(bridgeknowle) year end checklist for hr - companion workbook
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Page 1 of 100
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YEAR-END CHECKLIST FOR HR DEPARTMENTS[Complete Guide to Managing Year End HR Matters]
Kenny Ong
WORKBOOK
Page 2 of 100
Our Vision is to become and be recognised as a leading distributor in the industry.
This vision can only be realised by building on quality products, quality service and management / technical know-how and creativity. To do so, we need to build an organisation that is manned by people who are highly committed, motivate, competent, responsible, customer oriented and results oriented.
Our Human Resource Management Strategy shall be guided by three
key elements: -
Human Resource is managed in such a way that is adds high value to the organisation - employee performance is productive - the organisation is lean, adaptable and forward looking
Employees have a strong sense of purpose. They feel that they are an integral part of the ABC Company Sdn Bhd team. They have interesting and professionally challenging jobs and they want to improve individual skills and capabilities to match career opportunities.
All employees are accountable for results
We believe that in order to realise our Human Resource Management Strategy
Human Resource Management must be the responsibility of line managers
Capability growth of our employees must be integrated with business management
Performance development, performance recognition and reward management would be the core processes of ABC's human resource management
We believe that people work better if
They work to accomplish a purpose
They have the competencies to fulfil the job roles
They have the right tools, system and techniques
They have the resources available
They have the knowledge of their progress and results
They have guidance, coaching and counseling
We wish you a successful career with ABC Company Sdn Bhd Human Resource Manager
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Item Section Foreword 1
Introduction 2
Vision/Mission 3
Corporate Values 4
Core Competencies 5
Organisation Charts 6
Your Career in ABC Company Sdn Bhd 7
Your Role and Accountability 8
Rest & Recreation 9
Leave 10
Overtime 11
Reward and Compensation Principles 12
Benefits & Allowances 13
Retirement / EPF 14
Medical and Health Care 15
Staff Insurance 16
Perquisites 17
Quality of Work Life 18
Principles of Performance Appraisal 19
Your Training & Development 20
Succession Planning & Career Development 21
Code of Ethics Professional Accountability 22
The Employment Contract 23
Employment Discipline 24
Employment Grievance 25
Page 4 of 100
SECTION 1 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Foreword by the Managing Director
Welcome to ABC Company Sdn Bhd ! You are important to us, therefore this Career Guide is designed to provide you with relevant information and guidelines in line with the people management philosophy of the company. This Career Guide should enable you to feel comfortable with the company's operating principles and enable you to take accountability for your personal growth and advancement.
It is our desire to provide you with a motivating working environment so that you are
successful in your career aspirations
We look forward to your contribution as a team member of ABC Company Sdn Bhd.
Together ABC Company Sdn Bhd BOLEH!!
With best regards
____________________
Managing Director
Page 5 of 100
SECTION 2 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
The objective of this Handbook is to state the terms and
conditions of employment of the ABC Company Sdn Bhd. For the
purpose of this Handbook, the above companies are here-in-after
refer to as "The Company". The Company shall extend the terms
of this Handbook to only confirmed employees. The company shall introduce, modify, amend or annul
any terms and conditions of employment at any time during its operations provided that such changes
(shall not be in direct) conflict with the provisions of the Malaysian Labour Legislation. Employees affected
by such changes shall be duly informed at least two (2) weeks before any implementation. Any person so
affected by the terms and conditions of employment stated in this Handbook may seek clarifications or
explanations from the respective Head of Dept or the Human Resource Dept.
This handbook shall supersede all other terms and conditions of employment currently practised in the
Company.
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SECTION 3 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Please State your Vision here.
VISION
Please State your Mission
here.
MISSION
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SECTION 4 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
We value our people Our success depends on each of us. We WORK TOGETHER in a
way that recognises and takes advantage of this.
Our commitment to understanding and MEETING THE NEEDS OF OUR CUSTOMERS is key competitive advantage. By doing so, we
build enduring relationship
We value our customers
We are part t of our community where we operate and we are a citizen of these communities. Therefore, we conduct our business in
an ETHICAL MANNER.
We value our place in the community where we operate
We value our business partner WE RELY ON MANY PARTNERS. In our business, suppliers, service providers and joint venture partners.
We value our shareholders We are focussed to provide SUPERIOR AND SUSTAINABLE WEALTH FOR OUR SHAREHOLDERS. We treat all of them with fairness and equity
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SECTION 5 Page 1 of 2
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Actively seeks to improve others' skills and talents by providing constructive feedback, coaching, training opportunities, and assignments, which challenge their abilities.
Believes in own ability to accomplish a task and select an effective approach to solving the problem. Copes in increasingly challenging circumstances and demonstrates confidence in own initiatives. Impresses, influences and convince others in a way that results in acceptance and agreement
Desires to help the customer. Concerned to provide a prompt, efficient and personalised service to clients; focuses effort on discovering and meeting the internal and external customer's needs.
Successfully adapts to changing demands, conditions and people. Understands and
appreciates difference and opposing perspectives, is receptive to change and adapts own approach
Demonstrates a broad-based view of issues, events and activities and a perception of their longer-term impact or wider implications. Recognises that implications are wider than his or her own geography, business unit or function.
Building Potentials and Talents
Confidence
Customer Commitment
Flexibility
Global View
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SECTION 5 Page 2 of 2
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Meets or exceeds standards of excellence, which may be own past performance, an objective measure, others performance, challenging goals, or innovation. Commits self to work hard towards goals and exceed targets. Shows enthusiasm, drive and career commitment.
Implements plans to achieve results and monitors progress. Shows a clear sense of direction, meets deadlines and avoid crises. Confronts issues, influences and enlists the support of key players.
Analyses issues and breaks them down into their component parts. Make comparisons of different aspects and identifies trends and patterns within the problem. Makes systematic and rational judgements based on relevant information.
Works to build and maintain useful relationships and networks of contacts both inside
and outside the Board. Attuned to internal politics and alert to changing dynamics within the organisation.
Creates a positive environment, which encourages co-operation. Inspires enthusiasm, co-operation and commitment to achieve the goals of the team/organisation. Creates an environment where the experiences and views of all team members are valued and encouraged.
Works co-operatively with others, to be part of a team. Actively supports team decisions and carries out commitments. Interacts in a sensitive, supportive and effective manner. Shares information, co-operates, respects and works well with others.
Goals and Achievements
Planning and Implementation
Problem Solving & Analysis
Relationship Building
Team Leadership
Teamwork & Co-operation
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SECTION 6 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Managing
Director
Marketing
Manager
Senior
Sales Mgr
Operations
Manager
Business
Manager
Finance
Manager
Personnel &
Admin Mgr
Marketing
Team
Sales
Team
Operations
Team
Food Svc
Team
Finance
Team
Personnel
Team
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SECTION 7 Page 1 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
A career is a sequence of work-related experiences, which enable a person to apply his or her competency in producing some desired results. The several career stages in our life may include: -
1 2 3
Images from TV, movies and family
Introduction to 1st job
Reality shock
New opportunities
Sorting out work life
Finding a comfortable balance between work and home; friends and professionals
4 5 6
New senses of growth
New opportunity to be better
A solid citizen
A seasoned professional or conceptual leader
Learning to accept a reduced role
Readjusting the balance between family, friends and work
The Company’s Career Development Objectives are: - 1. To improve The Company’s performance by enhancing employee competency at every
career stage. 2. To “grow” and enhance employee competencies to match The Company’s current and
“future needs”. 3. To reduce “obsolescence” in traditional jobs by creating new employment
opportunities using new skills. 4. To encourage retention of professionals by providing professional development
opportunities.
Exploratory
Stage
Early
Experiences
Re-establishing
Mid Career
Late Career
Decline
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SECTION 7 Page 2 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Your Role in Career Advancement (How you can advance your career in The Company)
In order to take advantage of the career prospects in The Company, you must be active in taking the following steps: -
1. Conduct a self-appraisal - what are your current capabilities, strengths and areas for improvement?
2. What is your goal direction? (tentative though it may be )
- do you want to be a seasoned and recognised specialist in any field ? OR - do you want to manage your own business (ultimately)
3. Establish a time frame, consult your supervisor and others who may establish a reasonable time segment for you.
An example of a competency growth plan: -
Executive
3 years
Professional (Asst. Mgr.)
3 years
Senior Professional
5 years
Seasoned Professional
Age 24 27 30 35
Competencies to be acquired
Technical skills
Initiative Team Leadership Skills
Conceptual Thinking Capability
Planning and organising work
Analytical Thinking
Interpersonal Influence Skills
Mentoring Skills
Interpersonal Influence Skills
Tenacity Developing Others
Results Orientation
Self-managed career progression can be achieved by you taking an active role in seeking and acquiring these critical competencies.
You may consult and seek assistance from your supervisor, other senior professionals, the human resource manager or you may even consult external recognised experts for guidance.
The career progression may not proceed as you have planned with respect to time. You may move ‘faster’ or ‘slower’, but it is critical that you ‘grow’ in the manner planned.
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SECTION 7 Page 3 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
The Company’s Competency Based Career Levels Show below is a model of the general and specific competencies of the career levels of executives and professionals.
Typical Competencies Critical
Career Title General Specific Output
Seasoned
Professional
o Assignments are subject to broad goals and broad policies only
o Member of Management Team involved in determining key results to be achieved by the organisation both short term and strategic results
Multi business strategic management capability comprehensive integration of large but relatively homogenous business units
Management of conceptual direction and achievement of goals and business objectives within very broad guidelines
o Accountable for policy development and implementation at operating level
o Achievement of specific goals and objectives are critical
o Implements policies to achieve corporate planned results
Conceptual leader. Able to develops business alternatives Ability to develop and appraise conceptual alternatives
Management of long term business results and strategic position of the business unit within general guidelines
Senior
Professional
o Implements specific policies based on principles set by business unit head.
o Guided by general practice of the field and study on principles
o Review and recommend policy changes
Able to develop conceptual alternatives to deliver project results
Achievement of business objectives and goals within corporate guidelines
o Achievement of results is more important than compliance with internal procedures
Able to determine process and systems alternatives to deliver project sub-objectives Able to conduct process and systems variation with occasional guidance
Delivery of sub-objectives and results - only occasional conceptual guidance Delivery of results and achievements of sub-objectives - under policies guidance
Professional
o Implement systems and processes based on set principles and objectives to produce designed results.
o Discretion on basic principles and process is allowed in order to achieve results
Ability to determine process and systems alternatives to deliver sub-objectives within defined policy
Achievement of sub-objective and delivery of results within policies set Delivery of sub-objectives and results within specific policies on freedom to act
Delivery of sub-objectives and results - subject to supervisory review
Executive
o Implement systems and processes based on set standards specifications and objectives.
o Discretion to deviate is narrow and subject to review of progress and results.
Conduct work based on tasks assigned and keep to prescribed standards and work routine.
Take action for results within well defined processes and procedures on freedom to act. Results are reviewed by superior
o Usually a large part of the job involves scheduling and managing activities to achieve standard output on time.
Learning and understanding basic work process and procedures
deliver results within specific processes and procedures on freedom to act. Results are closely reviewed by superior
o Conduct work based on assigned tasks within prescribed standards
o Progress and results subject to close review.
Assist others in work assignments under close supervision
Work within well defined processes and procedures on freedom to act. Closely supervised by superior
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Your Role and Accountability
SECTION 8 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1. Your Role and Accountability
As a member of the company, you need to understand your role and the results expected of you.
All staff must have a copy of the Key Results expected of their position. Make sure you have a copy of the Key Results for your position
The company’s human resource process and systems will be explained in an induction program organised for you.
It will help you build relationships, understand norms, establish and develop a network of contacts relevant to your role. You will begin to build a relationship with the company.
Always contact your team leader or the Human Resource Manager for further clarification. You may also contact your friends in your team or section for assistance - but remember they can interpret matters in a different manner depending on their own experience.
The following is a format of a results description:
Key Results Major Supporting Actions Performance
Indicators1. Achieve targeted
production
volume
By monitoring production performance and taking corrective
actions
By analysing production downtime and introducing
improvements
By thorough preparation for introduction and
implementation of new models and variants
1. Timely production
targets
2. Productivity ratios
3. Downtime
4. Implementation
schedule
2. Achieve product
quality targets
By reviewing quality performance results and identifying non
conformance and undertaking corrective actions
By analysing customer feedback and taking corrective actions
By undertaking on-line and off-line continuous quality
improvement programs and activities
By undertaking education and re-education programs
1. Quality index
2. Defect occurrence
3. Non-conformance to
established standards
4. Demerit points
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Rest & Recreation (Work and Holiday)
SECTION 9 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Working Days and Hours
Introduction
This section covers the official working hours of the employee.
1.1 All employees except those from the Production and QC Dept shall work 5 days a week of thirty-seven and half (37½) hours (excluding meal breaks) per week
Monday - Friday 8.30 am to 5.00 pm Lunch 1.00 pm to 2.00 pm
The Production, Maintenance and QC staff are required to work on shift.
1.2 The Company may vary this arrangement depending on operational needs of particular unit and section in order to provide better service to our customers.
1.3 The Company may require you to work on shifts where and when it is necessary in order to be more effective.
1.4 The Sales and Marketing personnel may be required to work at different times when there are company's promotional activities taking place.
1.5 You shall also work on a public holiday or a rest day, or work overtime and attend to emergency work in excess of the normal work hours on any given day when requested by your superior. This is the nature of being dedicated and committed to the mission of The Company.
2.0 Public Holidays
The company shall grant all its employees paid holidays on all public holidays gazetted by the Malaysia Government. Where a state in Malaysia gazettes certain specified days as state holidays, the employees based in that State are eligible for such gazetted holidays.
