ORGANISATIONAL PSYCHOLOGY SECTION in the SCHOOL OF MANAGEMENT STUDIES
BUS5033W: ORGANISATIONAL PSYCHOLOGY MASTERS
REWARD MANAGEMENT AND
ESSENTIAL INFORMATION 2008
A/Prof Burger van Lill
Room 4.35 Leslie Commerce Building
Dr Anton F. Schlechter
Room 4.36 Leslie Commerce Building
Mrs Fazeela Felton
Room 4.34 Leslie Commerce Building
Tuesdays at 17:00 – 19:00
Room 3.08 in the Leslie Commerce Building
9 July – 4 November 2008
Organisational success is as much a function of the way business practitioners manage
employees, as it is the function of organisational structures and financial resources.
Compensating employees represents a critical human resource practice. Without sound
compensation systems, companies cannot attract and retain the best-qualified employees.
Compensation systems can promote companies’ competitive advantage when they are properly
aligned with strategic goals. The aim of this course is to provide students with the required
knowledge of the art of strategic compensation practice so that they, as strategic partners, may
play a role in ensuring an organisations’ competitive advantage.
One of the greatest challenges facing companies today is retaining top talent. The expense to an
organisation of replacing an employee (including separation, replacement, training and lost
performance costs) can be as much as that employee’s salary for a year. Turnover further erodes
morale among those employees that remain in the organisation and harms customer retention.
This course aims to help students understand turnover intentions and will show them how they
can assist organisations to gain a competitive advantage through being able to keep their most
After completion of this module, students should have a good understanding of:
• what an equitable reward programme is;
• when reward discrimination is justified and how to design models for rewarding special
• how to deal with inequitable rewards;
• retention strategies that organisations can make use of to retain top talent.
Course Content and Course Materials
This course consists of the following sections. The required readings for each of these sections
are provided and should be consulted as preparation for the section.
Week 1-4: Strategic Compensation and Fair Discrimination in Reward Management
• Reward analyses as strategic interventions.
• Factors influencing reward management decisions.
• The strategic role of compensation in ensuring competitive advantage.
• Legally required and discretionary employee benefits.
• Costs/benefits of flexibility in compensation systems.
• Reward equity analyses
• Reward disparities and how to deal with them
• Rewarding special groups as fair discrimination practice
• BEE share schemes
Burke, L.A., & Hsieh, C. (2006). Optimizing fixed and variable compensation costs for employee
productivity. International Journal of Productivity and Performance Management, 55(2),
Bussin, M., & Huysamen, D. (2004). Factors driving changes to remuneration policy and
outcomes. South African Journal for Human Resource Management, 2(2), 45-54.
Conley, P., & Lassonde, S. (2004) Using long-term incentives to retain top talent: Super Rewards
for Superkeeprs.. In L.A. Berger, & D.R. Berger (Eds.), The Talent Management Handbook
(pp. 399-412). New York: McGraw-Hill.
Dougherty, D. (2003). Human Resource Strategy: A Behavioural Perspective for the General
Manager. New York: McGraw-Hill Irwin. Chapter 4: Reward and Compensations Systems.
Grigoriadis, C., & Bussin, M. (In Press). Current practice with regard to short-term incentive
schemes for middle managers.
Madell, M. (2004) Linking Competencies to Performance and Pay. In L.A. Berger, & D.R. Berger
(Eds.), The Talent Management Handbook (pp. 384-398). New York: McGraw-Hill.
Montemeyer, E.F. (1996). Congruence between pay policy and competitive strategy in high-
performing firms. Journal of Management, 22(6), 889-908.
Muczyk, J.P. (1988). The strategic role of compensation. Human Resource Planning, 11(3),
Rosen, A.S., & Wilson, T.B. (2004). Integrating compensation with talent management. In L.A.
Berger, & D.R. Berger (Eds.), The Talent Management Handbook (pp. 351-364). New York:
Rosenbloom, J.S. (2005). The future of employee benefits. Journal of Financial Service
Professionals, 59(1), 61-65.
Williamson, J.A., & Kleiner, B.H. (2004). The use of options in compensation packages.
Management Research News, 27(4/5), 23-31.
Zingheim, P.K. (2004) Compensating Superkeepers: Talent your company needs to thrive. In L.A.
Berger, & D.R. Berger (Eds.), The Talent Management Handbook (pp. 365-383). New York:
Zingheim, P.K., & Schuster, J.R. (2007). What Are Key Pay Issues Right Now? Compensation
Benefits Review, 39, 51-55.
Week 5-9: Talent Retention
• Integrating compensation with strategic talent management.
• The psychological and motivational processes the lead to job withdrawal and the
decision to separate or not to separate.
• Talent retention strategies for competitive advantage.
Athey, R. (2004). It’s 2008: Do you know where your talent is? Why acquisition and retention
strategies don’t work. USA: Deloitte Development LLC.
