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Midtest Presentation of Compensation Management Course by Efi Dwi Indari
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THE LEGAL ASPECT OF REMUNERATION SYSTEM
IN INDONESIAN NATIONAL ARMY
Efi Dwi Indari10208034
Definition of Compensation
all forms of financial returns and tangible service and benefits employees receive as part of an
employment relationship.
Forms of return
Compensation Management
ensures that the right people get the right pay for achieving the right objectives in the right way
have a significant role to reach its objective, i.e. efficiency, fairness, compliance, and ethics.
The Legal Aspect of Remuneration System in
Indonesian National Army
Remuneration definition
Indonesian dictionary :gift giving (awards for service, etc); benefit.
Context : realignment of the payroll system that is associated
with the performance appraisal system. integral part of the policy reforms which well
motivated by the awareness of government’s commitment to bring clean and good governance.
Why government need remuneration? (1)
• Poor rated impression:– Poor quality of public service (slow, there is no certainty of
rules/laws, beating the bush, arrogant, have served or feudal style, etc)
– Loaded with the behaviour of corruption, collusion, and nepotism– The low quality of discipline and work ethic of the state
apparatus– Government’s management quality is unproductive, ineffective,
and inefficient– Quality public services that are not accountable and not
transparent
Why government need remuneration? (2)
• Some problems faced:– Salary does not meet the needs for decent living
– Civil servant salaries are less competitive
– Salary does not meet the principal equity because salaries are not linked to
competence and achievement
– Salary structure encourages less motivation to work because of the distance
between the lowest salary and highest salary is too short
– Allowance major structural cause of unhealthy competition
– Less transparent
Legal aspects
• Law No 28/1999 about state organization that is clean and free from corruption
• Law No 43/1999 article 7 about amendments to the law no 8/1974 on personal subjects.
• Law No 17/2007 about the long term National Development Plan 2005-2025.
• Presidential Regulation No 7/2005 about the national medium term development plan
• ILO convention number 100 about equal remuneration for jobs of equal value
Law No 43/1999 Article 7 Paragraph 1
Any civil servants are entitled to a fair and decent wages in accordance with the workload and
responsibilities.
What is meant by a fair and reasonable salary is the salary of civil
servants should be able to meet the needs of family life, so that the servants concerned to focus the mind, and strength just to carry out
the task entrusted to it
Law No 43/1999 Article 7 Paragraph 2
Wages earned by Civil Servants should be able to spur productivity and ensure their welfare
self-explanatory
Law No 43/1999 Article 7 Paragraph 3
Salaries of Civil Servants are just and reasonable as defined in paragraph (1) stipulated by
Government Regulation
Servant setting a fair salary is intended to prevent the welfare gap, both among civil servants and the servants with the private sector. While a decent salary is intended to ensure the fulfilment of basics needs
and to encourage productivity and creativity of Civil Servants.
• Kementerian Keuangan (Kemenkeu)
• Badan Pemeriksa Keuangan (BPK)
• Mahkamah Agung (MA)
2007
• Sekretariat Negara• Sekretariat Kabinet
2009
• Badan Pengkajian dan Penerapan Teknologi
• Lembaga Ketahanan Nasional• Lembaga Administrasi Negara• Lembaga Kebijakan Pengadaan
Barang/Jasa Pemerintah• Kementerian Riset dan Teknologi• Kementerian Perindustrian• Badan Tenaga Nuklir• Badan Pengawas Obat dan
Makanan• Badan Kepegawaian Negara• Badan Koordinasi Penanaman
Modal• Badan Pusat Statistik• Arsip Nasional RI• Badan Kependudukan dan Keluarga
Berencana Nasional• Kementerian Perumahan Rakyat• Kementerian Pemberdayaan
Perempuan dan Perlindungan Anak• Lembaga Sandi Negara• Badan Narkotika Nasional• Kementerian Pertanian.
2012 (soon)33 ministries/institute which implemented remuneration(Based on the priority)
Indonesian National Army Profile
Vision
The realization of a professional military and modern, has a formidable ability to uphold national sovereignty, defend the territorial
integrity of the Unitary Republic of Indonesia and maintain the safety of the nation and the
continuity of national development.
Organizational Structure/Internal Alignment
10 levels
Before remuneration
21 levels
Remuneration system
1. Position analysis
2. Term data collection
3. Job evaluation and Weighting
4. Grading or preparation of a new salary structure.
5. Job pricing or pricing position
6. Proposal pricing ranking and position to the President
No Class Title Performance Benefits per Class Title(Rp.)
1 19 29.226.000
2 18 21.649.000
3 17 17.471.000
4 16 12.942.000
5 15 9.586.000
6 14 7.101.000
7 13 5.462.000
8 12 4.202.000
9 11 3.232.000
10 10 2.693.000
11 9 2.245.000
12 8 1.870.000
13 7 1.626.000
14 6 1.414.000
15 5 1.230.000
16 4 1.118.000
17 3 1.016.000
18 2 924.000
19 1 -
After remuneration
Critical ReviewOld System New System
Give less base salary Give more base salaryUnfair compared with private sector Fair compared with private sectorAllowance given is not transparent Allowance given transparent, included
in one-packet salaryDifferential is low Differential is high motivate
employees to perform wellBased on the rank and years of service Based on the value of the job
Conclusion (1)
• Remuneration for Indonesian National Army is regulated by:– Law No 28/1999 (free from KKN)– Law No 43/1999 (a fair and decent wages) – Law No 17/2007 (long term National Development Plan 2005-
2025) – Presidential Regulation No 7/2005 (national medium term
development plan– ILO convention number 100 about (equal remuneration for jobs
of equal value) – President Regulation Number 72/2010 (nominal of total salary)
Conclusion (2)
• The remuneration system for Indonesian National Army is effective to increase employees’ performance and reach the institute’s objective
BIBLIOGRAPHY• http://ekonomi.kompasiana.com. Materi Kuliah Remunerasi. Date access:
7th March 2012• http://remunerasipns.com Date access: 7th March 2012 • http://www.tni.mil.id Date access: 7th March 2012 • Peraturan Pemerintah Republik Indonesia Nomor : 26 Tahun 2010• Peraturan Pemerintah Republik Indonesia Nomor 28 Tahun 2001 Tentang
Peraturan Gaji Anggota Tentara Nasional Indonesia• Peraturan Presiden Republik Indonesia Nomor 72 Tahun 2010 Tentang
Tunjangan Kinerja Pegawai Di Lingkungan Tentara Nasional Indonesia• Undang-Undang Republik Indonesia Nomor 43 Tahun 1999 Tentang
Perubahan Atas Undang-Undang Nomor 8 Tahun 1974 Tentang Pokok-Pokok Kepegawaian
Thank you