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Leave
SECTION 10 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
Introduction This section covers the entitlement, application and scheduling of the following types of leave: - a) Annual Leave b) Medical Leave c) Marriage Leave d) Maternity Leave e) Paternity Leave f) Examination Leave g) Compassionate Leave 3.0 Annual Leave
3.1 All employees shall be eligible for annual leave after completion of one (1) year of continuous service.
3.2 The Company may at its discretion grant proportionate annual leave to confirmed
staff in cases where their service with The Company is less than one (1) year.
3.3 Eligibility for annual leave shall be as follows:-
Years of Service
Days
Executive Non-Executive
1st to 5th year 6th to 10th year 11th year & above
16 18 21
14 16 18
3.4 Rest days and gazetted public holidays shall not be included when computing the leave entitlement.
3.5 The Company may call you back to work and cancel the leave if the nature of the
situation requires you to be back on duty.
3.6 When due to exigencies of the service, leave application is not granted or leave when granted is cancelled, then the leave which cannot be taken or cancelled shall be carried forward and taken when one can be spared during the following year.
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SECTION 10 Page 2 of 5
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
3.7 Employees are encouraged to take their leave for the respective year. Leave should only be carried forward when absolutely necessary and only upon written approval of the manager / supervisor.
3.8 During the first and last years of service, and if you work less than a complete
calendar year, your leave entitlement will be calculated on a pro rate basis.
3.9 An employee requesting for annual leave has to submit the Leave Application Card to his Head of Department at least seven (7) working days prior to the date of the planned leave.
3.10 On approval, the employee will return the card to the Human Resource Dept for
safe-keeping and updating of records. If the leave is not approved, the card will be returned to the Human Resource Dept with reason(s) provided.
3.11 In the case of work exigencies, an employee who is on leave may be called back to
his place of work. As soon as the employee is back for duty, his Head of Dept will notify the Human Resource Dept of the leave cancellation in writing. Human Resource Dept will amend the employee's leave record accordingly.
4.0 Medical Leave
4.1 An employee is eligible to paid medical leave up to fourteen (14) days in each calendar year if the said employee is not suffering from a prolonged serious illness and is not required to be hospitalised or confined to bed, medical leave eligibility is as follows:-
Years of service No of days
Less than 2 years 2 years but less than 5 years 5 years and above
14 18 22
4.2 An employee who is advised to go on medical leave by a doctor from the Company's Panel of Clinics (Exhibit 3A) has to inform Company within 24 hours. When the employee returns from medical leave, he is required to submit his Medical Leave Certificate to his Head of Dept for verification before submission to Human Resource Dept.
4.3 For non-emergency cases, Medical Leave Certificate obtained from a Non-Panel
Clinic may be considered as no pay leave.
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SECTION 10 Page 3 of 5
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
4.4 Human Resource Dept will inform employees who have fully utilised their medical
leave entitlement for the year. Human Resource Dept may then proceed to do the following:-
a) Deduct the excess leave from their annual leave entitlement, or b) Consider the access days taken as no pay leave, if the annual leave has been
exhausted. 4.5 The employee is required to complete the Leave Application Card for cases in
4.4.a). 4.6 Application for hospitalisation leave shall be made in writing to the Human
Resource Dept through the Head of Dept. All applications must be accompanied by a recommendation letter from the attending doctor/specialist.
4.7 If the employee is still not fit for work at the end of the hospitalisation leave,
Human Resource Dept may consider a medical boarding out. 5.0 Hospitalisation Leave
5.1 An employee who has been with the Company for 10 years or more and suffering from serious illness, or any other disease that requires prolonged absence from work, as certified by the approved doctor shall be granted sick leave with full pay up to a maximum three (3) consecutive months provided he is hospitalised. Those with less than 10 years' service will only be entitled to a maximum of two (2) consecutive months of sick leave.
5.2 At the expiry of the sick leave mentioned in Clause 3.3.1 above, an employee may
be medically boarded out, provided always that The Company seeks the advice of an approved doctor.
6.0 Maternity Leave
6.1 All female staff shall be entitled to fully-paid maternity leave of sixty (60) consecutive days in respect of the first five (5) confinements while under the employment of The Company. Non-pay leave will be granted by subsequent confinements.
6.2 Leave of absence due to any illness or miscarriage during the first 28 days will be
considered as normal sick leave.
6.3 A female employee applying for maternity leave shall submit the Leave Application Card together with the doctor's certification of the expected delivery date to Human Resource Dept through her Head of Dept by the 7th month of her pregnancy.
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SECTION 10 Page 4 of 5
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
6.4 The employee shall update Human Resource Dept and the Head of Dept on any
changes in the above.
7.0 Marriage Leave
7.1 Three (3) working days in continuous sequence to the day of marriage for a confirmed employee on the occasion of his/her own and first marriage.
7.2 An employee shall complete and submit Leave Application Card together with
Marriage Certificate and Invitation Card (if any) to Human Resource Dept through their Head of Dept at least seven (7) working days prior to the date of the planned leave.
7.3 The employee will be notified if the leaves are approved and the Card shall be
returned to the Human Resource Dept for updating of records.
8.0 Paternity Leave
8.1 One working day in the event of the birth of his legal child. 8.2 Application shall be made by completing the Leave Application Card.
8.3 If circumstances do not allow the employee enough time to apply for leave under
normal procedures, the employee shall inform his immediate supervisor at the earliest opportunity.
8.4 Upon his return from such leave, the employee shall complete the Leave
Application Card and submit it together with relevant supporting documents to his Head of Dept for approval. The card is to be submitted to Human Resource Dept for updating purposes.
9.0 Compassionate Leave
9.1 Three (3) working days in the event of the death of immediate family members such as spouse, son, daughter, mother, father, mother-in-law or father-in-law.
9.2 One working day in the event of the death of close relatives such as grandfather,
grandmother, brother or sister.
9.3 Application shall be made by completing the Leave Application Card.
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SECTION 10 Page 5 of 5
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
9.4 If circumstances do not allow the employee enough time to apply for leave under normal procedures, the employee shall inform his immediate supervisor at the earliest opportunity.
9.5 Upon his return from such leave, the employee shall complete the Leave
Application Card and submit it together with relevant supporting documents to his Head of Dept for approval. The card is to be submitted to Human Resource Dept for updating purposes.
10. Examination Leave
10.1 A confirmed employee who is nominated by The Company to attend courses may be granted examination leave maximum three (3) working days in a calendar year.
10.2 Application shall be made by completing the Leave Application Card with
supporting document to Human Resource Dept through Head of Dept at least seven (7) working days prior to the date of the planned leave.
10.3 This applies only to the days on which the exam is held and only when the time of
the exam falls within the normal working hours.
10.4 The employee will be notified if the leaves are approved and the Card shall be returned to the Human Resource Dept for updating of records.
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Overtime
SECTION 11 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Overtime
1.1 Overtime is defined as time worked in excess of normal working hours during normal workdays, or time worked on Saturdays. Non-supervisory employees may be required by management to work overtime. They are then entitled to overtime pay provided prior directive has been given by the appropriate Head of Dept for such work to be done on paid overtime.
1.2 Overtime rates are as follows:-
a) Normal Workday / Saturday b) Rest Day (Sunday) & Gazetted Public
Holiday
1.5 x Normal Hourly Rate
- Not in excess of Normal Hours of work
- In excess of normal hours of work
2.0 x Normal Hourly Rate
3.0 x Normal Hourly Rate
Normal Hourly Rate = Basic Pay x 13
weeks x 37½ hours 2.0 Computation of Overtime
2.1 All fraction of an overtime hour shall be rounded off to the nearest 1/4 of an hour. 2.2 Meal breaks taken during overtime are not included in the period of overtime.
2.3 Maximum overtime allowed per employee per month is 104 hours.
3.0 Application
An eligible employee who has worked overtime shall be required to complete the Overtime Claim Form (Exhibit 4A). The employee shall fill in his Name, Employee Number, Department, the date(s) and hours of overtime worked in the Form. All overtime work done shall be checked by the respective immediate superior and approved by the respective Head of Dept.
4.0 Processing
Completed Overtime Claim Forms shall be submitted to the Human Resources Dept by the 10th of each month. Late submission of overtime forms will be processed in the following month.
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Reward and Compensation Principles
SECTION 12 Page 1 of 4
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Reward and Compensation
1.1 The Company management is committed to offering pay and benefits that are fair
and competitive in order to recruit, retain and motivate highly productive talents who will continue to grow
1.2 The guiding principles are :-
1.2.1 Individual performance is rewarded according to achievement of results expected
1.2.2 Career levels are designed to reflect competencies necessary to perform at different levels. The salary range set for each career level is determined to a large extent by market practice
1.2.3 Outstanding achievement is further rewarded to encourage superior performance
1.3 The Company’s compensation policy is to pay salaries which reward each employee
in proportion to the value of the career level compared to established job levels which are competitive.
1.4 The Company’s pay philosophy is a combination of pay for performance and pay for competencies.
1.5 The individual can directly influence his or her total earnings through performance (results) and by self directed learning all the time
2.0 In addition to being externally competitive, The Company salary system is designed to be internally consistent.
These practices are designed to attract and retain
competent employees, and to motivate employees so
that they achieve high personal growth.
Page 23 of 100
SECTION 12 Page 2 of 4
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
3.0 Job Evaluation
3.1 Career levels increase with respect to responsibilities and accountabilities. 3.2 The term Job Evaluation refers to the process of measuring the value of each
career position with respect to their relative value to The Company.
3.3 The process of Job Evaluation begins with the Position Description which describes the basic purpose and job responsibilities of the position (not the individual) and covers the following :
3.3.1 Results Creation
3.3.1.1 Scope, accountability, level and degree of responsibility, reporting relationships and overall impact of the position on end results
3.3.2 Problem Solving
3.3.2.1 Level and complexity of problem solving required to perform standard results
3.3.3 Competencies
3.3.3.1 Special qualifications, experience, skills and competencies, technical and professional proficiencies
3.4 Managers and supervisors usually assume responsibility and accountability for
departments where career levels are already analysed, written and evaluated. However, many career levels change over time and new career levels may be created. When such changes occur, the Manager or supervisor should ensure that the Position Description is written or rewritten to capture the changes and, have them evaluated or re-evaluated.
3.5 Care must be taken to determine the requirements of the career level, not the
qualification of the individual.
3.6 Pay for Performance drives results orientation whilst pay for competencies encourages development.
Page 24 of 100
SECTION 12 Page 3 of 4
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
3.7 Pay for Performance is the recognition and reward for results.
3.7.1 The pay for Performance principles encourages initiative, creativity, continuous improvement and long term performance
3.7.2 Performance is measured by comparing an employee’s behaviour and
results against performance plans.
3.7.3 This process creates a results culture and motivates competent employees to contribute to their highest level of potential.
4.0 Performance plans include :
4.1 Selected competencies and behaviours that describe the manner in which results are achieved
4.2 Measures and standards that define the level of performance expected
4.3 Objectives that set measurable goals for the employee to achieve
4.4 Performance is recognised in the following salary actions :
4.4.1 Merit Increase which recognises and rewards productivity and results 4.4.2 Promotional Increase which rewards an employee’s assumption of greater
responsibilities and accountabilities.
4.4.3 Bonus which is discretionary may be paid according to both individual and company performance
5.0 Summary
5.1 The success of The Company’s Compensation System depends on how well it is understood and administered.
5.2 Good communication between the employee and his / her Manager / Supervisor is
essential. That is why we have published this guide which we hope will give you a better understanding of the system.
5.3 Each Manager / Supervisor must be able to explain the process involved and the
philosophy of The Company’s Compensation System.
Page 25 of 100
SECTION 12 Page 4 of 4
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
6.0 Salary Ranges
6.1 The salary ranges of career levels are confidential and should be treated
accordingly
7.0 Bonus
7.1 Payment of bonus shall be paid at the sole discretion of the Company. 7.2 Payment of bonus if declared by The Company shall be based on The Company’s
performance and individual performance.
7.3 Bonus shall be payable to confirmed employees who are in the services of The Company at the time of payment.
7.4 All confirmed staff shall be eligible for a 13th month's pay and shall be payable
during the month of December. However, for the first year of service, an eligible employee who has completed less than 12 months continuous service with the Company will be eligible for one-twelfth (1/12) of the 13th month's pay for each completed month of service.
8.0 Uniforms
8.1 The Company will provide uniforms to the following categories of staff. The design
and type of uniform shall be determined by the Company.
Office Cleaners - 3 sets to be provided yearly. Drivers/Attendants - Maximum RM60 per pair of pants T/Shirt Maximum RM100 per pair of shoes yearly
8.2 All uniforms staff provided with such uniforms shall wear such uniforms at all times
during working hours. Failure to wear such uniforms shall be construed an at of misconduct and the staff shall be liable to disciplinary action by the Company.
8.3 All staff required to wear uniforms shall be given 3 sets of uniforms on confirmation
in employment. Thereafter, uniforms will be replaced as and when necessary up to a maximum of 3 sets per calendar year starting 1st January of the year following the year in which the staff was confirmed.
Page 26 of 100
Benefits & Allowances
SECTION 13 Page 1 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Staff Loan
1.1 Introduction
This section covers the eligibility, processing and administration of loans listed below: - 1.1.1 Car Loan 1.1.2 Computer Loan
Human Resource Dept will ensure that the total monthly salary deduction inclusive of the loan applied for shall not exceed 1/3 of the employee's nett salary.
