32030374Okina Fitriani, Psi. MA

REMUNERATION

2

AGENDA

Perkenalan

Metode belajar dan rambu2

Penilaian

Sumber

Harapan anda dan harapan saya

Komitmen bersama

Pengantar PIO

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METODE

Interactive lecturing

Case Study

Individual and group learning

Journal review

Default : 75% kehadiran

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BOBOT PENILAIAN

Tugas : 25%

UTS : 30%

UAS : 30%

Keaktifan dalam kelas : 15%

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SUMBER

Milkovich & Newman,.2005. Compensation. New York: Mc.GrawHill

General Remuneration Certification Seminar Materials. 2000. WorldatWork.

Buku-buku lain

Jurnal-jurnal

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HARAPAN ANDA, HARAPAN SAYA

“Bacalah dengan nama Tuhanmu Yang menjadikan.

Yang menjadikan manusia dari segumpal darah. Bacalah, dan Tuhanmu teramat mulia. Yang mengajarkan dengan pena (khalam). Mengajarkan kepada manusia apa yang tidak diketahuinya.” (Surat Al ‘Alaq 1-5)

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KOMITMEN

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DEVELOPING A TOTAL REMUNERATION STRATEGY

Questions Addressed by

What do we want to be? Vision

What do we want to do? Mission

What are we good at? Core competencies

What is the context within which we work? oEnvironment oOrganizational realitiesoCulture

What is the value discipline that will enable us to win in the market place?

oStrategyoCulture

What has to happen for us to win? Critical success factors

How can we tell how well we did? oPerformance measurement systemoPerformance criteriaoPerformance standardsoPerformance measures

What should our HR strategy be? oStaffing strategyoDevelopment strategyoRewards strategy

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REMUNERATION DESIGN PROCESS

CORPORATEVISION / MISSION

BUSINESSSTRATEGY

HUMAN RESOURCESSTRATEGY

PROGRAM REVIEW& AUDIT

PROGRAM DESIGN& ADMINISTRATION

COMPENSATION

WORKEXPERIENCE

BENEFITS

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BUILDING TR PHILOSOPHY

Total Remuneration Philosophy Statement must express the objective of the total remuneration program, desired competitive position in the labor market, and factors which should be used to maintain internal equity.

IDEAL :

•provide internal equity

•externally competitive

•Can attracts, motivates and retains high caliber employees

•ensure company’s achievement of its vision and mission in the most economical cost

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Job Analysis

Job Documentation

ExternalData Collection & Analysis

Job Content Evaluation Internal Data Collection & Analysis

Job Content Evaluation

Market Data Emphasis

Job Content Emphasis

Which approach?

Reconciliation of Internal &External Considerations

Job Worth Hierarchy

Pay Structure

Benchmark Jobs• Jobs price• Pay trend• Pay practices

Need to refresh Job Evaluation?

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SALARY SURVEY

STEPS

• Select benchmark position

Ideally represent a full range of position and salary group

• Do position matching

• Obtain salary data

• Compare your salary structure with competitors

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EXTERNAL COMPETITIVENESS TRHU SALARY SURVEY

Major Decision in Pay Level Determination

• Specify pay-level policy

• Define purpose of survey

• Select relevant market/competitor

• Design and conduct survey

• Interpret and apply result

Adjust pay level?

Adjust pay mix?

Adjust structure?

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STRUCTURE POLICY

Our Structure

Competitive pay

Lead PolicyOur structure leads at the beginning,same level at end of year

Lag PolicyOur structure at same level at the beginning,and left behind at end of year

Lead-lag PolicyOur structure leads at the beginning, same at mid year, and left behind at end of year

Start EndPlan Year

Start EndPlan Year

Start EndPlan Year

Our Structure

Competitive pay

Our Structure

Competitive pay

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MOTIVATION THEORY

• Maslow’s hierarchy of needsMaslow’s hierarchy of needs

• Adam’s Equity TheoryAdam’s Equity Theory

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MASLOW’S

Self ActualizationSelf Actualization

Esteem/ RecognitionEsteem/ Recognition

Social/ AffiliationSocial/ Affiliation

Safety/ SecuritySafety/ Security

Physiological Physiological

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ADAM’S EQUITY THEORY

Balancing Employee Inputs and Outputs

EMPLOYEE VS ORGANIZATION

Inputs :

Effort, Loyalty, Hard Work, Commitment, Skill, Ability, etc

Output :

Financial rewards (salary, benefits, perquisite, etc.)

