Modul 12 - Direct Compensation

Direct Compensation, Indirect
Compensation, and Deferred

Compensation
Modul 12
CERTIFIED HUMAN RESOURCES
PROFESSIONAL (CHRP)
By: Ones Lebang
Certification on Human Resource Professional (CHRP), AtmaJaya University Jakarta, 2006
OBJECTIVES
z
By the conclusion of this Module, you will

be able to accomplish the following:
Differentiate Direct Compensation from

Indirect and Deferred Compensation.
Define the concept and components of

Direct Compensation as applicable in a
certain organization.
Identify the purposes of each component

of Direct Compensation as applicable in a
certain organization
Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006
ELEMENTS OF TOTAL COMPENSATION

COMPANY XYZ
Direct Compensation
- Base Salary
-Regional Allowance
- Temporary Monetary
Assistance (MAC)
- Overtime Pay
- Excess Working Hours
- Shift Allowance
- Onshore Allow
-Offshore Allow
-Leave Allowance
- THRK
- Vacation Travel Allowance
- AIP
- Coy Tax
Indirect Compensation
- Severance Pay
(Defined Benefits)
- Monthly Pension (Defined
Contribution)
- Old Age Benefit
- Coy Tax on Severance
Pay
- Medical Coverage
- HOP Loan
- VPA
- Educational Loan
- Natural Death Benefit
- Long Term Disability
-Industrial Death Benefit
- JK/JKK (XXVI.B)
-Salary Continuation
- Paid Vacations/Holidays
- Coy Tax
Deferred Compensation/Benefits
Total Compensation looks at all the cash programs, all the non-cash programs, and all the
deferred compensation and benefit programs offered by an organization to its employees.
KOMPONEN UPAH
DEFINITIONS :
z
Upah adalah hak pekerja/buruh yang diterima

dan dinyatakan dalam bentuk uang sebagai
imbalan dari pengusaha atau pemberi kerja
kepada pekerja/buruh yang ditetapkan dan
dibayarkan menurut suatu perjanjian kerja,
kesepakatan, atau peraturan perundangundangan,
termasuk
tunjangan
bagi
pekerja/buruh atas suatu pekerjaan dan/atau
jasa yang telah atau akan dilakukan.
KOMPONEN UPAH
DEFINITIONS :
UpahPokok adalah imbalan dasar yang

dibayarkan kepada pekerja menurut tingkat
atau jenis pekerjaan yang besarnya ditetapkan
berdasarkan kesepakatan
KOMPONEN UPAH
DEFINITIONS :
UpahPokok adalah imbalan dasar yang

dibayarkan kepada pekerja menurut tingkat
atau jenis pekerjaan yang besarnya ditetapkan
berdasarkan kesepakatan
Tunjangan Tetap adalah suatu pembayaran

yang teratur berkaitan dengan pekerjaan yang
diberikan secara tetap untuk pekerja dan
keluarganya serta dibayarkan dalam satuan
waktu yang sama dengan pembayaran upah
pokok,
seperti
tunjangan
istri,
anak,
perumahan, transport, dll.
KOMPONEN UPAH
DEFINITIONS :
Tunjangan Tidak Tetap adalah suatu

pembayaran yang secara langsung atau tidak
langsung berkaitan dengan pekerja, yang
diberikan secara tidak tetap untuk pekerja dan
keluarganya serta dibayarkan menurut satuan
waktu yang tidak sama dengan waktu
pembayaran upah pokok, seperti tunjangan
transport dan makan yang didasarkan pada
kehadiran.
KOMPONEN NON UPAH

DEFINITIONS :
Fasilitas adalah kenikmatan dalam bentuk

nyata/natura yang diberikan perusahaan oleh
karena hal-hal yang bersifat khusus atau
meningkatkan kesejahtraan pekerja, seperti
fasilitas kendaraan, pemberian makan cumacuma, sarana ibadah, tempat penitipan bayi,
koperasi, kantin, dll.
KOMPONEN NON UPAH

DEFINITIONS :
Bonus adalah pembayaran yang diterima

pekerja dari hasil keuntungan perusahaan atau
karena pekerja menghasilkan hasil kerja lebih
besar dari target produksi yang normal atau
karena peningkatan produktifitas, besarnya
pembagian
bonus
diatur
berdasarkan
kesepakatan.
THRK, Gratifitasi dan pembagian

Keuntungan lainnya
KOMPONEN UPAH
DEFINITIONS :
Kesejahteraan (benefit) suatu pemenuhan

kebutuhan dan/atau keperluan yang bersifat
jasmaniah dan rohaniah, baik didalam maupun
diluar hubungan kerja, yang secara langsung
dan tidak langsung dapat mempertinggi
produktifitas kerja dalam lingkungan kerja yang
aman dan sehat.
Prinsip-prinsip Pengupahan
(PP No. 8 tahun 1981 tentang Perlindungan Upah)
Adanya Hubungan Kerja

Tidak boleh mengadakan diskriminasi
No work no pay
Leave with pay
Waktu
pembayaran
sesuai
yang
diperjanjikan
Dibayar
dalam bentuk uang, sebagian
(max. 25%) dapat dalam bentuk lain
Prinsip-prinsip Pengupahan
(PP No. 8 tahun 1981 tentang Perlindungan Upah)
Pembayaran dengan alat pembayaran yang

sah
Pemotongan untuk pihak ketiga harus dengan
surat kuasa
Pemotongan untuk jaminan utang maksimum
20% sebulan
Tuntutan upah menjadi daluwarsa setelah 2
tahun
BASE PAY
What is Base Pay?
The amount of money you receive on an
hourly, monthly, or annual basis that is . .
Based on the value of your job-related skills and

experience compared to the market; and,
Tied to individual performance and contribution

relative to others.
BASE PAY (continued)

