Remuneration system and remuneration components

About the relevance of remuneration

Who is not familiar with the nice saying "Everything depends on money, and everyone pursues money." Johann Wolfgang v. Goethe (1749-1832)
Nowadays we see things more differentiated: remuneration alone does not motivate; still the following applies: there has to be an appropriate pay, no matter how interesting or diversified the work task may be.

New development trends

• adjustment of the basic remuneration to new work requirements and new regulations according to the collective agreement
• expansion of the performance-linked remuneration components and new performance appraisal methods
• expansion of the success-related remuneration components
• more options for employees ("cafeteria remuneration")
• connection of remuneration concepts and working time flexibilisation
• other development trends such as minimum wage and combined wages discussion, total compensation packages, international comparability of remunerations in connection with increasing globalisation, etc.

• system check remuneration: appraising the remuneration regulations in the company or in departments
• remuneration evaluation: criteria-based evaluation of remuneration systems or remuneration components according to strengths and weaknesses
• remuneration arrangements: adjustment or redevelopments of remuneration systems or remuneration components

System check remuneration

• need for consulting in case of fragmentary adoption of the formal and actually practiced remuneration regulations and concepts in the individual departments of the company
• by use of the system check, the formal and practiced remuneration regulations and concepts in the individual departments of the company are to be documented as completely as possible and according to standardised criteria
• usually the system check merely provides the basis for the following evaluation

Remuneration evaluation

• There is a need for consulting, because in many cases the target incentive aims are not, or only insufficiently, rejected and no generally accepted evaluation criteria are available. The call for remuneration conform to strategy often cannot be honoured, because the business strategy is lacking or unknown.
• It is the aim of remuneration evaluation to develop a target condition of remuneration, where necessary with the aid of Best Practice examples (Benchmarking), which can be opposed to the ascertained actual condition. The need for action, as basis for recommendations regarding the adjustment or redesigning of the remuneration system, results from this variance analysis.

Remuneration design

• As and when required by the client, ISPA consult participates in the remuneration design through process and/or content consulting with the desired intensity. It is recommended to manage remuneration design as a project and to apply the instruments and methods of the project management.
• During the process consulting, ISPA consult only acts as the process supervisor, who methodically and organisationally oversees the project's progress from analysing the problem over generating alternatives to the point of evaluating the alternatives and finally coming to a decision, e.g. by facilitating the brainstorming workshops.
• During the content consulting, ISPA consult is asked to actively contribute to the content of the workshops, for example by preparing drafts and discussion papers, by compiling recommendations for action and/or by actively participating in the discussion during project meetings.