Having considered the key psychological and strategic dimensions to understanding the employment relationship, as well as the three main approaches to managing employee performance, we can now turn our attention to the second of the two human resource management processes with which this book is concerned, namely the management of employee reward and, in particular, the management of employee pay or remuneration. As noted in chapter 1, a remuneration system typically comprises three main elements: base pay, benefits, and performance-related pay. In designing any remuneration system careful attention should be paid to three key considerations: first, the relative role that each of these three components will play in total remuneration; second, the practices that will be drawn on to configure each component; and third, the target level of total remuneration for each position. The chapters in parts 3 and 4 offer guidance in addressing these key design considerations.

The five chapters in part 3 cover base pay and benefits. Chapter 9 considers the rationale for base pay, the main options for configuring base pay, the general strengths and weaknesses of each approach, and the incidence of each. Chapter 10 then details the pay structures associated with each option, while chapters 11 and 12 discuss the evaluation methods and processes associated with the development of pay systems based on each of these approaches. Chapter 13 then examines the logic of employee benefit plans and the main options for configuring such plans.