Designing Reward System_Fadli Alexander-13510133

8/9/2019 Designing Reward System_Fadli Alexander-13510133

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Designing RewardDesigning RewardSystemSystem

Pay decisionIncentive system & variable pay

Executive pay & stock options

Benefit

by : Fadli Alexander - 13510133


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Reward System in The Organization :- S erving strategic purpose of attracting, motivating & retaining people

Reward will be formulated in a Fixed pay, Incentive or Variable Pay, andEmployee Benefit

Pay Plan/ Wage Decision3 types decision which is crucial for designing an effective pay plan;

1. Pay level

Pay level is usually shows the ability of the company to pay itsemployee, and its justified by the short term financial basis

2. Pay S tructureis decision to price difference job with in organization, is usuallyschemed in to pay grade with a floor & ceiling or bottom grade or thehighest grade

3. Individual payDecision to pay for similar job, differences by 2 ways, seniority andperformance


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INTERNAL FACTORCompensation policyWorth of jobEmployee relative worthEmployers ability to pay

EXTERNAL FACTORLabor Market ConditionArea Wage Rates

Cost of LivingCollective BargainingLegal Requirement

WAGEMIX

Factors thatinfluence Wage Mix


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USA Company JOB TITLE Yearly Monthly IDR1 Bingham McCutchen Associate $256,312 $21,359.33 IDR 202,913,666.672 Lehigh Valley Hospital & Health Physicians $244,605 $20,383.75 IDR 193,645,625.003 Orrick Herrington & Sutcliffe Associate $240,955 $20,079.58 IDR 190,756,041.674 Alston & Bird Associate $203,655 $16,971.25 IDR 161,226,875.005 Perkins Coie Associate $190,126 $15,843.83 IDR 150,516,416.676 Devon Energy Engineer $186,882 $15,573.50 IDR 147,948,250.00

7 Salesforce.com Senior Sales Engineer $172,303 $14,358.58 IDR 136,406,541.678 Arnold & Porter Associate $172,192 $14,349.33 IDR 136,318,666.679 Adobe Systems Sr. Computer Scientist Software Dev. $165,947 $13,828.92 IDR 131,374,708.3310 EOG Resources Engineer $158,302 $13,191.83 IDR 125,322,416.6711 Goldman Sachs Analysts 144994 $12,082.83 IDR 114,786,916.6712 Boston Consulting Group Consultant $141,111 $11,759.25 IDR 111,712,875.0015 Cisco Systems Software Engineer IV $131,703 $10,975.25 IDR 104,264,875.00

27 Microsoft Software Development Engineer $112,399 $9,366.58 IDR 88,982,541.67

RANK THE MOS T HIGHEST COMPANY AVERAGE PAY in th e World 2009

Source : CNN Money.com

Th enHow muc h your does company Pay You???


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Incentive System & Variable Pay

Incentive system have been devised to encourage and motivate employees to be moreproductive

Form of Incentive S ystem :- 1. Individual incentive plan

Determine by employees performance, like salesperson will receive extracompensation for exceeding sales target

-

2. Groups Incentive Plans,- - Gain S haring Plan, determine by saving money or increasing productivity in areas

under their direct control- - Profit S haring Plan, determine by company annual exceeding a specified profit target

3. Merit Pay S ystemDetermine by employee bosss judgmental merit rating


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Executive Pay & Stock Options

Most of Executive pay determine by the its company ExecutiveCompensation Policy, personal worth and options to buy Company S hareand exercise it.

This special right can make Executive pay has a gap with the blue collar.In U S A, average CEO pay is more than 500 times higher than the averageblue collar wage, when in Japan the ratio is 11, Germany is 13, andCanada is 20.


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Name Company Compensation ID RStephen Schwarzman Blac k tone Group $702,440,573 ID R6,673,185,443,500Lawrence Ellison Oracle Corp. $556,976,600 ID R5,291,277,700,000Ray Irani Occidental Petroleum Corp. $222,639,705 ID R2,115,077,197,500John Hess Hess Corp. $159,566,940 ID R1,515,885,930,000

Michael Watford Ultra Petroleum Corp. $116,929,392 ID R1,110,829,224,000Aubrey McClendon Chesapea ke Energy Corp. $114,286,867 ID R1,085,725,236,500Bob Simpson XTO Energy Inc. $103,485,972 ID R983,116,734,000Mar k Papa EOG Resources, Inc. $90,471,784 ID R859,481,948,000Eugene Isenberg Nabors Industries Ltd. $79,333,079 ID R753,664,250,500Michael Jeffries Abercrombie & Fitch Co. $71,795,744 ID R682,059,568,000

ighest paid US C E s, 2008

source : CNN Money.com


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NO NAME AGE PO T ON OMPANY YEAR DR1 Matt Maddox 34 C E

R orts ( Y ) 17,660,000 $167,770,000,0002 James R Murdoch 36 C E

Europe and

sia e ws Corp (CNN) $10,150,000 $96,425,000,0003 Geor ge "Mike " Mikan 37 CFO EV nitedHealth Group $6,730,000 $63,935,000,0004 W. Robert Berkeley, Jr. 36 CEO Berkley nt $6,630,000 $62,985,000,0005 Jonathan Z. Cohen 39 C EO Atlas Ener gy** $4,290,000 $40,755,000,000

WORLD H GHE T PA D EX E UT VE UNDER 4 , 9

Source CNN Money.com


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Employee BenefitEmployee Benefit consist of :

1. Required by Law - US Aa. Workers compensation Financial support work related injury/ilnessb. S ocial S ecurity Financial support to retireesc. Unemployment Insurance Financial support for who are laid off for externalcontrol

Indonesia?????

