Reference no: EM133211882

Read the following case study and then answer the questions that follow.

Woolworths SA Store Staff Received 4.5 Percent Salary Hike Woolworths South Africa (WSA) has committed to investing an extra R120 million in wages over the next three years, and has approved a 4.5 percent increase for South African store staff, according to the Woolworths (Woolies) 2021 annual report.

According to the annual report, the WSA base pay last year was 47 percent higher than the South African minimum wage rate and 13 percent above that of the retail sector. The legislated minimum wage is currently R21.69 an hour.

"To further accelerate the improvement in the lives of WSA store-based employees, we will invest an additional R120 million over a three-year period to adjust WSA's hourly base pay from R33.40 to R41.25 in 2023 - a 23.5 percent increase.

''This investment will bring a meaningful benefit to the more than 20 000 store staff and go a long way towards our 'just wage' aspirations," said the group.

The group said it introduced a ''just wage'' in 2019, a wage which would recognise the critical need to close the remuneration gap in the context of the socio-economic environment in South Africa.

Woolies said executive directors and management levels did not receive a guaranteed pay increase in 2021, and it has approved a 4.5 percent increase for South Africa store staff and 2 percent for Australia for the 2022 financial year.

"In South Africa, we have maintained the principle that store staff are given an increase higher than management levels. Non-executive directors' fees are proposed to increase by 4.25 percent for South Africa and CPI-related increases for Australian and UK based directors," said the group.

The group said it paid chief executive officer (CEO) Roy Bagattini, chief financial officer Reeza Isaacs, chief operating officer Sam Ngumeni and South African chief executive Zyda Rylands a combined R95 million remuneration based on the performance of the financial year including the vesting of shares.

Answer ALL the questions in this section.

Question 1: Discuss Woolworths' "just wage" initiative from the perspective of external equity.

Question 2: Will Woolworths' approach to executive compensation ultimately benefit the company? Discuss.

Question 3: Woolworths has decided to go through the process of conducting job evaluations so as to ensure that there is internal equity across similar jobs within the company. The HR Director has contracted you, a job evaluation specialist, to provide advice on how to go about evaluating all employee jobs. Write an email to the HR Director in which you discuss the purpose of job evaluation and detail the job evaluation process.