Overall Employee Effectiveness

YuYudhaSatdhaSatyayaYuYudhaSatdhaSatyayaO v e r a l l E m p l o y e e E f f e c t i v e n e s sO v e r a l l E m p l o y e e E f f e c t i v e n e s s

start

Incentive

System

Job promotion

and salary

increment

Job promotion

and salary

increment

Types of RewardAssessment

Impacts

Long Term

As a mechanism to build in a performance

Objectives of Periodic (Monthly)

Incentive System :

Incentive

Framework

SampleIncentive

EvaluationIncentive

SchemeOEE OEE

calculation

OEE

To incentive

YSP 2

incrementincrement

Annual bonusAnnual bonus

Periodic

incentive

Periodic

incentive

Mid Term

Short Term

As a mechanism to build in a performance

based variable portion in individual monthly

take home pay

Allow a relatively significant different

of monthly income between good and

bad performers

Provide a more frequent periodic

assessment on individual performance

Incentive Framework

Incentive scheme form variable portion of Take home pay more dynamic based on

his/her performance

Individual

monthly incentive

Individual

monthly incentive

Incentive

systemSampleIncentive

EvaluationIncentive

SchemeOEE OEE

calculation

OEE

To incentive

YSP

Department

performance

Department

performance

Individual

incentive rate

Individual

incentive ratex

•A fixed percentage over the basic salary pre-determined by policy

•Normally do not change however it can be revised quarterly, semi-annually or yearly

•Depends on the combined effect of individual function performance and company performances

•Vary from month to month and from individual to individual

Basic Salary

and allowance

Monthly

Incentive

Commission

/overtime

Fixed Portion

Variable Portion

3

Incentive Evaluation

Incentive

system

Incentive

FrameworkSampleIncentive

SchemeOEE OEE

calculation

OEE

To incentive

YSP

•The calculation method

must be straight forward

•The parameters used

must be quantifiable or

made quantifiable

through conversion of

qualitative data into

quantitative result

•As monthly processing

is required and the

scope of coverage is

wide, infrastructure and

resources must be

allocated to support the

performance evaluation

process

•The data must be readily

available and accessible

•Ideally, the data can be

extracted directly from

existing database to avoid

double entering

AccessibleAccessible ResourceResourceMeasurableMeasurable

4

Incentive Scheme

Incentive

system

Incentive

FrameworkIncentive

Evaluation

Background

• Necessity to leverage motivation

lever of employee to contribute

Objectives

• To recognize any employees who

consistently demonstrate outstanding

performance toward achievement of

SampleOEE OEE

calculation

OEE

To incentive

YSP 5

lever of employee to contribute

to corporate strategic objectives

by achieving a set of KPIs

Target for Cost and Quality

performance toward achievement of

productivity & error rate

• To differentiate clearly between outstanding,

mediocre and low performer

Incentive

system

Incentive

FrameworkIncentive

Evaluation

OEEIncentive

Scheme

OEE is an integrated metrics that measure the level of

availability, performance rate, and quality resulting from an

employee

OEE

SampleOEE

calculation

OEE

To incentive

YSP 6

Availability Performance Rate Quality Rate

6 Big Losses

• absents

• lateness• Idling

• Reduced Speed/ Capacity Losses

• Scrap/ Rework

• over SLA

Incentive

system

Incentive

FrameworkIncentive

Evaluation

OEECalculation

Incentive

SchemeOEE

• Availability = standard working hours – (hours lateness + hours absents)

Standard working hours

SampleOEE

To incentive

YSP 7

• Performance rate = Transaction done in that month

Targeted transaction in that month

• Quality = Transaction within SLA

Overall transaction

OEE = Availability x Performance Rate x Quality

Incentive

system

Incentive

FrameworkIncentive

Evaluation

OEE to incentive

Incentive

SchemeOEE OEE

calculation

Individual Monthly

Incentive

Sample

YSP 8

XDepartmental

KPI

Individual

Incentive Rate

= Monthly dept KPI

Bonus Unit X

= Overall Equipment

Effectiveness

= Basic Salary/12

Incentive

system

Incentive

FrameworkIncentive

Evaluation

SampleIncentive

SchemeOEE OEE

calculation

OEE

To incentive

YSP 9

Assume that Department KPI achievement

for Loan Processing (Irfan) score is 4.05 or

equal to 81%

Assume that on that month Irfan never late nor

absents

OEE = Availability x Performance x Quality

OEE = 100% x 131% x 92.1%

OEE = 121%

If Irfan has gross salary Rp. 4 mio,

the incentive received by Ifan is

= Dept KPI x OEE x BU

= 81% x 121% x (Rp. 4,000,000/12)

= Rp. 325,757