HR Practice For Payroll Practitioners

HR Practice for Payroll Practitioners

Base pay

For most positions employees are paid a base pay component. This is for either salary or wages.

How this base pay element is decided on is through the organisation’s view of how much that job is worth to the business as a whole. The “job” is the actual work the employee does for the organisation in return for what they are paid.

This is done by the organisation through:

• Deciding on the importance and the contribution the job will make in helping the organisation to achieve business goals (long- and short-term). • What the job is worth in the marketplace. • How much the business can pay for the job to be done. • How much flexibility the organisation has in paying or rewarding them in other ways. The process of determining the value of a job to the organisation is called job evaluation but in recent years this process has lost its appeal because of the complex methodology that it uses.

Deciding the importance and contribution of the job to the organisation

There are easier ways to determine the importance of a job to the organisation. Most of the information can be obtained from normal avenues within a business.

Job descriptions

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Remuneration surveys Performance management Management consensus

Job descriptions

An essential tool for any organisation is having an up-to-date job description that describes the tasks done by each position in the organisation. If well-constructed job descriptions were laid out end to-end they should show all the tasks that are completed in the organisation. It would also show the interactions between them. Of course it is important that the tasks actually link to organisation objectives so the work completed contributes to achieving the goals set by management.

© New Zealand Payroll Practitioners Association, Sep 2024, Ver 12

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