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|
INTERNATIONAL
JOURNAL OF SOCIAL SERVICE AND RESEARCH
|
Faiza Nur Aulia, Hasna
Nadiyah Banafsaj Sudaryono, Arina Salsabila Santoso, Sindhy Larasati, Muhammad
Ilham Pratama
Mahasiswa Departemen
Management, Fakultas Ekonomic dan Management
IPB University
Email: [email protected],
[email protected], [email protected],
[email protected], [email protected]
Abstract
In an organization or
company, determining the differences and grading between positions is needed to
determine the obligations between positions and the level of compensation. The
level or grade of the position will affect how much compensation is given by
the company to its employees and also reflects the knowledge, skills, and
responsibilities of employees at each level. The object of research from this
scientific journal is UKM XYZ which is engaged in food processing in accordance
with Law Number 20 of 2008 concerning Micro, Small and Medium Enterprises
(MSMEs). UKM XYZ is an UKM that has been established since 2004 and is located
in Lembang, West Bandung Regency, West Java. The research was conducted to
evaluate the salary system in UKM XYZ compensation to be more fair and
effective for each employee using Job Value & Grading basis and salary
mapping system with Adhered and Overlapping. The data used in this study are
primary and secondary data obtained through online systems such as conducting interviews
through Zoom Meetings, distributing questionnaires through Google Forms,
analyzing salary attachments, and conducting various literature studies through
several journals. In this study, the weighting criteria used were based on the
Hay System criteria, namely Know-How, Problem Solving, and Accountability. This
research is a quantitative and qualitative research by describing the job grade
system in compensation run by UKM XYZ.
Keywords: job
grading; hay system; compensation; know-how; problem solving; accountability
Received 20
November 2021, Revised 30 November 2021, Accepted 10 December 2021
Introduction
In a company, giving rights and obligations to employees
is very important. Fair distribution of employee rights and obligations can be
done through a good compensation system. According to Hasibuan, 2010
Compensation is the main encouragement and motivation for an employee to work
and to increase an employee's work productivity, and compensation can be
interpreted as all income in the form of money, goods directly or indirectly
received by employees as compensation for services provided to employees.
company. Compensation is very important for employees because the amount of
compensation reflects a measure of the value of their work among the employees
themselves, their families, and society. Therefore, if employees perceive their
compensation to be inadequate, then employee performance and motivation can
decline rapidly.
The company's compensation must be fair, appropriate and
effective in accordance with the grade and obligations of each employee who
works. If the compensation is not fair and appropriate, it will have a bad
impact on the company. Such as the loss of employee motivation due to the lack
of compensation provided, increasing costs companybecause the salary given
exceeds the value of the position, to increasing turnover employeedue to the
salary given being much lower than the job grading.
This research on compensation in thesystem job grading
takes a case study on UKM XYZ which is engaged in the food processing sector.
XYZ UKM is one of the processed food SMEs located in Lembang, West Bandung
Regency, West Java. These SMEs have marketed their products throughout
Indonesia and even abroad and have received certifications and also many international
awards. The employee payroll system at UKM XYZ uses an employee level system.
However, in actual conditions there are still many discrepancies in the
distribution of compensation for each level and grade of employees. This
condition is the focus of the problem in our research to apply themethod Hay
System in determining job grades so that the employee compensation system can
be in accordance with the job value and job grading of each workforce at UKM
XYZ.
Method
1. Framework
of Thought
Figure 1
Framework of Thought
2. Lokasi dan
Waktu Penelitian
This research takes a case
study on SMEs, namely XYZ SMEs. XYZ UKM is an UKM located in Lembang, West
Bandung Regency, West Java. This research began in August 2021 and lasted for
six weeks with each series to obtain information and data, processing data, to
writing papers.
3. Types and
Sources of Data Data
collection carried out by our
group used primary and secondary data. We then process the data to perform
calculations. We obtained primary data through interviews through electronic
communication media, namely Zoom Meetings by providing questionnaires.
Meanwhile, we obtained secondary data from sources. The secondary data is in
the form of an attachment to the salary allowance for the education component
in UKM XYZ. In addition, we also use secondary data from various literatures
from websites, journals, and theses. This research is a quantitative and
qualitative research by describing the compensation system that is run in UKM
XYZ.
4. Method of Data
Processing and Analysis
Methods of processing and
data analysis were used to develop a model system based compensation system job
value and job grading on SMEs XYZ is to use salarysurveys,methods of point
system to calculate the job value and job grading, as well as mapping, salary(salarymapping).
