Case Study: Remuneration at Zenith Manufacturing

Background: Zenith Manufacturing is a mid$-$sized company based in Johannesburg, South Africa, specialising in producing high$-$quality automotive parts. With a workforce of $500$ employees, Zenith prides itself on its innovative engineering and commitment to quality. However, the company is facing challenges in retaining key talent, particularly in technical roles, due to the competitive nature of the automotive industry.

In recent months, several skilled engineers and technicians have left Zenith to join competitors who offer more attractive remuneration packages. The Human Resources Director, Lindiwe Ndlovu, has identified that Zenith's current remuneration strategy is not as competitive as that of similar companies in the region. A benchmarking study by the HR department revealed that Zenith's salary offerings are below the market median, particularly for specialised roles. Additionally, other companies in the industry offer more generous benefits, such as performance bonuses, stock options, and flexible working arrangements.

Lindiwe has recommended that Zenith re$-$evaluate its remuneration policy regarding employee remuneration to prevent further loss of talent and attract new employees. However, the company is also concerned about balancing its salary offerings with financial sustainability.

$3\mathrm{.}1$ Identify the remuneration building block $[1$ mark$]$ inadequately addressed in Zenith Manufacturing. Provide specific examples from the case study $[1$ mark$]$ to support your answer. $(2)$

$3\mathrm{.}2$ Evaluate whether Zenith Manufacturing has effectively implemented the necessary remuneration practices to support the remuneration building block identified in Question $3\mathrm{.}1.$ For each relevant practice, provide a brief discussion $[4$ marks$],$ give an example from the case study $[4$ marks$],$ and critically assess whether the practice was appropriately applied or neglected within Zenith Manufacturing $[4$ marks$].$ Ensure the coherence of your response for an additional