STRATEGIC COMPENSATION SYSTEM DESIGN IN XY MINING COMPANY

Amount: STRATEGIC COMPENSATION SYSTEM DESIGN IN XY . MINING COMPANY

Authors: BIMO DWI MURHANINDYO

Item Type: Thesis

Memberships: Master of Management Study Program, Faculty of Economics and Business Universitas Airlangga Surabaya, Indonesia

Publisher: Airlangga University

Abstract

Compensation is a tool used by companies to attract, motivate and retain the best talents in the midst of industrial competition. Financial compensation and non-financial compensation provided to employees must have a logical and rational basis. The ideal compensation system in an organization must be related to the goals and strategies of the organization as well as a balance between the benefits and costs of the company with the needs and expectations of employees. This study aims to design a compensation system in accordance with the vision, mission and strategy of PT. XYZ and explains the various stages of compiling a compensation system. This study uses a case study design with an exploratory approach. because the focus of the research relates to answering the question of how the appropriate strategic compensation design for PT. XYZ, from a top management point of view. This research was conducted at PT. XYZ, a coal mining company which is also a subsidiary of the Cement Group. Research data were collected from interviews with key informants and various archive records owned by the company. The research phase begins with interviews with key informants (top management), which is then continued with the preparation of a compensation system. Compilation of compensation system starts from job analysis, job evaluation using Hay method, external compensation survey, preparation of job grading and basic salary structure, additional benefits and incentives/bonuses for employees. The resulting basic salary structure is slightly below the average coal mining industry in general. The benefits provided include office allowances, food allowances, transportation allowances, telecommunications allowances, vehicles and houses. Additional benefits provided include additional paid leave, employee recreation funds, life and education insurance, Car Ownership Program, House Ownership Program, and Corporate Credit Card. Bonuses/incentives given to motivate employee performance are profit sharing, gain sharing and stock options. The bonus is based on the results of employee performance evaluations at the end of the year. Compensation system developed for the needs of PT. XYZ has fulfilled the strategic element by aligning it with the company's vision, mission and business strategy in general. The compensation system that has been developed also takes into account aspects of internal justice through a job evaluation process using the Hay Job Evaluation System. External justice is created by the existence of a survey of compensation in the industry in general and the coal industry. The basic salary structure that is prepared is expected to attract employees to work at PT. XYZ. Additional benefits and bonuses are expected to maintain and motivate employees to always give the best contribution for the progress of the company.

Keywords: Strategic compensation, Hay Job Evaluation Method

sources: http://repository.unair.ac.id/38448/