1.1.1 Car Loan
1.1.1.1 Eligibility
All confirmed staff (Executives/Managers) from the Sales and Marketing Departments are eligible to apply for this loan.The maximum loan amount is 80% of the value of the car or RM50,000.00 whichever is lower.The repayment period is 5 years with an interest of 2% per annum. Employees who are provided with Company cars are not eligible to apply. Application from the confirmed Executives/Managers from the other departments will be considered on case by case basis.
1.1.1.2 Application Procedure
a) An eligible employee shall complete and submit to Human Resource Dept an Application for Car Loan form (Exhibit 6A). The employee should include a copy of the quotation (for new car) or a valuation letter (for used car).Human Resource Dept will check and certify the application before seeking approval from the Managing Director
b) Upon approval by the Managing Director, the Human Resource Dept shall
inform the employee and the Finance Dept to release the cheque made payable to the vendor through the employee.
c) A schedule of repayment will be signed by the employee for repayment of
loan to be made through salary deductions.
Page 27 of 100
SECTION 13 Page 2 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
d) Human Resource Dept shall keep a copy of the following documents once
the car has been registered:-
i) Registration Card to be registered under the employee's name ii) Insurance Cover Note
e) The employee shall clear the balance of the loan within seven (7) days
upon the employee's resignation/termination from the company.
f) If the application is not approved, Human Resource Dept shall inform the employee concerned in writing.
1.1.1.3 Withdrawal of Benefit
The loan will be withdrawn when:- i) The Employee resigns or whose services are terminated by the Company. ii) The loan has been repaid in full. iii) The employee sells the car.
1.1.2 Computer Loan
All confirmed staff (Supervisors/Executives/Managers) whose nature of work require the use of computer are eligible to apply. The maximum loan amount is 70% of the value of the computer or RM5,000.00 for laptop or RM3,000.00 for desk top, whichever is lower. The repayment period is for 2 years interest free.
1.1.2.1 Application Procedure
a) An employee applying for the Computer Loan must complete the Application for Computer Loan Form (Exhibit 6B) together with the quotation from a recognised vendor. These shall then be submitted to Human Resource Dept through their respective Head of Dept.
b) Human Resource Dept shall check and certify the application before seeking the approval from the Managing Director.
c) Upon approval by the appropriate authority, Human Resource Dept shall inform the employee and the Finance Dept to release the cheque made payable to the vendor through the employee.
d) The Human Resource Dept shall obtain the original receipt from the employee and forward it to the Finance Dept.
Page 28 of 100
SECTION 13 Page 3 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
e) A schedule of repayment will be signed by the employee for repayment of
loan to be made through salary deductions.
f) The computer purchased shall be under the employee's name.
g) Salary deductions will commence one (1) month after the loan is released.
h) The employee shall clear the balance of the loan within seven (7) days upon the employee's resignation/termination from the Company.
1.1.2.2 Withdrawal of Benefit
The loan shall be withdrawn upon the employee's resignation/termination from the Company.
2.0 Transport Allowance
Transport Allowance will be paid as follows:-
Head of Department - RM400/month Other Managers/Executives/Supervisors - RM300/month
The transport allowance will only be paid when a company car is not provided. For those who are not entitled to transport allowance, car mileage at RM0.35/km can be claimed for travel on company business.
3.0 Shift Allowance
Non-Supervisory employees who are required to work shift shall be paid a shift allowance at the following rates:-
a) Full rotating shift system: First shift - Nil (7.00am - 3.00pm)
b) Second Shift - RM2.00 p/day (3.00pm - 11.00pm)
c) Third Shift - RM5.00 p/day (11.00pm - 7.00am)
Alternating shift system: a) First Shift - Nil
(7.00am - 7.00pm) c) Second Shift - RM5.00 p/day
(7.00pm - 7.00am) The actual time schedule for each shift shall be determined by the company from time to time and this will be posted on the Notice Board.
Page 29 of 100
Retirement / EPF
SECTION 14 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Retirement Age
The Company's policy is to recruit employees who are 16 years of age and above and the retirement age for all staff shall be:-
1.1 Male 55 years 1.2 Female 55 years
Reemployment of an employee after his retirement shall be at the discretion of The Company provided the employee is certified medically fit.
2.0 EPF Contribution
2.1 The company and the employee will be jointly liable to contribute to this fund as per statutory rates set by EPF.
2.2 With effect from 1 June 1999, the company will contribute 15% and the employee 11% to this fund.
Page 30 of 100
Medical and Health Care
SECTION 15 Page 1 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Introduction
This section covers medical coverage entitlement for Group Hospitalisation and Surgical Policy, the list of the Company's Panel of Clinics/Hospitals, medical examination, medical treatment by Company's and non-Company's Panel of Clinics, specialist treatment and hospitalisation, reimbursement of medical bills and the maintenance of medical records.
2.0 Staff Entitlement
2.1 Schedule of Benefits (Maximum Per Any One Disability)
Type of Benefit Plan 5 Plan 6 Plan 7 Plan 8 1. Daily Room & Board
(Max. 60 days for Private Hospitals) (Max. 75 days for Govnt. Hospitals)
400 250 200 150
2. Maximum Limit Without Surgery 10,000 7000 5,500 4,200
3. Maximum Limit With Surgery 25,000 13800 10,000 7,000
Note Plan 5 - Senior Managers Plan 6 - Managers Plan 7 - Executives/Supervisors Plan 8 - Others
3.0 List of Company's Panel of Clinics/Hospitals
3.1 Human Resource Dept shall update the List of Panel of Clinics/Hospitals when necessary including all particulars of the clinic/hospital such as the clinic/hospital names, address, telephone number and operating hours.
3.2 Human Resource Dept shall inform all employees of any new Panel of
Clinics/Hospitals through memo on the notice board. 4.0 Medical Examination
4.1 All successful candidates are required to undergo a pre-employment medical examination before the issuance of his Letter of Appointment. Human Resource Dept shall issue a letter to authorise the medical examination (Exhibit 8A).
4.2 The doctor performing the medical examination shall submit the medical report to
Human Resource Dept.
Page 31 of 100
SECTION 15 Page 2 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
4.3 Human Resource Dept shall review the medical report to determine whether the
employee is medically fit for employment. 4.4 The medical examination report received shall be recorded by Human Resource
Dept and the report filed in the respective employee's Personal File.
4.5 All Managers are entitled for a full medical check-up every 3 years. 5.0 Medical Treatment by Panel of Doctors
5.1 An employee seeking medical treatment at a Company's clinic shall be required to produce the authorised Medical Card or the Clinic's Medical Chit. If the employee is without the card or the clinic's medical chit, he shall be required to pay for the treatment when requested by the clinic.
5.2 The employee shall be required to complete Part A of the Medical Form (Exhibit 8B)
which is available at the clinic.
5.3 After the medical treatment, the consulting doctor shall complete and sign Part B of the Medical Form. The clinic has to submit a copy of the Medical Form together with the invoices to the Company.
6.0 Specialist Treatment & Hospitalisation
6.1 Any employee seeking specialist treatment or hospitalisation shall obtain a Letter of Referral from the company's Panel of Clinics, except in the case of an emergency.
6.2 The Letter of Referral shall be presented to Human Resource Dept for the issuance
of a Letter of Guarantee.
6.3 Human Resource Dept shall issue a Letter of Guarantee (Exhibit 8C) to the referred Government/Private Hospital. The Letter of Guarantee shall be issued together with the Insurance Claim Form, if any, for Hospitalisation and Treatment. The Insurance Claim Form, if any, shall be completed by the attending physician.
6.4 The completed Insurance Claim Form shall be submitted to Human Resource Dept
who will initiate the insurance claims. 7.0 Medical Treatment by Non-Panel Clinics
7.1 In the case of an emergency where the services of a doctor from the Company's Panel of Clinics is not available, an employee may seek medical treatment from any registered medical practitioner. The employee will be required to pay for the medical treatment bills and claim reimbursement from the Company.
Page 32 of 100
SECTION 15 Page 3 of 3
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
7.2 In exceptional cases where after a reasonable period of treatment by the
Company’s Panel of Clinics the employee's health has not shown any improvement, the Company may allow the employee to consult a specific non-panel registered medical practitioner/specialist.
7.3 For the above purposes in subsection 12.6.2, the employee shall be required to provide full details and reasons for the request to Human Resource Dept for approval.
8 Exclusions of the Policy
The company shall not pay for the cost of the following:- 8.2 Any hospitalisation confinement or surgical operation which has not been previously
recommended by a legally licensed physician or surgeon appointed by the Company;
8.3 Medical or surgical or other appliances, including spectacles or glasses;
8.4 Suicide or attempted suicide, while sane or insane or intentionally self-inflicted injuries;
8.5 Direct participation in riot or civil commotion; insurrection or way or act of war of fulltime service in any of the armed forces.
8.6 Private flying except as a passenger in any commercial or chartered airline licensed to carry passengers.
8.7 Any dental work, dental treatment, eye examinations, hearing aids or the fitting of any thereof, or cosmetic surgery, plastic surgery.
8.8 Rest cure, veneral disease, AIDS, cancer, sterilisation, nervous or mental diseases or disorders.
8.9 Any expenses relating to pregnancy including childbirth, caesarean operation, abortion, miscarriage, whether natural or accidental and all complications therefrom, sub-fertility and infertility.
8.10 Any expenses incurred in respect of illness, injury or disablement, arising from any fault, carelessness, indiscretion of the employee, participation in or attending any hazardous sport, pursuit or pastime; the performance of any unlawful act; exposure to any unjustifiable hazards, except when endeavouring to save human life; provoked assault, the use of drugs not medically prescribed, congenital anomalies; excessive use of alcohol; or any breach of the peace or disorderly conduct.
8.11 Charges for telephone and television services during hospitalisation.
8.12 Any expenses for treatment in mental cases which have been certified by a Government doctor in charge of mental case.
Page 33 of 100
Staff Insurance
SECTION 16 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Introduction
This section covers the Company's Group Personal Accident and Social Security Organisation (SOCSO) coverage under the Employee's Social Security Act.
2.0 Staff Insurance
2.1 You will be insured by The Company's Group Personal Accident Insurance Policy. The scheme shall provide benefits for death as a result of an accident following the schedule below:-
Group E - Managing Director / Senior Sales Manager (60 x last drawn salary) Group D - Finance Manager / Senior Sales Manager / Marketing Manager / Operating Manager (36 x last drawn salary) Group C - All other Managers, Executives & Supervisors (24xlast drawn salary) Group B - All others (12 x Last Drawn Salary)
2.2 If you are eligible as stipulated by the Social Security Act, 1969 (Act 4) then you will
further be insured under the SOCSO Insurance Scheme.
Page 34 of 100
Perquisites
SECTION 17 Page 1 of 1
Revision No: 0
Issued by: Human Resource Department
Issue Date: April 2000
1.0 Club Membership
1.1 The Company shall provide senior managers with subsidised membership to a
recreation club. 1.2 The Company shall pay the entrance fee up to an amount of RM10,000.00.