Objectives of Base Pay:
Base Pay is intended to:
Provide a fundamental level of reward based on how

the position compares externally (vs. market) and
internally (vs. other roles in a company).
Reward performance and contribution over time.
BASE PAY (continued)

z
How Base Pay is Determined

The
value of the job in the market.
By position
By geography
Comparison
with salary structure.
Salary Grades and Ranges
Individual
performance and contribution

relative to others.
EQUITY AND BASE PAY

SYSTEMS
OS OO
=
IS I O
O = Outcomes
I = Inputs
= Self
O = Relevant Others
S
BEHAVIORAL THEORIES
Equity Theory
1. If ratios are equal, satisfied
2. If employees ratio is greater than
others, over-rewarded
3. If employees ratio is less than
others,
under-rewarded
and
dissatisfied
The Pay Model

Strategic Issues
CONSISTENCY
Techniques
Work
analysis
Descriptions
Evaluation
certification
Strategic Objectives
INTERNAL
STRUCTURE
EFFICIENCY
COMPETITIVESNES
Market
definitions
Surveys
Policy
lines
PAY
STRUCTURE
EQUITY
CONTRIBUTORS
Seniority
based
Performance
based
Merit
guidelines
INCENTIVE
PROGRAMS
COMPLIANCE
ADMINISTRATION
Planning
Budgeting
Communi
cation
EVALUATION
INTERNAL EQUITY
Different job, same
organization
z
z
z
z
Job Analysis
Job Descriptions
Job Evaluation
Salary Structures
EXTERNAL EQUITY
Same job, different
organization
z
z
z
z
Salary Surveys
Benefit Surveys
Market Pricing
Other Benchmarking
INDIVIDUAL EQUITY
Same job, same
organization, different
incumbent
z
z
z
z
Performance
Effort
Seniority
Legitimate (and not so
legitimate) individual
differences
PROCESS EQUITY
Procedural justice
z
z
Fairness of process
Communication
Participation
Appeals
COMPENSATION STRATEGY
AND YOUR ORGANIZATION
z
What compensation strategy is implicit in

your Base Pay program?
How does it support organizational strategy?

Could it do better?
Is it aligned
programs?
with
other
compensation
Transportation Allowance General Industry

Transportation Allowance in Rp000 Per month
Employee Category
Min
Top Management*
Management
Officer/Spv.
Clerical
Non-clerical
151
140
140
100
50
LQ
220
220
136
100
Med.
575
300
222
121
UQ
750
400
300
167
Max
1,000
1,000
750
600
300
Source : Watson Wyatt Total Remuneration Survey 2002

*: Due to insufficient data, we only provide the Minimum, Maximum and Average information
Avg.
575
554
358
249
142
ALLOWANCES (CONTINUED)
z
Labor Law No. 13. Article 94:

z
In the event the wage components consist of Base

Salary and Fixed Allowances, the magnitude of the
Base Salary is at the minimum 75% (seventy five
percent) of the sum of the Base Salary and Fixed
Allowances.
Example: Base Salary: Rp. 5,000,000.-
Housing Allow: Rp. 1500,000.Transport Allow: Rp. 1,000,000.Is the above in compliance with the Labor
Law?
ANSWER
PROPORTION OF BASE PAY TO FIXED ALLOWANCES
13%
20%
BASE
HOUSING
TRANSPORT
67%

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Direct Compensation, Indirect

Compensation, and Deferred

Certification on Human Resource Professional (CHRP), AtmaJaya University Jakarta, 2006

By the conclusion of this Module, you will

Differentiate Direct Compensation from

Define the concept and components of

Identify the purposes of each component

ELEMENTS OF TOTAL COMPENSATION

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Upah adalah hak pekerja/buruh yang diterima

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

UpahPokok adalah imbalan dasar yang

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

UpahPokok adalah imbalan dasar yang

Tunjangan Tetap adalah suatu pembayaran

Tunjangan Tidak Tetap adalah suatu

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

KOMPONEN NON UPAH

Fasilitas adalah kenikmatan dalam bentuk

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

KOMPONEN NON UPAH

Bonus adalah pembayaran yang diterima

THRK, Gratifitasi dan pembagian

Kesejahteraan (benefit) suatu pemenuhan

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Adanya Hubungan Kerja

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Pembayaran dengan alat pembayaran yang

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Based on the value of your job-related skills and

Tied to individual performance and contribution

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

BASE PAY (continued)

Provide a fundamental level of reward based on how

Reward performance and contribution over time.

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

BASE PAY (continued)

How Base Pay is Determined

value of the job in the market.

with salary structure.

Salary Grades and Ranges

performance and contribution

EQUITY AND BASE PAY

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

The Pay Model

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

What compensation strategy is implicit in

How does it support organizational strategy?

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Transportation Allowance General Industry

Source : Watson Wyatt Total Remuneration Survey 2002

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006

Labor Law No. 13. Article 94:

In the event the wage components consist of Base

Certification on Human Resource Professional (CHRP), AtmaJaya University, Jakarta, 2006