MANAJEMEN

KOMPENSASI
PENGANTAR
PENGANTAR
 PENGANTAR

This illustration presents a simplified version of how money circulates.

Although it does not take into account several major factors, such as the
role of government in the economy, the diagram shows the basic money
transactions that make the economy work.
PENGANTAR
 KOMPENSASI

Cash and non-cash rewards employees receive in

exchange for their work
Effective compensation management
Employees more likely to be satisfied and motivated
Compensation perceived to be inappropriate
Performance, motivation and satisfaction may decline
dramatically
Employee turnover may occur
Dissatisfaction with absolute or relative pay
 KOMPENSASI

Employees Perspective

What compensation do you seek?

Direct Indirect
Money Benefits
 KOMPENSASI

Employers Perspective
What do you compensate?
Individual
Job: Characteristics:
Responsibility Ability
Critical function Training
Job content Education
 Total Reward

Base
pay Recognition

Skills Total
Reward
Financial Variable Non- Development
pay Total
rewards remuneration financial
rewards
Share Current
owner- opportunities
ship

Benefits Quality of
working life
 DEFINISI MANAJEMEN
KOMPENSASI

Reward management is concerned with the

formulation and implementation of strategies
and policies the purposes of which are to
reward people fairly, equitably and
consistently in accordance with their value to
the organisation and to help the organisation
to achieve its strategic goals
 TUJUAN MANAJEMEN
KOMPENSASI
Acquire
Administrative personnel Retain
efficiency employees

Legal Effective Ensure

compliance Compensation equity

Control Reward
costs behaviour
 PENGARUH KOMPENSASI

Motivating
performance Identifying
Attract & valued rewards
retain

Areas that impact Relating to

performance
Motivating pay systems
development
Setting
Consequences goals
 KONSEP KOMPENSASI
Wages and salaries constitute the greatest single cost
of doing business.
Establishing equitable and competitive pay structure
is important from attracting point of view.
The organization can also hold out the possibility of
varying compensation, the payment of which is
dependant on specific behavior.
Supplementary pay plans (fringe benefits) can retain
the employees in the organization on a long term
basis
 KONSEP KOMPENSASI

Development, implementation, maintenance,

communication and evaluation of reward
processes.
Assessment of relative job values, the design
and management of pay structures,
performance management, paying for
performance, competence or skills, the
provision of employee benefits and pensions,
management of reward procedures
STRUKTUR GAJI POKOK PNS
 SASARAN MANAJEMEN
KOMPENSASI
Support the achievement of organizations strategic and short
term objectives
Support culture management and change
Drive and support desired behavior
Encourage value added performance
Promote continuous development
Compete in employment market
Motivate all members of the organization
Promote teamwork
Promote flexibility
Provide value for money
Achieve fairness and equity
 KONTEKS MANAJEMEN
KOMPENSASI
The cultural environment
Values (what is believed to be important)
Norms (accepted way of behavior)
Management style (how managers manage their staff)
The organizational structure
Employee relations
Technology
Operational processes and working methods
Management practices as a function of business strategy,
culture, technology and operations
Employment practices
External environment
 FAKTOR UTAMA KOMPENSASI

Supply and demand Statutory minimum

Labor unions wage Wage
Ability to pay determined in
accordance with an
Productivity established Act
Cost of living Minimum Wage
Government Living Wage
 PERHATIAN MANAJEMEN
KOMPENSASI
Wage and salary levels
Wage and salary structures
Individual wage determination
Incentive payments
Fringe benefits
Compensation of managers and professionals
Control
TANTANGAN KOMPENSASI