1.3 The Company shall also pay up to RM100 monthly subscription for eligible staff.
2.0 Company Car
2.1 The company may, at its discretion, provide company cars to the senior management
2.2 Employees provided with company cars should take good care of the cars. The
company will bear all expenses relating to maintenance and repairs but they must endeavour to keep such expenses within the budget allocated to them
2.3 The company may, at its discretion, allows fuel, toll and parking reimbursement, for
the senior management against actual receipt
2.4 The management may, at its discretion, provide the senior management employee with free parking at or near the place of the employment
Page 35 of 100
HRM Budgeting
Page 36 of 100
Sample HR Costs
ABC SDN BHD
DETAILED INCOME STATEMENT FOR THE PERIOD ENDED _____________________________
(ACTUAL VS BUDGET)
ACTUAL BUDGET
RM RM
HUMAN RESOURCE COSTS
HRLE - A.TRIP, DINNER & F.DAY 41,810.75 62,626.00
HRLE - ADVERTISEMENT - GENERAL 6,857.67 0.00
HRLE - EPF EMPLOYER - STAFF BONUS 3,350.35 16,474.00
HRLE - EPF EMPLOYER - UNUTILIZED LEAVE(DIRECTOR) 0.00 0.00
HRLE - EPF EMPLOYER - UNUTILIZED LEAVE (STAFF) 0.00 5,641.00
HRLE - HR DEVELOPMENT FUND 46,236.94 56,632.00
HRLE - PYSCHOMETRIC ASSESSMENT 0.00 0.00
HRLE - RETIREMENT BENEFIT 82,256.00 92,528.00
HRLE - RECRUITMENT EXPENSES 2,191.80 48,456.00
HRLE - SALARY - ASSIGNMENT ALLOWANCE 5,760.00 0.00
HRLE - SALARY - ALLOWANCE 0.00 0.00
HRLE - SALARY - ATTN INCENTIVE 1,470.00 1,384.00
HRLE - SALARY - BASIC 4,718,282.77 5,171,936.00
HRLE - SALARY - BONUS STAFF 30,556.36 68,639.00
HRLE - SALARY - CAR ALLOWANCE 145,353.99 148,800.00
HRLE - SALARY - CAREER LADDER 32,896.00 34,232.00
HRLE - SALARY - EMPLOYER EPF 584,719.93 621,112.00
HRLE - SALARY - EMPLOYER SOCSO (STAFF) 63,695.45 67,888.00
HRLE - SALARY - EXGRATIA 0.00 0.00
HRLE - SALARY - HANDPHONE ALLOWANCE 48,636.04 57,384.00
HRLE - SALARY - MEAL ALLOWANCE AND OTHER 9,915.18 19,816.00
HRLE - SALARY - SPECIAL ALLOWANCE 28,944.36 4,000.00
HRLE - SALARY - OVERTIME 81,138.84 100,544.00
HRLE - SALARY - SHIFT ALLOWANCE AND OTHERS 1,600.00 1,600.00
HRLE - S.WELFARE - ACCOMM 11,384.00 13,784.00
HRLE - STAFF WELFARE - BROAD BAND 687.00 0.00
HRLE - S.WELFARE - FOOD/BEV 10,324.00 84,040.00
HRLE - S.WELFARE - MEDICAL FEES 31,043.41 32,784.00
HRLE - STAFF WELFARE - MOBILE WORKFORCE 0.00 0.00
HRLE - STAFF WELFARE -MV INTEREST SUBSIDY 0.00 0.00
HRLE - STAFF WELFARE - NURSERY FACILITIES 0.00 0.00
HRLE - S.WELFARE - OTHERS 68,909.01 114,152.00
HRLE - S.WELFARE - SRC EXPENSES 0.00 8,664.00
HRLE - S.WELFARE - TRAINING 73,511.87 233,296.00
HRLE - S.WELFARE - TRANSPORT 429.00 14,800.00
HRLE - S.WELFARE - UNIFORM 11,718.40 99,740.00
HRLE - S.WELFARE - UNUTILISED LEAVE-STAFF 60.00 47,006.00
HRLI - S.WELFARE - OTHERS-XYZ Subsidiary 7,463.40 0.00
HRLR - STAFF WELFARE - FOOD/BEV - YAYASAN 101,709.68 50,424.00
6,252,912.21 7,278,382.00
YEAR TO DATE
Page 37 of 100
Sample HR Budget - Notes and Comments (part1) COMPANY NAME: ABC SDN BHD - HRM
BUDGET: HRM ______________ BUDGET
[EXP/3] NOTE TO OPERATING EXPENSES
No A/C JUSTIFICATION/REMARKS
1 2510111610 ENTERTAINMENT (meal expenses)
Signing for- Consultants / Suppliers est … in Canteen / Others 1,000
2 2510112410 GIFTS & PROMOTION
products requested for Consultants, O/sea subsidiaries' staff 400
3 2520110830 COURIER SERVICES 900
4 2520113200 INSURANCE GENERAL
Group Term Life /Critical Illness/PA for 226 pax est only (say 15% increase) 50,000
Group Hospitalization & surgical (say 10% increase) 40,700
Ind Policy (maintenance staff & Bus travel) 4,500
Laptop say 10units x RM5000 x 2.5% + 5% tax + RM10 stamp duty 1,260
Laptop cont 2006 NBV Ms Lim RM80000 x 2.5% + 5% tax + RM10 stamp duty (Feb07) 2,200
Grand Total 98,660
5 2520114410 LABOUR CHARGES (Casual Labour - Basic)
:- ERP, ISP project (RM 10,000 x 3 person x 12mth) 360,000
Part timer ( 5 person x RM1000 x 12mths) 60,000 420,000
6 2520114820 MAINTENANCE EQUIP
Actual Jan-Jul 08 = RM755
Forecast 5% increse for 2008 1,360
Laptop say 15 units x RM200/yr 3,000
Others 1,000
5,360
7 2520114890 M.VEHICLE PARKING
Using Admin staff for HRM errands -Salary related matters
120
8 2520116000 PENALTY
Say for late statutory submission 300
9 2520116010 POSTAGE & STAMPS
Forecast 100 letters for 2009 30
10 2520116040 PROF FEES LEGAL
EES prof fees 19,000
11 2520117220 STAMP DUTY
Car loan, laptop etc 300
12 2520117230 STATIONERY & PRINTING
Actual Jan-Jul08 =RM4,482.80 say add 10% increase 8,453
(L/head,A4paper,stickers,handbooks, access card,payslip,leave card etc )
Diary for Staff (226staff*RM12 + 100 pieces) 3,912
Total 12,365
13 2520117240 SUBSCRIPTION FEES
MEF 2,100
MIM 450
SRC - Registration as Non- Profit Organization (Pending for approval) 100
Total 2,650
Page 38 of 100
Sample HR Budget - Notes and Comments (part2) 14 2520117610 TEL & FAX
Actual Jan-Jul 08=RM861
Forecast 50% increse for 2009 due to Tele-interview 2,214
15 2520117650 TRAVELLING & SUBS - LOCAL
(A) HRM staff on official duties during non working days (petrol, toll & parking) 1,000
(B) HRM staff - Branch visit to Sbh & Swk
:- Air ticket RM200.00 x 2trips x 2 Branch AirAsia x 2 pax 1,600
:- Airport tax RM100.00 + RM100.00 x 2trips x 2 Branch AirAsia x 2 pax 1,600
:- Hotel RM150 x 2 nites x 2 trips x 2 Branches x 2 pax 2,400
:- Taxi KLIA RM160 return x 2 trip x 2 Branches x 2 pax 1,280
:- Meal BLD - (RM30 x 2days x 2trips x 2 pax) 240
Sub total *** 7,120
Grand Total 8,120
16 2520117660 TRAVELLING & SUBS - O/SEAS
(A) HRM International meeting to Indo/HK etc "one trip per year"
:- Air ticket to Indo RM500 x 2 (to&fro) x 2 pax -
:- Hotel 2nites x RM120 x 2 pax -
:- Taxi KLIA one trip per year x 2 pax -
:- O/sea pocket allw RM76 x 2 pax -
Sub total 0
(B) HRM meeting to Singapore - 2 trips per year
:- Air ticket (to&fro) - RM 750 x 2 trips x 2 pax) 3,000
:- Hotel 2 nites x RM150 - 2 pax x 2 trips 1,200
:- Taxi KLIA (to&fro) - RM 160 return x 2 pax x 2 trips 640
:- Meal BLD - (RM30 x 2days x 2trips x 2 pax) 240
Sub total 5,080
Grand Total 5,080
17 2540110000 A.TRIP. DINNER
(A) Staff Family day:-
Say RM100/pax ( 225 satff x 3) 67,500
Sub total 67,500
(B) Staff Annual Diner :-
Say RM90/pax x (225 staff + 110 Spouse) 30,150
External Entertainer say -
L/Draw 20,000
Venue set up cost 1,000
Branch staff invited to attend :-
Hotel 5 pax x RM150 twin sharing (5x150) 750
Air ticket 5 pax x RM500 2,500
Sub total 54,400
Grand Total 121,900
18 2540111630 EPF- Clerk Bonus - Est based on 2mths sal 16,473
19 2540111680 Staff Welfare - Unutilised Leave - EPF
Say 12% on RM90636 11,281
Page 39 of 100
Sample HR Budget - Notes and Comments (part3) 20 2540116900 ADVERTISEMENT - GENERAL (Staff Recruitment)
Career Fairs ( 4 x RM 4,500) 18,000
Advertisement ( Jobstreet / Newspaper - 30 positions x RM380 + 2 ads @ 5k) 21,400
Head Hunters [1 position salary 8k x 12mth x 18%] 17,280
Employee referral scheme (RM300 / RM 700 - 20/10positions) 13,000
Psychometric Assessments (10 pax) 3,000
Target sourcing (attend convention) -
Total 72,680
New * Recruitment Outsource Partnership -
21 2540117210 SALARY ATTN INCENTIVE 2,079
(Sbh / Srw : RM 157.5 per month, +10% for 2009)
22 2540117220 SALARY BASIC
Assume 5% annual & promotion increment. 8,053,634
23 2540117240 BONUS - STAFF
As per listing - Clerk say 2mth 137,273
24 2540117250 SALARY CAR ALLOWANCE 223,200
Actual : RM193, 200 + (500 x 5 x 12)
25 2540117251 CAREER LADDER 51,348
Actual : RM39,348 + (500 x 2 x 12)
26 2540117260 Proposed EPF (@ 15%) - STAFF SALARY (Permanent + Cotract) 1,213,670
( EPF @ 12% : RM967,156 --> diff : RM 246,514)
27 2540117280 SOCSO 107,316
28 2540117300 HANDPHONE ALLOWANCE 86,076
(actual : RM68,076 + (300 x 5 x 12)
29 2540117310 SALARY MEAL ALLOWANCE 29,728
(Actual : Branch - RM16,008 + [OT]Jan - Aug '08 : RM8,315 - +10% for 2009
30 2540117325 Others Allowances- Special Allowance
ICT (3000 x 12) 36,000 42,000
QAD (500 x 12) 6,000
31 2540117330 OVERTIME 150,812
(actual Jan - Aug : RM91,401.00 Est '09 + 10%)
32 2540117340 SALARY - SHIFT ALLOWANCE 2,400
(Maintenance team : RM200 x 12)
33 2540117360 STAFF WELFARE ACCOMODATION
Refer to sal listing 15,876
Est - F/Liners who stay at relative house while on outstation duties RM50/night 4,800
20,676
34 2540117370 STAFF WELFARE FOOD & BEV 187,414
Yearly Canteen RM3.10 x (223+6Dir) =RM709.9 x 22day/mth x 12 mths
Page 40 of 100
Sample HR Budget - Notes and Comments (part4) 35 2540117390 MEDICAL
Premployment 40new x RM45 1,800
HRM dept only say 3pax x 12mths X RM50 1,800
3,600
36 2540117396 Motor Vehicle Assistant programme
(Interest subsidy 3% - (max1500*100pax) 150,000
37 2540117410 S.WELFARE OTHERS
(A) Staff Awards
Long Service awards
5 yrs = AM-VP (2x RM5,000 and 9 Exe x RM3,000 37,000
10yrs= 1 Mgr x RM5,000 and 3Exe x RM3,000 14,000
15yrs= 2 Mgr x RM5,000 and 5 Exe x RM3,000 25,000
76,000
Plaque/certificate/ribbon etc 850
76,850
(B) Others
Baby gifts say 20pax RM140 products 2,800
Hospitalization gifts say 20pax x RM100 products 2,000
Wedding angpow say 15pax x RM200 3,000
Condolence money say 20 x RM100 2,000
Note No more staff interaction funds -
Hardship funds est only 30,000
CNY angpow 240 x RM10 2,400
42,200
( C ) Free Product Sample 5,000
Pesta Durian -
mooncake (223staff*1box -RM20) 4,460
* 9,460 128,510
38 2540117430 STAFF WELFARE - SRC
Year end reward- Advisor 2pax (RM500+PVRM500) 2,000
12 SRC committee (RM500+PV500 evaluated at 60%) 7,200
SRC working meal allow, petrol,parking 500
SRC O/T 1,000
SRC dinner with Dirs 1,600
P/Stationer 700
13,000
39 2540117450 STAFF WELFARE TRANSPORT
Ampang & Subang (save RM72k) -
Sri Muda/ Batu Tiga route (Own Drivers) + Taxi 22,200
22,200
40 2540117460 STAFF WELFARE UNIFORM
Official Uniform 96,500
T-shirt - Star Product Launching (say 270 x RM12) 3,240
99,740
41 2540117480 STAFF WELFARE - UNUTILISED LEAVE
Based on payout for unutilized leave - frontliner (RM85465.04 x10%) 94,012
Page 41 of 100
Sample HR Budget - Notes and Comments (part5) 42 New Spot Bonus 150,000
43 New EPF of spot Bonus 18,000
44 New Allow - Petrol 14,856
45 New Salary - Retail Outlet Incentive 4,862
(Actual Jan - Aug '08 : 2701, +20% for 2009)
46 New Salary - L/Pay (Maint.) ALLOWANCE (say ave 5days/mth) 6,600
47 New Salary - Branch Assignment ALLOWANCE 11,400
48 Propose Staff Welfare
1 Medical - RM500 per staff per year include dental & mediacl check 111,500
2 Kidnergarden/ Nursery Facilities - tranpotation (6000*12mth) -
- Subsidy Fees (RM100*50pax*12mth) - -
3 Mobile Workforce Scheme (Rm100*50staff) -
4 15% EPF (3% extra) 246,514
** Justification : Removal of Labour Charges (item 5 - ERP Project - RM 360,000)
and Special Alloance (item 30 : paying Corp staff - RM 36,000) = RM396,000 is
enough to cover for item 1 & 4 proposed (total of RM358,014)
49 2620001000 PROFIT SHARING - STAFF -- to be confirmed
50 2620001100 EPF PROFIT SHARING - STAFF ( -- to be confirmed
(excluding Profit Sharing) 11,934,738
Page 42 of 100
Sample HR Variance Report
Page 43 of 100
Sample Income (P&L) Statement
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64.8
632
-1,2
07
-753
Page 44 of 100
Sample HR Budget ABC SDN BHD
INCOME STATEMENT FOR PERIOD ENDED _______________________
MTDACT MTDBGT MTDVAR MTDVAR% YTDACT YTDBGT YTDVAR YTDVAR% TTLBGT(K) BGTBAL(K)
