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.

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

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.

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

KOMPONEN UPAH
DEFINITIONS :

UpahPokok adalah imbalan dasar yang

dibayarkan kepada pekerja menurut tingkat
atau jenis pekerjaan yang besarnya ditetapkan
berdasarkan kesepakatan

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

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

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.

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

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.

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

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

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.

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

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

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

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

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

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.

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

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.

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

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

EQUITY AND BASE PAY

SYSTEMS

OS OO
=
IS I O

O = Outcomes
I = Inputs
= Self
O = Relevant Others
S

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

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

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

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

INTERNAL EQUITY
Different job, same
organization

z
z
z
z

Job Analysis
Job Descriptions
Job Evaluation
Salary Structures

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

EXTERNAL EQUITY
Same job, different
organization

z
z
z
z

Salary Surveys
Benefit Surveys
Market Pricing
Other Benchmarking

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

INDIVIDUAL EQUITY
Same job, same
organization, different
incumbent

z
z
z
z

Performance
Effort
Seniority
Legitimate (and not so
legitimate) individual
differences

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

PROCESS EQUITY
Procedural justice

z
z

Fairness of process

Communication
Participation
Appeals

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

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

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

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

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

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?

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

ANSWER
PROPORTION OF BASE PAY TO FIXED ALLOWANCES

13%

20%
BASE
HOUSING
TRANSPORT

67%

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