Remuneration management is the process of operationalising the organisations strategic objectives and creating the underpinning policies and procedures that serve to link each employee’s remuneration to the objectives of the organisation.

To achieve this, remuneration management should be closely linked to the performance review process. Without this link, remuneration management becomes a process limited to passing on increments in salary or wages with little or no planned reward for the organisation or the employee.

The above is an objective statement about what remuneration management is. However before proceeding to developing and implementing a system, some understanding of the underpinning psychology of remuneration as a motivator and employee perceptions (or misperceptions) of it need to be considered. Fundamentally, remuneration and reward can be a highly subjective matter for employees and it is this dimension that makes remuneration management a difficult balancing act that requires careful management.