Current
wage rates

Government Union
constraints Compensation power
Challenges

Wage & salary

Productivity
policies
 PERUBAHAN PEMBERIAN
KOMPENSASI
Traditional Modern

Pay = 100% base Variable component

salary added

Entitlement-base Performance-driven
increases gains

Few incentive/bonus Many kinds of plans,

plans, restricted to extended throughout
executives the organization
MANAJEMEN KOMPENSASI
Phase I
Job Analysis Identify and study jobs
Position descriptions
Job descriptions
Job standards
MANAJEMEN KOMPENSASI
Phase I Determine relative worth or
Job Analysis value of jobs
Phase II
Job Evaluation
Provides for internal equity
Job evaluation methods:
Job ranking
Job grading
Point system
MANAJEMEN KOMPENSASI
Phase I Discover what other
Job Analysis employers are paying for
Phase II specific key jobs
Job Evaluation
Provides for external
Phase III equity
Salary Surveys
Sources of data:
HRDC
Consultants
Associations
Self-conducted surveys
MANAJEMEN KOMPENSASI
Phase I Establishing the pay level
Job Analysis for each job
Phase II Combines job evaluation
Job Evaluation ranking, survey wage rates,
and other considerations e.g.
Phase III organizations pay policy
Salary Surveys
Wage-trend line developed
Phase IV
Pricing Jobs Grouping the different pay
levels into a structure that
Match can be managed
Job classes and rate ranges
 STRUKTUR KOMPENSASI
A pay structure provides framework within
which an organization defines the different
levels of pay for jobs or groups of jobs on the
basis of their relative internal value and of
external relatives.
 KRITERIA STRUKTUR
KOMPENSASI
Be appropriate to the characteristics and need of the
organization
Flexible in response to market rates and skill shortages
Facilitate operational and role flexibility
Scope for rewarding performance
Ensure that consistent decisions are made on pay in relation to
job size, contribution, skill and competence
Clarify career ladders
Logically and clearly constructed
Enable the organizations to exercise control over the
implementation of p[ay policies and budgets
 PRINSIP DASAR PENYUSUNAN
KOMPENSASI
Is in accordance with the organization's philosophy and
policies concerning differentials, relationships with market
rates, and the scope for and methods of progressing the pay in
jobs.
Designed on a logical basis and helps in the application of
equitable and consistent reward management process.
Assist the management and maintenance of appropriate
internal and external relativities
Flexible enough to enable the organization to respond to
change
Reward competence and performance
Can be implemented with minimum amount of efforts and
cost.
Is likely to be acceptable to management and every other
member of the organization
 METODOLOGI
Analyze present arrangement
Set objectives and timetable
Decide who is going to conduct the review
Estimate the likely cost of conducting and implementing the review
Decide the extent of employee involvement
Brief employees
Make preliminary decision about the type of structure required
Analyze and evaluate jobs
Make a final decision on the type of structure (s) required and the main design and
operational features
Prepare a detailed design for the structure and how it will be managed and
maintained.
Communicate with the staff the details of the structure and how it will affect them
Train managers on hoe to operate the structure
Monitor the implementation of the structure
Evaluate the application and impact of the structure.
THREE IMPORTANT TYPES OF PAY
STRUCTURES

Graded
Job family
Broad banded
 GRADED PAY STRUCTURE

A graded pay structure consists of a sequence of job grades to

each of which is attached a pay range.
A pay grade is a grouping of different jobs that are considered
substantially equal for pay purposes. Grades enhance the
organizations ability to move people among jobs that are
within a pay grade without changing their pay.
Jobs are allotted to grades on the basis of their relative size.
A pay range is attached to each grade. This defines the
minimum and maximum rate payable to any job in a grade and
indicates the scope provided for job holders to progress
through the range
 JOB FAMILY STRUCTURES

Market rate pressures operate differently on

particular occupations or categories of employees
There are significant variations in the type of work
carried out and the competencies required by different
occupational groups , which can not be easily
centered for in a single pay structure
A job family structure consists of separate graded pay
structures for each of the job families which have been
identified for this purpose. These structures are aligned
individually to market rates and contain a number of pay
ranges which reflect the particular levels of work within the
job family.
 WHAT ARE JOB FAMILIES?

A job family consists of jobs in a function or discipline such as

research scientists, development engineers or personnel
specialists. The jobs will be related in terms of fundamental
activities carried out and the basic skills required , by they will
be differentiated by the level of responsibility, skill or
competence involved.
A job family is a group of jobs. Their essential nature and
purpose is similar but the work is carried out at different
levels. Job families may be functional, in that they cover
specific work groups within a function such as marketing,
finance or personnel. Or they may be generic , in that they
cover similar types of work across functional boundaries e.g.
administrators, managers or team leaders
 BROADBANDING

Collapse narrow salary grades into wide bands.

