Newsletter - Issue 1/2001
2001……A Global Odyssey

2001……A Global Odyssey

What will 2001 bring for us all? A continuation of natural disasters such as droughts, floods, fires, and earthquakes? Are there more disasters occurring, or is it simply that developments in communication allow us to instantly see and hear events from around the world as they occur?

We are definitely operating in a global environment and for all businesses this may mean we need to think globally in terms of the development, marketing and sales of our products and services.
For some organisations this may mean either moving off shore, or looking off shore for new products or new markets and customers.
New Zealand is a small market compared to the rest of the world and if we do not wish to expand off shore then the retention and development of local markets and customers is vital for business viability.

If we remain only in the NZ market, we still have to operate in a global environment competing against large international organisations for both customers and employees.
Because of their status, size, ability to pay and personal growth and development opportunities large multinationals are more often able to attract and retain high calibre employees.

How does the smaller New Zealand business manage against such competition?

If you wish to be an 'Employer of Choice' you not only need to consider how your organisation functions or how it is structured, but you need to provide an environment that attracts and retains 'top tier' employees.

Implementation of the above philosophies will assist in ensuring you gain a competitive advantage in the recruitment and retention process.

Remuneration Reviews

The time of year is approaching when many organisations will be reviewing their organisation's performance during the past 12 months in order to determine the level of annual wage and salary movements for their employees.

Along with all the other variables to be taken into account you should note the following.

Minimum Wage Act (see the Employment Acts section-subscriber access only)
The minimum wage (as per an amendment to the Act) has been adjusted with the new rates taking effect from 5 March 2001 as follows:

Youths (16-17 yrs)	$5.40 $43.20 $216.00	per hour per 8 hour day 40 hour week
Adults (19 and over)	$7.70 $61.60 $308.00	per hour per 8 hour day 40 hour week

These rates apply to all employees whether full time, part time or casual. They also apply as minimum rates to any hours worked in excess of 8 per day or 40 per week.

CPI Movement
The CPI movement for the December 2000 quarter over the December 1999 quarter was 4%.

Wage Movements
The following are some statistics from the latest edition of the Department of Labour's Employment Relations Service 'ERA Info' report, which may be of interest. The statistics are compiled from all collective agreements registered with the department.

A) Annualised base wage movements (most common movements)

• 1998 Between 0% & 2%
• 1999 Between 0% & 2%
• 2000 Between 2% & 4%

There were other movements in base rates including over 4% however the above indicate the rate movement that was most common.

B) Minimum adult rates /annualised base wage rates by Industry and rate movements
The rate increase is a percentage when weighted per employee.

	Maunfacturing
		Average minimum adult rate	$403.00 per week
		Average annualised rate increase	2%
	Retail Trade	Average minimum adult rate	$351.00 per week
		Average annualised rate increase	2%
	Accommodation, Cafes, Restaurants
		Average minimum adult rate	$346.00 per week
		Average annualised rate increase	0.9%
	Finance/Insurance
		Average minimum adult rate	$388.00 per week
		Average annualised rate increase	1.9%
	Health/Community Services
		Average annualised rate increase	$491.00 per week
		Average annualised rate increase	1.8%

General comment
An organisations Remuneration Policy can have a dramatic effect on the success or otherwise of the business. To be effective remuneration and incentive programmes must be linked with the organisation's goals and objectives and be clearly communicated and understood by all employees.

The individual's goals must be challenging but achievable and the rewards must be significant enough to encourage and influence their achievement by the employee.
Organisations need to consider:

• Whether rewards should be intrinsic (eg variety, challenge, social interaction)
• or extrinsic (eg pay and benefits, working conditions, incentives)
• Pay equity both internally (between internal jobs) and externally (market
• rates)
• Long term effects of any incentive programme (eg becoming expected as
• normal remuneration)
• Costs and benefits of a Remuneration/Rewards programme to the
• organisation.

Obviously the above is only a general comment, not a detailed procedure to follow.