Berglas, S. (2006, September). How to keep A players productive. Harvard Business Review,
Brown, A., Duncan, A., Harris, N. & Kelly, S. (2003). Strategic talent retention: Using
measurement to keep the best. Strategic HR Review, 2(4), 22-69.
Durgin, T. (2007). The Towers Perrin 2007-2008 global workforce study: Insights to drive growth.
HCI White Paper.
Frank, F.D., Finnegan, R.P., & Taylor, C.R. (2004). The race for talent: Retaining and engaging
workers in the 21st century. Human Resource Planning, 27(3), 12-25.
Glen, C. (2006). Key skills retention and motivation: the war for talent still rages and retention is
the high ground. Industrial and Commercial Training, 38(1), 37-45.
Guthridge, M., Komm, A.B., & Lawson, E. (n.d.). Making talent a strategic priority. The McKinsey
Hedger, A. (2007, April). Five ways to strengthen your engagement and retention strategies.
Workforce management. Retrieved from www.workforce.com
Heidrick & Struggles (2007, September). Mapping Global Talent: Essays and insights. Economist
Johnson, S.A. (2006). Talent segmentation in workforce planning. HCI White Paper.
Mossholder, K.W., Settoon, R.P., & Henagan, S.C. (2005). A relational perspective on turnover:
examining structural, attitudinal, and behavioral predictors. Academy of Management
Journal, 48(4), 607-618.
Sprague, C. (2008). The silent generation meets generation Y: How to manage a four generation
workforce with panache. HCI White Paper.
Tuckder, E., Kao, T., & Verma, N. (n.d.). Next-generation talent management: Insights on how
workforce trends are changing the face of talent management. Hewitt Associates.
Waldman, J.D., & Arora, S. (2004). Measuring Retention Rather than Turnover: A Different and
Complementary HR Calculus. Human Resource Planning, 27(3), 6-9.
Class meetings will take various forms and will include lectures, discussions and exercises. All
students are expected to contribute to the class discussions. Here quality is definitely more
important than quantity. For each session, assigned reading will be provided and all participants
are expected to read these as preparation for the class. Class attendance is compulsory (see
duly performed requirements below).
The final mark for this course will consist of four marks. A separate document is provided that outline the
four assignments in detail.
The assignment deadlines are as follows:
16 September: Assignment 1 (10%)
30 September: Assignment 2 (30%)
14 October: Assignment 3 (20%)
28 October: Assignment 4 (40%)
Duly Performed Requirements
Class Attendance and Permission to be Excused from Class
Attendance at all lectures is compulsory.
Only the course convenor may grant you permission to be absent from class. Do not
approach your lecturer if you want to be excused from class. To obtain permission to
be excused from class or get an extension for a hand-in date for an assignment, you
must first complete a form, obtainable from the course website. Permission to be
absent from class or for an extension of a hand-in date, is granted for medical,
compassionate or sports related reasons. Supporting documentation (e.g. a
medical certificate) should accompany the form.
Plagiarism (theft of intellectual property)
Plagiarism is the theft of intellectual property. Plagiarism of any kind will not be
tolerated. Any work copied directly (without appropriate referencing) from any book,
article, or other student’s work, constitutes plagiarism. The University regards
plagiarism as a very serious offence and strict disciplinary action will be taken
Assignments must be submitted by the deadlines indicated above in the labelled
boxes opposite Room 4.32 in Leslie Commerce.
One copy of an assignment must be submitted and it should have a plagiarism cover
sheet attached to it. Your assignments will not be marked if you have not attached
the cover sheet, We have to retain original, marked copies of assignments for the
external examiner. You will receive a photocopy of your marked assignment, should
your assignment be selected for this purpose,
Unauthorised late submissions will incur a penalty: -5% for one day late;
-10% for two days late; -15% for 3 days late. Unauthorised late submissions of
more than 3 days will not be marked.
Requests for a remark
You have the right to appeal the grade awarded by the marker of your assignments. If you
are dissatisfied with your assessment, please do not request a remark from your lecturer.
Write a formal letter to the external examiner requesting a remark and submit this letter to
the course convener. This request should be based on a clear argument, not simply
reflect the idea that you are accustomed to getting higher marks. You should note that when
a remark is agreed to, the entire assignment will be remarked. Moreover, a remark may
result in a lower mark being given to the work if the external examiner thinks that this is
justified. The course convener will submit this letter to the external examiner in June or in
Your lecturer may attach a document to your assignment indicating that your written work
does not meet the standard expected of a postgraduate student. The document will
contain directions to the University’s Writing Centre. You should make an appointment with
a consultant in the Writing Centre and take your assignment with you. The assignment will
contain the lecturer’s remarks pertaining to lack of quality or suggestions for improvements.
Even when your first language is English, it does not follow automatically that you can write
academic English. Poor writing skills will handicap you and it is imperative that you improve
your competence in this area when your lecturer indicates this.