20 grades reduced to 4 to 5 bands.
40-60% ranges increased to 100-250%
Increased emphasis on market pricing jobs
Decreased emphasis on job evaluation
 Broadbanding

Compressing a hierarchy of pay grades or

salary ranges into a number of wider bands
Typically no more than five or six bands
Wide pay spans
Market pricing used to define reference points
Focus on lateral career development and
competence growth
 Broadbanding

What are the advantages and disadvantages of

broadbanding?
 Broadbanding Technical Band

160%

IV $85K
40%

III 40%
Salary grades
for Engineers

II 40%

40%
I $35K
 Advantages of Broadbanding

Facilitate Lateral career moves

Enhanced flexibility for transfers
Cross-functional teams with fluid duties
More flexible pay decisions
Few control points such as midpoints or salary
caps.
More pay opportunities based on skills
Salary Surveys
 Why Conduct Salary Surveys?

To create and adjust pay structure

Adjust actual pay in response to the market
Monitor other forms of pay, such as shift
differentials, bonuses, incentives, overtime
practices
 What Is The Market?
Who?
Employers who compete for the same occupations and skills
Employers who compete for employees in the same geographic area
Employers who compete with the same products
How to determine this?
Who are our competitors?
Where do we recruit?
Where are employees going?
Interaction of skill/place/product
If labor market is rich in a particular skill, may recruit/price locally
If labor market does not include skills, recruiting and pricing are on a wider
scale
Commuting time within a market may also be a factor
 Guidelines for Salary Surveys

Make or buy?
How many firms to include
Price fixing issues
What jobs to survey
What data to collect
How to survey
 Putting it Together: The Pay
Regression Line
Job evaluation (internal equity) gives us
relative value of jobs within the organization
Salary surveys (external equity) gives us value
of selected jobs outside the organization
Contingent Pay
 Contingent pay covers the various methods of
providing additional rewards for individuals or
teams
 Types of contingent pay
Contingent pay for individuals
Service related pay: provides fixed increments which
are usually paid annually to people on the basis of
continued service either in a job or in a grade
Competence related pay: Links pay to an assessment
of competence achieved
Contribution related pay: Links pay both to
performance as measured by results and competence
Skill based pay: Which provides additional payments
that reflect the level of skill attained
 Types of contingent pay contd.
Contingent pay for teams
Payments to members of a formally established team or the provision
of other forms of non-financial reward which are linked to the
performance of that team. The rewards are shared by the team members
in accordance with a published formula.
Contingent pay based on organizational performance:
Profits sharing: Provides a cash payment related to the level of profits
Profit related pay:Provides for a proportion of pay to go up or down in
line with profits
Gain sharing :Shares gains in terms of added value or some other
measure between the company and its employees , and includes various
forms of its involvement
 Performance related pay

Provides individuals with financial rewards in

the form of increases to basic pay or cash
bonuses which are linked to an assessment of
performance , usually in relation to agreed
objectives.
 Reasons for introducing performance
related pay
To attract the right type of applicant and to send
strong messages to those employees the organization
wanted to loose as well as those they wanted to retain
To achieve organizational transformation by
promoting values suggesting that the company was
performance-driven , cost conscious and flexible ,
and by encouraging commitment- locking individuals
in through objectives cascading from the companys
business plan.
 Stages in development of PRP
program
Define the objectives
Analyze the existing situation
Decide on the involvement of line managers, team leaders,
employees , trade unions.
Consider alternative designs
Consider process elements
Produce overall design
Prepare implementation program
Implement communication and training programs
Implement the plan
Evaluate the impact of the plan
 Advantages and disadvantages of
PRP
Advantages Disadvantages
Motivates Is not the only motivator
Is a lever of change Is not an effective motivator
Links rewards to results Can demotivate
Delivers message that performance is important May deliver the wrong message
Helps to attract and retain staff Problems of measuring performance
Meets basic human need-to be rewarded for achievement Relies on managerial judgment which may be partial
Emphasizes quantity at the expense of quality
Is prejudicial to teamwork
May be discriminatory
May not deliver value for money
May not be appropriate
Is too often taken on trust
May be right in principle but is hard to make work in
practice
 Advantages and disadvantages of
Competence related pay
Advantages
Encourages competence development
Fits de-layered organizations by
facilitating lateral career moves
Helps to integrate role and
organizational core competence
Forms part of an integrated,
competence based approach to people
management
Delivers message that competence is
important
Disadvantages
Relies on appropriate relevant and
agreed competence profile
Assessment of competence levels may
be difficult
Might pay for irrelevant competencies
Link to pay may be arbitrary
Costs may escalate if inappropriate or
unused competencies are rewarded
 Competence related pay

