PAD214 INTRODUCTION TO PUBLIC PERSONNEL ADMINISTRATION LESSON 10 COMPENSATION

INTRODUCTION Compensation is one of the most importance thing that an employee is always looking forward for the job that assigned by the employer. Employer must paid the employee a certain amount of financial and non-financial rewards to compensate the employee on the job that has been done. This lesson describes the compensation policy that should be practiced by an organization, especially in the public sector.

OBJECTIVES OF THIS LECTURE Upon completing this chapter student should be able to: Understand the concept of compensation Describe the purpose of compensation policy Describe the determinant factors of compensation policy Describe the methods to pay compensation Understand the compensation policy in the public sector

Definition Compensation is any type of reward or what employees receive in exchange for performing organizational tasks or for their contribution to the organisation. Compensation is a tool used by management for a variety of purposes to further the existence of the company. Compensation may be adjusted according the the business needs, goals, and available resources.

The purposes of compensation recruit and retain qualified employees. increase or maintain morale/satisfaction. reward and encourage peak performance. achieve internal and external equity. reduce turnover and encourage company loyalty. modify (through negotiations) practices of unions.

Types of compensation Direct financial compensation- such as pay an employee receives in the form of wages, salaries, bonuses or commissions. Indirect Financial compensation – all types of financial rewards that are not include in direct financial compensation such as vacation, life insurance, child benefit, medical benefit & health care. Non-financial rewards- any recognition and appreciations from employer to fulfil employee satisfaction.

Determinants of Financial Compensation The organization – Compensation policy, Organizational politics and ability to pay. The labor Market – Cost of living, Labor unions The economy and compensation survey. The employee – Job performance, Seniority, Political influence and luck. The job – Job Evaluation, Job pricing and job description.

Methods of determining pay compensation The pay-level decision – is decided by managers who compare the pay of people working inside the organisation with those outside it. Play survey- are technique and instrument used to collect data about compensation paid to employee by all employers in a geographic, an industry or in occupational group. Pay structure decision- is to construct an internal pay hierarchy by using job evaluation. Four basic methods of job evaluation are: Job ranking- the evaluator rank-order whole jobs, from the simplest to the most challenging Classification – group a set of together into a grade or specific class.

Point system – requires evaluators to quantify the value of the elements of a job. Points are assigned on the basis of skill required, degree of dangerous or unpleasant working condition. Factor comparison – the job evaluation process to be done factor by factor Individual pay decision – how much she or he will earn. The methods of payment include : Flat rates – employers setting same wage rates for different employees. Payment for Time Worked – wage (pay calculated at an hourly rate). salary (pay calculated at an annual or monthly rate)

THE GOVERNMENT SERVANT COMPENSATION POLICY The remuneration or salary of all government servants are standardized by JPA. The level of salary is determined by the grade and qualification – Degree Professional Grade (N41 – N 54) & Diploma (N27)& certificate (SPM) Supporting staff (N17) SSB salary structure for N41 Assistant Director Level 1 P1T1, T2, T3, T4, …… T10 level 2 P2T1, T2, T3, T4, …… T10 Level 3 P3T1, T2, T3, T4, ….. T10

Types of Compensation Basic salary Elaun Khidmat Awam/Keraian Imbuhan Tetap perumahan COLA – bantuan sara hidup bandar RM300 Luar bandar RM150. Panel perubatan

PENOLONG PEGAWAI SAINS C27 P1T1 RM1215.14 RM160.00 RM180.00 RM300.00 P1T5 RM1481.34 P1T6 RM1547.89 PENOLONG PEGAWAI SENIBINA J29 RM1549.40 P1T2 RM1615.95 PENOLONG PEGAWAI SIASATAN P29 RM1482.85 PENOLONG PEGAWAI TEKNOLOGI MAKLUMAT F29 RM1544.86 RM1611.41 PENOLONG PEGAWAI SYARIAH LS27 RM1206.06 RM1472.26 PENOLONG PEGAWAI TADBIR N27 RM1204.55 RM1470.75 RM1537.30

SALARY SCALE AND ADJUSTMENT P1T1 P1T2 P1T3 P1T4 P1T5 ………………….. P1T10 P2T1 P2T2 P2T3 P2T4 P2T5……………………P2T10 P3T1 P3T2 P3T3 P3T4 P3T5……………………P3T10 1) P1T1 P1T2 MENDATAR 2) P1T1 MENEGAK P2T1 3) P1T1 P2T1 P2T2 MELINTANG

THAT ALL FOR TODAY SEE YOU AGAIN NEXT LECTURE LESSON 11 EMPLOYEE BENEFITS AND SERVICES