Human resource management- Remuneration and Benefits Plan
Order Description
Each dot point in the marking/ assessment criteria must be covered. This is in order to pass the assessment. Thank you
Wages
Store Manager Barista (Full Time)
Relevant Award Restaurant Industry Award 2014 Restaurant Industry Award 2014
Base Wage
1 hour =$22.67
50 hours =$1133.50
48 weeks = $54408
(Fair Work Ombudsman. 2014)
1 hour =$18.02
38 hours = $684.76
48 weeks = $32868.50
(Fair Work Ombudsman. 2014)
Minimum Entitlements Sunday: $45.33
Public Holiday: $56.66
(Fair Work Ombudsman. 2014)
Sunday: $27.03
Public Holiday: $45.05
(Fair Work Ombudsman. 2014)
Employer Obligations Appendix A Appendix A
Supplying uniforms and PPE.
Obligation Costs Super: 9.5% (after $350 income earned per month) (ATO. 2014)
FBT: on bonus above $2000
Appendix B
Super: 9.5% (after $350 income earned per month) (ATO. 2014)
FBT: on bonus above $2000
Appendix B
ATO Requirements Appendix C
Annual PAYG: $9229.60
Appendix C
Annual PAYG: $2787
Benefits/Incentive Costs 20% of profits made exceeding their Outlet’s Sales KPIs for the month.

Loyalty Bonus:
Annually for their years of service. Starting with:
• 5% of their total annual salaries, every year for the first 5 years,
• 9% for 5-10 years,
• 12% for 15 years; and
15% for over 15 years. (Ueda, 2014)

Referral Bonus:
Will receive a $250 bonus after a referral has been successfully hired by CaffeineCapers. The employee who referred the new staff member will receive an additional $250 after the new staff member has been retained for a period of 6 continuous months.$500 bonus after 1 continuous year of employment (Martocchio, 2004)
Loyalty Bonus:
Annually for their years of service. Starting with:
• 5% of their total annual salaries, every year for the first 5 years,
• 9% for 5-10 years,
• 12% for 15 years; and
15% for over 15 years. (Ueda, 2014)

Referral Bonus:
Will receive a $250 bonus after a referral has been successfully hired by CaffeineCapers. The employee who referred the new staff member will receive an additional $250 after the new staff member has been retained for a period of 6 continuous months.$500 bonus after 1 continuous year of employment (Martocchio, 2004)
Wage and Entitlements Comparison
Total Package Annual Gross Income:
$54408 (annual wage)
+ loyalty bonus 5%
($2720.4 Grossed Up = $5133)
= $59541
– Superannuation 9.5%
= $53884.61

Annual Net Income:
$53884.61
– $9059.50 (PAYG)
– Medicare Levy
($53884.61 x 2% = $1077.70)
= $52806.90
Annual Gross Income:
$32868.50
+ loyalty bonus 5%
$1643.45
= $34511.93
-Superannuation 9.5%
= $31233.30

Annual Net Income:
$31233.30
– $2476.33 (PAYG)
– Medicare Levy
($31233.30 x 2% = $624.65)
= $30608.65
Wage and Entitlements Comparison Continued.

Industry Budget Comparison

Manager Minimum(AUD) Maximum(AUD) CaffeineCapers
bonus $0.00 $7,250.00 $2,720.40
wage annual $30,408.75 $45,665.25 $54,408.00
wage hourly $12.67 $19.00 $22.67
(PayScale. 2014)
Graph A: Australian Restaurant Manager

Explanation:
This representation displays the average Australian budget for wages and bonuses for Restaurant/Store Managers. This snap shot shows CaffeineCapers offering average bonus packages in relation to the industry norm. The CaffeineCapers calculations are based on a Store Manager who has been with the company for 5 years and their store did not make over their allocated KPI. Taking into account the number of other circumstances in which managers can earn bonuses at CaffeineCapers they will have the capacity to take a market leading position throughout the financial year.
As can been seen in the above table CaffeineCapers offers an above average hourly base rate. Annual wages offered by CaffeineCapers is above the market average and will create desirability for these management positions within the industry.

Barista Minimum(AUD) Maximum(AUD) CaffeineCapers
bonus $0.00 $102.94 $1,643.45
wage annual $22,070.40 $39,106.55 $32,868.50
wage hourly $12.10 $21.44 $18.02
(PayScale. 2014)
Graph B: Australian Barista

Explanation:
The above graph displays where in the hospitality industry CaffeineCapers falls in regards to their pay and bonuses for Barista staff. They are paying above minimum industry standards but below maximum recorded amounts. This gives CaffeineCapers room to increase wages should they see fit. Maintaining this average balance within the industry creates more incentive for staff to climb up the hierarchy as their pay and bonuses gradually increase over the regular industry standards. This average amount creates room in the budget for CaffeineCapers to be more generous to their management staff. CaffeineCapers baristas receive more than 10 times the average amount.
The above table indicates that CaffeineCapers offers an average hourly wage to their Baristas.