2. Employers optional

a. Cafeteria benefit programs employee can choose from benefit menu of optionsb. Flexible benefit program employee are given credits to spend their benefit needs

Benefit Form :

a. Pension Plan & Medicalb. Hospital Insurance, Dental Insurancec. Life Insuranced. Facility, like gym, playground, etc


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Work - Life Balance

According to a survey conducted by the National Life Insurance Company, 4 out of 10

employees state that their jobs are "very" or "extremely" stressful, what ever it paysThe study states that women, in particular, report stress related to the conflictbetween work and family

The number of stress - related disability claims by American employees has doubledaccording to the Employee Assistance Professionals Association in Arlington, Virginia.75% to 90% of physician visits are related to stress and, according to the AmericanInstitute of S tress, the cost to industry has been estimated at $200 billion-$300

billion a year

Work Life balance :- Acceptable Working Hours- Flexibility to have a pray- Maternity leave benefit to leave office hrs to take care child- Breast Feeding- Telecommuting working remote/ from home

Deloitte and Cisco S ystems is the best telecommuting company in The World


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Indonesia : 40 h rs per weekCh ina : 50 h rs per week

Source : OECO.org


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S AS (core : Business Intelegent S oftware)

is t h e Best company in t h e world t h at give employee best work life balance

CEO & Founder : Jim Goodn ight (The Only CEO SAS had for 34 years!)

Offers :1. h igh-qual ity ch ild care at $410 a m onth,2. 90% coverage of the health insurance pre mi um ,3. unl imi ted s ick days,4.a m ed ical center staffed by four phys icians and 10 nurse pract itioners (at no cost toe m ployees),5. a free 66,000-square-foot f itness center and natator ium ,6. a lend ing l ibrary, and7.a su mm er ca m p for ch ildren.

Com

pany Im

pact :1. SAS is h ighly prof itable and ranks as the worlds largest pr ivately owned softwareco m pany.

2. Turnover is the industrys lowest at 2%.3. One of the Best Co m pan ies for all 13 years

Source : Forbes.co m


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NO CO MPA NY CO RE1 APPLE Com pu

Software & Har dware2 Bek hire Hat hawa y Investme nt Bankin ! "

oyota # otor Otomot ive4 Goog le Searc h $ ngines & Wor ld Wide Web%

&

ohnso n & John so n Hea lth, # edicine6 Protect & Gam ble Co nsumer Goo ds7 Fed $ x Cargo Ser vice8 Southwest

'

irlines Low Cost Carr ier9 Genera l $ lectr ics Electro nics , Finance , Leas ing

10 M icrosoft Com pu ter Software & Har dware11 Wa l-Mart Stores Reta il Stores12 Coca Cola Foo d & Beverages13 Wa lt ( isney Enterta inme nt14 We lls Fargo Investme nt Banking15 Go ldma n Sach Gro up s Investme nt Banking16 McDo na lds Foo d & Beverages17 IBM Com pu ter Software & Har dware

18 3M D ivers if ied Tec hno log y19 Target Furniture20 J.P Morga n Chase Financia l Ser vice 21 Pepsi Co Foo d & Beverages22 Costco Who le sa le Merc handise Reta iler23 Nike Sport Fas hion24 Nor dstrom A ppare l/Fas hion Reta iler25 Exxon Mo bil Energ y

RANK THEM O S T 5 ADM RED CO MPA NY in t e W rl

S ) u r 0 e : F) rt une 51 1

b 2 F) rt une Magaz ine

Apple is t h e M ostAdmired Company in Th eWorld 2009

Apple IPAD


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NO CO MPA N Y CO R26 Ba nk O

3

America Ba nking

27 U nited Parc el Service Parc el Service28 BM W Otomot ive29 Am erica n Express Co nsum er Banking30 H ew le t-Packar d Com pu ter So

3

twar e & Har dwar e31 Cisco Syst em So

3

war e Networ king32 Ho nda Motor Otomot ive33 Singa por e Airline Low Cost Carr ier34 Star bucks Beve rag e

35 Cat erpillar H eavy Equiptm ent36 Intel Com pu ter So3

twar e 37 Marr iot Internat iona l Hot els 38 Nest le Dairy Pro duct39 Sony Electro nics40 Bo eing Aircra

3

t Plant41 D ee re Heavy Equiptm ent42 Nokia Mo bile Device43 Nort hwest ern Mutua l Financia l Service & Insura nce44 Best Buy Online Shop45 Genera l Mills Proc essed Foo d46 To yota Indu str ies Otomot ive & Leas ing47 Low e' s Advirt ising48 AT & T Telco Pro vider & Content Interne t49 Acc enture Ma nag em ent Conso lt ing50 Sams ung Electro nics Electro nics

RANK TH M OS T 5 ADM R D CO MPA N Y in W rl

So u r 4 5 : Fo r6

un 5 57 7

b 8 Fo r6

un 5 M agazin 5

S ingapore Airlines is oneof t h e 3 Asian Companyw h ic h is listed on Top 50 of Fortune 500 in 2009, standswit h Toyota (#3) & Honda(#32)


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Thank You

Designing Reward System_Fadli Alexander-13510133

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