5) Salary determination

• The difference between piece-meal and time-related salary determination

  Piecemeal:

  • workers are paid according to the number of items/ units produced/ actions performed
  • workers are not remunerated for the number of hours worked, regardless of how long it takes them to make the items
  • mostly used in factories, particularly in textile/ technology industries
• The difference between piece-meal and time-related salary determination

  Time-related:

  • workers are paid for the amount of time they spend at work/ on task
  • workers with the same experience/ qualifications are paid on salary scales regardless of the amount of work done
  • many private and public sectors businesses use this method
• The link between salary determination and BCEA

  • BCEA sets out conditions that ensure fair labour and human resource practices
  • Businesses supposed to deduct income tax (PAYE) from employees taxable salaries
  • BCEA outlines legalities, such as employment contract, may affect salary determination
• Fringe benefits

  Examples of fringe benefits in the workplace:

  • Pension fund
  • Funeral benefits
  • Medical aid fund/ health insurance fund
• Fringe benefits

  Benefits required by law (UIF):

  • Employer and worker each contribute 1%
  • Employers must pay unemployment insurance contributions of 2% value of each worker's salary per month
  • Fund offers short-term financial assistance to workers when unemployed or unable to work due to illness, maternity or adoption leave
• Fringe benefits

  The impact of fringe benefits on the business:

  Advantages

  • Improves productivity, resulting in higher profitability
  • Businesses save money as benefits are tax deductible
  • Fringe benefits can be used as leverage for salary negotiations
• Fringe benefits

  The impact of fringe benefits on the business:

  Disadvantages

  • Errors in benefit plans lead to costly lawsuits/ regulatory fines
  • It can create conflict/ lead to corruption if allocated unfairly
  • Business who cannot offer fringe benefits fail to attract skilled workers