1. BP Amoco Finland Team 10: Compensation
Elina Laurila
Iiro Paajanen
Teemu Saxen
Taija Tanskanen
Soot Yin Yow

2. Agenda
Taija: Introduction, Compensation objectives and policies and wage mix
Soot Yin: Government regulations and other factors influencing compensation, job ranking table
Elina: Compensation instruments, traditional compensation model
Teemu: Recommended compensation model, additional benefits
Iiro: Benefits for expatriates

3. Compensation Objectives
Match employees’ future performance with organizational goals
Reward employees’ past performance
Employ and retain most talented people
Improve productivity
Remain competitive in the labor market
Control the compensation budget
Maintain salary equity among employees

4. Compensation Policies
Pay for performance
Competitive base salaries
Incentives (merits, bonuses, stock options)
Indirect compensation
Salary ranges for each management level
No pay secrecy - open policy

5. Wage Mix Internal factors: External factors:
Compensation policy of organization
Worth of job
Employee’s relative worth
Employer’s ability to pay
External factors:
Conditions of the labor market
Area wage rates
Cost of living
Collective bargaining
Legal requirements

6. Finnish Government Regulations
Regulated working hours
Paid vacation
Minimum wage
Occupational health service
Retirement benefits
Maternity benefits
Right for paternity leave
Insurance (accidents, unemployment)

7. Other Influencing Factors
High tax rates
High cost of living
Inflation
Decrease in real wage
Unemployment rate

8. Job Ranking Table

9. Compensation Instruments
Direct Compensation
salaries
incentives (merits, bonuses, stock options)
Indirect Compensation
benefits (company car, petrol, cellular phone etc.)
retirement insurance
relocation assistance
flexible working hours
self development program

10. Incentives Merits Bonuses - Goals set by superior
- Allocation by superior based on performance appraisal
Bonuses
- Goals set by superior
- Based on the profit
Stock option plan for top management

11. Traditional Compensation Model
CEO
Country
Functional
Regional
Facility
Asst. Facility
Base Merit Bonuses Stock Indirect
Salary options compensation

12. Recommended Compensation Model

13. Salary Ranges for Each Management Level
CEO: FIM
Country VP: FIM
Functional VP: FIM
Area Manager: FIM
Facility Manager: FIM
Ass. F. Manager: FIM

14. Additional Benefit Packages
Addition to base salary
Value of package according to position
Range: FIM
Employee chooses the content of the package
Country Club membership, Car, Pension plan, Household services, Holiday packages, etc…

15. Benefits for Finns Working Abroad
20 % premium on top of base salary
Basic health care for the family
Child care and school placement
Housing arrangements

16. Benefits for non-Finns Working in Finland
Housing arrangement
Basic health care for family
Child care and school placement

17. Thank You! Questions?