Method of rewarding people wholly or partly

by reference to the level of competence they
demonstrate in carrying out their roles. It is a
method of paying people for the ability to
perform.
Process of competence related pay

Competency analysis
Agreeing competency requirements in a
particular role
Assessing levels of competence for individuals
against the requirements
Relating pay of individuals to the assessment
 Appropriateness

Well researched competency framework exists

Criteria are available for the
measurement/assessment of competencies
The organization is concerned with the
development of competence levels
Managers and staff are properly briefed and
trained on the assessment of competence
 Performance Management

A business process intended to ensure

alignment of group and individual efforts for
achievement of continuous business
improvement
How much and how??
 Critical success factors

Ongoing tracking
Direct linking to companys mission
Timely communication and skills training
Connection between reward and performance
Objective feedback and review
Employee ownership I own the direction in
which I go
Senior leadership involvement
 Mission Why does the company
Exist ?
Vision of future Where is it going?

How will it
Strategic organizational
goals Get done? Esp.
Focusing on
Values.
Core
Organizational
Capabilities

Performance
Development
& planning
 Four stages of performance

Contribute by following direction

Contribute demonstrating individual competency
Contribute through people
Contribute by shaping the organization
 Performance management at a
glance
Business strategy & goals
Unit performance
Goal setting
1
3
Individual / team goal setting
And planning
Formal assessment
And pay link
Write performance goals/ plans
Write development plan for current
2 Performance goal and future interest
Select coaches
Ongoing progress review
And coaching
 Performance management &
rewards
Not purely for what you DO but also HOW
you do it.
Integration of demonstrated development ,
performance , results and competitive market
to determine total compensation
Performance and incentive compensation
linked to business results
 The Impact of Performance Management

A once a Year An ongoing Competency Based Holistic Organisation/Culture

Event Management Process (Mixed Model) Process Change Process
Impact on the High (1) (2) (3) (4) (5)
Organisation

Degree of integration with other

HR and related processes/
Management Capability
Low
Level of Intervention High

We want to We want to We want to We want to ink up our We want to transform

improve our skills improve our integrate PM process to other how we operate
in objective appraisal scheme competencies and/or initiatives/ processes
AIMS setting/appraising skills in our appraisal e.g. Investors in People,
Business Process Re-
engineering
process Business Process Re-
design, Business
Planning, EFQM

Feature Once a year event An integrated A competency-based A holistic process with PM process part of an
management process integrated PM explicit links to other integrated HR project
of PM Not integrated
covering four phases process initiatives/ processes Pay, Work Definition,
Process Little managing Planning, Managing, Organisation Change,
360 feedback usually
of performance Reviewing and Benefits Management
involved
Rewarding
 And The Impact On Pay .

HIGH Pay Progression Mechanism

Strength Fixed Flexible Pay Flexible Line Management
Increments Increments matrix Guidelines held Budget
of Message

LOW Not Manage Decisions Rating Total

HIGH
Relevant Exceptions on Rating and Pay Ownership Management
Only Capability
 Making Contribution related pay
work requires:
Clarity about organisational strategy and plans and
requirements they will make on:
Departments, teams and individuals
Values that recognise that how can be as or more important
as what
Skill/competence frameworks that support delivery and are
well understood
Learning and development resources
Sound performance management processes
Clear pay progression rules linked to roles/levels (often in job
families)
Capable managers who praise achievement and confront
contribution shortfalls
 Tax considerations
A tax efficient remuneration package can benefit both
employers and employees. From the employees perspective it
can enhance the benefits of working for that employer, from
the employers point of view, it can mean reduced costs.
In the past , tax efficiency was one of the main reasons for the
proliferation of benefits, but it has become progressively less
important as governments have tightened up the fiscal rules
relating to employee benefits.
Because fiscal regulations are constantly changing, it is
essential to update the information related to tax law for
salaried persons.