaluate roles across the organisation is an automatic defence against equal
pay claims. Organisations just need to ensure that their job evaluation system is
up to date, and it does not perpetuate gender bias – there are still systems which
over-emphasise the working environment, for example, or use loaded language
in their descriptors. Having a decent job evaluation system in place means an
organisation can understand and evaluate its existing workforce in the context
of new challenges and the wider business aims and goals, ensuring it is done in
an equitable, fair, and consistent manner.

Refer to “remuneration in practice 2.2” in the prescribed book for more

explanations regarding this matter.

What are the job evaluation methods?

As you will note from the discussion in the prescribed book, there are primarily four methods of job
evaluation: (1) ranking; (2) classification; (3) the factor comparison method; and (4) the point method.
While many variations of these methods exist in practice, the four basic approaches are described here.
An organisation usually chooses one of these methods and modifies it to provide for its particular needs.

Before we continue, consult the sources at the links below to understand the different job evaluation
methods.

https://hr-guide.com/JobEvaluation/Job_Evaluation_Factor_Comparison.htm

https://hr-guide.com/JobEvaluation/Job_Evaluation_Classification.htm

http://www.whatishumanresource.com/Quantitative-methods-of-job-evaluation

Reflection activity 3.7

What are the main strengths and weaknesses of analytical and non-analytical
methods of job evaluation? Find out what your organisation or one with which
you are familiar with had adopted, and critically review its applicability in the
current context.

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In order to do this activity, go to the Discussion Forum tool on the HRM3705

myUnisa module site and access Forum 3: Lesson 03, Reflection activity 3.7.
Complete this activity by sharing your answers with your fellow students online
and study the answers of other students.

Now that you have studied the relevant sections on the various job evaluation methods, you can apply
what you have learnt in the following activity.

Activity 3.8

Read the following case study and, based on what you have learnt, answer
the questions that follow.

Classique Pharmaceuticals
|
Managing director
Thandi Ngwenya
|
Planning and marketing manager
Thabo Molefe

“The purpose behind the job evaluation system is to ensure equity,

alignment and fairness in the pay rates at Classique Pharmaceuticals”,
explains Thandi Ngwenya. “I understand all of that, Ms Ngwenya”,
protests Thabo, “but Johan is the best chemist in the country. We now
have an opportunity to get him to work for us. We need to offer him an
attractive salary. We need to do something in order to re-evaluate the
position of chemist.”

Thandi speaks firmly. “Look Thabo, the grade for chemists is grade C;
only managers from grade D upwards get a company car. Can you
imagine what would happen? I’ll have the other chemists demanding
cars as well. You were part of the job evaluation panel, you concurred
with the evaluation, and now you want the job to be pushed to grade D.
I have a major problem with that – I do not want the system
manipulated.” Thabo, however, is determined. “Employing Johan would
be in the interests of the business, Ms Ngewnya. We cannot afford to
lose a resource of that calibre. There must be a way that we can get
around this problem.”

“'I’m sorry, I don’t know of any way. If you can think of one, come and
tell me, but I doubt that you will.” Thabo Molefe can see that Thandi
Ngwenya is in no mood to argue any further.

(1) If Thabo were to employ Johan as a chemist on a grade D position,

would the chemist position still be internally aligned?
(2) What could be the potential consequences of employing Johan on a
grade D position?
(3) Why is conducting job evaluation so important for internal
alignment?

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 Feedback on activity 3.8

(1) If Thabo were to employ Johan as a chemist in a grade D position, the

chemist position would no longer be internally aligned as the grade for
chemists is grade C.

(2) Employing Johan on a grade D position would result in pay inequities

at Classique Pharmaceuticals. The other chemists would also need to
be placed on a grade D position otherwise the result could be
dissatisfaction, low morale and turnover.

(3) Job evaluation is a way of systematically assessing the value of

individual jobs objectively while avoiding prejudice or discrimination.
The purpose of job evaluation is to achieve and maintain an equitable
distribution of pay according to level or position. As indicated in the case
study: “The purpose behind the job evaluation system is to ensure
equity, alignment, and fairness in the pay rates at Classique
Pharmaceuticals”. Job evaluation grades the job and NOT the person.
Even if Johan is the best chemist in the country, Classique
Pharmaceuticals will have to think of other ways to attract and retain
him such as non-financial perks and benefits.

