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Employment relations have been receiving increasing attention in many organizations. This is because many organizations have realized that in order for businesses to perform, the relationship between employees and employers is an important consideration.

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A remuneration system refers to a payments and benefits package offered for employees to ensure employee satisfaction and morale.

Relationship between employees and employers are compensated by their remuneration package whereby; employees see rewards or compensation as an exchange for their services rendered to the organization or as a reward for a job well done.

The remuneration package has over time come to be recognized as an important component of employment relations in many organizations.

In the past, relationship between employer and employee was led by the assumption that employers were free to treat employees in whichever way they deemed fit and employees were hence free to either work or leave. There were few laws available to safeguard the interests of the employees and at times of manipulation, shabby treatment and unfair practices, employees did not have a platform to voice their protests.

Hence, employees often sought the help of labor unions to voice their concerns, with most of the time negotiating with employers on pay structure or conditions at work. But with time employees have begun to realize their rights and a major issue that inflicts the stability of the relations between employee and employer are the well-being of the employees.

Especially when employees feel that they are underpaid. This creates friction and a rift between the employees and the employer, thus attenuating the impact of human resource practices and affecting the image of the organization It is for this reason that many companies all over the world begun to pay attention to the relationship between their remuneration systems and employment relations and productivity. Affordable Writing Services

The main objective of this research was to examine the relationship between the remuneration systems and employment relations and the impacts that the employment relations have on the organizations.

2)      Literature Review

A remuneration system refers to cash or non-cash supplements which are regarded as adding value to the employees total pay package (Elizabeth 1992). Many researchers have found out that there is a direct relationship between the remuneration system and employment relations.

The Human Resources development working group for example outlines different kinds of remuneration packages. One of the most extensively used remuneration systems by small and medium enterprises is the performance-based remuneration system. This system ensures that an increase in employee remuneration is backed by an increase in performance.

a)      What is the relationship between remuneration systems and employment relations?

A performance based remuneration study was carried out by APEC economics in Korea, Malaysia, the Philippines and Chinese Taipei. Prior to the study other forms of remuneration systems like the High Performance work systems where in place in the target organizations.

Affordable Writing Services The constant variables in this study included the basic wage of the employees and the productivity improvement and profitability.

The study of two firms showed that once the use of the Performance based remuneration system was introduced the changes were vast. This system also improved employee relations as there was increased morale towards the work and a sense of commitment and dedication.

Pay for performance became an acceptable normal practice. In addition, multi-tasking to reduce unwarranted recruitment of staff was initiated.

The positive impact of implementing performance-based remuneration systems revealed the shared cooperation of employers and employees. Affordable Writing Services

Through this system feelings of ownership and responsibility were acquired and rewards were real and reflective of performance. Thus each individual found ways to support and contribute to improvement, ultimately leading to better quality for all. This system is an indication that employee relations rely is influenced by the remuneration system.

Business performance was also affected by the performance based remuneration system. Some firms showed that profits had doubled within two to three years and were more after the three year period. Productivity of the employees also doubled with the expansion of sales and the expansion of sales and the reduction in the sales costs

b)     How does a remuneration system affect business performance?

In another study Companies with implemented profit-sharing/gain-sharing programs were chosen as the study’s focus, and Porter strategy vision was utilized. Affordable Writing Services

Financial and non-financial value drivers measured firm performance. The 79 companies of the sample were medium and large-sized firms, from the industrial sector, and located in the Brazilian state of Sao Paulo. The analysis of the study data indicated a statistically significant relationship between profit-sharing/gain-sharing programs, and value drivers.

The performance of the non-financial value drivers is the most favorably influenced by the implementation of profit-sharing/gain-sharing programs, and productivity is the most highly influenced of all the value drivers evaluated in this study.

Affordable Writing Services In spite of the fact that the descriptive analysis showed a relationship between profit-sharing/gain-sharing programs, organizational strategy, and value drivers, it was not possible to find statistically significant evidence to confirm the existence of such a relationship.

Profit-sharing/gain-sharing programs are the variable remuneration modality most utilized by Brazilian companies, which is regulated by the Federal Law # 10,101 of December 19, 2000.

Business literature makes a distinction between profit-sharing and gain-sharing programs. With profit-sharing, the remuneration is extracted from the profit generated by a company over a period of time, whereas with gain-sharing the remuneration is dependent on the accomplishments of performance goals.

Profit-sharing is the payment provided by a company to its employees regarding “the distribution of positive results obtained by the company” (Martins, 2000, p. 49). Affordable Writing Services

Gain-sharing programs align a parcel of employee remuneration with the accomplishment of organizational or team performance goals (Berger and Berger, 2000).

c)      How do corporations determine the pay level within a remuneration system?

To establish a scientific and effective sales force compensation system is not easy, in fact, sales management personnel remuneration issue is an important issue, but also a problem.  There is no common, fixed form of sales compensation system.

This is because there are different types of sales force, different types of enterprises, different types of markets, there are different types of remuneration systems. There however must be specific conditions in order to design an effective reward system and to meet the needs of different types of salespeople.