Human Resource
Management
(Lesson 7 - Employee
Performance, Reviewing
and Rewarding
Contributions)
COHRA3
Disclaimer
Please note that content made available on myLMS may deviate
only slightly from what is covered in lecturer-led sessions,
however, the content uploaded to myLMS represents all the
material that you need to refer to in preparation for your
assessments.
Eduvos and the Flipped Classroom
1 2 3
Before this lecturer-led session During this lecturer-led session After this lecturer-led session
At home, in your self-study time, you During your lecturer-led session(s), you will Depending on how difficult this lecturer-led
worked through myLMS content to prepare engage with your peers and lecturer in session is, your lecturer may recommend
you for this lecturer-led session. You have active learning. I.e. you will have an some concepts to revise for this week's
completed any practice activities and opportunity to ask your questions, to learning opportunities. Then you will focus
prepared any questions you may still have debate topics, and to practice working on the following learning opportunities on
on the content. The lecturer-led session will through the technical aspects of what you myLMS in your self-study time to prepare
not be a traditional lecture. learnt at home. You will be exposed to for the next lecturer-led session(s).
higher-order thinking activities. Your
lecturer will guide you on what to prepare
before attending your next session.
3
What will be covered in the rest of today’s
session?
What will be covered in the lecture-led session:
• What is performance within the remuneration context?
• Pay-for-performance
• Establishing a pay-for-performance culture
• Types of pay-for-performance plans
• Competency related pay
• Skills-based pay
Performance within the
remuneration context
• Employees contribute differently to organizations, so remuneration and incentives
should be tailored to individual needs.
• A key challenge is effectively using remuneration to motivate employees.
• Performance management can offer non-financial rewards like:
• Recognition
• Skill development opportunities
• Career guidance
• These non-financial rewards can boost employee engagement and influence behavior.
• Many organizations use performance-related pay systems to utilize pay as a
motivational tool.
Pay for performance
• Pay for performance is a form of direct pay linked to the performance of an individual
team or all employees when pre-defined objectives are achieved.
• Known as incentive pay or variable pay
• Forms part of direct remuneration and is categorized as variable pay
• PFP differs from other forms of remuneration, in that it represents an additional
rewards for exceptional efforts aimed at attaining organization goals
• PFP plans can also be categorized according to the period linked with measuring and
rewarding performance ( short term or long term)
• PFP plans can be categorized according to the type of rewards (cash, equity or
recognition)
Pay for performance
• Individual incentive
• Team incentive
• Year end bonus
• Spot bonus
• Stock options
• Hiring bonus
• Commission
• Retention bonus
• Project bonus
• Profit-sharing
Pay for performance
• Reasons
• Increase the organization competitiveness in the labour market
• Stimulate individual, team or organization performance by making variable pay reliant
on agreed goals or work outcomes
• Recognize and reward extraordinary performance
• Share some of the wealth created in the organization
• Drive organization strategy
• Encourage employee identification with the organization objective and values
• Control fixed remuneration costs by putting a portion of pay at risk if certain agreed
objectives are not achieved
Pay for performance as a
motivator
• PFP serves as a motivator if employees have a clear line of sight.
• The Expectancy theory suggest that people are motivated only when they believe their efforts
will results in higher performance and that this higher performance will result in a rewards.
• Line of sight refers to the extent to which employees can see a clear connection between
behaviour and rewards
• Effort Performance Results Measure Payout
Linking Performance to pay
• Link individual performance goals to organisation goals
• Analyse jobs
• Provide communication and feedback
• Differentiate between levels of performance
Design a pay for performance
plan
Efficiency – needs to address the criteria of structure, strategy and standards
Fairness – PFP plan should be fair to all employees procedurally and distributive.
Compliance – plan must comply with all relevant labour legislation and organisation policies
Establishing a pay-for-
performance culture
Organisations must assess whether their culture is supportive of Pay-for-Performance (PFP).
Organisational culture encompasses shared values and typical behaviours within the workplace.
Supervisors are key intermediaries between management and employees and must treat staff fairly.
An effective performance evaluation system is essential, requiring supervisors to have sufficient
time and tools to regularly monitor and document employee performance.
Adequate funding is necessary to meaningfully differentiate between levels of employee
performance.
Fairness is crucial; systems should include checks and balances to ensure poor performance is
managed with appropriate discretion and judgement.
Ongoing evaluation of the PFP system is needed to ensure it achieves its objectives in a fair and
cost-effective manner.
