HR

Discussion Material

HRMS

March 2009
Corporate Human Capital

For Internal Use

Tudung Group

HRMS / 1

HR

Company Strategic Direction

Customer
SHAREHOLDERS

Competitors
MISSION

OBJECTIVES

STRATEGY

KEY RESULT AREAS AND

CRITICAL SUCCESS FACTORS

KEY ACCOUNTABILITIES

Structure

JOB TASKS

HRMS / 2

HR

Tudung Human Capital Framework

HRMS / 3

Organization Design - Key Concepts in Design of Organization

HR

Span of control - the range of employees who to report to a managerial position

Authority - the formally-granted influence of a position to make decisions, pursue goals and get
resources to pursue the goals; authority in a managerial role may exist only to the extent that
subordinates agree to grant this authority or follow the orders from that position
Responsibility - the duty to carry out an assignment or conduct a certain activity
Delegation - process of assigning a task to a subordinate along with the commensurate
responsibility and authority to carry out the task
Chain of command - the lines of authority in an organization, who reports to whom
Accountability - responsibility for the outcome of the process
Line authority - the type of authority where managers have formal authority over their
subordinates' activities (the subordinates are depicted under the manager on a solid line in the
organization chart); departments directly involved in producing services or products are
sometimes called line departments

HRMS / 4

Organizational Design

Sample

M. Porters Value Chain

6
7

The Value Chain framework of Michael Porter is a model

that helps to analyse specific activities that can create
value and competitive advantage of a particular company.

8
9

Inbound Logistics
Includes raw materials receiving, storing, invetory control,
and transportation scheduling.

Operations
Includes machining, equipment maintenance, testing and
all other value-creating activities that transform the inputs
into the final product.

Outbound Logistics
The activities required to get finished product to the
customers: order fulfillment, transportation, distribution
management.

Marketing & Sales

The activities associated with getting buyers to purchase
the product including channel selection, promotion,
selling, pricing, retail management, etc

Service
The activities that maintain and enhance the product's
value, including customer support, repair services,
installation, upgrading, etc
Mercer

6
7

Administrative Firm Infrastructures

Includes legal, finance, accounting, external affairs, etc
Human Resources Management
The activities associated with recruiting, development,
retention, and compensation of employees.

Technology Development
Includes technology development to support the value
chain activities, such as process automation.

Procurement
Procurement of raw materials, servicing, spare parts,
buildings, machines, etc
5

HR

Human Resources: The 3-P Management Model

Role
Clarification
Objective
Setting
Position
Evaluation

Performance
Review

Compensation

Person Development

HRMS / 6

HR

Three Management Aspects

Role
Clarification
Objective
Setting

Resources
Inventory

Position
Evaluation

Resources
Utilization

Performance
Review
Compensation

Person Development

Resources Development

HRMS / 7

HR

Three Management Systems

Position
Evaluation

Role
Clarification
Objective
Setting

Performance
Evaluation

Position
Evaluation

Performance
Review
Compensation

Person Development

Person Evaluation

HRMS / 8

HR

Role Clarification / Job Analysis

Communication

Expected
Expectedrole
role

Commitment

Perceived
Perceivedrole
role

Accepted
Acceptedrole
role

Allocation of responsibilities
Role clarification

HRMS / 9

HR

Example of Responsibility Mapping

HUMAN
RESOURCES
HR Policies

Hiring

Compensation

Etc.

HR Director
Design, develop and review
HR policies in line with
strategic planning and labor
laws, control implementation
of approved policies.
Set up and control recruitment
needs assessment systems,
approve recruitment plans,
design candidate assessment
tools, participate in selection of
management positions, control
employment contracts.
Suggest Compensation Mix,
develop and suggest total
remuneration structure, control
implementation and annual
reviews.
Etc.

Recruitment Manager

Etc.

Follow-up legal requirements

and market practices related to
hiring, suggest new or improved
policies, supervise
implementation of approved
hiring policies.
Assess recruitment needs, plan,
organize and supervise
recruitment campaigns,
participate in selection of
supervisory positions, develop
employment contracts, design
and supervise orientation and
relocation programs.
Suggest Compensation and
Benefits Package for new
recruits within total
remuneration structure.

