REMUNERATION
Okina Fitriani, Psi. MA
32030374
AGENDA
Perkenalan
Metode belajar dan rambu2
Penilaian
Sumber
Harapan anda dan harapan saya
Komitmen bersama
Pengantar PIO
2
METODE
Interactive lecturing
Case Study
Individual and group learning
Journal review
Default : 75% kehadiran
3
BOBOT PENILAIAN
Tugas
: 25%
UTS
: 30%
UAS
: 30%
Keaktifan dalam kelas
: 15%
4
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 realities
oCulture
What is the value discipline that will enable us
to win in the market place?
oStrategy
oCulture
What has to happen for us to win?
Critical success factors
How can we tell how well we did?
oPerformance
oPerformance
oPerformance
oPerformance
What should our HR strategy be?
oStaffing strategy
oDevelopment strategy
oRewards strategy
measurement system
criteria
standards
measures
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REMUNERATION DESIGN PROCESS
CORPORATE
VISION / MISSION
PROGRAM REVIEW
& AUDIT
BUSINESS
STRATEGY
COMPENSATION
PROGRAM DESIGN
& ADMINISTRATION
BENEFITS
HUMAN RESOURCES
STRATEGY
WORK
EXPERIENCE
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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
Which approach?
Market Data
Emphasis
Benchmark Jobs
• Jobs price
• Pay trend
• Pay practices
Job Content
Emphasis
Job Content Evaluation
External
Data Collection & Analysis
Job Content Evaluation
Reconciliation of Internal &
External Considerations
Internal
Data Collection & Analysis
Job Worth Hierarchy
Need to refresh Job Evaluation?
Pay Structure
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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
Lead Policy
Our Structure
Our structure leads at the beginning,
same level at end of year
Competitive pay
Start
Plan Year
End
Lag Policy
Our Structure
Our structure at same level at the beginning,
and left behind at end of year
Competitive pay
Start
Plan Year
End
Lead-lag Policy
Our Structure
Our structure leads at the beginning, same at
mid year, and left behind at end of year
Competitive pay
Start
Plan Year
End
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MOTIVATION THEORY
• Maslow’s hierarchy of needs
• Adam’s Equity Theory
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MASLOW’S
 Self Actualization
 Esteem/ Recognition
 Social/ Affiliation
 Safety/ Security
 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
EQUITY
EMPLOYEE
OTHER
(COMPARISON)
Outcomes
Inputs
Outcomes
Inputs
• 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. AlBaqarah, 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
PAY
REMUNERATION
TOTAL
REMUNERATION
TOTAL
REWARDS/
REMUNERATION
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
Direct
Indirect
Variable
Fixed
Base
Protection
Programs
Pay for Time
Not Worked
Premium
Service &
Perquisites
Profit Sharing
Mandatory
Voluntary
General
Incentive
Bonus
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 COMPENSATION
Base 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.
Premiums
In 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 for
the 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
Non cash
(financial
(symbolic)
value)
Organization wide
Possible
Common
Rare
Rare
Common
Less
Rare
Rare
Less
Less
common
common
Common
Common
Long-term
Organization wide
Short-term
Organizational
common
Common
Rare
Unit
Short-term
Team
Common
Less
common
Individual
Recognition
Common
Common
Common
Common
Less
Less
Common
Common
common
common
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TYPE OF SHARE
{
Appreciation
Only
• Share purchase
• Share option
• SAR
Original
Value
Total Value
• Share grant
• Restricted
Share
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.
2.
At Work

Coffee/Tea break

Training

Praying, etc
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
Direct
Indirect
Variable
Fixed
Base
Protection
Programs
Pay for Time
Not Worked
Premium
Service &
Perquisites
Profit Sharing
Mandatory
Voluntary
General
Incentive
Bonus
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
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