Intangibles that typically include:

Recognition, Reputation, Responsibility, Growth, Job Security, etc

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ADAM’S EQUITY THEORY

Balancing Employee Inputs and Outputs

EMPLOYEE VS OTHER EMPLOYEES

Employee’s perception about whether they are fairly treated are based on comparison with others

Outcomes

Inputs

Outcomes

Inputs

EQUITY

OTHER (COMPARI SON)

EMPLOYEE

Outcomes

Inputs

Outcomes

Inputs

EQUITY

OTHER (COMPARI SON)

EMPLOYEE

• If ratio are equal, then satisfaction exist• If ratio is greater than others ratio, then the employee may feel over rewarded

• If ratio is less than others ratio, then the employee may feel under rewarded and dissatisfied

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MOTIVATION THEORY FROM AL QUR’AN

"Dan katakanlah, "Bekerjalah kamu, maka Allah dan Rasul-Nya serta orang-orang mu'min akan melihat pekerjaanmu itu, dan kamu akan dikembalikan kepada (Allah) Yang Mengetahui akan yang gaib dan yang nyata, lalu diberitakan-Nya kepada kamu apa yang telah kamu kerjakan". (QS. At-Taubah, 9:105)

Islam didasarkan pada keseimbangan antara kepentingan individu dan kelompok.

"Tidak berbuat zhalim dan tidak dizhalimi" (QS. Al-Baqarah, 2:279), dan diperjelas Rasulullah saw dalam kaidah syar'iyah, yakni: "Tidak merugikan diri sendiri dan tidak merugikan orang lain

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TUGAS KELOMPOK

•Cari 1 teori motivasi

•Jelaskan beserta contoh aplikasinya

•Cari 1 jurnal mengenai aplikasi teori tersebut

•Susun dalam bentuk paper dan presentasikan di pada 2 pertemuan berikutnya

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THE EVOLUTION OF REWARDS

Throughout history, employers have been challenged with attracting, retaining and motivating employees from the simplest barter systems of century past to the current complex incentive formula of today

TOTALREWARDS/

REMUNERATION

TOTALREMUNERATION

REMUNERATIONPAY

COMPONENTS

•Base Salary •Base Salary•Variable Pay•Incentives

•Base Salary•Variable Pay•Incentives•Benefits•Perquisites•Equity

•All Components of TR

•Work Experience•Relationships•Pride•etc

TOTALREWARDS/

REMUNERATION

TOTALREMUNERATION

REMUNERATIONPAY

COMPONENTS

•Base Salary •Base Salary•Variable Pay•Incentives

•Base Salary•Variable Pay•Incentives•Benefits•Perquisites•Equity

•All Components of TR

•Work Experience•Relationships•Pride•etc

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TERMINOLOGY

(Green R.J, Jackson L.B, Maxwell J.S, Rimsky T.M, 1991)

• Pay

To give (money) in return for goods or services

• Compensation

Cash or pay provided by an employer

• Benefits

Includes program that an employer uses to supplement the cash compensation an employee receives

• Remuneration

Everything that employees perceive to be of value resulting from the employment relationship

• Total Remuneration/Total Rewards

Salary, incentives, benefits, perquisites, organizational affiliation, status, etc

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MAJOR ELEMENTS OF TOTAL REMUNERATION

TOTAL REMUNERATION

Intrinsic Rewards Extrinsic Rewards

Financial Non Financial

Indirect Direct

Base Premium

Fixed Variable

Profit Sharing Incentive Bonus

ProtectionPrograms

Pay for TimeNot Worked

Service &Perquisites

Mandatory Voluntary General Limited

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DIRECT COMPENSATION

•Fixed Compensation is nondiscretionary remuneration. Typically refers to base pay.

•Variable Compensation is contingent on discretion compensation, performance or results achieved. Much of the innovation in remuneration is occurring in the variable pay element.

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FIXED COMPENSATIONBase Pay

Time Based: Based on length of service. In the starting level, all incumbents of job paid the same. The payment will be increased each year (seniority pay or step rate)

Job Based: Increases in base pay tied to individual performance in a specific job. Encourages performance by rewarding success.

Person Based: Payment will be made based on individual skill/knowledge. Classify each level of a specific job with career ladder. Encourages skill development.

PremiumsIn general terminology, premiums are usually defined as fixed

allowances. The payment of premiums could be made based on the following reasons:• Geographic, Hazardous Work, Shift work, On call job• Excess working hours (Overtime)

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VARIABLE COMPENSATION - Philosophy

Variable compensation may be developed forthe following purposes: • Make up the differences to be externally competitive.• Share organization’s success (fairness).• Align employees with organizational

objectives• Improve performance• Reinforce teamwork• Engage employees• Communicate measures and objectives )

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VARIABLE COMPENSATION - Type

Variable pay may be categorized to the following types (Archibald. G &

Lucas.R, 2003):

• Incentives are delivered through plans that predetermined a performance and reward schedule. The incentive may be paid in an accounting period (month, quarter, year multi-year) or upon an event (reaching an objective, completing a project, etc).

• Bonuses are delivered after the fact, based on some party’s (management or peer) judgement of performance and the warranted reward. Recognition plans are considered bonuses because they are after the fact (not a predetermined performance-reward schedule). Incentives and bonuses can be any type of award: cash, share, non cash, benefits, etc.