Types of pay for performance
plans
Individual pay for performance plans
Individual PFP plans
Merit pay
Piece-rate plans
Standard hour plans
Commission
Individual bonuses
Types of pay for performance
plans
Group pay for performance plans
With team based PFP plans
Work/process teams
Parallel teams
Project teams
Gainsharing plans
Types of pay for performance
plans
Organisation-wide pay-for performance plans
Profit sharing plans
Employee stock options
Suggestion systems
Competency Based Pay
(CBP)
• Competency based pay rewards employees for their skills and knowledge and not according to the job or
position they hold.
• Focuses more on what employees can achieve as opposed to skills
• Employees receive financial remuneration rewards in the form of increases to their base pay based on
the level of competence they demonstrate in carrying out their duties
• CBP is suitable in organization where:
• There is an over emphasis on output
• A fit with performance appraisal is required and
• A culture change towards greater flexibility is sought
Questions for Discussion
Competency related pay (CBP)
After revising the relevant content in your textbook, discuss and answer the following
questions:
• How might rewarding potential through CBP, rather than current skills or roles, reshape employee
motivation and career planning?
• What challenges could arise in fairly assessing competencies across diverse roles and
departments within an organization?
• In what ways can a well-established competency framework influence the success of CBP
implementation?
• Can CBP support meaningful cultural change in an organization aiming for greater flexibility, and
if so, how?
• What risks might organizations face when shifting from output-based rewards to competency-
based rewards?
• How does integrating CBP with performance appraisals enhance or complicate the evaluation
process?
Skill-based pay (SBP)
• Skills-Based Pay (SBP), or ‘pay for skills’, rewards employees for acquiring new, job-related
skills.
• The system encourages employees to be proactive in skill development by offering financial
incentives.
• Pay increases are typically linked to three types of skills:
• Horizontal skills – expanding the range of tasks an employee can perform.
• Vertical skills – gaining higher-level or more complex skills.
• Depth skills – developing specialized expertise within the same job area.
Eduvos and the Flipped Classroom
1 2 3
Before this lecturer-led session During this lecturer-led session After this lecturer-led session
At home, in your self-study time, you During your lecturer-led session(s), you will Depending on how difficult this lecturer-led
worked through myLMS content to prepare engage with your peers and lecturer in session is, your lecturer may recommend
you for this lecturer-led session. You have active learning. I.e. you will have an some concepts to revise for this week's
completed any practice activities and opportunity to ask your questions, to learning opportunities. Then you will focus
prepared any questions you may still have debate topics, and to practice working on the following learning opportunities on
on the content. The lecturer-led session will through the technical aspects of what you myLMS in your self-study time to prepare
not be a traditional lecture. learnt at home. You will be exposed to for the next lecturer-led session(s).
higher-order thinking activities. Your
lecturer will guide you on what to prepare
before attending your next session.
What Happens Next?
Week 4 (Lesson 8)
Explaining Employee Benefits
Human Resource
Management
(Lesson 8 – Employee
Benefits)
COHRA3
Disclaimer
Please note that content made available on myLMS may deviate
only slightly from what is covered in lecturer-led sessions,
however, the content uploaded to myLMS represents all the
material that you need to refer to in preparation for your
assessments.
Eduvos and the Flipped Classroom
1 2 3
Before this lecturer-led session During this lecturer-led session After this lecturer-led session
At home, in your self-study time, you During your lecturer-led session(s), you will Depending on how difficult this lecturer-led
worked through myLMS content to prepare engage with your peers and lecturer in session is, your lecturer may recommend
you for this lecturer-led session. You have active learning. I.e. you will have an some concepts to revise for this week's
completed any practice activities and opportunity to ask your questions, to learning opportunities. Then you will focus
prepared any questions you may still have debate topics, and to practice working on the following learning opportunities on
on the content. The lecturer-led session will through the technical aspects of what you myLMS in your self-study time to prepare
not be a traditional lecture. learnt at home. You will be exposed to for the next lecturer-led session(s).
higher-order thinking activities. Your
lecturer will guide you on what to prepare
before attending your next session.
23
What will be covered in the rest of today’s
session?
What will be covered in the lecture-led session:
• The purpose of providing employee benefits
• Types of employee benefits
• Designing an employee benefit plan
• Implementation and administration of an employee benefit plan
Introduction
• Structuring an employee benefit plan is a complex task for organisations.
• The plan must cater to the diverse needs and preferences of the workforce.
• Recognising that employees value different types of benefits is essential.
• The chapter covers:
• Types of employee benefits
• Design of benefit programmes
• Administration and implementation of benefits
Purpose of providing
employee benefits
• Employee benefits are part of the total remuneration package, alongside salary, incentives, and
allowances.
• They serve as a form of reward to support employee well-being and job satisfaction.
