REMUNERATION is one of the most powerful tools an organisation has to shape its culture, drive performance, and attract or retain critical talent.
It reflects not only what an organisation values but also how it balances fairness, competitiveness, sustainability, and compliance.
A well-defined remuneration policy provides clarity, strengthens governance, and ensures alignment between reward and strategy.
This remuneration policy sets out the principles, structures, and processes through, which an organisation determines, administers, communicates, reviews, and governs employee pay.
It is more than a technical document; it is a declaration of how value creation is recognised and rewarded while maintaining integrity, equity, and sustainability.
Purpose
This policy establishes how an organisation manages remuneration in compliance with the Labour Act [Chapter 28:01], relevant national employment council (NEC) collective bargaining agreements, Zimbabwe Revenue Authority (Zimra) requirements including PAYE and Aids levy, Reserve Bank of Zimbabwe (RBZ) guidance on currency and payment practices, and National Social Security Authority (Nssa) obligations.
It aligns reward with strategy through grade-based pay structures, credible market benchmarking that typically targets the market median unless exceptions are justified, and performance-linked elements that reward results and ethical behaviours.
- Teachers, other civil servants face off
- Veld fire management strategies for 2022
- Magistrate in court for abuse of power
- Vungu Dam water treatment and irrigation project takes off
Keep Reading
The policy promotes internal equity and non-discrimination, balances competitiveness with affordability, and clarifies governance through decision rights, audit trails, and controls such as clawback and malus.
Scope
The policy applies to all employees of the organisation, including permanent, fixed-term, part-time, casual or temporary staff, graduates, trainees, and interns.
Executives are also included, although they may be subject to additional policy guidelines by the remuneration committee.
Expatriates or secondees working in Zimbabwe are covered, with addenda such as tax equalisation stated in their contracts.
The policy excludes independent contractors, vendors, agency workers, and fees for non-executive directors. It applies across all entities unless a stricter or more favourable board-approved addendum exists.
The policy covers the full reward lifecycle from offers and grade-based fixed pay, to variable pay, benefits, currency arrangements, allowances, deductions, promotions, transfers, and termination-related payments.
Where conflicts arise, precedence is given in the following order: Zimbabwean law, applicable NEC CBAs, signed contracts, RBZ directives, this policy, and supporting procedures. Confidentiality of personal pay data is maintained at all times.
Principles
The remuneration framework is founded on compliance, equity and fairness, market competitiveness, performance and values, affordability and sustainability, transparency with confidentiality, simplicity and consistency, and robust governance.
Pay structure
Roles are graded, for example using the Paterson system, with each grade having a minimum, midpoint, and maximum pay. Hiring usually occurs between the minimum and midpoint, with progression depending on competence, performance, and internal equity.
Annual reviews are not automatic; instead, they consider market movements, performance, equity, and affordability. Consumer price index data is a factor but not a guarantee for salary adjustments.
Currency, frequency, and indexation
Pay may be denominated or paid in either USD or ZiG, as allowed by law and contracts. Payment is made monthly in arrears, and payslips reflect all components, deductions, and currencies.
Indexation and cost-of-living adjustments consider CPI, exchange rate shifts, NEC collective bargaining outcomes, and budgets but are not automatic unless stipulated by a contract or collective bargaining agreement.
Variable pay
Variable pay includes annual bonuses that cascade from company performance down to function, team, and individual levels, all governed by thresholds and caps.
Sales and operations incentives are governed by written policy, auditable metrics, quarterly reconciliations, and capped payments.
Clawback and malus provisions apply to reduce, defer, or recover awards in cases of misconduct, misstatement, or risk failures.
Benefits, leave-linked pay
The policy provides for statutory entitlements such as Nssa, statutory leave, and other legal obligations. Core benefits, where provided, may include medical aid, pensions, and funeral cover.
Allowances such as housing, transport, on-call, or data are based on job needs and aligned to NEC or role requirements, but they are not entitlements.
