Increasing Employee Productivity through Well Structured Remunerations Packages
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Transcript of Increasing Employee Productivity through Well Structured Remunerations Packages
Increasing Employee Productivity
Through Well Structured
Remunerations Packages
Presentation for
7th Indonesia Reward SummitDesigning & Managing Compensation & Remuneration in High Economy
Environment
Erwin Muniruzaman2015
Role of Reward
main role of
REWARDis to
Attract,Motivate,
Retain
TOP TALENT
Functions of Reward
REWARDserve as
CORPORATE LANGUAGEto communicate
what company expect from its employee
How to Have Well Structured Remuneration
Linked to Productivity?
Understand
Business Strategy
Understand
Reward Influencing Factor
Create Good
Design
Make Clear & Good
Communicatio
n
Consistent Implementatio
n
1 2 3 4 5
Corporate Vision & Mission
Business Strategy
Business Performance Indicator
Employee Performance Indicator
Performance Based Reward
Understand Business
Strategy
1
Performance Management
How to Have Well Structured Remuneration
Linked to Productivity?
How to Have Well Structured Remuneration
Linked to Productivity?
Understand BUSINESS strategy is essential for designing
good REWARD Policy
Understand Business
Strategy
1
How to Have Well Structured Remuneration
Linked to Productivity?
Total Reward Component
Employee Motivation
External Environment
Capacity to Change
Understand Reward Influencing
Factor
2
How to Have Well Structured Remuneration
Linked to Productivity?
Understand Reward Influencing
Factor
2 Total Reward
Compensation
Fixed Pay
Salary, Allowance
Variable PayIncentives
, Bonus
Benefit
Healthcare, Retirement
Career & Development
Career Path, Performance Mgt,
Training
Total Reward
Component
How to Have Well Structured Remuneration
Linked to Productivity?
Work Motivation & Priorities
by Workforce Generations
Gen Y(18 – 29 thn)
Gen X(30 – 42 thn)Baby Boomers(43 – 60 thn)
1. Career Path
1. Base Salary1. Short Term
Incentives
2. Base Salary
2. Short Term
Incentives2. Base Pay
3. Recognition3. Career
Path3. Retirement
Source: Mercer 2015
Understand Reward Influencing
Factor
2
Employee Motivation
How to Have Well Structured Remuneration
Linked to Productivity?
Money is Dissatisfying Factor if you don’t pay people enough they won’t be motivated.
the best use of money as a motivator is to pay people enough to take the issue of money off the table.
Pay people enough, so they are not thinking about money and they’re thinking about the work.
Dan Pink, author of Drive, The Suprising Truth
About Motivation
Understand Reward Influencing
Factor
2
Employee Motivation
Monetary vs Purpose
Source https://www.youtube.com/watch?v=u6XAPnuFjJc
Understand Reward Influencing
Factor
2
Indonesia Diversity Challenge
Geographical
Economical
Cultural Education
External Environment
Issues:• Tingkat Inflasi (IHK)• Nilai UMK• Kualitas Pendidikan
How to Have Well Structured Remuneration
Linked to Productivity?
How to Have Well Structured Remuneration
Linked to Productivity?
Understand Reward Influencing
Factor
2
Desired culture
Reward Strategy (as tools)
Change Management Process
Culture change• Corporate• Nation/
Local
Capacity to Change
align employee
MOTIVATION
with company culture to create
ENGAGEMENT
and increase
PERFORMANCE
How to Have Well Structured Remuneration
Linked to Productivity?
Understand Reward Influencing
Factor
2
Create Good
Design
3
Setup Reward Strategy
Internal External Equity
Roll Out Strategy &
Plan
Administration Simplicity
Feedback & Review
clear
fair
effectiveefficient
Up to date
How to Have Well Structured Remuneration
Linked to Productivity?
Create Good
Design
3
Setup Reward Strategy
Reward Strategy
Competitive Positioning 75th
50th
25th
Market Positioning
Executive
Fixed – 70%
Variable – 30%Pay Mix
Reward Component
Ince
ntive
Lev
els
Performance Levels
Pay – Performance function
Business Strategy
Fixed – 90%
Variable – 10%
Non-Executive
Components
Base
Allowances
Bonus/Incentive
Benefits
FinancialStrength
FinancialStrength
How to Have Well Structured Remuneration
Linked to Productivity?
Create Good
Design
3
Internal External Equity
Internal equity, Determine the value of the job and/or person based on value added to the company
External equity, Determine the value of the job or person on the basis of the market
Job Evaluation
Market Survey
Tools
Job Grading
Market Position
Output
How to Have Well Structured Remuneration
Linked to Productivity?
Create Good
Design
3
Internal External Equity
How to Have Well Structured Remuneration
Linked to Productivity?
Salary Structure
Issue:- Market positioning- Single vs Multi Structure - Management vs Non Management
Issue:- Clean Wages vs Allowance
Issue:- Paymix By Level (leverage)- Line of Sight
Fix Pay Composition
Pay Mix Reward
Component
Create Good
Design
3
Good reward policy design
ensuring FAIRNESS
How to Have Well Structured Remuneration
Linked to Productivity?
Make Clear & Good
Communication
4
Purpose
•Creates Engagement
Stakeholder
•Employee•Labour Union•Line Management Team•BoD – Top Management•Owner
Time Frame
•Pre-Policy Setup•Roll Out•Feedback•Review
How to Have Well Structured Remuneration
Linked to Productivity?
Communications
is the
KEY Succes Factor of Reward
How to Have Well Structured Remuneration
Linked to Productivity?
Make Clear & Good
Communication
4
Consistent Implementation
5
IMPLEMENTATIONis
UNSPOKEN word of company policy
CREDIBILITY
How to Have Well Structured Remuneration
Linked to Productivity?
Benefit ofWell Structured Remuneration
• Reinforces business strategy
• Promotes repeatable
behaviors• Increase engagement• Improves morale
http://id.linkedin.com/in/erwinmuniruzaman/
http://mewarisgagasan.wordpress.comemuniruzaman
[email protected]@gmail.com
0811 94 28 70
Profile
A seasoned Reward Practitioners in Retail and Banking industries in Indonesia.More than 12 recent years of overall experience in the HR and full scope of Rewards Management (both Policy and Operation), 2 years in HR Operations including centralized payroll and HRIS operations and 3 year in managing Talent Acquisition. During his previous role he is also work in the field of Marketing and Credit Analyst,
He has been actively working closely with senior management in his many previous projects such as Review and Design/re-Design Reward Schemes (Bonus, Sales Incentives, Healthcare, Pension) and HRIS Project, along his regular responsibility for designing Reward Strategy & Policy and Salary Structure.
He is graduates from Astronomy Dept – ITB in 1995, then has his IPGDI (International Post Graduate Diploma in Insurance) in 2004. His Course for Pension Fund Manager from UI is in 2005 prior to his Certified Human Resources Professional (CHRP) from Universitas Atma Jaya in Dec 2011.
Sharing his ideas, opinions and experiences about HR related issues (especially Indonesian cases) in personal blog http://www.mewarisgagasan.wordpress.com