Manage remuneration and employee benefits

Part -1:

Performance objective

Demonstrate the skills and knowledge required to analyse strategic and operational plans in order to present remuneration and benefit options to management.

Assessment description

Develop two remuneration and benefits strategy options based on information provided in the Exclusive Foods case study.

Procedure
1. Review the Exclusive Foods case study.
2. Review information provided in your Student Workbook and other reference materials as required.
3. Complete a written report detailing two remuneration and benefits strategy options that will provide for the needs of Exclusive Foods.
4. Outline the remuneration principles or model approaches you have used.
5. Explain the ethical practices relating to remuneration and benefits strategies.
6. Ensure all areas detailed in the quality specifications below are included in the strategy.

Note: Assessment Task 2 builds upon the strategy options developed for this task. Ensure that you adequately save and retain your work for further use in Assessment Task 2.

Specifications

You must provide:
- a written report using Microsoft Word.
Your assessor will be looking for:
- the strategic goals of each remuneration strategy
- the features of each remuneration strategy
- factors have been taken into consideration in regards to current practice and possible developments in the market and legislative parameters including:
? short-term business needs
? medium- to long-term considerations.
- explanation of the features of each option and comparison of the:
? strengths and weaknesses of each option
? advantages and potential disadvantages to Exclusive Foods of each option
- an outline of principles, models or approaches
- an explanation of ethical practices relating to remuneration and benefits strategies
- an outline of various remuneration or employee benefits
- a description of the ways to position an organisation as an ‘employer of choice'.

You have just been appointed to our management team as Human Resources Manager.
- Exclusive Foods operates a chain of 17 retail outlets in NSW.
- Exclusive Foods has grown from a small family business started in the 1970s to a business employing around 350 people.
- Our corporate office is in Sydney, NSW. All administrative functions including sales planning, operations management, financial management and human resource management are conducted at these premises.
- Each of the 17 stores has a manager appointed to run the day-to-day operations of the business.

General background
Exclusive Foods has undergone many changes in the past ten years and particularly in the past three years. Rapid expansion from the Sydney metropolitan region to larger regional sites such as Newcastle, Wollongong, and Bathurst has characterised the changes occurring in recent years.

Exclusive foods cater to a niche market looking for high quality fresh and organic foods and ingredients not found in traditional supermarkets. Each store offers a high level of service with staff available to assist customers select the finest meat, produce and dry goods on the market. The stores also stock high-end cookware and utensils, cookbooks and wine.

We have always had a strong operational focus which has helped the business to grow, not only in size but in reputation and profitability. This growth, which has been our strength, has also raised our awareness that we may be failing to adequately consider the ‘people' side of the business.

In the past two years, Exclusive Foods has faced growing pressure from competitors who are entering the market. We believe our product, pricing, marketing and administrative systems are suitable and competitive, however we are aware that attracting and retaining qualified staff has become more difficult.

Your management of the HR function will be a critical factor which determines whether or not we achieve our goals.

Staff turnover statistics and exit interview data indicate that staff feel dissatisfied with their remuneration and benefits packages and are consequently leaving the company for employment which offers them greater rewards. This is perceived as a threat to Exclusive Foods on a number of levels.

Firstly, increasing competition in the specialised food business has led to greater employment opportunities, particularly for skilled workers such as retail managers, accounting personnel and experienced senior sales personnel.

Secondly, Exclusive Foods has built its reputation by having staff that are highly trained in product knowledge and wines. This degree of product knowledge takes many months to develop and is what differentiates us from our competitors.

The directors feel it is imperative that we take a fresh approach with regard to our people management so that we can position ourselves as an employer of choice to attract the most qualified personnel.

The planned expansion of the company will require a strong and loyal workforce and your role is to review our current situation and make recommendations for improvement.

Other considerations
Financial analysts have predicted an economic downturn in two to three years based on local and global trends.
The directors are concerned that Exclusive Foods may not be prepared for the impact this might have on the business and the achievement of its strategic goals.

Exclusive Foods - Goals and objectives
The senior management team has developed a five-year plan for the growth of the business. This plan incorporates both strategic and operational plans.