You should now have a good understanding of how organisations determine internal alignment. In the
next section, you will learn about the consequences of a lack of internal alignment.

3.6 CONSEQUENCES OF A LACK OF INTERNAL ALIGNMENT

In the introductory section of this lesson, it was mentioned that it is important for organisations to ensure
that their remuneration structure is fair. Unfair pay decisions and relationships will result in several
negative consequences such as an unproductive and unprofitable organisation with unhappy and
dissatisfied employees.

In the study guide, study section 3.6, consequences of a lack of internal

alignment.

In chapter 2 of the prescribed book, study the following section:

2.4 Consequences of a lack of internal alignment

As you will note from the discussion in the prescribed book, internal inequity results in consequences
such as a reduction in work effort, reduced productivity, a decline in work quality, low morale, poor
cooperation, increased absenteeism and high staff turnover.

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Activity 3.9

Go back to lesson 01 where you have learned about the remuneration objectives
(refer to figure 1.5 in the prescribed book). Identify the objectives that will be
impacted by a lack of internal alignment in an organisation. Provide reasons for
your answer.

Feedback on activity 3.9

A lack of internal alignment will have an impact on the objective of employee

retention as employees will most likely start looking for other work and an
organisation will be unable to retain dissatisfied employees. Employee
motivation will also be impacted, and employees will most likely be less
committed to their work and this will impact their engagement and productivity.
An organisation will also not be complying with labour legislation, specifically the
Employment Equity Act (55 of 1998) which regulates income differentials and
specifies that equal remuneration must be provided for work of equal value.

Reflection activity

Reflect on what you have learnt from this lesson.

(1) Make a list of at least five key terms in this lesson that you think are essential
to remember.

(2) Describe the most interesting knowledge that you acquired from this lesson.
Why was this so interesting?

(3) Describe the most difficult knowledge you acquired from this lesson. What
did you do to ensure that you understood what you had learnt?

In order to do this activity, go to the Discussion Forum tool on the HRM3705

myUnisa module site and access Forum 3: Lesson 03, Reflection activity.
Complete this activity by sharing your answers with your fellow students online
and study the answers of other students. Was there anyone else who struggled
with the same material? What did that student do to help himself/herself to
understand the work? Was the same information interesting to other students?

3.7 SUMMARY
In this lesson, you were introduced to the first step that needs to be conducted when developing a
remuneration system, namely, internal alignment. You learnt about what internal alignment is and how
organisations can determine internal alignment. You will recall from the remuneration framework in figure
1.5 that there are many steps that must be conducted when developing a remuneration system. Now that

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you have learnt about internal alignment, I will move on to the next step which is called external
competitiveness. You will be learning about external competitiveness in the next lesson.

3.8 SELF-ASSESSMENT
You will recall that in the preface I mentioned that I will be following a different
approach in this module. Self-assessment questions will therefore appear at the end
of each topic and not at the end of each lesson. The purpose of this is to facilitate
an integrated assessment approach which will enable you to gain a better
understanding of how the theory in all the topics fits together. Self-assessment
questions on topic 2 will appear after lesson 05. The self-assessment questions will
cover the theory you have learnt in lesson 03, 04 and 05.

Now that you have successfully completed lesson 03 and all the activities, you
can go on to lesson 04.

3.9 REFERENCES
Carbery, R & Cross, C. 2019. Human resource management. A concise introduction. London: Red Globe
Press.

Cotter, C. 2015. Job evaluation and grading – process and systems [online]. Available from
https://www.slideshare.net/CharlesCotter/job-evaluation-and-grading-process-and-systems [accessed
11 March 2021].

Coetzee, M, Bezuidenhout, ML, Furtak, A & Lee, J. 2020. Remuneration management: A South African
perspective. 2nd edition. Moreleta Ridge, Pretoria: Frontline Books.

Kokemuller, N. 2021. The advantages of internal equity in a compensation plan. Hearst Newspapers,
LLC [online]. Available from https://smallbusiness.chron.com/important-traits-leadership-emotional-
intelligence-81165.html [accessed 10 March 2021].

Newman, JM Gerhart, B & Milkovich, GT. 2017. Compensation. 12th edition. United States of America:
McGraw Hill Education.

Painter, K. 2016. HR challenges: 3 tips for avoiding employment law issues [online]. Available from
https://www.eskill.com/blog/avoid-employment-law-issues/ [accessed 10 March 2021].

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