COMPENSATION

SHINTA, ELIZABETH, DIDIK

PAY AND INCENTIVES SYSTEM
FOUR KEYS CHALLENGES IN PLANNING AND
ADMINISTERING A PAY SYSTEM

Understand Tie compensation

economic and legal strategy to general
factors that business strategy
determine pay levels

Pay Planning and Administration

Develop systematic Address key policy

pay structure issues
CHANGING PHILOSOPHIES REGARDING PAY
SYSTEMS

cost - containment actions

paying what the company can afford

program that encourage and reward

performance
 COMPONENTS AND OBJECTIVES OF
ORGANIZATIONAL REWARD SYSTEM

Reward System

Direct payments
(salaries)
Financial Non financial • Protection programs
• Employee
involvement in
Indirect payments decision making
(benefits) • Effective supervision
• Recognition
• Training opportunities
• Supportive, nurturing
company culture
 STARTEGIC INTEGRATION OF COMPENSATION
PLANS AND BUSINESS PLANS

ØRECOGNIZE COMPENSATION AS A PIVOTAL CONTROL AND INSENTIVE

MECHANISM THAT CAN BE USED FLEXIBLY BY MANAGEMENT TO ATTAIN
BUSINESS OBJECTIVES.
ØMAKE THE PAY SYSTEM AN INTEGRAL PART OF STRATEGY FORMULATION.
ØINTEGRATE PAY CONSIDERATIONS INTO STRATEGIC DECISIONMAKING
PROCESSES SUCH AS THOSE THAT INVOLVE PLANNING AND CONTROL.
ØVIEW THE FIRM'S PERFORMANCE AS THE ULTIMATE CRITERION OF THE SUCCESS
OF STRATEGIC PAY DECISIONS AND OPERATIONAL COMPENSATION
PROGRAMS.
DETERMINANTS OF PAY STRUCTURE & LEVEL
MARGINAL REVENUE THEORY IN LABOR ECONOMICS HOLDS THAT
UNLESS AN EMPLOYEE CAN PRODUCE A VALUE EQUAL TO THE VALUE
RECEIVED IN WAGES, IT WILL NOT BE WORTHWHILE TO HIRE THAT
WORKER.

Implementation in practice, a number of factors interact to determine

wage levels. some of the most influential of these are :
1. labor market condition
2. legislation
3. collective bargaining
4. managerial attitude and an organization's ability to pay
 LABOR MARKET CONDITIONS
if the demand for
certain skills is high
while the supply is
low (tight market)
there tends to be an
increase in the price
tight paid for these skills
wages
market
structures
analysis
and levels
loose
if the supply of
labor is plentiful
relative to the
demand for it,
analysis result effect wages tend to
drease.
 LEGISLATION

• PP 78 TAHUN 2015 PASAL 13

PASAL 5 1. UPAH BERDASARKAN SATUAN WAKTU SEBAGAIMANA DIMAKSUD DALAM PASAL 12

HURUF A DITETAPKAN SECARA HARIAN, MINGGUAN, ATAU BULANAN.
1. UPAH SEBAGAIMANA DIMAKSUD DALAM PASAL 4 AYAT (2) HURUF A TERDIRI ATAS KOMPONEN:
2. DALAM HAL UPAH DITETAPKAN SECARA HARIAN SEBAGAIMANA DIMAKSUD PADA AYAT
A. UPAH TANPA TUNJANGAN; (1), PERHITUNGAN UPAH SEHARI SEBAGAI BERIKUT:
B. UPAH POKOK DAN TUNJANGAN TETAP; ATAU a. BAGI PERUSAHAAN DENGAN SISTEM WAKTU KERJA 6 (ENAM) HARI DALAM
SEMINGGU, UPAH SEBULAN DIBAGI 25 (DUA PULUH LIMA); ATAU
C. UPAH POKOK, TUNJANGAN TETAP, DAN TUNJANGAN TIDAK TETAP.

