COMPENSATION

1. Understanding Compensation

Compensation is everything that employees receive as a reward for their work. The question of compensation may be a function of personnel management of the most difficult and confusing. Not only because the compensation is one of the most complex tasks, but also one of the most significant aspects for both the employee and the organization.

 According to Drs. Malay S.P. Hasibuan. Compensation is an income in the form of money, goods directly or employee langsungyang be received in exchange for services provided to the company.

Compensation in the form of money, meaning that compensation be paid to the amount of currency to the employees concerned. Compensation can be divided into two general categories: compensation (direct compensation) in the form of salaries, wages, and wage incentives. Compensation (indirect compensation) or employee welfare or the welfare of the employees.

Salaries are paid periodically to the permanent employees as well as having a definite guarantee. That salary will still be paid even if the worker is absent from work.

Wages are remuneration paid to day laborers by referring to the treaty agreed to pay.

Wages additional remuneration incentives are provided to certain employees whose performance in the achievement standard. Incentive pay is a tool used to support the principle of fair compensation.

Compensation (fringe benefits) directly is the right of keryawan and a companys obligation to pay.

2. Factors mempngaruhi compensation policy

There are six factors that influence compensation policy, the government factor, offers shared, standardized and cost of living, salary comparisons, demand and supply, and the ability to pay it in accordance with the opinion of Leon C. Megginson (1981: 401)

a. Factors Government

Government regulations relating to the determination of the minimum wage standard, income taxes, peneptan raw materials, transportation / freight, inflation and devaluation greatly affect the company in determining employee compensation policy

b. Special joint between the company and the employee

In determining compensation policies can be influenced as well as the negotiation of the amount of wages to be paid by the company to pengawainya.

c. Standard and cost of living employee

Compensation policies need to consider the cost of living standard and employees without regard all other factors, in the long term, disbursement of the compensation depends on the ability of the company.

    

d. Size comparison of wages

Policy in determining compensation is influenced also by the size of the size of the company, the level of education employees, and employee tenure.

    e. Demand and supply

In determining employee compensation policies need to be consideration of the supply and demand market.

    f. Ability to pay.

In determining employee compensation policies should be based on the companys ability to pay employee wages.