Salary survey is a method
used by companies/organizations to find out the amount of salary given by
companies/organizations engaged in similar fields/sectors. The data is obtained
from the salary survey through three stages, namely the coordination stage to
the research object, the preparation stage (questionnaire), the data
collection stage (interview) and data processing. Thedata is salary
survey converted into tables and graphs to make it easier to conclude.
Meanwhile,analysis is salary mapping used to determine the percentage of the
spread and mid to mid range of positions in the object of research to other
sections or levels of positions. (Payscale Compensation Consultant 2013).
The point system method is a
point method assigning numerical values to certain job factors
and the total value providing a quantitative assessment of thejob value
relative (Mondy 2008). Thismethod point system provides an assessment
with a scale or "benchmark" to measure differences between jobs. The
assessed work is measured by factors, against a predetermined scale. The stages
of the point system method based on (Mondy, 2008) include selecting work
groups, identifying compensable factors, determining factor weights,
determining factor point values using theweighting method
eckenrode, point system validation, setting prices for each job to get a
midpoint salary, range pay, pay tiers, and adjustments. At the adjustment
stage, 3 conditions of actual salary will be determined, namely underpaid is a
condition where the actual salary received is lower than the basic salary, in
paid is a condition where the actual salary is between the basic salary and the
peak salary, the last is overpaid is a condition where the actual salary
received exceed the top salary. Next, an ideal compensation system will be
created, by freezing thecondition overpaid and for thecondition it underpaid
can be increased to the basic salary from the point system calculation.
Results and Discussion
- XYZ SME Overview
UKM XYZ is a micro, small and
medium-sized enterprise with a small scale engaged in food trading. This UKM is
located on Jl. Raya Lembang No. 70, Gudangkahuripan, Lembang, West Bandung
Regency, West Java. UKM XYZ was founded in 2004. UKM XYZ is the pioneer of the
first vacuum packaging rendang in Indonesia. This business operates in 2
different types of rendang businesses, namely Padang restaurants and packaged
rendang.
The vision of UKM XYZ is
"To become the best global company in processing herbs, spices and local
foods typical of West Sumatra with high taste and quality". Meanwhile, the
mission of UKM XYZ is as follows:
1.
Participate in promoting local food sources to
the international scene with quality innovative products.
2.
Creating employment opportunities for the
surrounding community and driving an environmentally friendly economic sector
3.
Helping and making it easier for consumers who
yearn for products with local flavors, generally domestic consumers, especially
Indonesians who live abroad.
The organizational structure of
XYZ UKM can be examined in the following figure.
Figure 2
XYZ SME Organizational
Structure
- XYZ SME Compensation System Overview
Based on financial data, the average
turnover per month is IDR 527,989,859.00 with a net profit per month of IDR
134,087,043.00. From these results, it is determined that the operational
salary per month is Rp. 52,714,095.00. The percentage of operating salary to
turnover is 25.40%. Meanwhile, the percentage of operating salary to net profit
was 39.31%. The compensation system in UKM XYZ can be analyzed using salary
mapping based on position. However, when viewed based on its organizational
structure, UKM XYZ does not yet have a clear organizational structure. This is
one of the reasons why the compensation system applied by UKM XYZ is currently
not fair, because there are still some positions that do not receive
compensation according to the level of position they occupy. Therefore, further
analysis and evaluation is needed to improve the compensation provision in XYZ
SMEs that is fair and appropriate. Improving the compensation system will also
take into account Law Number 13 of 2003 concerning Manpower.
a.
Characteristic Analysis
b.
This study uses respondents with a number of
33 respondents to be studied. The explanation of the characteristics of the
respondents was carried out to find out the categories/types of respondents who
were the sample.
Table 1
Characteristics of
Respondents
Source: Processed data (2021)
Based on the results in table 1, the
respondents in this study did not have a significant difference in number, this
indicates that a high level of education is not too a priority for UKM XYZ in
recruiting employees, according to the table above which is dominated by
workers with a junior high school education level. equivalent to the percentage
of 42%.
The following are the characteristics of the
respondents in the formulation of compensable factors:
�
Table 2
Characteristics of
Experts/Experts
|
Expert
|
from Institution
|
Position
|
Last Educational
|
|
1
|
UKM XYZ
|
Director
|
S1/Equivalent
|
|
2
|
UKM XYZ
|
Representative Manager
|
S1/Equivalent
|
|
3
|
UKM XYZ
|
SPV
|
S1/Equivalent
|
Source: Processed data (2021)
�
1.