Etc.

Etc.

Etc.

Etc.

Etc.

HRMS / 10

HR

Job Evaluation - What is Job Evaluation

Job Evaluation is the process used to measure the relative job

value of positions (not volume of work) within an organisation at
a point in time.
Job evaluation focuses on the actual requirements of a position
and not a person, or their performance.
Jobs are compared in terms of common factors which are
considered to be key determinants of job worth.
Supply and demand issues may affect pay but do not affect job
evaluation.

HRMS / 11

HR

What is Job Evaluation? (cont)

Why are positions evaluated?

Positions are evaluated to establish internal relativities and to determine the

appropriate classification level within the organization.

This in turn establishes the salary range

When might job evaluation occur?

Formal evaluation may occur when:

the requirements of the position have changed, or

when there have been significant changes or growth in the role, or

when new roles have been created.

HRMS / 12

HR

What is Organizational?

To be considered an organization for the

purpose of position evaluation, a business
entity needs to meet three criteria. It must:
1. Include at least one primary
function, such as production, service,
research, or marketing and sales
2. Include at least two supporting
functions, such as information
systems, finance and / or human
resources, and
3. Be operational enough to produce
added value.
If a review of the structure results in the definition of more than one organization, Mercer
recommends evaluating a position within the most specific organizational context that the
position impacts.

HRMS / 13

HR

About Mercers IPE

The value of positions is calculated through 10 dimensions under 4 factors:

Impact
Impact

Organization size is determined by monetary

scale such as sales and assets, and number of
employees.
Assess impact level a position has on
organization.

Contribution
Contribution

Assess relative contribution that a position

holder makes in the context of Impact.

Communication
Communication

Assess the nature of the necessary

communication ability required by a position.

Frame
Frame

Determine both organization frame and nature

of interests of communication contacts.

Organization
Organization
Impact
Impact

Position
Position
Class
Class (PC)
(PC)

Communication
Communication

Innovation
Innovation

Innovation
Innovation
Complexity
Complexity
Knowledge
Knowledge

Knowledge
Knowledge

Assess the requirements to identify, make

improvements to, or develop procedures,
services or products
Assess level of complexity that a position
holder must deal with.
Measure the nature of knowledge required in
the job to accomplish objectives and create
value.

Team
Team

Assess the way the knowledge is applied.

Breath
Breath

Assess the breadth (geographic context) in

which the knowledge is to be applied.

HRMS / 14

HR

Sample IPE result

Div./Dept.:

Finance & Accounting

Position:

Sr. Accountant

Factor

Dimension

SAMPL
E

Impact

Communication

Innovation

Knowledge

Degree

Org. Size

Impact

Contribution

Communication

Frame

Innovation

Complexity

Knowledge

Teams

Breadth

Points

Position Mapping by Functions / Divisions

112

55

45

PC

Finance

54

Finance Mgr

Marketing

Marketing Mgr

53
52
51

95

50

Total Points

307

Position Class (PC)

51

Sr. Accountant

Specialist

HRMS / 15

etc.

Sample Grade Structure

HR

Narrow Banding on Staff Levels, Broad Banding on Professional and above

Position
Grade
Class

SubGrade

Career Stream

56 58

12

A-B-C

General Manager

54 55

11

A-B-C

Manager

52 53

10

A-B-C

Manager

50 51

A-B-C

Manager

Senior Specialist

48 49

A-B-C

Supervisor

Specialist

46 47

A-B-C

Supervisor

Analyst

Senior Staff

45

A-B-C

Supervisor

Analyst

Staff

44

A-B-C

43

4
A-B-C
Grade: Levels into which jobs of the
similar values based on impact,
3
A-B-Cinnovation,
communication,
knowledge are grouped.