Strategic plan
Exclusive foods will increase its market share and profits by expanding operations into Victoria and the ACT over the next five years.

Our vision
Exclusive foods will be a one stop shop for high quality food, and cooking needs with an exclusive range of products for gourmet cooks.

Our mission
Exclusive foods will be the retailer of choice for customers seeking the best quality and range of food, wines and cooking supplies not available in traditional supermarkets.
Operational plan

Specific objectives:
1. To implement remuneration and benefits plan to meet the needs of the employees in line with current market rates and conditions, organisational policies and legal requirements within the next six months.
2. To open an Exclusive Foods Store in Canberra within 12 months.
3. To open an Exclusive Foods Branch in Melbourne by within 18 months.
4. To increase net operational profits by 7% within 24 months.

Part -2:

A remuneration and benefits strategy

Performance objective
Demonstrate the skills and abilities involved in documenting and gaining support for a remuneration and benefit strategy.

Assessment description
Document remuneration and benefits strategy based on one of the options developed for Assessment Task 1 and complete a market analysis activity.

Procedure
Part A - Remuneration strategy
1. Select one of the remuneration and benefit strategy options developed for Assessment Task 1.
2. Prepare a written presentation, ensuring the following points are covered:
a. How will the remuneration and benefits strategy help the organisation achieve its goals?
b. What will the financial impacts be to the organisation?
c. Are there any legal or taxation factors involved?
d. Ensure that organisation is positioned as an employer of choice and regarded as a desirable workplace.
e. Ensure that the strategy adheres to relevant legislation, for example, equal employment opportunity, diversity and anti-discrimination legislation.
3. Document the remuneration strategy under the following headings:
a. Remuneration Policy:
i. pay structure
ii. types of remuneration
iii. market competitiveness.
b. Performance Management:
i. how the strategy links to performance management.
c. Performance rewards:
i. what reward methods you would include.
4. Include a summary of the research you have conducted into current practice, recent developments and legislative parameters.
5. Document the approach you would take to obtain agreement on your strategy including;
a. who is required to agree
b. how agreement will be obtained (e.g. presentation or strategy paper)
c. how agreements will be recorded (e.g. sign-off sheets).

Part B - Analyse market conditions
1. Complete all elements of the ‘Salary Review' worksheet.
2. Include a graph/chart formatted using Word or Excel.

Specifications
There are two parts to this Assessment Task.
Part A - Remuneration strategy
You must provide:
- a written report using Microsoft Word, Excel, and PowerPoint.
Your assessor will be looking for:
- a report that is presented in a logical and sequential manner, such as:
· introduction/background
· details of the proposed strategy
· how the remuneration strategy is linked to the organisation's strategic and operational plans
· how the strategy addresses the needs of the different employee populations
· how the strategy ensures that those employees who are covered by an award receive, at the least, minimum entitlements
· how the strategy aims to position the organisation as an employer of choice and regarded as a desirable workplace
· details of how the strategy incorporates information gathered from market rate surveys
· advantages and risks of implementing the strategy.
- a report supported by appropriate and professionally prepared materials as:
· handouts
· PowerPoint presentation
· graphs and charts
· copies of documents referenced.
- recommendations made throughout the argument are supported, and research results and demonstration of the analysis undertaken to develop the strategy.
Part B - Analyse market conditions
You must provide:
- the completed worksheet
- a graph/chart formatted using Word or Excel.
Your assessor will be looking for:
- market data applied correctly
- salary recommendations are in line with market data
- salary recommendations reflect employee performance levels
- reasons for the selections provided
- at least two sources of market data on salary ranges identified
- explanations of how the remuneration strategy supports the operational goal
- graph or chart professionally presented with the following information shown:
· employee names
· current salaries
· recommended salaries
· any increases or decreases shown in dollar and percentage terms.

