BENEFITS AND REWARDS
For organization’s success, compensation package such as pay, benefits, working hours and holidays, and rewards and incentives should be provided to workers which complied with the relevant employment laws (Aminuddin, 2009, p. 101).
One compensation package must combine with four elements by the employer to employee for their performance as total rewards (Figure 4. – Combining wages and benefits) (Aminuddin, Human Resourse Management – Revision Series, 2009, p. 101). Mostly, employees are more prefer to have high wages and high benefits.
The wages are a sum of amount that paid from employer to employees pay by cash or directly into employees’ bank account. Wages are kind of regular basis pay normally receives in the end of the week or month. Employees should receive the paid on time before 7th or 10th day of every month (Vaghela, n.d.). An individual skill and knowledge, experience, length of time service and performance will affect an increase or decrease of wages.
According to Sutera Harbour Resort, it had posted some job vacancies in JobStreet.com (Sutera Harbour Resort jobs in Sabah, 2015). In Figure 4.1, it listed types of jobs and salary range in direct financial compensation form.
Jobs Salary
Service Associate MYR 800 – 1,200
Guest Service Agent MYR 1,200 – 1,800
Junior Sous Chef MYR 2,500 – 2,900
Boiler man MYR 2,500 – 2,900
Assistant Executive Housekeeper MYR 4,000 – 5,000
Assistant Food & Beverage Manager MYR 4,000 – 5,600
Dim Sum Chef MYR 6,000 – 8,000
However, benefits is not including wages, but the forms of compensation. Benefits can be classified as financial and non-financial and they also can be statutorily or non-statutorily. The purpose of providing benefits to employees is to motivate and retain employees. Compare benefits with rewards, benefits can be offered for every employees, while, rewards are only provided to those employees who contribute more towards company.
Statutorily required Benefits
In statutorily required benefits, there are few employment laws required for the benefits to employees includes the Employment Act 1955, the Sabah and Sarawak Labour Ordinances, the Employees Provident Fund Act, the Employees Social Security Act, and the Workman’s Compensation Act (What Employees Need To Know, 2013).
Any employees in Sabah or Sarawak that under the Sabah and Sarawak Labour Ordinances are similar to the Employment Act 1995, who earns RM2, 500 and above are excluded from the coverage (Labour Ordinance, n.d.). Thus, there are few minimum benefits available for those employees such as maternity protection for female, time-off payments for a weekly rest day, public’s holidays, annual leave and sick leave, Employees Provident Fund contributions, and Employees Social Security contributions.
Under the Employment Act 1955 – section 37(1), female employees are entitled to maternity leave of sixty consecutive or more days for each confinement period. Maternity leave is a period of time protected for female who are pregnant and had given birth are taking care of baby. Hence, any female employees were also entitled to the maternity protection if she was employed at any time in four months or was employed for ninety days in the nine months before confinement (MALAYSIA EMPLOYMENT ACT 1955, n.d.). The seventh day of coming month, maternity allowance shall be paid up later than the date. Employers have no rights to terminate her for being absent up to 90 days after maternity leave period.
To ensure employees motivation and enthusiastic towards company, other types of paid leave are offered besides maternity leave in the Employment Act 1955 and the Sabah and Sarawak Labour Ordinances includes rest day, public holidays, annual leave and sick leave.
All employees must have one rest day in each week according the Section 59 of the Employment Act 1955 (Daniel Ng, 2015). The employee who required to works on the rest day may entitled additional day wages. A minimum of 11 gazetted public holidays per year should receive by employees in the Section 60 of the Employment Act 1955. The first five public holidays was specified by the act involves the National Day, the Birthday of the Yang di-Pertuan Agong, the Birthday of the Ruler or the Yang di-Pertua Negeri, the Labour Day; and Malaysia Day (Compulsory Public Holidays, 2011). Whereas, the employer will choose the other six public holidays for employees.
Employees are entitled for eight days annual leave pay with services less than two years. For two to five years’ service, employees will offered twelve days leave per year, meanwhile more than five’s services year are entitle to 16 days leave (Andre, 2014). To prevent the abuse of sick leave, the law had stated those who has services less than two years can take up fourteen days sick leave per year, as well as employees who have services between two to five years are entitled for eighteen days sick leave. Thus, when an employee works more than five years in a company can has twenty-two days of sick leave (Donovan & Ho Advocates and Solicitors , n.d.).
The Employees Provident Fund Act is known as EPF and also as Kumpulan Wang Simpanan Pekerja (KWSP). It is a kind of ‘forced’ savings scheme towards the deduction of any employee individual monthly salary and save into an account under his or her name for ensure employees have sufficient retirement funds, which also can use it for special purpose.
According to the official page of KWSP, it stated that any employees’ wages not exceeding RM5,000 , the contribution of employee will be 11% of their monthly salary whereas the employer will contributes 13% (About EPF – Overview Of The EPF, n.d.). The employee who receive his or her salary at RM5,000 or above, the employee’s contribution will remain as 11% and the employer’s contribution is 12%.