• Commissions are cash payments, based on a predetermined performance and reward schedule. Commissions are generally based on sales or profit margin on those sales. They are generally for sales employees.

• Profit Sharing is rewards system that bases rewards on organisation wide financial performance. Distribution of rewards to individuals is automatic, as equal amount or equal percentage of pay. Primary objective of profit sharing implementation is to achieve employee identification with the organization’s success thru a clear linkage with profit performance.

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VARIABLE COMPENSATION - Type

Cash Equities Non cash

(financial

value)

Non cash

(symbolic)

Organization wide

Long-term

Possible Common Rare Rare

Organization wide

Short-term

Common Less

common

Rare Rare

Organizational

Unit

Short-term

Common Rare Less

common

Less

common

Team Common Less

common

Common Common

I ndividual Common Common Common Common

Recognition Less

common

Less

common

Common Common

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TYPE OF SHARE

OriginalValue

{ Total Value• Share grant• Restricted

Share

AppreciationOnly• Share purchase• Share option• SAR

Type of Plan What employee gets

Share purchase Appreciation only

Share option Appreciation only

Share-appreciation rights (SAR) Appreciation only

Share grant Entire value

Restricted share Entire value

OriginalValue

{ Total Value• Share grant• Restricted

Share

AppreciationOnly• Share purchase• Share option• SAR

Type of Plan What employee gets

Share purchase Appreciation only

Share option Appreciation only

Share-appreciation rights (SAR) Appreciation only

Share grant Entire value

Restricted share Entire value

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INDIRECT COMPENSATIONS

A variety of factors are influencing the growth and change of

employee benefits:

Government involvement. In many countries, the government is the main provider of employee benefit programs. In other countries, the government mandates or encourages employers to provide certain programs.

Competitive practice. Employee benefits play a significant role in helping the employer attract and retain the work force it needs to carry out its mission.

Employer initiative. Employers commonly use benefits to protect the standard of living of its workers.

• Employee demands. Employee often request new or different benefits. Unions sometimes represent workers in negotiating with companies for benefits

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PROTECTION PROGRAMS

Mandatory Protection Programs

Protection program which is governed by applicable laws in

the operating area of the company.

•National healthcare system

oJamsostek in Indonesia

oNational healthcare protection in Great Britain, etc

National retirement system in Italy, Germany, Chile, etc

Termination indemnity program in Indonesia, Brazil, Mexico, etc

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PROTECTION PROGRAMS

Voluntary Protection Programs

1. Insurance Coverage

• Health care

• Medical insurance

• Dental insurance

• Vision insurance

Survivor benefits

• Employee life insurance

• Dependent life insurance

• Accidental death & dismemberment insurance

• Disability insurance

• Sick pay

• Short-term disability

• Long-term disability

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PROTECTION PROGRAMS

Voluntary Protection Programs

2. Defined Benefit Plan. It may be an additional retirement benefit. Usually defined by a formula of service year. Integration to government sponsored programs is very important.

3. Defined Contribution Plans

Employee and company contribute to the retirement account that could be withdrawn after retirement period. May be paid as lump sum or monthly

Saving Plan. Employee and company contribute to special account which my be withdrawn after a certain period of service.

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PAY FOR TIME NOT WORKED

This benefit is the most forgettable benefit in the employee’s point

of view.

1. At Work

Coffee/Tea break

Training

Praying, etc

2. Not at work

Vacation/Holidays

Leave Time : due to disability, sick, maternity etc

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SERVICES & PERQUISITES

General Availability

This type of benefit is available generally for all employees

but may be in different level.

Examples:

o Company cafeteria

o Transportation services (bus, company plan, etc)

o Parking Area

o Medical Clinic in office area

o Etc

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SERVICES & PERQUISITES

Restricted availability

The eligibility of these perquisites is restricted for certain

position or level.

Examples:

o Company car

o Club membership

o Financial Planning

o Vacation / Rest & Relax

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MAJOR ELEMENTS OF TOTAL REMUNERATION

TOTAL REMUNERATION

Intrinsic Rewards Extrinsic Rewards

Financial Non Financial

Indirect Direct

Base Premium

Fixed Variable

Profit Sharing Incentive Bonus

ProtectionPrograms

Pay for TimeNot Worked

Service &Perquisites

Mandatory Voluntary General Limited

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NON FINANCIAL EXTRINSIC REWARD

• Quality of life

• Experiences

• Social Status

• Sound environment

• Work load

• Work variety

• Non financial appreciation

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TUGAS KELOMPOK

• Cari 1 perusahaan

• Selidiki bagaimana sistem remunerasi finansial perusahaan tersebut

• Buat analisa apakah sistem tersebut sudah tepat

• Jika belum apa saran anda

• Presentasikan