CH 05

5
Payment
Systems and
Working Hours
Preview
 The different types of payment structures, including

basic pay, benefits and incentives
 Wage systems currently in use
 Factors which influence the quantum of wages paid
by employers to employees
 The legal requirements which impact the payment
of wages
 The provisions of the Employment Act 1955 on
working hours
Human Resource Management Principles and Practices (Fourth Edition) All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2018 5–3
Preview (cont.)
 Overtime working
 The shift system of working
 Alternative work schedules such as flexitime,
job-sharing and part-time work
 The advantages of teleworking and working
from home
The Importance of Wage Systems
 Wages are important to employees—standard

of living and status
 Wages are important to employers—cost of
production
 Wages are important to society—
competitiveness of Malaysian businesses
Remuneration Package
Remuneration
Remuneration
Wages
Wages Benefits
Benefits Incentives
Incentives
Goals of Remuneration Systems
Employer’s Goals
 To maximize profits
 To have an attractive package
 To retain the best employees
 To have a system simple to administer
 To maximize income
 To have a stable income
Goals of Remuneration Systems
(cont.)
Employees’ Goals
 To maximize income
 To have a stable income
Wage Systems
 Time-related system
 Piece-work/payment by results
 Combination
Factors Affecting Levels of Pay
Internal
Internal Factors
Factors
External
External Factors
Factors
Compensation
Compensationpolicy
policyof
of
organization
organization The
Thelabour
labourmarket
market
Worth
Worthof
ofthe
thejob
job Cost
Costof
ofliving
living
Wage
Employee’s
Employee’srelative
relative Mix Collective
Collectivebargaining
bargaining
worth
worth Legal
Legalrequirements
requirements
Employer’s
Employer’sability
abilityto
topay
pay
Individual Employee’s Wages
 Seniority
 Degree of skill and experience
 Increase in the cost of living
 Performance
Equal pay for equal work?
Legislation Relevant to
Remuneration
 The Employment Act

 The Sabah Labour Ordinance
 The Sarawak Labour Ordinance
 The National Wages Consultative Council Act
Remuneration (cont.)
 Frequency of wage payment

 Timing of wage payment
 Mode of payment
 Advances on wages
 Deductions from wages
 Situations when wages are not required
to be paid
 Failure to pay wages
Remuneration (cont.)
MINIMUM
 WAGES
Is the current minimum wage of adequate?
 How often should the minimum wage be
revised?
 Should the minimum wage be the same
throughout the country?
 What is the likely impact of the minimum wage
on employers, employees and the country?
Working Hours
Restrictions on working hours established by the

Employment Act and the Sabah and Sarawak
Labour Ordinances:
No employee shall be required under his contract to
work:
 more than 8 hours per day or
 more than 45 hours per week or
 more than 5 consecutive hours without a
30-minute break
Working Hours (cont.)
Employees within the scope of the

Employment Act and the Sabah and
Sarawak Labour Ordinances are entitled to:
 One rest day per week
 Minimum public holidays:
• Employment Act = 11 days
• Sabah Lab. Ord. = 14 days
• S’wak Lab. Ord. = 16 days
Overtime Work
 Overtime work, i.e. work done outside the
normal hours of work, is permitted up to a
maximum of 104 hours per month.
 Overtime work cannot be made compulsory
except in certain circumstances and in certain
industries (the essential services).
 Overtime work must be paid at premium rates.

 Monthly rated workers are entitled to 1.5 times
their hourly rate of pay when they work
overtime hours.
 An employee may not be permitted to work
more than 12 hours per day inclusive of
overtime.
Overtime Work
ADVANTAGES:
ADVANTAGES:
 Production
Production or or service
service levels
levels increase
increase without
without
hiring
hiring extra
extra workers
workers
 Provides
Provides opportunity
opportunity for
for workers
workers toto increase
increase
their
their income
income
DISADVANTAGES:
DISADVANTAGES:
 Higher
Higher cost
cost per
per hour
hour of
of labour
labour
 May
May cause
cause fatigue
fatigue which
which leads
leads to
to accidents
accidents
 May
May cause
cause dissatisfaction
dissatisfaction among
among workers
workers
Shift Work
Types of Shift Work

 Double day
 Triple shift
 Continuous
 Semi-continuous
 Split shift
 Rotating or fixed shift
Shift Work (cont.)
 Does shift work cause health problems?

 Are shift workers as productive as
non-shift workers?
 What are the costs of shift work?
Alternative Work Scheduling
Flexitime
Job-sharing
Part-time working
Teleworking
Homeworking
Review
 The different types of payment structures, including

basic pay, benefits and incentives
 Wage systems currently in use
 Factors which influence the quantum of wages paid by
employers to employees
 The legal requirements which impact the payment of
wages
 The provisions of the Employment Act 1955 on
working hours
Review (cont.)
 Overtime working
 The shift system of working
 Alternative work schedules such as flexitime,
job-sharing and part-time work
 The advantages of teleworking and working from home

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5

 The different types of payment structures, including

 Wages are important to employees—standard

Equal pay for equal work?

 The Employment Act

 Frequency of wage payment

Restrictions on working hours established by the

Employees within the scope of the

 Overtime work must be paid at premium rates.

Types of Shift Work

 Does shift work cause health problems?

 The different types of payment structures, including

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