REMUNERATION

1. REMUNERATION

2. AGENDA Perkenalan Metode belajar dan rambu2 Penilaian Sumber Harapan anda dan harapan saya Komitmen bersama Pengantar PIO

3. METODE Interactive lecturing Case Study Individual and group learning Journal review Default : 75% kehadiran

4. BOBOT PENILAIAN Tugas : 25% UTS : 30% UAS : 30% Keaktifan dalam kelas : 15%

5. SUMBER Milkovich & Newman,.2005. Compensation. New York: Mc.GrawHill General Remuneration Certification Seminar Materials. 2000. WorldatWork. Buku-buku lain Jurnal-jurnal

6. 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)

7. KOMITMEN

8. DEVELOPING A TOTAL REMUNERATION STRATEGY

9. REMUNERATION DESIGN PROCESS CORPORATE VISION / MISSION PROGRAM REVIEW & AUDIT BUSINESS STRATEGY COMPENSATION PROGRAM DESIGN & ADMINISTRATION HUMAN RESOURCES STRATEGY BENEFITS WORK EXPERIENCE

10. 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

11. Job Analysis Job Documentation Which approach? Job Content Emphasis Market Data Emphasis • Benchmark Jobs • Jobs price • Pay trend • Pay practices Job Content Evaluation External Data Collection & Analysis Internal Data Collection & Analysis Job Content Evaluation Reconciliation of Internal & External Considerations Job Worth Hierarchy Pay Structure Need to refresh Job Evaluation?

12. 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

13. 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?

14. STRUCTURE POLICY Our Structure Our Structure Our Structure Competitive pay Competitive pay Competitive pay Start Start Start Plan Year Plan Year Plan Year End End End Lead Policy Our structure leads at the beginning, same level at end of year Lag Policy Our structure at same level at the beginning, and left behind at end of year Lead-lag Policy Our structure leads at the beginning, same at mid year, and left behind at end of year

15. MOTIVATION THEORY • Maslow’s hierarchy of needs • Adam’s Equity Theory

16. MASLOW’S • Self Actualization • Esteem/ Recognition • Social/ Affiliation • Safety/ Security • Physiological

17. 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

18. 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 • 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

19. 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

20. 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

21. 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

22. 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

23. MAJOR ELEMENTS OF TOTAL REMUNERATION TOTAL REMUNERATION Intrinsic Rewards Extrinsic Rewards Financial Non Financial Direct Indirect Variable Fixed Base Premium Protection Programs Pay for Time Not Worked Service & Perquisites Profit Sharing Incentive Bonus General Limited Mandatory Voluntary

24. DIRECT COMPENSATION • Fixed Compensationis 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.

25. 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)

26. 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)

27. 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.

28. VARIABLE COMPENSATION - Type

29. TYPE OF SHARE

30. 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

31. PROTECTION PROGRAMS • Mandatory Protection Programs • Protection program which is governed by applicable laws in • the operating area of the company. • National healthcare system • Jamsostek in Indonesia • National healthcare protection in Great Britain, etc • National retirement system in Italy, Germany, Chile, etc • Termination indemnity program in Indonesia, Brazil, Mexico, etc

32. PROTECTION PROGRAMS • Voluntary Protection Programs • 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

33. PROTECTION PROGRAMS • Voluntary Protection Programs • 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. • 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.

34. PAY FOR TIME NOT WORKED • This benefit is the most forgettable benefit in the employee’s point • of view. • At Work • Coffee/Tea break • Training • Praying, etc • Not at work • Vacation/Holidays • Leave Time : due to disability, sick, maternity etc

35. SERVICES & PERQUISITES General Availability This type of benefit is available generally for all employees but may be in different level. Examples: • Company cafeteria • Transportation services (bus, company plan, etc) • Parking Area • Medical Clinic in office area • Etc

36. SERVICES & PERQUISITES Restricted availability The eligibility of these perquisites is restricted for certain position or level. Examples: • Company car • Club membership • Financial Planning • Vacation / Rest & Relax

37. MAJOR ELEMENTS OF TOTAL REMUNERATION TOTAL REMUNERATION Intrinsic Rewards Extrinsic Rewards Financial Non Financial Direct Indirect Variable Fixed Base Premium Protection Programs Pay for Time Not Worked Service & Perquisites Profit Sharing Incentive Bonus General Limited Mandatory Voluntary

38. NON FINANCIAL EXTRINSIC REWARD • Quality of life • Experiences • Social Status • Sound environment • Work load • Work variety • Non financial appreciation

39. 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