Why Have Australian Organisations Become More Interested in Incentive Remuneration

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The Answer is Traditionally, Australian organisations have not linked their remuneration systems to employee performance believing that it strikes at the heart of egalitarianism and worker solidarity and causes employees to compete with each other. However there are three reasons why public and private sector organisations in Australia have been more interested in using forms of incentive remuneration. Firstly, Australians are increasingly coming to appreciate the opportunity to be rewarded for their individual contribution to an organisation's success. Secondly, the onset of enterprise bargaining in Australian workplaces has placed more reliance on productivity gains as a trade-off or requirement of increased remuneration. This has led organisations to review their work practices and to introduce some variable pay components based upon performance. Thirdly, there is an increasing demand for pay structures to provide a more direct link between employee rewards and organisational objectives. Organisations feel there is a need to reward those employees directly who most contribute to the achievement of the organisation's goals. Moreover such incentive schemes, if properly designed, can act as a motivator for improved employee performance.

Why Have Australian Organisations Become More Interested in Incentive Remuneration

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Why Have Australian Organisations Become More Interested in Incentive Remuneration

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