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Compliance is key to hassle-free compensation in business

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Compliance is key to hassle-free compensation in business

Compensation, the term used to define the cost of employment of employees, can be a major headache for decision makers in business, particularly if it is not managed properly and issues like compliance are not taken seriously.


One of the main reasons why this responsibility can turn the world of an employer upside down is because it encompasses far more than just salary. Although employees tend to associate compensation exclusively with salary, it is actually far broader than that – in fact, it includes benefits, rewards, incentives and other costs.


So, in practice, compensation covers everything that an employee earns for bringing value to the employer.


In the South African context, the issue is of extreme importance because of the country’s strong trade union background and the ongoing problem of skills shortages.

It is for this reason there often exists a disconnect between employers and employees as far as compensation is concerned. This does not help matters when the issue of compliance with regulation through legislation is already adding pressure.


This is because there is a great deal of legislation that governs compensation and it is the Basic Conditions of Employment Act that probably has the most significant impact on compensation. There are other rules that apply at higher levels and if you are a manager in business today, you have to be aware of statutory requirements covered by the Employment Equity Act, Labour Relations, SARS and COIDA.


Labour law

Our labour law includes detailed chapters dedicated to the determination and calculation of compensation, claims for compensation, as well as the Compensation Fund and its relevance to business practice. It outlines exactly what is legally required in terms of salary, wages, benefits and other expenses and transactions.


There is extensive coverage of that which governs an employee’s right to compensation, when and how claims should be managed, and what the rights/ responsibilities are of the employer. This is also across the board and has certain implications for specific industries, which is helpful to employers because of the diversity of South Africa’s commercial landscape.


With the emphasis on equality and equal opportunity within the workplace today, it is expected that legislation like the Compensation for Occupational Injuries and Diseases Act will increase in significance.


Aside from having to deal with the realities of compliance with corporate governance regulation, the decision maker also has to implement equitable practices and create a view of the entire Compensation Structure, inclusive of levels/grades/equity, of the organisation. This represents something of a challenge for managers and, although a challenge, is imperative to decision making to ensure hassle-free compliance.


Unfortunately, this cannot happen overnight and the process requires a proactive approach. Energy and meticulous attention to detail is called for in the formation of strategies and their implementation in order to roll out the required change management and communication processes effectively.


It will not help to rush these crucial phases of compensation management strategy development and implementation – that will only cause more difficulty and hamper operations.


It is another reason why experts in the field are called in to assist and provide their knowledge and insight of the market. This can really make a meaningful difference in terms of what kind of strategy is best for a company and how this should be implemented. An ad-hoc approach simply cannot work.


As HR and payroll professionals, we continue to place a premium on systems and solutions to increase employee performance and efficiency in operations.



Fortunately, today, there are solutions that are designed to provide the bird’s eye view of the organisation referred to earlier. This can happen quickly which offers decision makers a head-start on strategy development, organising and assimilating expert advice and putting into action the final strategy.


Sufficient and relevant training, combined with the right solutions, will enable businesses to pin this strategy down quickly.

Last modified on Monday, 03 March 2014 08:29
James McKerrell

James McKerrell

James McKerrell, Chief Executive Officer, CRS Technologies (Pty) Ltd


After qualifying in the accounting field and having run a Fund Raising entity, James became interested in technology and joined CRS as a consultant way back in 1991. He was tasked with starting the CRS Cape Town office, and later moved back to Johannesburg as Ops Director, where he took over the management of the business and today plays an active role in the development of CRS's people, products, new markets and solutions.

CRS Technologies is a provider of services and solutions to the Human Resources and Payroll markets in Africa in general and South Africa in particular.

Established in 1985, the company has served as the premier provider of HR systems, solutions and remuneration products to business across expanding market segments.


CRS is a signatory to the Information Technology Association (ITA) and a member of the Payroll Authors Group of South Africa.


It is also a member of the South African Payroll Association, South African Rewards Association and the Institute of People Management.


James is passionate about the products and services, not forgetting their people and customers. He has a wonderful and supportive family and enjoys fly fishing (fishing not catching!) in his spare time.


As chairman of The South African Payroll Association (SAPA), James has to strategically focus the efforts of the EXCO to enhance the profile of the Association, increase membership, and also engage with other international Payroll Associations to form a “global body”.


He enjoys MC’ing the annual conferences and workshops that SAPA hosts as this gives him an opportunity to engage with the members. James is passionate about having payroll professionals recognized as professionals and spends much time lobbying for this cause.

James is pleased to be involved with the Association’s endeavour to become the accreditation body of payroll professionals in SA.

Website: www.crs.co.za

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