2. DALAM HAL KOMPONEN UPAH TERDIRI DARI UPAH POKOK DAN TUNJANGAN TETAP b. BAGI PERUSAHAAN DENGAN SISTEM WAKTU KERJA 5 (LIMA) HARI DALAM SEMINGGU,
SEBAGAIMANA DIMAKSUD PADA AYAT (1) HURUF B, BESARNYA UPAH POKOK PALING SEDIKIT UPAH SEBULAN DIBAGI 21 (DUA PULUH SATU).
75% (TUJUH PULUH LIMA PERSEN) DARI JUMLAH UPAH POKOK DAN TUNJANGAN TETAP.

3. DALAM HAL KOMPONEN UPAH TERDIRI DARI UPAH POKOK, TUNJANGAN TETAP, DAN
TUNJANGAN TIDAK TETAP SEBAGAIMANA DIMAKSUD PADA AYAT (1) HURUF C, BESARNYA UPAH
POKOK PALING SEDIKIT 75% (TUJUH PULUH LIMA PERSEN) DARI JUMLAH UPAH POKOK DAN
TUNJANGAN TETAP.
4. UPAH SEBAGAIMANA DIMAKSUD PADA AYAT (1) DIATUR DALAM PERJANJIAN KERJA, PERATURAN
PERUSAHAAN, ATAU PERJANJIAN KERJA BERSAMA.
PASAL 33
UPAH KERJA LEMBUR SEBAGAIMANA DIMAKSUD DALAM PASAL 3 AYAT (2) HURUF B WAJIB
DIBAYAR OLEH PENGUSAHA YANG MEMPEKERJAKAN PEKERJA/BURUH MELEBIHI WAKTU
KERJA ATAU PADA ISTIRAHAT MINGGUAN ATAU DIPEKERJAKAN PADA HARI LIBUR RESMI
SEBAGAI KOMPENSASI KEPADA PEKERJA/BURUH YANG BERSANGKUTAN SESUAI DENGAN
KETENTUAN PERATURAN PERUNDANG-UNDANGAN.
 COLLECTIVE BARGAINING
NONUNIONIZED FIRMS ARE AFFECTED BY COLLECTIVE BARGAINING
AGREEMENTS MADE ELSEWHERE BECAUSE THEY MUST COMPETE WITH
UNIONIZED FIRMS FOR THE SERVICES AND LOYALTIES OF WORKERS.
COLLECTIVE BARGAINING AFFECT TWO KEY FACTORS :
1. THE LEVEL OF WAGES
2. THE BEHAVIOR OF WORKERS IN RELEVANT LABOR MARKET.
 MANAGERIAL ATTITUDES AND AN
ORGANIZATION’S ABILITY TO PAY

MANAGERIAL ATTITUDES AND AN ORGANIZATION'S ABILITY TO PAY

HAVE A MAJOR IMPACT ON WAGES STRUCTURES AND LEVEL. EARLIER
WE NOTED THAT AN ORGANIZATON'S ABILITY TO PAY DEPENDS TO A
LARGE EXTENT, ON THE COMPETITIVE DYNAMICS IT FACES IN ITS
PRODUCT OR SERVICE MARKETS. THEREFORE, REGARDLESS OF ITS
ESPOUSED COMPETITIVE POSITION ON WAGES, AN ORGANIZATION'S
ABILITY TO PAY ULTIMATELY WILL BE A KEY FACTOR THAT LIMIT
ACTUAL WAGES.
 AN OVERVIEW OF PAY-SYSTEM MECHANICS

Updated job descriptions

TO DEVELOP SUCH A SYSTEM, WE NEED FOUR BASIC TOOLS :

A job evaluation method

Pay surveys

A pay structure
TRADITIONAL JOB BASED COMPENSATION MODEL
important job characteristic

compensable factor

job evaluation to rate the relative worth of

job

job hierarchy

pay surveys to attach pay rates to job

pay structure to classify jobs by grade level

assignment of individual pay within a range of each job

 A CHART RELATING HOURLY
WAGE RATES TO THE TOTAL
POINTS ASSIGNED TO EACH
JOB. THREE TREND LINES ARE
SHOWN MINIMUM, MID-
POINT AND MAXIMUM A
WELL AS 11 PAY GRADES.
WITHIN EACH PAY GRADE
THERE IS A 30 PERCENT
SPREAD FROM MINIMUM TO
MAXIMUM AND A 50
PERCENT OVERLAP FROM
ONE PAY GRADE TO THE
NEXT