42
41

A-B-C

Professional

Sa
mp
le

Management

Staff

Staff
Staff
Sub-Grade: Sub grade is to
accommodate differences in
employees achievements and yearsJunior Staff
of experience.
Junior Staff

HRMS / 16

Sample Grade Structure

HR

Position
Grade
Class

SubGrade

Career Stream

46 47

A-B-C

Senior Staff
Individual contributor that is fully proficient in applying established standards.
Works independently or with very limited supervision.
Requires knowledge acquired from several years of experience in the career stream.
May instruct or coach other staffs.
Reports to Manager / General Manager.

45

A-B-C

44

A-B-C

43

A-B-C

Staff
Individual contributor that works under limited supervision.
Applies subject matter knowledge based on strict procedures and guidelines.
Develops experience in the career stream.
Reports to Manager / Supervisor.

42

A-B-C

41

A-B-C

40

A-B-C

Staff

Junior Staff
Individual contributor that works under direct supervision.
Applies subject matter knowledge based on strict procedures and guidelines.
Reports to Manager / Supervisor.

HRMS / 17

Compensation Philosophy

HR

OBJECTIVES: Serves as an overview of the major considerations influencing the rewards

program (e.g., the companys business strategy, business unit objectives/initiatives, human
resources implications, etc.). At a minimum, the companys compensation program must
enable it to attract and retain people with the required talent and skills to carry out the
organizations mission.

COMPARATIVE FRAMEWORK: Specifies the industries and/or companies which will be used
as a basis for determining the competitiveness and balance of the companys pay practices
and performance relative to the external market.

PAY POSITIONING: Identifies the companys overall objective for setting total remuneration
levels in relation to its comparative framework(s). (e.g., 25th percentile, median or 75th
percentile).

PAY MIX/VARIABILITY: Establishes the role each reward program (e.g., base pay versus
variable pay) will play to achieve the companys pay positioning goal. Addresses reward
levels and performance required to justify/deliver it.

EMPHASIS ON TEAM VS. INDIVIDUAL PERFORMANCE: Defines the companys position

regarding the desire to balance rewards tied to overall company and /or business unit
performance versus providing rewards based on individual performance.

INTERNAL EQUITY AND CONSISTENCY: Defines the companys position regarding

structuring award programs which are uniform across the entire organization versus tailored
award programs to meet the differing needs of business units.

HRMS / 18

Whats the Range - Quartiles

HR

4th quartile

P50
Q2
Median

3rd quartile

P75
Q3
Upper quartile

2nd quartile

1st quartile

P25
Q1
Lower quartile

HRMS / 19

HR

Compensation Structure Design

Identifying overpaid and underpaid positions

Salary Range
Individual
Position

Red Zone (overpaid)

Q4

Base
Salary

Q3
Reference
Q2 Salary
Q1
Green Zone (underpaid)
Grade

HRMS / 20

HR

Salary Structure and Pay Position -General Principles based on 3-P

ABOVE MAXIMUM

MAX
Q4

Q3
REFERENCE
SALARY

Q2

Q1
MIN

Competence & Performance

Considerations

Market Competitiveness
Considerations

Highly competent employee

or outstanding performer

Highly specialized skills

required; scarce and critical
to business outcomes

Extensively experienced,
highly promotable

Very experienced, superior

performer
Competent performer, meets
expected requirements

Able to compete satisfactorily

in the market

Experienced or showing
adequate performance but
capable of further
development

Need to make a pay offer

sufficiently attractive for a
person to move

Inexperienced or showing
marginal performance
Recent appointee

BELOW MINIMUM

HRMS / 21

Variables to Salary Increment Matrix: Pay Position / Compa-Ratio HR

Compa-Ratio Illustration
RED ZONE
MAX

120%

Q4

CompaRatio (%)

Q3
REFERENCE
SALARY

Compa-Ratio (percentage) is a
compensation terminology that is used to
describe an employees pay position relative
to the respective grades salary range.

Individual Salary
Reference Salary

100%
Mapping the Compa-Ratio will enable deeper
analyses into the current state of a
companys pay equity.

