SA’s wage gap among the world’s widest

2011-11-01 09:17

The wage disparity between top executives and entry-level employees in South Africa is particularly wide compared with other developing and, in some cases, First World countries, according to Professor Barney Jordaan, the director of the Africa Centre for Dispute Settlement at the University of Stellenbosch Business School.

“South African companies are facing extreme pressure to address growing employee dissatisfaction due to wage disparities. Employers are urged to review existing structures, as well as investigate the most appropriate method of remuneration for their company structure,” Jordaan said.

He added that the issue was clearly outlined in the PricewaterhouseCoopers (PwC) Executive Directors Remuneration Practices report that was issued in June, which illustrated how the wage gap in South Africa was growing and was one of the highest in the world.

The report highlighted that listed companies on the stock exchange increased their total guaranteed pay to executive directors and top management by 23.3%, noted Jordaan.

High executive remuneration has captured the spotlight lately and most recently it emerged that food and clothing retailer Woolworths Holdings paid CEO Ian Moir R13.6 million, including a bonus of R8.25 million, added to his R5.312 million normal package for the year.

Jordaan said while there was a place for salary differentials and that chief executives should be paid more than other employees due to their experience and responsibility, it is difficult to determine whether such complex situations were acceptable or not.

“Significant increases do not necessarily lead to better performance or productivity, albeit there are methods with which to narrow the wage gap that businesses should consider.

“By simply adopting and implementing good governance principles, coupled with collective bargaining, provides vehicles to narrow high gaps,” he said.

Management and employee incentives were an attractive alternative method that employers should adopt that rewarded management and employees at all levels for good performance, according to Jordaan.

“If one only provides substantive rewards, employee engagement is not only limited, but also cultivates a culture of self-centred gain.

“On the other hand, if management and employees are involved in decisions that affect them, in addition to whatever substantive rewards they might receive, one develops a culture of engagement that not only motivates but improves decision-making and implementation of decisions,” he concluded.

– Fin24

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/Sport

Book flights

Compare, Book, Fly

Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.