Continuing the trend of recent years, this year`s Salary Survey has found a dramatic
drop in the number of ICT companies guaranteeing a 13th cheque. Good increases and bonuses are possible, but they are linked to performance.
[CHART]While one third of respondents still said they received a guaranteed 13th cheque, it is a significant drop from last year`s 42%. Executives were even less likely to receive a guaranteed bonus. Only 11.5% of participants received one, compared with 35% last year.
Shape your own package
[CHART]Describing this as a "dramatic shift", Morag Phillips, director at 21st Century Pay Solutions Group, says it again reinforces the trend toward performance-based incentive payments.
Analysing the findings of this year`s IT Salary Survey, Phillips says another interesting trend to emerge is that most of the 3 035 respondents survey takers who completed the remuneration-related portion say they are now offered flexible pay structures within a "total cost to company" package.
Phillips says 77% of the respondents are employed by organisations that remunerate on a total package approach, a trend that is growing in South Africa.
"This is higher when compared to the sample who participated in the survey last year (61% in 2005), but should be interpreted on the basis that this is a different sample," she notes.
At strategic management (executive) level, 77% of participants are remunerated on a total package approach, while this is true for 69% and 63% respectively for operational management and staff levels.
The advantage of total package to the employer is that it contains and defines the total fixed cost of employment and empowers its employees to structure more competitive packages compared with their peers.
"The total package concept is exciting and flexible in that employees can choose, from a number of different options offered to them, those benefits that are most suitable to their lifestyles," she says.
Annual and ad-hoc increases
[CHART]As with the bonuses, annual increases are usually linked to performance.
"Seventy-six percent of the entire sample determines increases with a link to performance, demonstrating the growing trend to tie performance closely to the annual increase determination," says Philips.
Most of the annual increases were in the 5% to 10% range, similar to those reported last year.
[CHART]Phillips says ad-hoc increases were reported where respondents took on additional responsibilities within the same position, were promoted to a higher-level position or increased their skill sets.
Again, she says, the results here reinforce the focus on performance, although not always the only factor considered in increase determination. "The incidence of a guaranteed increase is very limited."
The sample shows a growing trend by companies to follow a combined approach on increases.
"In our experience, where an organisation adopts this, there would typically be reference to a cost-of-living portion (CPIX) where performance criteria are met. Where performance exceeds expectations, an additional performance component is awarded," Phillips says.
Some individuals receive more than one form of incentive payments, which are listed in Table 3. This table demonstrates the link to performance, whether determined by an individual or company measure. Again, this reinforces the message that bonuses are not guaranteed.
Contractors` incomes vary
[CHART]Ruan Smythe, survey consultant at 21st Century Pay Solutions, notes: "The range of remuneration for contractors is very wide, and perhaps indicative of the range of levels of consultant within the group, from those that operate at a strategic level to those operating at a more functional/operational level."
He adds that few contractors enjoy any employment benefits that are typically available to permanent employees, and as was the case with previous sample groups, the majority of contractors are still paid monthly or hourly.
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