Increasing Employee Productivity through Well Structured Remunerations Packages
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How to Have Well Structured Remuneration Linked to Productivity - Indonesia Challenge Presented at 7th Indonesia Reward Summit - 2015
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Increasing Employee Productivity through Well Structured Remunerations Packages
- 1. Increasing Employee Productivity Through Well Structured Remunerations Packages Presentation for 7th Indonesia Reward Summit Designing & Managing Compensation & Remuneration in High Economy Environment Erwin Muniruzaman 2015
- 2. Role of Reward main role of REWARD is to Attract, Motivate, Retain TOP TALENT
- 3. Functions of Reward REWARD serve as CORPORATE LANGUAGE to communicate what company expect from its employee
- 4. How to Have Well Structured Remuneration Linked to Productivity? Understand Business Strategy Understand Reward Influencing Factor Create Good Design Make Clear & Good Communi cation Consistent Implemen tation
- 5. Corporate Vision & Mission Business Strategy Business Performance Indicator Employee Performance Indicator Performance Based Reward Understand Business Strategy Performance Management How to Have Well Structured Remuneration Linked to Productivity?
- 6. How to Have Well Structured Remuneration Linked to Productivity? Understand BUSINESS strategy is essentialfor designing good REWARD Policy Understand Business Strategy
- 7. How to Have Well Structured Remuneration Linked to Productivity? Understand Reward Influencing Factor
- 8. How to Have Well Structured Remuneration Linked to Productivity? Understand Reward Influencing Factor Total Reward Compensation Fixed Pay Salary, Allowance Variable Pay Incentives, Bonus Benefit Healthcare, Retirement Career & Development Career Path, Performance Mgt, Training
- 9. 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 Salary 1. Short Term Incentives 2. Base Salary 2. Short Term Incentives 2. Base Pay 3. Recognition 3. Career Path 3. Retirement Source: Mercer 2015 Understand Reward Influencing Factor
- 10. 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 Monetary vs Purpose Source https://www.youtube.com/watch?v=u6XAPnuFjJc
- 11. Understand Reward Influencing Factor Indonesia Diversity Challenge Geographical Economical Cultural Education Issues: • Tingkat Inflasi (IHK) • Nilai UMK • Kualitas Pendidikan How to Have Well Structured Remuneration Linked to Productivity?
- 12. How to Have Well Structured Remuneration Linked to Productivity? Understand Reward Influencing Factor Desired culture Reward Strategy (as tools) Change Management Process Culture change •Corporate •Nation/Local
- 13. 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
- 14. Create Good Design 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?
- 15. Create Good Design Setup Reward Strategy Reward Strategy Competitive Positioning 75th 50th 25th Market Positioning Executive Fixed – 70% Variable – 30%Pay Mix Reward Component IncentiveLevels Performance Pay – Performance function Business Strategy Fixed – 90% Variable – 10% Non-Executive Compone nts Base Allowances Bonus/Incentive Benefits Financial Strength How to Have Well Structured Remuneration Linked to Productivity?
- 16. Create Good Design Internal External Equity Tools Output How to Have Well Structured Remuneration Linked to Productivity?
- 17. Create Good Design 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
- 18. Create Good Design Good reward policy design ensuring FAIRNESS How to Have Well Structured Remuneration Linked to Productivity?
- 19. Make Clear & Good Communi cation 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?
- 20. Communications is the KEY Succes Factor of Reward How to Have Well Structured Remuneration Linked to Productivity? Make Clear & Good Communi cation
- 21. Consistent Implemen tation IMPLEMENTATION is UNSPOKEN word of company policy CREDIBILITY How to Have Well Structured Remuneration Linked to Productivity?
- 22. Benefit of Well Structured Remuneration • Reinforces business strategy • Promotes repeatable behaviors • Increase engagement • Improves morale
- 24. 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