39000-00 OTHER INCOME 0 0 0 NO BGT 979.29 0 979.29 NO BGT 0 -1
SUB-TTL 30I100 OTHER INCOME 0 0 0 NO BGT 979.29 0 979.29 NO BGT 0 -1
40130-00 ADVERTISEMENT -100 -3,000.00 2,900.00 97 -21,610.30 -55,750.00 34,139.70 61 -98 -77
40200-00 CAFETERIA BENEFIT 0 0 0 NO BGT 0 0 0 NO BGT 0 0
40700-00 DONATION/CONDOLENCE 0 0 0 NO BGT 0 0 0 NO BGT 0 0
40910-00 GIFTS & PROMOTION 0 0 0 NO BGT 0 -200 200 100 0 0
40930-00 ENTERTAINMENT 0 -250 250 100 0 -500 500 100 -1 -1
41500-00 GIFT 0 0 0 NO BGT 0 0 0 NO BGT 0 0
44060-00 TRAVELLING & SUBS -105 0 -105 NO BGT -1,222.60 -500 -722.6 -145 -7 -6
44070-00 TRAVELLING & SUBS O/SEAS 0 -1,430.00 1,430.00 100 0 -4,310.00 4,310.00 100 -4 -4
SUB-TTL 40E100 MARKETING & PROMOTION -205 -4,680.00 4,475.00 96 -22,832.90 -61,260.00 38,427.10 63 -111 -89
40500-00 CANTEEN EXPENSES 0 0 0 NO BGT 0 -150 150 100 0 0
40520-00 COURIER SERVICES 0 0 0 NO BGT -367.25 -400 32.75 8 -1 -1
41700-00 INSURANCE GENERAL -5,312.66 0 -5,312.66 NO BGT -31,809.59 -3,460.00 -28,349.59 -819 -86 -55
41840-00 ISO EXPENSES & AUDIT 0 0 0 NO BGT 0 0 0 NO BGT 0 0
42320-00 LABOUR CHARGES 0 -320 320 100 0 -1,920.00 1,920.00 100 -4 -4
42520-00 MAINTENANCE EQUIP -131.67 -750 618.33 82 -1,040.02 -2,800.00 1,759.98 63 -6 -5
42560-00 M.VEHICLE PARKING 0 -10 10 100 -18.2 -60 41.8 70 0 0
43100-00 POSTAGE & STAMPS 0 0 0 NO BGT 0 -10 10 100 0 0
43110-00 PENALTY 0 0 0 NO BGT 0 -300 300 100 0 0
43130-00 PROF FEES LEGAL 0 -19,466.00 19,466.00 100 0 -19,466.00 19,466.00 100 -19 -19
43920-00 STATIONERY & PRINTING -155.95 -550 394.05 72 -2,301.16 -9,200.00 6,898.84 75 -13 -10
43930-00 STAMP DUTY 0 -100 100 100 0 -200 200 100 0 0
43940-00 SUBSCRIPTION FEES -37.5 -220 182.5 83 -225 -1,320.00 1,095.00 83 -3 -2
43960-00 SUNDRY EXPENSES 0 0 0 NO BGT 0 0 0 NO BGT 0 0
44050-00 TEL & FAX -209.96 -350 140.04 40 -1,012.64 -2,200.00 1,187.36 54 -4 -3
SUB-TTL 41E100 GENERAL & ADMINISTRATION -5,847.74 -21,766.00 15,918.26 73 -36,773.86 -41,486.00 4,712.14 11 -137 -100
40120-00 A.TRIP. DINNER & FAM DAY 221.94 0 221.94 NO BGT -73,039.84 -151,500.00 78,460.16 52 -204 -131
43555-00 RECRUITMENT EXPENSES 0 -750 750 100 0 -3,000.00 3,000.00 100 -5 -5
43700-00 SALARY BASIC -14,205.00 -19,060.00 4,855.00 25 -84,468.47 -114,360.00 29,891.53 26 -229 -144
43710-00 SALARY OVERTIME -397.83 -640 242.17 38 -2,519.11 -3,840.00 1,320.89 34 -8 -5
43730-00 SALARY BONUS 0 -559 559 100 -290.18 -559 268.82 48 -2 -2
43740-00 SALARY CAR ALLOWANCE 0 -5,350.00 5,350.00 100 0 -32,100.00 32,100.00 100 -64 -64
43750-00 SALARY ATTN INCENTIVE 0 -60 60 100 0 -360 360 100 -1 -1
43760-00 SALARY MEAL ALLOWANCE -65 -1,000.00 935 94 -405 -6,000.00 5,595.00 93 -12 -12
43765-00 SALARY-CAREER LEADER 0 -1,000.00 1,000.00 100 0 -6,000.00 6,000.00 100 -12 -12
43770-00 EMPLOYER EPF -1,720.00 -2,290.00 570 25 -10,315.78 -13,740.00 3,424.22 25 -27 -17
43773-00 EPF-CASUAL LABOUR 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43777-00 EPF-EMPLOYER(SALARY BONUS) 0 -67 67 100 -34.82 -67 32.18 48 0 0
43780-00 EMPLOYER SOCSO -238 -283 45 16 -1,428.10 -1,698.00 269.9 16 -3 -2
43782-00 EPF - UNUTILISED LEAVE 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43790-00 HANDPHONE ALLOWANCE 0 -2,010.00 2,010.00 100 0 -12,060.00 12,060.00 100 -24 -24
43796-00 SALARY OVERSEAS ALLOWANCE 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43797-00 SALARY EXGRATIA 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43798-00 SALARY-SHIFT ALLOWANCE 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43799-00 SALARY- ASSIGNMENT ALLOWAN 0 -300 300 100 0 -1,800.00 1,800.00 100 -4 -4
43800-00 STAFF WELFARE TRANSPORT -4,460.00 -7,000.00 2,540.00 36 -27,401.00 -42,000.00 14,599.00 35 -84 -57
43810-00 STAFF WELFARE ACCOMODATION 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43820-00 S.WELFARE FOOD/BEV -330 -385 55 14 -1,980.00 -2,310.00 330 14 -5 -3
43830-00 STAFF WELFARE TRAINING -800 0 -800 NO BGT -890 0 -890 NO BGT 0 1
43840-00 STAFF WELFARE UNIFORM -994 0 -994 NO BGT -3,486.00 -73,240.00 69,754.00 95 -83 -80
43850-00 MEDICAL -342 -190 -152 -80 -1,041.00 -1,140.00 99 9 -2 -1
43870-00 S.WELFARE OTHERS -3,018.40 -10,087.00 7,068.60 70 -80,382.27 -60,522.00 -19,860.27 -33 -121 -41
43871-00 STAFF WELFARE-SRC 0 -1,100.00 1,100.00 100 -6,120.00 -6,600.00 480 7 -13 -7
43880-00 STAFF WELFARE-UNUTILISED L 0 0 0 NO BGT 0 0 0 NO BGT 0 0
SUB-TTL 43E100 HUMAN RESOURCES -26,348.29 -52,131.00 25,782.71 49 -293,801.57 -532,896.00 239,094.43 45 -904 -610
40720-00 DEPRECIATION -1,317.63 -3,220.00 1,902.37 59 -7,371.29 -19,320.00 11,948.71 62 -39 -31
SUB-TTL 44E100 DEPRECIATION -1,317.63 -3,220.00 1,902.37 59 -7,371.29 -19,320.00 11,948.71 62 -39 -31
43720-00 SALARY PROFIT SHARING - ST -59,480.13 -1,575.86 -57,904.27 -3,674 -84,170.42 -7,304.78 -76,865.64 -1,052 -14 70
43721-00 SALARY PROFIT SHARING - DI 0 0 0 NO BGT 0 0 0 NO BGT 0 0
43775-00 EPF SALARY P/SHARING - STA -7,137.61 -189.1 -6,948.51 -3,675 -10,007.75 -876.58 -9,131.17 -1,042 -2 8
43776-00 EPF SALARY P/SHARING - DIR 0 0 0 NO BGT 0 0 0 NO BGT 0 0
SUB-TTL 45E100 PROFIT SHARING -66,617.74 -1,764.96 -64,852.78 -3,674 -94,178.17 -8,181.36 -85,996.81 -1,051 -16 79
TOTAL -100,336.40 -83,561.96 -16,774.44 -20 -453,978.50 -663,143.36 209,164.86 32 -1,207 -753
Page 45 of 100
Sample HR CAPEX Budget
ABC SDN BHD
BUDGET: _________________
NEW CAPITAL EXPENDITURE/FIXED ASSETS
DATE
A/C OF
CODE DESCRIPTION PURCHASE RM JUSTIFICATION/REMARKS
3110003000 Plant & machinery -
3110004000 Equip & tool - factory/warehouse -
3110004010 Equip & tool - lab -
3110004030 Equip & tool - office 2,000.00 Estimation
3110004040 Equip & tool - maintenance -
3110004050 Equip & tool - function & events -
3110004500 Electrical installation -
3110005000 Air conditioner -
3110005500 Furnitute & fittings 2,000 Estimation
3110006000 Computer Hardware
Laptop Scheme - 10 units thru out 2009 50,000 Company Laptop Scheme
Desktop - 10 units (Contingency thru out 2009 35,000 Desktop 10 units- Contigency Fund
Scanner 2008 Qtr 1 800 HR matters eg scanning of staff photos
PC Ram -additional 1GB 2008 Qtr 1 400
As actual specified RAM is not
compatible & not sufficient for XP
operating system
Maybank2e.net Devices 2008 Qtr 1 1,000 To assist salary crediting process
Desktop -1 unit (HRM) 2008 Qtr 1 3,500 Replacement
3110006500 Computer Software
Laptop Scheme - 10 units thru out 2009 15,000
Desktop - 10 units (Contingency
Funds) thru out 2009 15,000
Desktop - 1 unit (HRM) 2008 Qtr 1 1,500
3110007000 Motor vehicle -
126,200.00
Page 46 of 100
Sample HRDF Budget Report
HR
DF
Re
po
rt
Last
update
d:
31/0
7/0
909/0
9/0
9
Ju
l-09
Au
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9S
ep
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Oct-
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31/0
7/0
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24/0
8/0
9
To
tal
HR
DF
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b/f
120,0
74.0
7 1
18,3
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8
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ly C
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trib
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to
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7
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Page 47 of 100
EA Form
Page 48 of 100
Employee Benefits and Income earned by Staff exempted from Income Tax
With effect from YA 2008, employees are given tax exemption on allowances, benefits in kind and perquisites that received from their employer as follows:
(a) perquisites in relation to travel allowance, petrol card, petrol allowance or any of its combination for travelling between the home and work place up to RM2,400 per year.
(b) perquisites in relation to travel allowance, petrol card, petrol allowance or toll rate or any of its combination for travelling for official duties up to RM6,000 per year.
(c) parking rate or parking allowance.
(d) meal allowance.
(e) child care allowance of up to RM2,400 a year.
(f) gifts and monthly bills for fixed line telephone, mobile phone, pager, or broadband.
(g) the amount of subsidy on interest of housing, education or car loan shall be determined in accordance with the following formula: A x (B / C)
A – difference between the amount of interest to be borne by the employee and the amount of interest payable by the employee in a basis period for a year of assessment;
B – the total aggregate of balance of the principal amount of the housing, education or car loan taken by the employee in a basis period for a year of assessment or RM300,000.00, whichever is the lower; and
C – the total aggregate of the principal amount of the housing, education or car loan taken by the employee.
(h) medical benefits exempted from tax be extended to include expenses on maternity and traditional medicines.
(i) discounted price for consumable business products of the employer up to RM1,000 per year.
(j) discounted price for services provided by the business of the employer and for the benefit of the employee, spouse and child of the employee.
The above exemptions are not extended to an employee where the employee has control over his employer. All the above proposals are effective from Y/A 2008 except for item (a) which is effective from Y/A 2008 to Y/A 2010.
Page 49 of 100
Malaysia Income Tax Guide 2014
Whenever the tax season rolls around (that’s 1st March to 30th April), there is
inevitably a sense of worry amongst the public because there are many financial,
technical and even legal considerations to be taken into account when filing in at
Lembaga Hasil Dalam Negeri (LHDN or Hasil) or online.
Two key things to remember:
1. Tax rates are Progressive, so you only pay the higher rate on the amount above the
rate (i.e. you will never have less “net income after tax” by earning more!).
2. Tax rates are on Chargeable Income, not salary or total income. Chargeable income
is calculated after tax exemptions and tax reliefs (more below).
First off, we start with the table for personal income tax rates in Malaysia for the
Assessment Year 2013, so everyone would be able to cross-check the tax bracket and
the amount of tax needed to pay.
Chargeable Income (RM) Calculations (RM) Rate (%) Tax(RM)
0 - 2500 On the first 2,500 0 0
2,501 - 5,000 Next 2,500 0 0
5,001 - 10,000 On the first 5,000
Next 5,000 2
0 100
10,001 - 20,000 On the first 10,000
Next 10,000 2
100 200
20,001 - 35,000 On the first 20,000
Next 15,000 6
300 900
35,001 - 50,000 On the first 35,000
Next 15,000 11
1,200 1,650
50,001 - 70,000 On the first 50,000
Next 20,000 19
2,850 3,800
70,001 - 100,000 On the first 70,000
Next 30,000 24 6,650 7,200
Page 50 of 100
Chargeable Income (RM) Calculations (RM) Rate (%) Tax(RM)
Exceeding 100,000 On the first 100,000
Next RM 26 13,850
Budget 2014 update: 1-3% reduction in tax rates but only after 2015!
Many would have heard about the announcement in the Malaysia Budget 2014 (on 25th October 2013), where personal income tax rates are being reduced across the board by 1-3% for the assessment year 2015 (filing in March/April 2016). As it doesn’t affect Assessment Year 2013 (or even 2014) tax returns, we’ve put it in this accordion, but we’ll come out with a full guide once its closer to the date.
