ASSESSMENT 3 The case for Assessment 3 builds on from the case of Assessment 2 and you can use any of the information provided from Assessment 2. You are not, however, bound to your response for Assessment 2. If you introduce elements of a Performance and Rewards Management System to complement a proposed Base Pay System, you will need to provide these details and explain how you believe it will interact with the Base Pay Review of Assessment 3. The year is still 2018 (Do not consider anything to do with the Covid-19 pandemic) Repeat of some information from Assessment 2 Case Study - Tropical Fruit Research Institute Background The Tropical Fruit Research Institute (TFRI) is an industry owned organisation to conduct Research and Development projects for the processing of the Tropical Fruit. The Board of TFRI is made of seven elected representatives of the various member Cooperatives and Companies who grow and process the tropical fruit. The board appoints the CEO who heads an Executive Management Group (EMG) including the Business Manager, and Unit Managers of the three Research Units, including Agronomy, Engineering and Chemistry Departments. The Business Manager oversees all the Business and Administration functions including HR and Accounting. Each of the Research Units is headed by a Unit Manager and consists of several Senior Researchers, Researchers, and Technical Support staff. Each Manager also has a Personal Assistant for the administration duties of the Research Unit. An Organisational Breakdown Structure is shown in Figure 1. 7 Board Members (Elected by TFRI members) [ CEO ' Business Mgr Engineering Unit Mgr | chemistry Unit Mgr Senior Professionals | | Agronomy Unit Mgr Accountant | Senior Professionals HR Mgr | Senior Professionals Professionals Admin Support 4' Professionals 4| Techs/Trades 4| Admin Support 4| Professionals 4| Techs/Trades 4| Admin Support Techs/Trades | Admin Support Figure 1 TFRI's Organisational Breakdown Structure Revenue for the institute comes from three main sources. TFRI's financial reporting year is the calendar year. In simple terms, a forecast annual surplus revenue Primarily, funding comes from the Member Companies through an annual levy, based on company turnover, Secondly, Member companies can engage researchers for specific consultation services and research projects. Thirdly, funding comes in the form of grants from various government departments and industry funding initiatives. (the annual net revenue minus the annual net costs) is divided into two components as recommended by the EMG and approved by the Board at the September board meeting. The annual surplus revenue essentially goes to two internal accounts being the Rewards Management Account, which funds the annual rewards to staff as bonuses, and the Revenue Reserves Account used to fund strategic projects such as seed funding for new research initiatives. Strategy Review Earlier this year, the EMG conducted a workshop to update the organisational strategy for the next five years. As part of this Strategy Review process, they undertook a SWOT analysis to determine their Strengths, Weaknesses, Opportunities and Threats as those summarised in Figure 2. Strengths Guaranteed source of Levy funds Reputation of established researchers Strong talent pool of recently acquired researchers and technicians Well-equipped research facility Healthy Revenue Reserves Weaknesses Lack of applied or practical skills in professional researchers Lack of knowledge in emerging technologies Weaker relationships with Member Companies Some discontent emerging over base pay rates across departments. SWOT Opportunities Increase of Member base to other industries or other countries Provide consulting and research services to non-member companies both domestically and internationally s Engage persons skilled in emerging technologies Threats o Encroachment on existing client base by other research providers (e.g., universities) o Downturn in Tropical Fruit industry and/or economy e Loss of talented staff Figure 2 Summary of TFRI's SWOT analysis New information for Assessment 3 In investigating the identified opportunities above, the CEO has discovered that the Singapore Government will consider supporting research projects in Australia on the condition that; e the research outcomes would be relevant to industry within Singapore, and e established researchers from Singapore are engaged as expatriate employees in senior roles by the Australian organisation for a minimum of three years. Further investigation reveals that suitably qualified Singaporean researchers, pre-approved by the Singapore's government, would apply for the roles based on position descriptions and selection criteria set out by TRFI. Once compatible projects and expatriates are agreed upon, the Singapore Government would arrange for the appropriate visas and the relocation of the Singaporean expatriates into Australia, however the remuneration package (including base pay, bonuses, benefits, and allowances) are to be covered by TFRI. The CEO believes that the potential benefits of this international funding includes; e arevenue stream from the Singapore tropical fruit industry via their government, e potential revenue from the Australian Government to contribute to those projects supported by Singapore, and e the expatriates' knowledge, skills, and experience in emerging technologies. Base Pay Review TFRI, recently engaged your team as independent consultants to review the current Base Pay System. The Base Pay Review was to be completed in three steps: 1. Review the historical records of staffing and their Base Pay. 2. Determine the Remuneration requirement for the proposed Expatriate personnel. 3. Develop Recommendations for a system for determining Base Pay. You have completed the first two steps as detailed as follow. The Current Base Pay System is a traditional Pay Scale system where there are 5 levels from A to E with 5 steps per level refer Figure 3. Administration staff would be in levels A and B, Technicians and Trades personnel would be in level B, Degree Qualified Professional staff are in level C, Senior Professional staff are in level D and Unit Managers would be in Level E. The CEQ's remunerations package is not bound by the Pay Scale System, rather it is negotiated every three years with the Board. The base pay for a few staff members has been above their typical level, but only in rare cases of long serving employees with very specialised and sought knowledge, skills and experience. Year on year pay scale adjustments are made by the HR Manager based on either CPI or the official interest rate, whichever is lower. An initial comparison with data from professional associations such as Professionals Australia and Engineers Australia suggest that the existing Pay Scale is below median for the professional staff, at around the lower end of the second quartile. Information through https://www.payscale.com/ for the technical, trades and administration staff suggest a similar situation. This may offer some explanation for the growing discontent emerging over base pay rates across departments as noted in a SWOT analysis. With regards to the remuneration packages for the Singaporean expatriates, you suspect their expectations may be based on the going rate in Singapore. A quick search of https://livingcost.org/ reveals that in Singapore salaries are about 30% higher and the Cost of Living is about 35% higher than in Australia. Step Level {increment for (promotion) semiofity, service and/or 'merit) Unit Managers T ; Senior Degree Qualified T S Professionals Degree Qualified Professionals Technical and Trades Personnel and Senior Administration Support Administrative Support Figure 3 TRFI's current Pay Scale THE NEXT STEP You realise that there are serious deficiencies with TFRI's current base pay scales. You are faced with the major challenge of reviewing the base pay system for the domestic staff while integrating the remuneration packages for expatriate staff. Assessment 3: You are required to develop a position paper in a report format providing TFRI with a range of options for employee remuneration. This report will provide strategic remuneration options, the advantages and disadvantages of each option and appropriate examples to demonstrate the remuneration approach