For professionals, managers, and executives, the total cost to company (TCTC) model applies, where all guaranteed cash and recurring allowances are rolled into a single figure.
Company vehicles are the exception, not the norm, and are only provided where job demands justify. Rules govern caps on acquisition, replacement, and business-related fuel use.
Schooling for dependents is not a standard benefit for local hires, except in legacy cases with a 24-month sunset clause, after which benefits are converted to cash or discontinued.
Expatriates may receive schooling support per contract, while local staff may apply for study assistance for job-related education, subject to conditions. Festive bonuses such as the 13th cheque are only granted if explicitly covered by contracts or CBAs.
Performance and pay link
Annual goals cascade from organisational strategy, with key performance indicators (KPIs) designed to be measurable, ethical, and within the employee’s influence.
Performance assessments combine results and behaviours. Merit increases prioritise high performers, especially those below the midpoint of their grade or in scarce roles, while low performers generally do not receive merit increases until improvement is shown.
Promotion, transfer, acting
Promotion requires a higher role level and pay is normally set at or above the grade minimum, subject to equity checks. Lateral transfers do not usually change pay unless scarcity or retention concerns justify it.
Acting allowances are provided per NEC rules once the qualifying period is reached and are removed when the acting period ends.
Overtime, standby, deductions
Overtime and holiday work must be pre-approved and are paid according to law or the NEC collective bargaining agreements.
Standby or call-out compensation applies where roles require such availability.
Deductions include statutory requirements, lawful contractual deductions, and court or authority-ordered payments.
Offers, buy-outs, retention
Offers are made with a total reward perspective, covering fixed, variable, benefits, and growth opportunities. Over-market offers require approval.
Buy-outs are only allowed for evidenced awards that a candidate forfeits by moving, and they must be time-bound and subject to clawback.
Retention awards are exceptional, granted for scarce or business-critical roles, and always conditional on service and behaviour.
Governance and decision rights
The remuneration committee approves policy and executive pay, notes material exceptions, and ensures strong governance. Its membership includes at least one human resource (HR) expert as chair and one finance expert.
The CEO or equivalent executive implements the policy and approves within delegated limits. HR is responsible for structures, benchmarking, payroll, compliance, and educating managers, while finance ensures affordability, tax accuracy, and risk monitoring.
Internal Audit conducts periodic checks.
Any exceptions to the policy, such as off-cycle increases or special retention payments, require a written business case with chief finance officer (CFO) and HR sign-off, and in material cases, remuneration committee approval.
Monitoring, review, effective date
The organisation tracks its market position against the P50 benchmark, monitors equity dispersion including gender pay gaps, reviews the effectiveness of incentives, checks compliance, and evaluates payroll-to-revenue ratios.
The policy is reviewed annually or when material legal or macroeconomic changes occur. It becomes effective upon board approval. Key definitions include total reward, grade midpoint, and NEC.
Finally, the policy includes a disclaimer that it serves as a framework and not an employment contract.
In all cases, Labour Act provisions, NEC CBAs, RBZ directives, Zimra and Nssa requirements, and signed contracts take precedence.
Conclusion
Remuneration is not simply a cost; it is an investment in people, performance, and the future of the business. By adopting this policy, an organisation ensures that pay decisions are grounded in fairness, competitiveness, compliance, and sustainability.
Every salary, allowance, or bonus becomes a signal of what the organisation values and how it rewards contribution.
This policy is not just administrative; it is strategic. It reflects a promise to employees and stakeholders that remuneration will be managed with transparency, discipline, and foresight.
In doing so, the organisation strengthens trust, reinforces alignment with strategy, and positions itself to attract, retain, and motivate the best talent available.
Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and HR consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone +263 24 248 1 946-48/ 2290 0276, cell number +263 772 356 361 or e-mail: [email protected] or visit ipcconsultants.com.