Page 51 of 100
Chargeable Income
Tax Rate (2013 and 2014) Cumulative Tax
Tax Rates (2015 - ) Cumulative Tax Saving
From RM1 - RM5,000
0% RM0 0% RM0 -
From RM5,001 - RM20,000 2%
RM300 (RM0 after RM400 rebate) 1%
RM150 (RM0 after RM400 rebate) -
From RM20,001 - RM35,000
6% RM1,200 (RM800 after RM400 rebate)
5% RM900 (RM500 after RM400 rebate)
RM300
From RM35,001 - RM50,000
11% RM2,850 10% RM2,400 RM450
From RM50,001 - RM70,000
19% RM6,650 16% RM5,600 RM1,050
From RM70,001 - RM100,000
24% RM13,850 21% RM11,900 RM1,950
From RM100,001 - RM250,000
26% RM52,850 24% RM47,900 RM4,950
From RM250,001 - RM400,000
26% RM91,850 24.5% RM84,650 RM7,200
RM400,001 and Above
26%
25%
Page 52 of 100
How Much Do I Have To Earn Before Paying Income Tax? For most residents of Malaysia, the key figure to take note of is about “RM36,704 per
year (about RM3,060 per month)” which is inclusive of all benefits, allowances,
bonuses, overtime and commissions. If you’re earning anywhere below that figure, then
there’s no need for you to open up a file for tax to be deducted from your income
(while the con is that you’re not earning as much as you’d like, the pro is that there’s
less hassle from a tax perspective!).
How did we determine that any income below RM36,704 (about RM3,060 per
month) is not taxable? Take a look at our quick guide to the tax cut-off point for
Malaysia below.
However, if you do earn above that, you need to have a tax file opened with your
income tax automatically deducted from your income (welcome to the world of big
money!).
Some extra notes about income tax that you may find interesting:
1) For non-residents of Malaysia (people who have been living in the country for less
than 182 days per year), the tax rate has been set at 26% on all the income that has
been earned in Malaysia. regardless of your citizenship or nationality. However, there
are some exceptions to the matter. Certain professions such as public entertainers
(15%) as well as those who receive payments for services in connection with the use of
property or installation, payments for technical advice and rent (10%) are taxed
differently.
2) You may still be overpaying or underpaying on your tax, even if you are a salaried
worker or civil servant under a Potongan Cukai Bulanan (PCB), a Monthly / Schedular
Tax Deduction (MTD) system or if you are self-employed / own your own business.
What is Chargeable Income in Malaysia? As mentioned before, the tax rates above are effected on a person’s Chargeable Income
(rather than salary or total income, in fact, the amount of the chargeable income is
usually much lower). Now I’m sure many of you first-timers may be wondering what
your “Chargeable Income” is.
You take the following equation and apply where necessary:
Page 53 of 100
Chargeable Income = Taxable income – Tax exemptions – Tax Reliefs
Check out the example below for a general idea:
You are earning a RM40,000 salary, you have a RM2,000 local bank interest income as
well as RM13,000 from property rental income a year. That should bring your
chargeable income to RM55,000 correct? Nope, that’s not the way to go about it. Even
without taking into account the many tax reliefs available, every taxpayer gets the
standard RM9,000 individual tax relief as well as a maximum relief of RM6,000 for EPF
contributions. That means your EPF contribution is calculated at 11% of RM40,000, i.e.
RM4,400. Also, while “interest” is taxable income (more on this below), all local bank
interest income is tax exempted (lucky us!).
Therefore, your Chargeable Income (by applying the aforementioned formula) will
actually be:
RM55,000 – RM2,000 – (RM 9,000 + RM4,400) = RM39,600.
And there you have it! A much lower figure than which you initially thought would be
the amount!
Taxable Income in Malaysia Taxable income actually refers to the “base upon which an income tax system imposes
tax”. In general, the Lembaga Hasil Dalam Negeri (LHDN) organisation includes all kinds
of earnings which the Malaysian taxpayers have to pay for, but which is reduced by
expenses and other deductions. Some of them include the following:
1. General Taxable Income
a) Business or Profession
b) Employment
c) Dividends
d) Interest (except bank deposit interest)
e) Discounts
f) Rent
g) Royalties
h) Premiums
i) Pensions
Page 54 of 100
j) Annuities
k) Others
2. Perquisites
Perquisites are taxable benefits that can be converted to cash and are given to an
employee from his/her employer.
Examples of which include:
1) Bill Claims
If your employer pays your utility, mobile phone, income tax, road tax or car insurance
tax bills for you, then the amounts paid are considered to be perquisites and are
taxable.
Example: John’s company pays his RM100 mobile phone bill. Then the amount of
RM100 is a perquisite and is taxable
2) Company Credit Card
If your employer provides you with a credit card to make purchases on behalf of the
company, but you use that card instead for personal use, then any retail purchases you
make including the annual fee of the credit card are considered to be perquisites and
are taxable.
Example: Tom uses the company credit card which has an annual fee of RM200, to
purchase a flat screen TV worth RM5000 for his home. Then the amount of RM5200 is a
perquisite and is taxable.
3) Loan from Company
If your employer provides you with a interest free loan and the source of funds for the
loan is derived from extra company funds, then the loan is considered to be a perquisite
and is taxable.
Example: Leonard’s boss grants him an interest free loan of RM6000 using extra
company funds. Then the amount of RM6000 is a perquisite and is taxable.
Page 55 of 100
Or if your employer provides you with a loan with funds taken from a third party source
such as a bank etc. Then the difference in interest paid by the employee and the
employer is considered to be a perquisite and is taxable.
Example: Keith’s boss gives him a loan with 4% interest using company funds taken
from a local bank. The bank in turn, charged the company 8% interest for the initial
loan. If the company paid a total of RM900 of interest payments to the bank while Keith
paid a total of RM460 in interest payments to the company. Then the amount of RM900
– RM460 = RM440 is considered to be a perquisite and is taxable.
Or if your employer agrees to waive a loan in exchange for services performed, then the
loan amount is a perquisite and is taxable.
Example: Eddie’s boss gives him a study loan of RM30,000 and agrees to waive the loan
if he stays and works with the company for a minimum of 36 months. If Eddie
successfully completes this agreement and the loan is waived, then the amount of
RM30,000 is considered a perquisite and is taxable
4) Sponsored Club Membership
If your employer provides you with an individual club membership (not corporate), then
the cost of the membership is considered to be a perquisite and is taxable.
Example: Bruce is provided with an individual country club membership by his
company. The annual fees of the membership are RM400. Then the amount of RM400
is a perquisite and is taxable.
5) Sponsored Child Tuition Fees
If your employer pays for your child’s tuition fees, then the amount paid is considered
to be a perquisite and is taxable.
Example: Shawn’s company pays for the school fees of his son, Ross. The annual school
fees amount to a total of RM10,000. Then the amount of RM10,000 is a perquisite and
is taxable.
6) Company Insurance Premiums
Page 56 of 100
If your employer pays for an insurance premium that covers yourself and your
immediate family. Then the annual amount of premium paid is considered to be a
perquisite and is taxable.
Example: Richard’s company pays for an insurance package that covers himself and his
wife and five children. The annual amount of premium paid is RM900. Then the amount
of RM900 is a perquisite and is taxable.
7) Personal Driver, Guard or Maid
If your employer allows reimbursements on the salary of personal drivers, guards or
maids, then the amount that is reimbursed is considered to be a perquisite and is
taxable.
Example: Colin’s company allows him to reimburse 40% of the cost to hire his personal
driver, Carlo. Carlo’s annual salary is RM25,000. Then the amount of RM10,000 is a
perquisite and is taxable.
8) Special Staff Discounts
If your employer grants special staff discounts for certain products with monetary value
such as cars, furniture, electronics etc. Then the amount of discount given is considered
to be a perquisite and is taxable.
Example: Nathan’s company, BMW, grants him a special employee discount of 15% if he
chooses to buy a BMW. If Nathan buys a BMW worth RM250,000 but only pays
RM212,500 due to the 15% discount. Then the discount amount of RM37,500 is
considered to be a perquisite and is taxable.
9) Gift Vouchers
If your employer gives you gift vouchers with monetary value during festive seasons
such as Chinese New Year or Hari Raya. Then the monetary value of such gift vouchers
is considered to be a perquisite and is taxable.
Example: Donald’s company awarded him a RM100 Tesco voucher during Chinese New
Year. He subsequently used that voucher to pick up groceries for his family. The amount
of RM100 is considered to be a perquisite and is taxable.
Page 57 of 100
3. Benefits in Kind (BIK)
Benefits in Kind (BIK) are taxable benefits that cannot be converted to cash and are
given to an employee from his/her employer. Since Benefits in Kind do not have a direct
monetary value, there are two ways to determine the value of a BIK, the formula
method or the prescribed value method. Examples of Benefits in Kind include company
provided automobiles, lodging and household furnishing & electronics.
Formula Method:
Value of asset = Annual Value of Benefit
Life span of asset
Prescribed Value Method:
Assigns a predetermined value from a list sorted by classification of asset.
Example: Company Automobile
If your employer provides you with an automobile to use on the job and privately, then
the asset is considered to a benefit in kind and is taxable by the formula method. Any
petrol costs and toll bridge costs which are subsidized by the employer are included in
the total taxable amount as well.
Example: Christopher’s company provides him with a car worth RM81,000 to use to get
to work and travel around in his spare time. He passes by 1 toll bridge on his way to
work which charges RM1.50. Any toll payments he makes are subsidized by his
employer. In addition, his petrol costs are subsidized by his employer as well. In 2013,
he made a total of RM1,800 in toll payments and RM3,000 in petrol payments. For cars,
the prescribed average lifespan is set at a fixed 8 years.
Formula Method:
81,000 X 80% (20% abatement represents the value of the car when returned to the
employer)
8
= RM8,100 + RM1,800 (toll payments) +RM3,000 (petrol payments) = RM12,900
Page 58 of 100
Prescribed Value Method:
Cost of Automobile (RM)
Annual Prescribed Benefit of Automobile (RM)
Annual Prescribed Benefit of Petrol (RM)
Up to 50,000 1,200 600
50,001 - 75,000 2,400 900
75,001 - 100,000 3,600 1,200
100,001 - 150,000 5,000 1,500
150,001 - 200,000 7,000 1,800
200,001 - 250,000 9,000 2,100
250,001 - 350,000 15,000 2,400
350,001 - 500,000 21,250 2,700
500,001 and Above 25,000 3,000
Under the prescibed value method, since the value of the car falls between RM75,001 and RM100,000, then the amount taxable is RM3,600. In addition, his petrol costs are also set at a predetermined RM1,200.
Total Cost:
RM3,600 + RM1,200 + RM1,800 (toll payments) = RM6,600
Page 59 of 100
Tax Exemptions on Income in Malaysia
Tax exemptions in Malaysia come in many forms, and can be defined as “a personal
allowance or specific monetary exemption which may be claimed by an individual to
reduce taxable income”.
Generally speaking, it means they are income items which can be omitted from (we
refrain from using the word deductions here, because tax reliefs are also ‘deducted’
from your taxable income) the individual’s paycheck. Below you will find a full list of
those items along with their respective descriptions, so that you will get a general idea
of what to expect:
1) Leave Passage
Leave passage within Malaysia not exceeding three times in a year and one leave
passage outside Malaysia not exceeding RM3,000.
2) Medical and dental benefit
With effect from the year of assessment 2008, medical benefits exempted from tax is
expanded to include maternity expenses and traditional medicine like ayurvedic and
acupuncture without limit.
3) Retirement gratuity
The full amount of gratuity received by an employee on retirement from employment is
exempt if:
i. The Director General of Inland Revenue is satisfied that the retirement is due to ill
health;
ii. Retirement on or after reaching the age of 55 years/compulsory age of retirement
and the individual has worked 10 years continuously with the same employer or
companies within the same group;
iii. The retirement takes place on reaching the compulsory age of retirement pursuant
to a contract of employment or collective agreement at the age of 50 but before 55 and
that employment has lasted for 10 years with the same employer or with companies in
the same group.
Page 60 of 100
4) Gratuity paid out of public funds
Gratuity paid out of public funds on retirement from an employment under any written
law.
5) Gratuity paid to a contract officer
Gratuity paid out of public funds to a contract officer on termination of a contract of
employment regardless of whether the contract is renewed or not.
6) Compensation for loss of employment
This is payment made by an employer to his employee as compensation for loss of
employment either before or after the date of termination.
This compensation is exempted from tax. If compensation received is due to ill health.
Compensation received in other cases:
i. Termination before 1st July 2008 – exemption of RM6,000 for every completed year
of service with the same employer or with companies in the same group.
ii. Termination on or after 1st July 2008 – exemption of RM10,000 for every completed
year of service with the same employer or with companies in the same group
Compensation received by a director (not service director) of a Control Company is fully
taxable.
7) Pensions
Pensions received by an individual are exempt under the following conditions:
i. He retires at the age of 55 or at the compulsory age of retirement under any written
law; or
ii. If the retirement is due to ill health and the pension is received from the government
or from an approved pension scheme.
For an employee in the public sector who elects for optional retirement, his pension will
be taxed until he attains the age of 55 or the compulsory age of retirement under any
Page 61 of 100
written law. Where an individual receives more than one pension, the exemption is
restricted to the highest pension received.
8) Death gratuities
Monies received as death gratuity is fully exempted from income tax.
9) Scholarships
Any monies paid by way of scholarship to an individual whether or not in connection
with an employment of that individual is exempted from income tax.
10) Cultural performances
Money received under this category is exempted from tax on condition it is approved by
the Minister.
11) Interest
Income in respect of interest received by individuals resident in Malaysia from money
deposited with the following institutions is tax exempt with effect from 30 August 2008:
i. A bank or a finance company licensed or deemed to be licensed under the Banking
and Financial Institutions Act 1989;
ii. A bank licensed under the Islamic Banking Act 1983;
iii. A development financial institution prescribed under the Development Financial
Institutions Act 2002;
iv. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;
v. The Malaysia Building Society Berhad incorporated under the Companies Act 1965;
vi. The Borneo Housing Finance Berhad incorporated under the Companies Act 1965.