Consequently, the cumulative statutory contribution rate of any employees aged less than 60 years have two, 24% and 23%.The employees aged between 60 to 70 years old, will has 50% of the cumulative contribution rate. For example, refers to (Figure 2 – Type of Jobs and Salary Range) Sutera Harbour’s Dim Sum Chef’s salary is above RM5,000 so his or her contribution will be 11% and his or her employer’s contribution is 12%
The scheme of the Employees Social Security Act 1969 is administered by Social Security Organization known as SOCSO. The SOCSO provides employees social insurance such as compensation and financial benefits to protect an employee who suffer work-accident or contracts a work-related disease (Saraswat, 2014). In order, SOCSO also offered few range of benefits for employees involving medical benefit, disablement benefit, dependants’ benefit, and invalidity pension.
Under the act, any employees who earns RM3,000 or less than it must contribute to SOCSO. For employees who earns exceeding than RM3,000 and not yet register or contribute to SOCSO are given chance to be covered. Besides that, with the principle ‘Once in Always in’, those employees who have registered and now earn more than RM3,000 must continue contributes.
Non-Statutorily Benefits
Others than statutory benefits, there are various types of non-statutory benefits offered from company to employees includes time-off payments, allowances, health care, insurance, financial service, subsidies and services, retirement benefits, and educational fee assistance.
A lot of organizations or companies provided other types of leave for employees, except of sick leave, maternity leave, and annual leave which are under the Sabah and Sarawak Labour Ordinances and the Employment Act 1955. The time-off payments involves in marriage, birth of a newborn baby, personal emergencies, a journey to sacred place, further study, and death of a family member (Aminuddin, Human Resourse Management – Revision Series, 2009, p. 106).
There are several common allowances offered to employees such as meals allowance, travel or transport or parking allowance, housing allowance, hand phone allowance, shift work allowance, standby work allowance and entertainment allowance (Aminuddin, Human Resourse Management – Revision Series, 2009, p. 106). In addition, employees are given health care from companies. Most organizations and companies nowadays consider employees health as a serious problem.
Other than that, companies always combined insurance with health care. To ensure employees safety, life and accident insurance are commonly buy by employers (Aminuddin, Human Resourse Management – Revision Series, 2009, p. 106). Few large organizations or companies will offered financial assistance such as personal loans to their employees. Subsidies and services like transportation for employees who stay far from company, cafeteria or canteen for resting and relax, company car, hostel or accommodation, and provision of a hand phone will be given to employees from employers.
Hence, when an employee retired, he or she will get a direct pay of retirements benefits or addition monthly contribution to employee’s EPF account. Furthermore, training course, scholarship, and libraries with up-to-date reading materials and computer readable files may set up by organization or companies to motivate employees.
Reward System
Benefits and rewards are kind of compensation for employees, both of them help employer to motivate and retain employees. However, only offered rewards which consists of financial and non-financial rewards can motivate employees to meet their best job performance. Rewards basically linked to companies or organizations’ goals. If one’s had achieved the goals, the rewards will follow (Hartzellv, n.d.)
Non-Financial Rewards
Most of the employees are more prefer financial rewards than receiving a non-financial reward but some of the employees will choose non-financial rewards as the same value. It includes the performance awards, letters of appreciation, sponsorship to seminars, conferences, and oversea tours, and rewards for long service (Aminuddin, Human Resourse Management – Revision Series, 2009, p. 108).
The performance awards can be classifies as giving a certificate with titled “Employee of the month” and cash prize or a trophy, an annual dinner with special prize giving, or a brief article for the winner in the company newsletter. A letter or note of appreciation rewarded from high level managers or the company president when an employee’s performances quality praised. Other than recognition towards one person, sending employees for seminars, conferences and overseas tours may also a non-financial rewards. Employees gain valuable knowledge or new ideas when their return back. Certainly, an employee who had long service should be rewarded which includes a gift cards or vouchers, memorabilia like pens and plaque, a trip, gold watch or a special dinner event.
Financial Rewards
The most effective rewards from employer to employees is by financial payments in form of increase in salary, bonus and profit sharing, and commissions based on contribution (Aminuddin, Human Resourse Management – Revision Series, 2009, p. 109). It is act as a motivation tools that drive employees to perform better. Subsequently, employer offered the rewards based on the how much the value of each employee.
For employee who work with high contribution or get best performance quality, employer will increase their salary. With the policy of pay secrecy, jealousy of salary differences between employees with employees prevented. For example, Sutera Harbour staffs who works for long term will have increase in salary as a compensated. The longer the services time, employee’s salary will increase by every year.
Bonuses is a sum of money that involves in motivate employees and increase their loyalty, as an addition to regular pay based on company’s profits and individual or team job’s performance. During Chinese New Year, Sutera Harbour employer may give each of the employees an Ang Pow as a special thanks and to motivate employees. Whereas, companies or organization may contribute a percentage of organizational profit as profit sharing to employees either annually or on a deferred plan.
Salespeople who responsible contribute directly to company sales revenue is paid by commissions-based system. Companies or organization usually provide base salary to encourage their salespeople and offer commissions based on salespeople contributions (Magloff & Demand Media, n.d.).