Enrich Roofing: Remuneration Management Program

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Erich’s Roofing is the eleventh largest roofing company in the world, providing roofing services to several residences within Australia and beyond. The quality of its roofing has earned it worldwide acclaim in the construction sector and a loyal customer base over the years. However, the company is recently facing serious human resource management (HRM) issues due to high turnover of the roofers, the employees who install roofs. The company’s management is naturally worried as high turnovers negatively impact the company, directly taking a toll on its revenues and profitability (Markovich, 2019). Not only that, high turnovers can also lower the workplace morale and demotivate employees. This, in turn, affects the product or service quality.

There can be many reasons behind employee turnovers, but all of them can be generally summed up as “dissatisfaction” – the employee leaves when his/her satisfaction level is compromised, either due to the job or due to the company environment (Flowers & Hughes, 1973). Sometimes there can be external reasons too, like better financial opportunities in the market. The reasons notwithstanding, a company must endeavour to retain its employees who add value to its bottomline. In case of Erich’s Roofing, the roofers are critical people to the business and its profitability. Hence, the management has decided to formulate a remuneration management program with the intent to lower turnovers.

This document has been created on the General Manager’s request to address the turnover issue and will discuss the reasons and solutions for roofer turnovers at Erich’s Roofing. It will assess if a competitive base pay can help mitigate the problem or if the company needs to enhance its incentive package or both or more.

Work Environment

Employee turnover is one of the key result areas (KRAs) measured in an organisation to understand how the company is performing. The key performance indicator (KPI) for quantifying this KRA (employee turnover) is simply by tracking the number of voluntary separations every month. The lesser the number, the better the KPI for the KRA. In case of construction companies, such as Erich’s Roofing, there is yet another KRA and corresponding KPI to consider and that is the ‘safety’ area. Construction is a high-risk sector as it exposes the workers to occupational safety hazards like falls and injuries (Choi & Carlson, 2014). According to a study by Nadhim, Hon, Xia, Stewart and Fang (2016), falls from a height and subsequent injuries are a significant public health issue worldwide and these are also one of the major reasons behind severe injuries for construction people. Recent high employee turnovers at Erich’s Roofing need to reflect on this safety KRA. The company can measure KPI against this by tracking the man hours lost every month due to injuries.

As per the US Occupational Safety and Health Administration (OSHA), residential construction is a hazardous industry due to the health risks workers face when they work at heights (US NIOSH, 1999). The roofers here also face similar work hazards every day. Falling from heights are the commonest causes of on-the-job fatalities in the residential construction industry, contributing to 64% of fatalities in the sector (US BLS). These fatalities can occur due to lack of proper awareness/training of the construction workers or due to lack of proper protective equipment like safety glasses, gloves, safety shoes, back supports, hearing protection equipment, fall protection gears, etc. (Choi & Carlson, 2014). Since construction sector emerged as the largest contributor to workplace fatalities in 2019 (PBCToday, 2020), Erich’s Roofing must probe the ‘safety’ issue behind its recent employee turnovers.

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