12) Dividend
The following dividends are exempt from tax:
i. Dividends received from exempt accounts of companies.
Page 62 of 100
ii. Dividends received from co-operative societies.
iii. Dividends received from a unit trust approved by the Minister of Finance such as
Amanah Saham Bumiputra.
iv. Dividends received from a unit trust approved by the Minister of Finance where 90%
or more of the investment is in government securities.
13) Royalty
Royalties received in respect of the use of copyrights/patents are taxable if they exceed
the following exemption limits:
Types of Royalty Exemption (RM)
Publication of artistic works / recording discs / tapes 10,000
Translation of books / literary works 12,000
Publication of literary works / original paintings / musical compositions 20,000
However, the exemption stated above does not apply if the payment received forms
part of his emoluments in the exercise of the individual’s official duties.
14) Income Remitted from Outside Malaysia
With effect from the year of assessment 2004, income derived from outside Malaysia
and received in Malaysia by a resident individual is exempted from tax.
15) Fees or Honorarium for Expert Services
With effect from the year of assessment 2004, fees or honorarium received by an
individual in respect of services provided for purposes of validation, moderation or
accreditation of franchised education programmes in higher educational institutions is
exempted.
The services provided by an individual concerned have to be verified and acknowledged
by the Malaysian Qualifications Agency (MQA). However, the exemption does not apply
if the payment received forms part of his emoluments in the exercise of his official
duties.
Page 63 of 100
16) Income Derived from Research Findings
With effect from the year of assessment 2004, income received by an individual from
the commercialization of a scientific research finding is given tax exemption of 50% on
the statutory income in the basis year for a year of assessment for 5 years from the
date the payment is made.
The individual scientist who received the said payment must be a citizen and a resident
in Malaysia. The commercialized research finding must be verified by the Ministry of
Science, Technology and Environment.
17) Company Special Service Awards
With effect from the 2007 year of assessment, a tax exemption of up to RM1,000 has
been allocated for company special service cash or prize awards
18) Travelling Allowances
Travelling allowances of up to RM6,000 for petrol and tolls are granted a tax exemption
if the vehicle used is not under ownership of the company.
19) Benefits in Kind Exemptions
Certain Benefits in Kind pertaining to consumable services are not eligible for taxation.
Consumable Services
Example: Dental care, child care benefits, food & drinks, special arranged transportation
between pick-up points and special discounts for consumable products that cannot be
resold (such as food or toiletries etc.)
What Are Tax Reliefs? What about a tax relief? It is defined as “an amount that can be deducted from a
person’s annual income to reduce the amount on which tax is paid”.
To describe it in a more clear and concise manner, it is actually a way for you to lessen
your chargeable income.
Page 64 of 100
Let’s say you took home a monthly paycheck of RM40,000 from your company in 2013
and if there were no tax exemptions or reliefs, your chargeable income will remain the
same and your tax for the year would have been in the 11% bracket.
Now say the Government decides that all Residents of Malaysia should get a personal
tax relief of up to RM9,000 per year. Your chargeable income will now be RM31,000
which means that your tax would be in the 6% bracket.
These are the following reliefs available for Malaysian Residents:
Included in MTD system RM
Self and Dependent 9,000
Life insurance and EPF 6,000
Husband/Wife/Alimony Payments 3,000
Ordinary Child relief (per child) 1,000
Total > 15,000
Not usually included in MTD / PCB system but relevant to most taxpayers RM
Interest expended in 2013 to finance purchase of residential property dated 2010 (but interest payments starting in 2011 only)
10,000
Net saving in SSPN's scheme 6,000
Education Fees (Individual) 5,000
Updated: PRS Voluntary Contribution 3,000
Purchase of personal computer (every 3 years) 3,000
Insurance premium for education or medical benefit 3,000
Special relief for tax payers earning an income of up to RM8,000 a month (RM96,000 anually). Only applicable for the 2013 year of assessment.
2,000
Purchase of books, journals, magazines and publications 1,000
Page 65 of 100
Included in MTD system RM
Complete medical examination 500
Purchase of sport equipment for sport activities 300
Total 29,300
Not included in MTD system but relevant to certain taxpayers RM
Disabled Individual 6,000
Basic supporting equipment (for disabled self, spouse, child or parent) 5,000
Medical expenses for serious diseases 5,000
Disabled child 5,000
Medical expenses for parents 5,000
Child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities
6,000
Disabled Wife / Husband 3,500
Child age 18 years old and above, not married and receiving full-time tertiary education 1,000
Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1,000 can be claimed together with life insurance premium)
1,000
Total > 35,500
Tax Deductions vs Tax Reliefs Most of the time people get confused between Tax Deductions and Tax Reliefs, and its
easy to see why. They are for the most part the same thing, as they both allow you to
reduce your Chargeable Income (that is, before you even start looking at tax rate
tables). In fact most people worldwide use both terms interchangeably, and LHDN goes
one step further and classifies Tax Deductions as a reduction in your Chargeable Income
as a result of Gifts or Donations.
Page 66 of 100
As a rule of thumb, you can deduct up to 7% of your Taxable Income for gifts to
charities and institutions which are approved by the government (not all charities are
approved, so be sure to find out before you donate away!), unless you are giving to a
few selected government-related bodies, where there is less restrictions on the amount
deductible from your income.
For example, if you earned RM60,000 this year, and donated RM5,000 to an approved
charity, you may deduct RM4,200 (ie. 7% of RM60,000) off your chargeable income, in
addition to all those reliefs above.
What are the Tax Rebates in Malaysia for 2014? Some people will be having the question of how is a tax rebate different from a tax
relief? A tax relief is a reduction in your chargeable income (ie. before you calculate
tax) whereas a tax rebate is a reduction in your tax expenseafter you have calculated
your tax for the year.
Tax rebates (or also known as “tax refunds” but done automatically rather than actually
refunded to you). Simply put, there are income tax rebates for Malaysian taxpaying
citizens who are having a chargeable income of less than RM35,000 which is RM400.
There is also an additional RM400 rebate for married couples who have a chargeable
income of less than RM35,000 per year and are eligible for the RM3,000 wife / husband
/ alimony relief.
To give a quick calculation example for tax rebates:
Taxable Income: Salary of RM45,000 a year
Chargeable Income: RM45,000 – RM9,000 Personal Relief – RM2,000 One-off 2014
relief – RM4,950 EPF relief =RM29,050.
Tax calculated using Income Tax Tables (without counting any rebates): RM843
Tax Payable: RM843 – RM400 rebate = RM443
In the above example, you were eligible for the RM400 tax rebate because your
Chargeable Income was less than RM35,000 (it was RM29,050 in that example).
Another type of tax rebate, but which is only applicable for Muslim citizens, is the zakat
/ fitrah. Zakat is a compulsory payment for charity and considered to be compulsory as
it is one of the five pillars in Islam. It can be calculated via the Muslim taxpayer’s
Page 67 of 100
acquired wealth or income. Zakat Fitrah, on the other hand, can be considered to be a
small, compulsory levy that is imposed upon Muslim taxpayers only. It used to be
calculated in the olden days using a pack of rice grains (one pack is equivalent to
approximately 2.7 kg) but in the modern days, it is calculated based on the equivalent
price of this pack rice grains. You can read all about Zakat and the various types that
exists in our guide Zakat in Islam.
So… why is RM36,704 the cut-off point to pay tax? Assuming that you made RM36,704 in 2013…
Chargeable Income
Your Chargeable Income = Your taxable income – (Standard RM9,000 individual tax
relief + 11% EPF Contribution of your salary + Special tax relief of RM2,000 per month)
which means
Your Chargeable Income = RM36,704 – (RM9,000 + RM4,037 + RM2,000) = RM21,667
Based on the tax rate table above, RM21,667 would be taxed RM300 on the first
RM20,000 and RM100 on the remaining RM1,667 which brings it up to about RM400 in
tax.
RM400 Rebate
After taking into account the RM400 rebate for those with a chargeable income of
RM35,000 or less, you’ll be paying
RM400 – RM400 = RM0 (no tax, yay!) PCB / MTD System: Has your employer paid too much tax for you?
First off, do you know what the words “PCB / MTD” mean? The words are actually
acronyms for “Potongan Cukai Bulanan / Monthly Tax Deductions”.
How this works is that your employer will automatically deduct a certain amount from
your salary every month to pay for tax on your behalf, going towards paying your tax for
the year. This type of deduction is different from the basic Employees Provident Fund
(EPF) and Social Security Organization (SOCSO) monthly deductions.
Therefore, one can sum up that the MTD is calculated from one’s gross salary minus the
EPF deductions of up to RM6,000 per year. If you were to take a closer look at the sum
of the total MTD for the year, you will realise that the figure will be very close to your
Page 68 of 100
actual tax expense for the year, but given that your company has no idea of your
additional reliefs other than being married or having children (such as Books, Sporting
equipment etc.), they are very likely to have been overpaying for you.
Even without taking into account those extra reliefs, the PCB/MTD schedules aren’t
100% accurate (and typically overpay tax on your behalf), as we will see shortly below:
Salary Gross Salary MTD Salary MTD
Deduction Actual Tax Expense
Paid too much / (little)
Monthly Amount RM3,500 RM3,115 RM34 RM23.55 RM10.45
Total Amount for 2013
RM42,000 RM37,380 RM408 RM282.60 RM125.40
Final Reminder
The 2013 tax assessment year follows the calendar year, so the 2013 tax year is
effective from 1st January 2013 to 31st December 2013.
Taxpayers can start submitting their income tax return forms for the year of assessment
2013 through e-filing as well. The due date for the submission of return forms are as
follows:
1) Employers (Form E) is 31 March 14
2) Residents and non-residents with non-business income (Form BE and M) is 30 April
14
3) Residents and non-residents with business income (Form B and M) is 30 June 14
4) Partnerships (Form P) is 30 June 14
Finally, do take note that you must keep records for 7 years from the date of filing so
don’t throw away any receipts or evidence of tax reliefs, keep them in a file sorted by
tax year.
Page 69 of 100
Salary & Benefits Consideration of principles for the determination of salary of a person.
Exercise 5.1 Employee A has been a Manager with ABC Company for 3 years and is currently earning a monthly salary of RM 5,040. Is Employee A paid fairly for his job?
Exercise 5.2 The grid shows ABC Company’s salary scale for a Manager: Indicate Employee A’s salary on the scale above. Is Employee A’s pay considered to be low, high or fair?
Exercise 5.3 A simple equation for determining the salary position of Employee A is by using the formula
= Salary of Employee Midpoint of Salary Scale
= RM 5,000 RM 6,300 = RM 0.80
Indicate on the grid the salary position of Employee A How far is Employee A’s salary from the Midpoint of the scale in terms of percentage?
RM 6,300
RM 8,190
RM 4,725
RM 6,300
RM 8,190
RM 4,725
1.30
1.0
0.75
Page 70 of 100
Salary & Benefits Consideration of principles for the determination of salary of a person. Compa-ratio (comparative ratio)
Refers to the salary position in the salary scale. A compa ratio of 1.0 is at the mid-point of the salary scale. On compa-ratio of 0.75 is at the lower end and a compa-ratio of 1.3 is at the top end.
In order to set individual salaries compared to market related salary, the usual measure used is compa-ratio.
The compa-ratio (C-R) is a reference that shows the relative position of an employee’s salary compared to the mid-point salary of a particular job grade. The compa-ratio of an employee’s salary is determined by the following method:
Current salary of employee is compared with mid-point salary of the job grade For example: Salary of Employee = C-R Mid-point Salary of Grade
Before awarding annual increments it is usually necessary to determine an employee’s current salary position (Compa ratio).
A compa ratio of lower than 0.75 indicates lower than job rate and a compa ratio of higher than 1.30 indicates higher than job rate. If the organization’s pay philosophy is to pay job rate than these indications are
minimum and maximum points for the job.
New salary scale
Mkt. mid point
130%
(CR 1.30)
Mid point (100%)
(CR 1.0)
X 70%
(CR 0.7)
Job points
SalaryRange
Sal
arie
s (R
M)
Page 71 of 100
Salary & Benefits Consideration of principles for the determination of salary of a person. The major factors to be considered in determining the salary of a person are:-
Step One – determine job grade in line with his job responsibilities
Refers to the job currently being held by the incumbent. It does not necessarily reflect the incumbents’ career status.
Step Two - Career Level (career grade)
Refers to capability ranking. Often due to business reasons the incumbent could be in a similar or a bigger job grade then his ability. Therefore, for proper management of people, organizations have to maintain information about a person’s career progression and capability level usually referred to as career level. For example, an Engineer with 6 years of relevant industrial experience after graduation should be considered as being in a career level higher then one who just graduated – refer page
Step Three - Years of relevant service
Refers to “seniority” in the job grade. The critical consideration is relevant work experience in the job level with performance rated as competent or better. Please refer facing page.
Step Four - Current Total Cash (Value)
Basic salary
Entertainment allowances
Transport allowances
Housing allowances
Domestic help allowances
Other fixed cash allowances
Page 72 of 100
Process for Determining Salary - continued
Performance Rating
Consideration of the incumbent’s record of performance over the immediate business performance period. Pay for performance is the factor that separates the best companies from the rest. Where management have developed and established a performance management process which is effective and accepted it becomes a key management tool for employee motivation. On the other hand, where the process has low acceptance it creates demotivation for the large majority of employees. Shown here is the best practice standard on salary positions (C-R) for different performance levels.