Market Surveys
IPSOS Australia are the leading specialists in market research and innovative systems. During annual budget evaluations it would be beneficial to enlist their services to conduct a variety of market surveys. These can be used to justify any changes to current pay rates and encourage CaffeineCapers to raise their wages and salaries if they are below the industry average. Human Resources can assist to develop surveys appropriate to the culture within CaffeineCapers and to ensure whatever the results are they correlate with the data available for collection at CaffeineCapers. (IPSOS Australia. 2014)
Preliminary investigations can be done by running a generic market survey analysis through mediums such as PayScale which is available for free over the internet. Once the criteria have been entered you will be presented with information as follows.
Restaurant Manager Salary (Australia)

A Restaurant Manager earns an average salary of AU$50,844 per year. Most people with this job move on to other positions after 20 years in this career. Experience does not have a big impact on this job’s pay.

Salary AU$40,545 – AU$60,887
Bonus AU$0.00 – AU$7,250
Profit Sharing AU$0.00 – AU$3,500
Commission AU$0.00 – AU$1,350
Total Pay AU$39,455 – AU$61,492
(PayScale. 2014)
Barista Salary (Australia)

The average pay for a Barista is AU$17.43 per hour. Most people with this job move on to other positions after 10 years in this field. For the first five to ten years in this position, wages increase somewhat, but any additional experience does not have a big effect on pay.

Hourly Rate AU$12.10 – AU$21.44
Hourly Tips AU$0.00 – AU$1.53
Overtime AU$2.98 – AU$29.17

Bonus AU$0.00 – AU$102.94
Total Pay AU$25,468 – AU$45,659
(PayScale. 2014)

Bonus and Incentives Applicable to Roles
Store Manager Barista (Full Time)
Bonus Standard:
As above. Loyalty:
As above.

Referral:
As above.
3. Tipping

Incentives Corporate Memberships (Appendix D) Corporate Memberships (Appendix D)
Staff Discount:
All employees receive discounts at all CaffeineCapers store fronts. Show your employee ID card. Staff on wages receive a 30% discount on any menu items Staff Discount:
All employees receive discounts at all CaffeineCapers store fronts. Show your employee ID card. Staff on wages receive a 30% discount on any menu items
1. Novated lease 4. Profit sharing
2. Profit sharing

Store Manager
1. Store Managers are entitled to organise a Novated Lease with CaffeineCapers and their nominated fund. This can be done on any vehicle currently owned or to be purchased that is used for personal and business use. This is the only vehicle compensation that CaffeineCapers offers. The nominated fund supplies fuel cards and other perks. This agreement will allow the store managers to claim tax deductions and other monetary savings. (NLC. 2014)

2. The CaffeineCapers profit sharing scheme is designed to encourage advancement and whole organisation performance. Payouts will be calculated and distributed from company profits only. This will apply mostly to upper levels of management and will be dependent on annual profit margins. Awareness of how profit sharing is calculated will be regularly distributed amongst the CaffeineCapers work community. (Masternak and Associates. n.d.)

Barista

3. Tipping: Tips will be distributed among store staff on a weekly basis and divided based on hours worked. To encourage tipping there will be advertising and encouragement from the store manager. (PayScale. 2014)

4. These full time Barista’s are more likely to receive profit share bonus payments then their casual or part time counterparts. The more the whole organisation gets behind the expansion and branding of CaffeineCapers the more likely the profit share will reach lower level staff. (Masternak and Associates. n.d.)

Justification

Incentive Justification Strengths Weaknesses Legal
Tipping This is an Australian hospitality industry expectation. All wage analysis surveys calculate the hourly tips per frontline staff member. Incorporating this into the culture of service at CaffeineCapers encourages these staff members to improve their customer service and focus on those most important to the business. Tax free and tangible representation of impeccable customer service.

Encourages top performance.

Encourages team work and support.

Encourages innovative thinking to improve and create new methods of service. Can cause some disputes if all team members are not pulling their weight.