Analysis of UMK and UMP on Basic Salary
From the existing data, the base salary
of 33 employees at UKM XYZ is compared with the West Java UMP of IDR 1,810,351
and the Bandung Regency UMK of IDR 3,241,929, the following results are
obtained. The calculation of the basic salary of this section uses the
assumption that all employees are fully present to work in one month. There is
only 1 employee, namely Personnel (Supervisor) whose salary is UMK (3.03%), 11
employees whose salary is between UMK and UMP (33.33%), and the remaining 21
employees whose salary is UMP (63.64%). When referring to the initial analysis
of the basic salary grading that the author made based on the organizational
structure of the owner, it is divided into 4 levels, but for which we have only
2 levels of data, all employees belonging to level 2 (blue box) have salaries
above the minimum wage and only 1 employee who the salary is above the minimum
wage. Meanwhile for level 1, only 9 employees whose salaries are above the UMP
and the rest are below the UMP and none are above the UMK. From the comparison
results, it can be concluded that the majority of XYZ UKM employees still
receive salaries below the UMP and UMK.
�
Figure
3
Comparison
Graph of XYZ's Basic Salary with UMK and UMP
However, after further investigation and
confirmation to the owners of UKM XYZ, some of the employees' salaries which
are below the UMK and UMP are caused by the short working time (just working in
that position). There are two payroll systems at XYZ UMK, namely monthly salary
and weekly salary. The weekly salary system is implemented by the owner because
of the condition of some of their workers who need salaries to be disbursed
faster than the monthly salary system. For some employees who are paid on a
weekly basis, there is a basic salary per day that is received if the worker
comes to work. If the basic salary per day is still small because you are new
to work, it will automatically make the basic salary per month received also
small. In addition, according to the owner's statement, several employees were
provided with housing facilities and some daily necessities. So it is estimated
that it is one of the reasons why the salary received is below the UMK and UMP
because some of their needs have been met by UKM XYZ. Therefore, it is not
possible to immediately assume that it is a mistake from the SME side if there
is a salary that is below the UMK and UMP, but it is necessary to look at the
employee's side as well.
2.
The Ideal Compensation Design System for XYZ
UKM.
The ideal compensation payment system is
a system that can create fairness in compensation payments so that it can be accepted
by all employees. There are several steps in creating an ideal compensation
plan, namely determining the weight of each job (job value), assigning points
for each job factor at each position level, then making job grading.
- Determine
compensable factors
In designing compensation, the first step
is to determine compensable factors. In this case, we interviewed experts from
internal SMEs who were able to formulate the compensable factors used. These
factors can be seen in table 3 below:
�
Table
3
Compensable
Factor
|
Cluster (Hay Method)
|
Compensable Factor
|
Number of Levels
|
Source
|
|
|
Know How
|
Education
|
7
|
CAAT Job Evaluation Manual (2007)
|
|
|
Work Experience
|
6
|
CAAT Job Evaluation Manual (2007)
|
|
|
Knowledge and Training
|
8
|
NHS Job Evaluation Handbook (2013)
|
|
|
Physical Ability
|
5
|
NHS Job Evaluation Handbook ( 2013)
|
|
Problem Solving
|
Integrity
|
4
|
Hay Competency Dictionary (2005)
|
|
|
Cooperation
|
5
|
Hay Competency Dictionary (2005)
|
|
|
Fostering Relationships
|
5
|
Hay Competency Dictionary (2005)
|
|
Financial Responsibility and Physical Assets
|
6
|
NHS Job Evaluation Handbook (2013)
|
|
Customer Service Orientation
|
6
|
Competency Dictionary Hay (2005)
|
|
Accountability for
|
Service Delivery
|
4
|
CAAT Job Evaluation Manual (2013)
|
|
|
|
|
|
|
|
|
|
From the results of interviews with SME
experts, they formulated 10 compensable factors taken from Hay's dictionary,
namely education level, responsibility for tools and equipment, responsibility
for materials and products, working conditions, accuracy, physical endurance,
service orientation. customers, cooperation, communication skills and
responsibility for records and reports.
������� Determining the weight of each
job (Job Value)
According to Permata S et al (2017),
evaluation is defined as an analysis to estimate the value or weighting of a
job. Through job evaluation, the value or weight of each position will be
grouped into certain levels so that employees will receive compensation in
accordance with their degree of competence in a company.
