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Memory Nguwi
Today we focus on frequently asked questions on how employees are remunerated.
Employees and employers often ask these questions and, in some cases, job seekers.
1. Who determines how much I should earn between the human resources department and my manager?
The manager should input how much their subordinates should earn within policy guidelines. The role of human resources is to ensure that the manager makes recommendations that conform to the policy guidelines. It is good practice to involve the line managers in deciding what their subordinates should earn. In practice, we know most managers are disempowered.
2. Is it legal for the employer to reduce my salary?
Due to the harsh economic environment, some employers have resorted to salary cuts. It is illegal for the employer to unilaterally reduce an employee salary without consulting and agreeing with the employee. The best way to institute salary cuts is to negotiate with the concerned employees individually (managerial employees) and through the works council if they are non-managerial employees. For non-managerial employees, it is essential to involve the NEC from the beginning. For employees, it does not help your cause to resist salary cuts without a valid reason when you know the business overall is not doing well. Other organisations that have instituted salary cuts have avoided retrenchment, thereby serving jobs. If your employers consult you in good faith, it is essential to return the favour so that together you preserve the collapse of your business.
3. Is it correct for employees in the same grade to earn different salaries?
Yes, it is normal for people in the same grade to earn different salaries. How much each individual earns within a particular grade is usually a function of the individual’s experience, level of education and performance. Different organisations give these three factors different weights. In an organisation where experience carries more weight, you will notice that more experienced employees earn more. In an organisation that values individual contribution, you may find that high performers earn more regardless of education or experience. Check what drives earnings within your organisation.
4. Am I entitled to demand to be paid a market-going rate for my position?
Yes and no, is the answer here. While the market may pay a specific going rate for your position, your employer will need to decide whether they can afford and sustain the market-going rate. If not, they are likely not to agree. Please remember that the
market going rate does not consider individual performance. No employer will pay you a market-going rate for your role if you are a non-performer. The market going-rate (which is usually a premium) is reserved for employees performing above average.
5. How much should I demand as an acting allowance?
Acting allowances vary from organisation to organisation. In some organisations, acting allowance is calculated as a percentage of your current basic salary. In others, it is a percentage of what the role incumbent is earning. In others, we notice that it is a percentage of the grade minimum for the acting role. What I have outlined would most likely apply to managerial employees. For unionised employees (non-managerial) the acting allowance calculations are normally covered in the Collective Bargaining Agreement (CBA) for your sector.
6. Can I afford to pay my workers below NEC minimum wage?
You are required to pay all your non-managerial employees at least above the minimum set up by the NEC. In cases where you can’t afford NEC-mandated minimum for whatever reason, you must engage the NEC for your sector and apply for an exemption. Not easy to get, but you can try. If you are caught paying your employees below minimum wages for the sector, you will be forced to back pay the correct pay.
7. Can a subordinate earn more than their manager?
Yes, it is possible in certain circumstances. Skilled personnel in demand sometimes demand more than your internal salary hierarchy can accommodate. This is not unique to the corporate world; it seems to be the trend in sports. Managers earn far much less than some of their players in sports. In the corporate world, we have also seen some CEOs earning less than some of the skilled staff who are in demand worldwide.
8. How much should I demand if I am offered a job?
The starting point is what value are you bringing to the organisation? What does the market pay for similar skills as yours (experience, education, etc.)? If the employer asks you for your expectations, be reasonable. Start slightly below market and agree on an upward movement based on your performance. Have this put in your contract to avoid problems in the future.
*Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm (https://www.thehumancapitalhub.com)
Email: [email protected] or visit our website at www.ipcconsultants.com
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