Can be difficult to advertise and encourage without being pushy. N/A
Novated Lease
(NLC. 2014) These agreements open a wide avenue of incentives funded by the independent provider. Saving CaffeineCapers money in tangible incentives while providing a ‘full comprehensive’ incentive scheme to those in deserving positions such as management. No matter how much driving you do you save in FBT.

Get to drive a relatively new car supported by work.

GST and FBT savings to be made.

Access to a large range of other free services.

Bolsters Employer of Choice opinion by supporting key staff.
(Smart Leasing. 2012) Vehicle under lease needs to be no more than 8 years old at the end of the contract.

If staff member ends employment early they need to pay out the difference in their lease. Standard FBT (Smart Salary. 2014)
Profit Share
(Masternak and Associates. n.d) The essence of profit sharing is to bring an organisation together. Fostering an innovative culture within a business relies heavily on the support of all staff members. Using profit sharing as a vehicle to create this will assist CaffeineCapers in achieving its operational and strategic goals. an encourage staff to identify with organisation success.

Encourage lower level staff to progress through the organisation to start receiving the extra bonus.

Increases standard annual bonuses.

Easily calculated and distributed.

Allows rooms for addition incentive schemes where necessary. Payouts are made when there is profit not because there is an improvement in performance.

Some employee groups will be excluded.

No employee involvement in design process.

Can’t stand alone as the only incentive scheme. Standard FBT (Business Law Today. 2014)

Financial Impacts

Tipping and profit sharing is dependent on how profitable CaffeineCapers is on a daily and annual basis. These do not impact on the expenditure for the business within the financial year. Any expenses incurred during the lease process are manageable and necessary expenses. The benefits of maintaining staff at the management level of employment out ways the cost of offering this form of incentive.

Remuneration and Benefits Agreement and Support

The most efficient way to introduce the R and B plan to staff members is during their orientation and induction programs. A preliminary introduction to highlight its existence and potential applications will make a smoother transition for the staff members when it comes to identifying how the Remuneration and Benefits Plan affects their individual performance. There should be two stages of agreement documentation:

1. To be signed and acknowledge during their orientation and induction program to show a copy has been provided and the implications of the plan have been briefly explained.
2. During their first performance review to acknowledge an understanding of how the R and B Plan affects their performance rating and what they can strive for in improving or maintaining their work performance.

As discussed previously the planning, review and amendment process for this plan with be in line with the same structure as the Performance Management Process. This will ensure all changes are made in correlation with current employee requirements and demands. These classifications do not change how the Remuneration and Benefits Plan aligns with individual positions.

Regardless of a Store Manager being classified as Supervisory position under the PMP and as such would have their performance measured based on Performance Factors that have be predetermined for their role and grow as CaffeineCapers expands their Strategic and Operational Goals.Or that the barista positionsare under the General Employee branch meaning their responsibilities and performance rely on key competencies for that role. Purely, knowledge and skill based measured activities.

Review Process

Review Process Responsible Measure
What? And Why? Amendments
Track all benefits gifted to employees and for what reason. Accounting Manager (responsible for allocating budget amount) and

HR Manager (responsible for all PM docs)

Dollar value and purpose

Does this correspond as an appropriate reward for the task?

Develop an easier and more comprehensive monitoring system.
Track all bonus payments made and justifications. Accounting Manager (responsible for allocating budget amount) and

HR Manager (responsible for all PM docs) Dollar value and purpose

Does this correspond as an appropriate reward for the task? Develop an easier and more comprehensive monitoring system.
Analyse employee resignation rates and exit interview information. HR Manager (manage exit interviews and terminations of contracts) Collate annual data on all forms of resignations.

Tally results from exit interviews and create database.

Track trends and analyse effectiveness.
Streamline process and ensure all exit interviews are conducted by one team and the information is stored in a universal filing system.
Review employee engagement survey results. Induction officer (responsible for educating new staff and collating surveys)

HR Manager (responsible for recording survey results) Ensure file retention and communication to head office is maintained.

Follow up on induction process and collate results in database.

Evaluate effectiveness and cause and develop trends to highlight areas of improvement.
May change procedures to inform new staff of responsibilities.

Provide training to improve integration into teams.
Analyse employees remuneration data such as relevant position to market. (Market survey position specific) Head office staff with research skills and economic understanding. Manage subscriptions to market analysis databases and companies. Create parameters to search and maintain.

Identify trends and assist in forecasting. Will highlight areas that require amendments.
Use annual trends to develop strategies to improve remuneration levels and appropriateness.
Market data analysis. (hospitality industry) Head office staff with research skills and economic understanding. Manage subscriptions to market analysis databases and companies. Create parameters to search and maintain.