When evaluating a position, it is
necessary to weigh and assign a value to the factors and positions before using
themethod Given Grade or Min Max. The compensation design in XYZ UKM uses 10
assessment factors, namely education, work experience, knowledge and training,
physical ability, integrity, cooperation, building relationships, financial
responsibility and physical assets, customer service orientation, and service
delivery.
�
Table
4
Weighting
of Compensable Factors
Table 4 shows the results of weighting
values between compensable factors or the factors used as the
basis for determining compensation in XYZ SMEs. The weighting of these factors
shows the level of importance between factors, with a value of 1 meaning that
the factors are equally important, a value of 3 meaning that factor one is
slightly more important than other factors, a value of 5 means that one factor
is more important than other factors, a value of 7 means that factor one is
very more important than other factors, the value of 9 which means that one
factor is absolutely more important than the other factors and the value of
2,4,6,8 is the middle value. From the calculation of these compensable factors,
the accumulated value of each factor will be calculated and the total weight
and value of the factors for each position will be calculated.
Assign value to each job factor level
After settingweight compensable factors
from each position, the next step is to assign a value to each compensable
factors from each position. The values given can show how
important a factor must be in a position. At UKM XYZ, there are 15 (fifteen)
positions that influence the design of the compensation system, namely
Personnel Coordinator (Supervisor), Quality Assurance, Finance and
Administration Coordinator, Retail and Partnership Associate,Assistant Quality
Control, Customer Experience and Relations, Marketing Staff, Servers,
Restaurant Clerks , Restaurant Kitchen Staff, ButchersPackaging,Staff, Vacuum
& SteamStaff, Cooking Staff, and Drivers. This step needs to be done to get
the results of calculating the number of Weights and Values for
the factors of each position.
Table
5
Factor
Value for each XYZ SME Position
Table 5 as above shows the value of each
factor from each position in UKM XYZ. If each factor has been assigned a value,
then the next step is to calculate Job Value of each position. Job Value can be
calculated by multiplying the weight with a predetermined value. After that,
sorted by total Job The largest to the lowest values.
�
Table
6 Job Value in SMEs XYZ
Table 6 above shows Job Value of each
position in UKM XYZ. Positions that have Job Thevalue highestis the Personnel
Coordinator while the position with the position Job Thevalue lowestis the packing
staff.
Design Job Grading. At this stage,is
arranged job grading based on themethod given grade , starting with choosing
how many grades you want to make.
�
Table
7
Job
Grading withMethod Given Grade
From table 7 above shows there are five
grades to be created. Here are the steps to obtain Job Grading with the Given
Grade Method:
�
Calculate the interval in each given grade by
reducing the highest job value by the lowest then divided by the number of
grades to be created. = [(Highest Job value �
Lowest Job value)/5] = [(1319-340)/5] = 196.
�
Calculate the upper limit of Given I by adding
the lowest job value at the previously obtained given grade interval. = 340 +
196 = 536.
�
Set the lower limit given II. The upper limit
of Given I is used as the lower limit of Given II.
�
Define the Given II Upper limit by adding a
given grade interval with the Given II lower limit.
�
Repeat steps 3 and 4 until the entire upper
and lower limit of the existing Given limit is known. Revamping XYZ SME Salary
by Using Adhered Method
To follow up the grading results, it can
be further analyzed with salary mapping based on position with adhered and
overlapping methods. Table 8. Salary Mapping results
�����������
Description:
X
= not ideal, V = ideal.
Based
on Table 8, the following results are obtained:
1.
Grade V������� �������� : the salary given is
not ideal (X)
2.
Grade IV������ �������� : the salary given is
not ideal (X)
3.
Grade III������ ������� : the salary given is
ideal (V)
4.
Grade II������� ������� : the salary given is
not ideal (X)
5.
Grade I�������� �������� : the salary given is
not ideal (X)
From these results it can be concluded that the
compensation system in the form of salary at UKM XYZ is still not ideal because
thevalue spread that has not increased is increasing from low to high level and
there is a mid to mid value which is still bigger than the spread. It can be
seen in Grade V where there is no increase in thevalue spread, which is 0%.
Further irregularities are seen in the salaries received by positions occupying
Grades I, II, and III, because the salaries that should be received are higher
in higher grades as well. However, based on the results of the salary mapping
above, it is found that the maximum salary for Grade III is lower than the
maximum salary for Grades I and II. Likewise with Grade II, which has a lower
maximum salary than Grade I. If you look at Figure 4, there is a gap between
the salaries of Grade III and Grade IV. Therefore, it can be said that the
compensation system in UKM XYZ is still not ideal. This shows that justice has
not been created in these SMEs. After we know the results of the salary mapping
using the existing salary or the actual salary, it turns out that the
compensation conditions applied are not ideal and it is necessary to improve
the salary using themethod Adhered and Overlapping.