Q2

Q1
MIN
GREEN ZONE

80%

HRMS / 22

COMP2 - Custom Market Pay Position

HR

P75th

P50th

P25th

HRMS / 23

COMP2 Companys Trend line

HR

P75th

P50th
P25th

Company

HRMS / 24

Salary Structure

HR

Salary Structure, Individual Salaries, and Market Data

Gr 8
Gr 7
Annual Base Salary

Gr 6
Gr 5
Gr 4
Gr 3
Gr 2
Gr 1
Gr 9

Gr 10

Gr 11

Individual Salary

Data

Mercer Human Resource Consulting

HRMS / 25

HR

Salary Structure Range (monthly)

(Rp.000/Gross)

New Salary Structure

Grade

Range
Ref. Salary

Maximum

24,042

32,056

40,070

-25% to +25%

13,811

19,731

25,650

-30% to +30%

7,809

11,155

14,502

-30% to +30%

4,415

6,307

8,199

-30% to +30%

2,312

3,303

4,294

-30% to +30%

1,078

1,658

2,238

-35% to +35%

Sa
mp
le

Minimum

HRMS / 26

HR

Bonus
Definisi :

Bentuk imbalan yang diberikan perusahaan untuk meningkatkan motivasi kerja

dalam sistem remunerasi yang berimbang untuk memacu seluruh Unit kerja agar
dapat lebih meningkatkan kinerjanya di tahun mendatang.

Pemberian didasarkan pada penilaian prestasi kerja masing-masing karyawan

sesuai dengan hasil penilaian prestasi kerja (Performance Appraisal) yang telah
dilakukan.

Pencapaian target dari masing-masing Bisnis Unit. Sehingga setiap unit bisnis dan
kelompok grade karyawan memiliki tabel formula Bonus yang berbeda-beda.

Merupakan hak prerogatif Manajemen yang pelaksanaannya disesuaikan dengan

situasi dan kondisi internal maupun eksternal perusahaan.

HRMS / 27

HR

Bonus
Masing-masing Bisnis Unit pengali bonusnya dihitung berdasarkan pencapaian target tahun lalu
dan ditetapkan pada SK tentang Pedoman Performance Bonus Tudung Group, sbb :
EBT Realisasi vs EBT Target (Business Plan)

1.

Performance < 80 %

2.

80 % < Performance < 85%

3.

85 % < Performance < 90%

4.

90 % < Performance < 95%

5.

95 % < Performance < 100%

6.

100 % < Performance < 105%

7.

105 % < Performance < 110%

8.

110 % < Performance < 115%

9.

115 % < Performance < 120%

10.

120 % < Performance < 125%

11.

Performance > 125%

Sa
mp
le

NO

Index Pengali Bonus

0,00
0,WW
0,XX
0,YY
0,ZZ
1,AA
1,BB
1,CC
1,DD
1,EE
1,EE + Alpha**

Untuk perusahaan yang belum mencapai target yang telah disepakati berlaku ketentuan sbb:

Pencapaian Performance Bisnis Unit 25% < Performance < 80%, diberikan Gratifikasi sebesar 0.VV kali
gaji khusus untuk karyawan dengan masa kerja 1 tahun atau lebih, dan nilai PA (prestasi kerja) minimal NI+.

Pencapaian Performance Bisnis Unit < 25% tidak diberikan Gratifikasi.

HRMS / 28

HR

Bonus - Sample
Individual Bonus Scheme
Company
Achievement

Grad
e

PERFORMANCE RATING
ME
AE
+
ME NI+
NI

1
2
3
4
5
80% - < 85%

7
Bonus diberikan kepada karyawan dengan ketentuan:
8 tanggal tertentu.
Karyawan yang sudah diangkat tetap per
Karyawan yang masa kerjanya belum melampaui masa kerja 1 (satu) tahun dihitung secara proporsional.
9
Karyawan yang mendapatkan bonus ini adalah karyawan yang sampai tanggal pembayaran Bonus masih
bekerja/tercatat sebagai karyawan aktif
Dasar pemberian Bonus dan Gratifikasi sebagai pengali adalah Grade dan Gaji per Bulan Desember

HRMS / 29

HR

Only HR can translate a Companys business

strategy into a detailed talent strategy. HR
should assert their influence and provide
credible and proactive business counsel and
support for individual business units.
McKinsey Quarterly Newsletter, August, 2008

HRMS / 30