Identify trends and assist in forecasting. Will highlight areas that require amendments.
Use annual trends to develop strategies to improve remuneration levels and appropriateness. Insure desired market position is maintained. (leading position)

Appendix A: Leave Entitlements and Pay Responsibilities

LEAVE ENTITLEMENTS
Annual
Full Time 4 weeks
Part Time 4 weeks (based on regular work hours)
Casual Not applicable

Personal
Full Time Discretion of management
Part Time Discretion of management
Casual Discretion of management

Carer and Sick Paid
Full Time 10 days
Part Time 10 days (based on hours of work)
Casual Not applicable

Carer and Sick Unpaid
Full Time 2 consecutive days for immediate family
Part Time 2 consecutive days for immediate family
Casual 2 consecutive days for immediate family

Compassionate
Full Time 2 consecutive days for immediate family
Part Time 2 consecutive days for immediate family
Casual 2 consecutive days for immediate family

Parental
Full Time Have worked for business for at least 12 months. 12 months unpaid.
Can request an additional 12 months unpaid.
Part Time Have worked for business for at least 12 months. 12 months unpaid.
Can request an additional 12 months unpaid.
Casual Have worked for business for at least 12 months.
Expectation that they will continue employment on a long term basis. 12 months unpaid.
Can request an additional 12 months unpaid.

Community Service
Full Time No limit. At discretion of management. Unpaid.
Part Time No limit. At discretion of management. Unpaid.
Casual No limit. At discretion of management. Unpaid.

Long Service

Full Time, Part Time and Casual are eligible.
“As from 3 June 2001 the entitlement to long service leave is 8.6667 weeks on full pay after each period of 10 years continuous service.

After an employee has completed their first 10 years continuous service, they are entitled to take any further long service leave accumulated only after another five years continuous service (i.e. after 15 years continuous service).” (Industrial Relations. 2014)

Pay Requirements
Employees must be paid weekly or fortnightly and on any day except Friday, Saturday or Sunday.
When pay day falls on a public holiday, an employer and employees can agree for wages to be paid on the Friday.

Casuals are paid either:
• at the end of each time they work, or
• where they agree, weekly or fortnightly, when the full-time or part-time employees are paid.

An employee can agree to be paid monthly.
(Fair Work Ombudsman. 2014)

Appendix B: Fringe Benefits Tax

Gross Up Calculation
Total Taxable Value
1 – tax rate applied = $2,500
1 – 0.465 = $4,673

This must be recorded on an individual’s pay slip as there is no income tax taken directly from bonus payments. “The highest marginal tax rate plus the Medicare levy” equals 1 – the denominator value.(Department of Finance. 2014)
From 1 July 2014 the Medicare levy rose from 1.5% to 2.0% (ATO. 2014)
Appendix C: PAYG Requirements

Taxable Income Tax on This Income
0-$18200 Nil
$18201-$37000 19c for each $1 over $18200
$37001-$80000 $3572 plus 32.5c for each $1 over $37000
$80001-$180000 $17547 plus 37c for each $1 over $80000
$180001 and over $54547 plus 45c for each $1 over $180000
(ATO. 2014)

CaffeineCapers can ensure compliance with tax income rates and PAYG by doing to following:

• Ensure all new staff complete a Tax File Declaration Form.
• Have all staff complete weekly timesheets to be submitted to HR.
• Withhold the appropriate amount of PAYG tax.
• Lodge PAYG activity statements and make payments to ATO.
• Provide PAYG withholding payment summary and annual report.
• Provide payment summaries to employees and other payees.
ATO. (2014)

Appendix D: Corporate Memberships.

• Discount to local Globe Gyms: any employee may obtain a gym membership for $60 per month.
• Discount Childcare:your local Happy Smiles childcarers will allow a 50% discountwhen a CaffeineCapers employee enrol their kids (ages 3-5).
• Discounts on Training Seminars: Depending on the type of seminar employees, CaffeineCapers may reimburse; the full cost, partial cost or no cost. This is left at the discretion of the HR department whom will take the circumstances into consideration and asses the amount (if any) of the reimbursement. (Frydman. 2008)

References
1. ATO. (2014) Individual Income Tax Rates. Retrieved 21 October, 2014, from: https://www.ato.gov.au/Individuals/Income-and-deductions/How-much-income-tax-you-pay/Individual-income-tax-rates/
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21. Masternak and Associates. (n.d.) The Difference Between Gainsharing and Profit Sharing. Retrieved 5 November, 2014, from: http://www.masternak.com/gainsharing-versus-profitsharing.asp
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