�
Figure
4. XYZ SME Initial Salary Mapping Chart
Then, the salary mapping was using theMethod
correctedAdhered. By using a spread of 25% for Grade I, 30% Grade II, 40% for
Grade III, 50% for Grade IV, 55% for Grade V. The following are steps to reform
salary adheredMethods:
�
Determine the minimum salary of the existing
positions in Grade I. Our group decided to raise the minimum salary of
employees of SMEs XYZ underpaid West Java, namely Rp 1,000,000
�
Determine the maximum salary for Grade I with
the formula: [minimum salary at grade + (minimum salary at grade X spread)]
�
Determine the midpoint salary by the formula: [(minimum
salary at grade + the maximum salary on grade)/ 2]
�
Determine the minimum value for the Grade
next. The maximum value in the grade previouswill be the minimum value in the
grade next.
�
Calculate the mid-to-mid value with the
formula: [(valuemidpoint grade calculated-the midpoint grade belowvalue)/the
midpoint grade belowvalue]
�
Repeat steps 2, 3, 4, and 5 until all minimum,
maximum, midpoint, andvalues mid-to-mid for each grade are known.
�
Table
9
Improvement
Method UsingSalary adhered (coincident)
Figure 5
Graph Salary Mapping
once addressed by Method adhered to (coincide)
After reforming salaries with theMethod Adhered, a more
ideal compensation system is obtained. One of them can be seen from the
mid-to-mid value of each grade which is always smaller than spread the
predeterminedand the salary value of each grade coincides with each other.
�Improvement of XYZ UKM by Using theMethod Overlapping
Salary improvement can be done by various methods. In
addition to using theMethod Adhered, salary improvements can also be made using
themethod overlapping.
By
using spread the sameas the method is adhered to (coincide), here are some
measures salaries with OverlappingMethod:
�
Determine the minimum salary of the existing
positions in Grade I. Our group decided to raise the minimum salary of
employees of SMEs XYZ underpaid West Java, namely Rp 1,000,000.
�
Determine the midpoint in Grade I. The
midpoint can be calculated by the formula: [(minimum salary at grade + the
maximum salary on grade)/ 2]
�
Determine the maximum salary for Grade I with
the formula: [minimum salary at grade + (minimum salary at grade X spread)]
�
Determine thevalue midpoint for all grades
subsequent. Thevalue midpoint in theMethod is Overlapping directly determined
without even though the minimum and maximum salaries have not been filled. The
determination of thevalue midpoint must consider the company's ability to pay
employee salaries. Determine mid-to-mid with the formula: midpoint value
[(grade calculated- the value of the midpoint grade below)/value midpoint grade
below].
�
Determine the minimum salary column in the
next Grade with the formula: [Midpoint / (1+ (0.5 X spread on the line)].
�
Repeat steps 3, 5, and 6 until all minimum,
maximum, midpoint, andvalues mid-to-mid for each grade are known.
Table
10
SalaryUsing
theMethod ImprovementOverlapping (Overlapping)
Figure 6
Graph Salary Mapping after
being fixed with theMethod Overlapping (Overlapping)
After reforming salaries with theMethod Overlapping, a
more ideal compensation system is obtained. One of them can be seen from the
mid-to-mid value of each grade which is always smaller than spread the
predetermined, such as using theMethod Adhered, but the salary values
of each grade overlap with grades other.
Conclusion
UKM XYZ has two levels in the compensation system based on
the hierarchy contained in its organizational structure. At the first level,
there are twelve positions, namely retail and partnership associate, assistant
quality control, customer experience and relations, marketing, server, clerk,
restaurant kitchen staff, butcher, packaging staff, vacuum and steamstaff,
cooking staff and drivers. Meanwhile, for the second level, there are three
positions, namely personnel (SPV), finance and administration, and quality
assurance.
Based on an analysis using a job point system, the factors
that form the basis for determining salary based on weighting for UKM XYZ in
order from the highest to the lowest are work experience, knowledge and
training, education, integrity, cooperation, relationship building, service
delivery. financial responsibilities and physical assets, and physical abilities.
After analyzing and improving the payroll system, it can
be concluded that an effective compensation system to be applied by UKM XYZ is
to use themethod Overlapping. This is because the operating costs of salaries
are smaller.
�
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