• A survey identified the top ten employee benefits as:
• Wellness programmes
• Flexible work arrangements
• Health insurance benefits
• Paid time off
• Mental health benefits
• Family-friendly benefits
• Professional development opportunities
• Student-loan assistance
• Pet-friendly workplace benefits
• Social responsibility initiatives
Types of employees benefits
• Legally required benefits
• UIF
• Compensation for Occupational Injuries and Diseases
• Skills Development
• Paid Time off
• Discretionary benefits
• Protection programmes
• Paid off time
• Services
• Other benefits
• Flexible benefits
• Core benefits
• Optional benefits
Activity: Jigsaw
Objective:
To obtain an understanding of the types of employee benefits
Instructions:
1. Divide the group into “home groups” (3 people works well).
Breakout rooms in Teams make this simple even if
everyone is remote.
2. Assign each person in the group a different topic to
explore (legally required benefits, discretionary benefits &
flexible benefits) – they’ll regroup to work with
all the students from the other groups who are
exploring the same idea.
3. Once they’ve mastered the concept, students return
to their home group and everyone shares newfound
expertise.
Problem-Based Learning
Designing an employee benefit plan
Scenario:
You are the new remuneration specialist at a mid-sized tech company aiming to update its
employee benefit plan. The company wants to improve retention, enhance its employer
brand, and align the plan with its innovative, flexible culture.
Task:
Using the factors and principles outlined in Coetzee et al. (2020:136–141), answer the
following:
Part A: Decision-Making Questions
Answer the following questions based on the scenario:
1. Which employer factors should you consider before designing the benefit
plan? List at least three.
Problem-Based Learning
Designing an employee benefit plan
(continue)
Part A: Decision-Making Questions
Answer the following questions based on the scenario:
2, Which employee factors might be particularly important in a tech company
environment?
3. How can the benefit plan be aligned with the organisation's remuneration
strategy and culture?
4. What steps would you take to ensure your benefit plan helps position the
company as an “employer of choice”?
5. Name one way to manage costs while still offering attractive benefits.
6. How would you ensure your plan remains legally compliant?
Problem-Based Learning
Designing an employee benefit plan
(continue)
Part B: Quick Design Proposal
Write a brief (3–4 bullet points) benefit plan concept based on your answers. For example:
• Flexible working hours and remote work support
• Contribution to personal learning and development platforms
• Private medical aid and mental health days
• Profit-sharing scheme for long-term employees
Designing an employee benefits plans
• The design of an employee benefit plan will depend on the remuneration strategy which
is linked to the overall organisation strategy
• Reward options should be designed in such a way that it supports the organisation
culture
• Employee benefits should foster a feeling of appreciate and acknowledgement by
employees.
• Employee benefits should satisfy individual needs. Survey could provide information on
what employees prefer and provide feedback on possible improvement of the
employee's benefit
• The employee benefits packages should be benchmarked against the benefits offered by
other organisation.
• The employee benefit packages offered should establish the organisation as an
employer of choice.
Implementation and
administration of an employee
benefit plan
Once all necessary information is gathered, the employee benefit plan must be implemented.
Implementation involves various tasks such as enrolment, coverage administration, record keeping,
and payroll processing.
Remuneration specialists should follow three key steps in implementation and administration:
Communicating employee benefits:
• Misunderstanding of benefits often leads to dissatisfaction.
• Most effective communication methods include small group meetings and personalised benefit
statements.
• Technology aids communication by offering:
Easy access to information
Increased employee control
Improved effectiveness
Compliance with legal requirements
Implementation and
administration of an employee
benefit plan (continue)
Processing claims:
• A defined process must be followed for handling claims efficiently.
Managing cost:
• Benefits can make up to 40% of total remuneration costs.
• Cost management strategies include:
Implementing probation periods before benefits begin
Setting limitations on certain benefits
Encouraging shared contributions between employer and employee
Eduvos and the Flipped Classroom
1 2 3
Before this lecturer-led session During this lecturer-led session After this lecturer-led session
At home, in your self-study time, you During your lecturer-led session(s), you will Depending on how difficult this lecturer-led
worked through myLMS content to prepare engage with your peers and lecturer in session is, your lecturer may recommend
you for this lecturer-led session. You have active learning. I.e. you will have an some concepts to revise for this week's
completed any practice activities and opportunity to ask your questions, to learning opportunities. Then you will focus
prepared any questions you may still have debate topics, and to practice working on the following learning opportunities on
on the content. The lecturer-led session will through the technical aspects of what you myLMS in your self-study time to prepare
not be a traditional lecture. learnt at home. You will be exposed to for the next lecturer-led session(s).
higher-order thinking activities. Your
lecturer will guide you on what to prepare
before attending your next session.
What Happens Next?
Week 5
Ethics and remuneration
governance and strategic
remuneration
• Throughout next week you will
learn about ethics and
remuneration governance, as well
as strategic remuneration.
