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AfroCentric INTEGRATED ANNUAL REPORT 2016
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REMUNERATION COMMITTEE REPORT
INTRODUCTION
The business landscape has changed considerably over
the last decade, with all stakeholders in the value chain
demanding greater outputs (Jensen, 2010). Shareholders are
expecting sustainable returns on capital investments; top
management is expected to achieve greater efficiency and
sustainable financial growth; and employees and organised
labour are demanding equitable rewards (financial and non-
financial).
With the rise in social consciousness and economic
pressures, management sees the need for their organisations
to adapt more rapidly. News headlines are dominated by
organisations engaged in labour disputes around wages,
reorganisation initiatives (retrenchments) or internal
employee announcements regarding business process re-
engineering projects. In June 2015, unions − representing
around 1.3 million public servants, inclusive of nurses –
threatened to walk out from wage talks, raising the risk of a
protracted strike (Reuters, 2015).
Remuneration strategy, policy and systems to support the
modern business environment are of great importance
and come under increasing scrutiny. This is evident where
management seeks to motivate employees to deliver
on shareholder expectations and improve efficiency and
effectiveness. The practical reality is that an organisation’s
performance (financial or non-financial) can be positively
or negatively influenced by employees in various ways.
The combination of employees and IT sets the tone for an
organisation’s core capabilities. Competencies or capabilities
are essential for the execution of organisational strategy, and
these competencies are mainly the sum total of education,
experience, knowledge and skills. Therefore, if a company is
to compete on its intangible assets – its employees – it has
to be informed and demonstrate thought leadership around
what motivates employees to achieve and exceed their full
potential.
Consequently, the Remuneration Committee (“the
Committee”) completed a detailed analysis of the reward
principles for the organisation. The principles and supporting
strategies may be amended, based on ongoing analysis
conducted during the creation of reward practices, policies
and procedures that support the business strategies.
TOTAL REWARD PHILOSOPHY STATEMENT
The AfroCentric Group is committed to developing,
implementing and upholding sound total reward strategies
and practices and applying reward principles consistently
across the entire organisation and within those businesses
where it owns the majority shares.
The reward strategy and philosophy:
Is consistent with and aligned to the vision, mission,
values, and business objectives of the Group
Pursues the best interests of the Group, its shareholders,
and its broad internal and external stakeholder base
Offers an appropriate mix of remuneration
Is fair, equitable and transparent
Is market-related
Is driven by and shows a commitment to rewarding
performance, integrity, quality and innovation
Articulates a distinctive value proposition for current and
prospective employees, which assists in:
− Enabling the attraction, motivation and retention of
high-calibre employees who have the skills, capabilities
and values needed by the organisation
− Allowing for the development of the full potential of all
employees
− Recognising and encouraging exceptional and value-
adding performance
− Achieving maximum motivational impact and
desired behaviour through remuneration and reward
programmes and practices
− Creating sustainable employee satisfaction and
engagement
TOTAL REWARD GUIDING PRINCIPLES
AfroCentric aims to manage its remuneration and rewards in
line with generally accepted reward practice. This includes,
among others, the pursuit of the guiding principles below.
These principles not only underlie the Group’s approach and
rationale for its total rewards value proposition, they also
provide a guiding framework for all its reward programmes,
processes and policies.
Strategies and processes will be developed and
implemented in relation to each guiding principle, according
to the parameters set out below. The guiding principles for
AfroCentric Group and the related strategies and processes
the Group is working towards are:
A consistent and fair job evaluation system and process
which forms the basis for reward management
Internal equity balanced with external competitiveness
through reliable benchmarking
‘Determinants of pay’ which include performance and
position in the scale
Reward policies and practices aligned to the achievement
of overall business strategy and objectives