PAY STRUCTURES
 GR PONT MIDPOIN MINI MAXIMU
PAYADSTRUCTURES
SPREAD T MUM M RATE
E RATE OF PAY
OF
• Illustrative pay
PAY
structure showing pay
grade, the spread of 2 62-75 68 $ $ 9.75
point within grade, the 7.50
midpoint of each pay
grade And the
3 76-91 83 8.63 11.21
minimum and maximum 4 92-110 101 9.92 12.90
rates of pay per
grade
5 111- 121 11.4 14.83
132 1
6 133- 145 13.1 17.06
157 2
7 158- 172 15.0 19.62
186 9
INDIRECT COMPENSATION:
EMPLOYEEE BENEFITS PLANS
 INTRODUCTION

Employee Benefits
o Have grown in importance and variety
o Are typically membership-based reward offered to attract and keep employess
o Do not directly affect workers’s performance, but inadequate benefits lead to employee dissatisfaction
 STRATEGIC CONSIDERATIONS IN THE DESIGN OF
BENEFITS PROGRAMS

q The organization’s stage of development

q Projected rate of employment, growth, or downsizing
q Geograpic redeployment
q Acquisitions
q Expected changes in profitability
q Each of these conditions suggests a change in the optimum ‘mix’of benefits to be consistent with
long term business plan
 CLASSIFYING BENEFITS
Three board categories exist for classifying benefits :
v Security and health
v Payments for time not workes
v Employee services
 1. SECURITY & HEALTH BENEFITS

q Life Insurance
Yearly renewable : Employee insured one year at a time
Flexible-benefits programs : provide core basic life coverage

q Workers’compensation
Provides income and medical benefits to work related accident victims
or their dependents, regardless of fault
Controlling workers compensation costs

q Other medical coverage (dental, mental, helath, substance abuse)

q Sick leave
q Pension plans
q Social security
q Unemployment insurance &supplemental unemployment insurance
q Severance pay
 4. Disability Insurance
Provides a supplemental, one-time
payment when death is accidental &
provides a range of benefit when
employee can’t perform the main
functions of their occupations.
HealthCare Exchanges
- Long-Term Disability plans 5. Hospitalization, Surgical and The law requires states to create and
Maternity Coverage maintain health care “exchanges” in
Provide income replacement for
which health insurance providers
employees whose illness or injury
compete for equal terms.
causes a longer absence from work.
Start after one or two weeks of
absence
- Short-Term Disability plans
Start after six weeks to three months
 2. PAYMENT FOR TIME NOT WORKED

v Vacations
v Holidays
v Reporting Time
v Personal excused absences
v Grievances and negotiations
v Sabbatical leaves
 3. EMPLOYEE SERVICES

Layanan karyawan : beberapa Benefit di setiap perusahaan akan

contohnya adalah bantuan konseling,
layanan makan, mobil perusahaan,
fasilitas olah raga, rencana pembelian
saham, transportasi, bantuan adopsi,
seragam, bantuan hukum, penjagaan
anak, THR, fasilitas kredit, jam kerja
fleksibel, dan lain sebagainya.
berbeda antara satu perusahaan
dengan perusahaan yang lain, hal ini
bergantung pada keuangan masing-
masing perusahaan. Jika perusahaan
mampu memenuhi seluruhnya maka
alangkah baiknya semua hal tersebut di
penuhi
1. FoR yaitu Foundational Reward à penghasilan tetap yang diterima pegawai berdasarkan jabatan dan Person Value-nya.
2. MoRe yaitu Motivational Reward à reward bersifat variabel dan digunakan untuk memotivasi pegawai dalam berkinerja.
3. Benefit yaitu Benefit & Allowances untuk memberikan rasa aman dan nyaman kepada pegawai.
4. WE yaitu Working Enviroment merupakan kondisi fisik, sosial, dan psikologis yang kami bangun untuk pegawai.
5. GO yaitu Growth Opportunity yang disediakan untuk pegawai agar dapat mengembangkan potensi dan karirnya