There are five buyers employed at Exclusive Foods. When developing your remuneration strategy, you researched the following information relating to remuneration market rates for buyers in the food retail industry.
Salary survey market data that you have collected indicates the following:
Retail Buyers' salary range:

Current situation
- Currently at Exclusive Foods, the remuneration strategy for retail buyers has been to pay at the 25th percentile.
- Feedback from the buyers is that they are unhappy with their base salaries and feel they are underpaid in relation to other retail buyers.
- Bonus incentives have been minimum or unpaid in the past and projections are that Exclusive Foods will not exceed budget profit by more than 5% in the next financial year and therefore bonuses will be very small.
- There are some job opportunities for experienced buyers in the market place but not a great deal.
- Turnover for buyers at Exclusive Foods is 20%-48% higher than the industry average.
- You have recommended to management that you would like to position the buyers remuneration towards the market medium (50th percentile) as they currently sit at the 25th percentile.
- The senior management team has asked that you put your recommendations in writing and provide them with a graph showing current costs and proposed increases for increases you are recommending. Please show the increases in both dollar and percentage amounts.

Instructions
Review the information provided. Using a merit-based pay methodology and the information you have researched to complete the attached worksheet, make salary recommendations for Exclusive Foods.

Your financials graph/chart should be prepared using Word or Excel and attached or forwarded to the assessor with the completed worksheet.

Part 3: Performance objective

Demonstrate the skills and knowledge required when consulting with managers and employees to review the effectiveness of a remuneration strategy and make amendments as required.

Assessment description
Develop a plan for reviewing and amending a remuneration strategy and evaluate the effectiveness of a remuneration strategy.

Case study: Exclusive Foods

Exclusive Foods have implemented the remuneration strategy and it has now been in place for three months.
As a result of harsher than expected sales losses due to the economic downturn which impacted on Exclusive Foods to a greater degree than anticipated, the organisation has decided to close two stores.
You have been asked to make amendments to the remuneration policy to accommodate this redundancy offer to employees.

Procedure
1. Research methods of reviewing a remuneration strategy.
2. Write a report on the purpose and methodology for reviewing a remunerations and benefits strategy covering the following areas:
a. Why is it important to review and amend remuneration and benefits strategies?
b. Who would you consult? How and why?
c. What methodology could you use? Include quantitative and qualitative measures.
d. What would you measure the effectiveness of the remuneration strategy against?
3. Develop a format and questions for a focus group or individual interview to determine the effectiveness of a remuneration strategy. Questions for the focus group or individual interviews should aim to determine:
a. the remuneration strategy for the person or group
b. employee satisfaction levels
c. market competitiveness
d. how effectively the remuneration strategy supports organisational goals.
4. Conduct the focus group/interviews using the questions designed in step 3. Write down the feedback obtained and use these responses as part of your written report.
5. Develop a written report outlining the amendments you would make to the remuneration and benefits strategy based on your research, interviews and analysis of the case study information provided.

Specifications
You must provide:
· a written report based on the questions in step 2 of the above procedure
· a list of questions used for the focus group or individual interviews
· a written report on what changes you would recommend to the remuneration strategy based on the research you conducted.
Your assessor will be looking for:
· a variety of methods for evaluating the effectiveness of a remuneration strategy
· explanation of how each method would be used and why you have included that method
· evidence of the following considerations:
· Which stakeholders of the organisation would you consult with? How and why?
· What will you be measuring your strategy against:
- organisational strategic and operational goals
- employee satisfaction levels
- management satisfaction levels
- legal requirements
· questions for the meeting or individual interviews that determine:
· the remuneration strategy for the person or group
· employee satisfaction levels
· market competitiveness
· how effectively the remuneration strategy supports organisational goals
· demonstrate effective presentation and collaboration skills to show options, negotiate agreement and gain feedback
· use of evaluation and analysis of feedback to decide on improvements to strategy
· the written report includes arrangements for those employees affected by the change to the remuneration policy (redundancy) in regards to:
· award requirements (where applicable)
· ethical practices relating to remuneration and benefits strategies
· requirements of the Australian Taxation Office in regards to income tax, superannuation, fringe benefits tax and bonus payments
· summary of the research conducted into relevant legislation, for example, equal employment opportunity, diversity and anti-discrimination legislation.

Attachment:- Assessment Tasks.rar