Rating Compa-ratio
Distinguished
Consistently exceeds most requirements associated with the position
Accomplishments are outstanding to the standards expected for the position and sustained over the review period
5
1.21 1.30
Commendable
Exceeds most requirements associated with the position
Accomplishments are very good (superior) and more than required by the job
4
1.13 –
1.20
Competent
Meets all the requirements associated with the position
Accomplishments are clearly in accordance with the job demands
3
0.97 –
1.12
Adequate
Meets some of the requirements associated with the position
Accomplishments are below expectations demanded of the job
2
0.89 –
0.96
Entry zone / unsatisfactory
Does not meet most of the requirements associated with the position
Consistently fail to meet expectations and standards in most area
1
0.88 – 0.75
Page 73 of 100
Avera
ge S
ala
ry In
cre
men
t an
d B
on
us b
y S
ecto
r in 1
999, 2
000 a
nd
2001
6
8
66
6
5
7
8
7
7.5
77
8
7
7.5
77
9
7.3
7.4
1.5
3.5
2
1.5
1.5
3
1
2
3
22
2
2.5
2
3
2
33
21
.72
2
5.5
7.5
8.5
7.5
6.5
7.8
1.6
1.5
1.5
1.5
2.5
0 1 2 3 4 5 6 7 8 9
10
Genera
l
Mark
et
Pla
nta
tion
Fin
ance
Consum
er
Insura
nce
ITM
anufa
ctu
ring
Moto
r Tra
de
Pro
perty
Salary Increses (%)
Inc 1
99
9(A
ctu
al)
Inc 2
00
0 (A
ctu
al)
Inc 2
00
1(F
ore
ca
st)
Bo
nu
s 1
99
9 (A
ctu
al)
Bo
nu
s 2
00
0(A
ctu
al)
Bo
nu
s 2
00
1(F
ore
ca
st)
Page 74 of 100
Process for Determining Salary - Annual Increment
The rate for job principle is usually accepted as fair and the first condition for equitable salary practice. If an individual is in the wrong job then the application of the principle will not produce the desired results.
The second major factor is the performance rating of the individual.
The third major factor is the average annual increment paid by peer companies for the year 2001. Shown below is the estimated annual increment for the year 2001 and the forecast for the year 2002.
Average Salary Increment, CPI & Unemployment
6 6.3
7.8 8.3 7.99 9.2 9.2 9
5
3
67 7.5
5.9
3.93 2.9 2.8 2.8 2.6
6.56
3 2.8 2.93.2 3.74.7
3.6 3.7 3.4 3.7 3.5
7 7
43.5 3.5
6.3
4.4
4.5
0
2
4
6
8
10
12
14
16
18
20
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
(e)
2001
(f)
GDP(%)
Average Salary Increment Unemployment CPI
5.4 -7.59.59.58.38.9 9.2 9.7 8.7 7.8 5.4 5.8 7 5 GDP(%)
2002
(F)
Page 75 of 100
Determination of Annual Increment using the performance – Annual Increment Matrix
This matrix combines the average annual increment of 7% with the compa-ratio range of
0.75 to 1.30.
Performance Rating Descriptions
Compa Ratio
<0.75 0.76-0.88
0.89-0.96
0.97-1.04
1.05-1.12
1.13-1.30
>1.31 Average
Performance Rating
Consistently exceeds most requirements associated with the position
Accomplishments are outstanding to the standards expected for the position and sustained over the review period
5 Distinguished
10 9 9 9 8 8 7
10.5
Exceeds most requirements associated with the position
Accomplishments are very good (superior) and more than required by the job
4 Commen
dable 9 9 8 8 7 7 6
8.5
Meets all the requirements associated with the position
Accomplishments are clearly in accordance with the job demands
3 Compet
ent 9 8 8 7 6 6 6
6
Meets some of the requirements associated with the position
Accomplishments are below expectations demanded of the job
2 Adequat
e 5 4 4 4 3 3 3
3.5
Does not meet most of the requirements associated with the position
Consistently fail to meet expectations and
1 Unsatisfactory
0 0 0 0 0 0 0
0
Page 76 of 100
standards in most areas
Page 77 of 100
The best practice model for annual increment decision Most organizations want to recognize performance
It is usually an HR objective that superior performers must be rewarded appropriately
It seems logical that inflation and the prevalent market practice on annual increment be significant considerations in setting the annual increment policy.
In summary, the factors influencing annual increment decision are :-
Prevalent market
practices
Annual
Increment
Value
Organisation
business
performance
Individual’s
performance
Annual increment communicated to
employees as an indicator of
individual performance and
organization performance
Inflation
Predicted future
business
conditions
Determination of
average annual
increment
Page 78 of 100
Exercise 5.4 How to fill up the Annual Increment Matrix
Performance Rating Descriptions
Compa Ratio
<0.75 0.76-0.88
0.89-0.96
0.97-1.04
1.05-1.12
1.13-1.30
>1.31 Average
Performance Rating
Consistently exceeds most requirements associated with the position
Accomplishments are outstanding to the standards expected for the position and sustained over the review period
5 Disting
uished
Exceeds most requirements associated with the position
Accomplishments are very good (superior) and more than required by the job
4 Commendable
Meets all the requirements associated with the position
Accomplishments are clearly in accordance with the job demands
3 Compet
ent
Meets some of the requirements associated with the position
Accomplishments are below expectations demanded of the job
2 Adequa
te
Does not meet most of the requirements associated with the position
Consistently fail to meet expectations and standards in most areas
1 Unsatisfactory
1. Insert the anchor Value (Performance Rating of 3 and Compa Ratio of 0.97-1.04) by using the Average Market
Increment Practice
2. Fill up the rest of the matrix with figures that you feel will be motivating for superior performers and manageable within the company's budget.
Page 79 of 100
Employee HR103 has a compa
ratio of 3.23 based on the
current salary scale but only
1.20 when compared to other
companies’ practice.
This shows that the current job
salary scale is unmatched with
market practice.
Example of Increment Calculation:
Intern
al
Co
mp
arison
Extern
al
Co
mp
arison
N
o
Dep
artmen
t E
mp
loyee
Nu
mb
er
Nam
e
Positio
n
Cu
rrent
Co
Grad
e
Mark
et
Job
Grad
e
Ag
e P
erform
anc
e Ratin
g
Con
tractual
Bonu
s (# N
o
of M
on
ths)
An
nu
al
Base S
alary
(RM
)
Co
Com
pa
-ratio
An
nu
al
Mark
et M
edian
(RM
)
Mark
et
Com
pa
-Ratio
Incr
(%)
Pro
posed
(An
nu
al R
M)
1
HR
1
1
A
GM
HR
G
3
10
52
2
0
252
,00
0
3.2
3
210
,00
0
3
.00
259
,56
0
2
HR
2
2
B
Sen
ior
Man
ager
G3
8
50
2
0
145
,20
0
1.8
6
132
,00
0
3
.00
149
,55
6
3
HR
2
2
C
Sen
ior
Man
ager
G1
7
48
1
0
96,0
00
2.5
4
96,0
00
0
96,0
00
4
MIS
134
D
Man
ager
G3
7
37
1
0
78,0
00
1.0
0
78,0
00
0
78,0
00
5
Sales &
Mark
eting
23
E
Man
ager
G3
7
41
2
0
66,0
00
0.8
5
66,0
00
4
.00
68,6
40
6
Ad
min
3
4
F
Ad
min
M
anag
er G
3
7
43
0
2
60,0
00
0.7
7
60,0
00
0
60,0
00
7
Ad
min
1
4
G
Sen
ior
Man
ager
G3
6
43
2
0
120
,00
0
1.5
4
120
,00
0
3
.00
123
,60
0
8
Fin
ance
3
5
H
Man
ager
G1
5
52
1
0
84,0
00
0.7
3
84,0
00
0
84,0
00
9
Pro
du
ction
67
I M
anag
er G
7
2
37
3
0
36,0
00
0.9
5
36,0
00
7
.00
38,5
20
Page 80 of 100
Exercise Determination of Annual Increment Determine the proposed salary increment and new compa ratio for the following positions:
Company Name Position Salary
Job Points
Job Grade
Performance Rating
Market Median
Market CR
Proposed Incr %
Proposed Salary
New CR
ABC General Manager 17,300 9 5
ABC Finance Executive 1,850 1 3
ABC Marketing Manager 4,000 5 2
ABC Engineer 2,100 1 2
ABC Senior Manager 7,200 6 3
1. Based on
Market Practice
range
2. Based on
Annual
Increment Model
3. Add current
salary with
Increment %
4. Calculate
New CR
Page 81 of 100
Considerations for handling discrepancy between Current Salary and Appropriate Salary In correcting the discrepancy between the employee’s individual salary position as determined by job grades and performance level, as compared with current salary, it seems reasonable to keep in view the following factors:
Are people occupying positions that are not appropriate with their expected career level (professional qualifications). What is their relative performance level and potential for higher level performance. This consideration should lead to movements – transfers and promotions or at least counseling
Bearing in mind past practices (culture of organization), to what extent can salary increase be “suspended “ till “acceptable level of performance is demonstrated.
Are there opportunities for employees to participate in programmes for performance improvement (such as job related training and other development) activities.
What is the time span available to the organization in attempts to bring salaries within acceptable salary
ranges.
Page 82 of 100
Communications Organizations differ widely on how much information they communicate about their reward systems:
Some companies communicate grades and salary scales and all process information i.e. how jobs are evaluated, how salary scales are detrmined, etc. Job Points of positions are usually not revealed.
Some companies do not have grades, they only reveal salary scales and the individual’s salary
Some companies reveal the salary of the individual only
Open systems put considerable pressure on organizations to do an effective job of administering rewards. Policies such as merit pay/increase are difficult and
time consuming to defend. Many companies want to spend little time in administering but still want the merit system practice secrecy, although secrecy
in turn may limit the effectiveness of the merit pay plan.
Page 83 of 100
Total Compensation Architecture
The kind of rewards that organizations give to individuals can vary widely. Money can come in many forms – base salary, fixed allowance (housing allowance), and other cash benefits. Organizations can
choose to reward people almost exclusively with cash, down playing fringe benefits, and status symbols. The choice of what form of rewards to give the individuals needs to be driven by a clear feeling of what
type of climate the organization wants. The following is an example overall compensation architecture for salary, benefits and incentives
Market Practice Desired Current compensation
practice of most organisations Ideal Business related practice?
60%
25%
15%
50%
40%
10%
?
?
?
SALARY
BENEFITS
INCENTIVES
Incentive Schemes (Key Features) Taking a leading position on compensation and publicizing it can contribute to an organization,
being seen as the best company to work for in the industry. This desirable effect can also discourage employees from looking elsewhere, because they perceive it as unlikely that they will find a better paying company elsewhere.
If the ‘rates are the best’ and the corporation pays for performance very significantly then the feeling among employees would be that the organization ‘demands the best’ gets the best and will tolerate only the best. This practice develops a culture of organization excellence and commands significant respect for the organization.
However, there are major challenges with implementing a strategy of being a leading payer in the
industry
Before the Incentives are designed, it is critical that Key Success Factors of the business are appropriately determined. It is also important that the schemes be able to integrate all staff.
We need to be able to measure and reward Organization Performance as well as Team and Individual Performances. This can be done systematically by first determining the Key Performance Indicators for the business, then the major teams, then the individuals.
Page 84 of 100
Types of Incentive Schemes The Incentive Schemes proposed can been categorized into two: 1. Short Term Strategies – to motivate employees to produce short term results e.g. Revenue, Profits, Cost
objectives etc 2. Long Term Strategies – to motivate employees to build and develop the organization to achieve future goals
and objectives e.g. Five year Return on Capital Employed target etc The role of compensation management demands strategic business thinking. Don’t get stuck with particular, out dated human resource thinking on procedures. Keep in touch with the business aspirations of the organisation. Be creative. Seek to gather information from anywhere. Manage expectations and deliver business results.
Page 85 of 100
Models for Performance Incentive – PRODUCTION related
1. Fixed Salary Proportion (Fixed Personal, Variable Team)
Performance Incentive = Fixed Quantum + Example: Weekly Bonus Pool Staff strength Monthly basic salary per employee
RM 40,000 (refer to table below) 360 RM 500
Fixed Quantum per week = RM 100 x 360 employees Balance sum in Pool Equivalent month bonus (after 4 weeks) Cash bonus per employee
= = = = = =
RM 36,000 RM 40,000 - RM 36,000 RM 4,000 RM 4,000 x 4 weeks = RM 16,000 RM 44.44 per month RM 533 per year
Team Target Achievement Weekly Bonus Pool
5 4 3 2 1
RM 48,000 RM 44,000 RM 40,000 RM 36,000 RM 36,000
Balance Sum in Bonus Pool
Monthly basic payroll
This can be determined by management using any
available measure
E.g. % of productivity, % of sales, % of margin,
% of cost savings etc.
Page 86 of 100
Models for Performance Incentive 2. Two-tier Multiplier (Variable Personal, Variable Team)
Performance Incentive = Weekly Personal Target Achievement + (Personal Target Achievement x Team Performance Multiplier)
Personal Target Achievement Weekly Incentive
5 4 3 2 1
RM 120 RM 110 RM 100 RM 90 RM 80
Personal Target Achievement
Monthly Incentive Bonus Multiplier Team Target Achievement
5 4 3 2 1
RM 120 RM 110 RM 100 RM 90 RM 80
x
1.0 0.75 0.5
0.25 0
5 4 3 2 1
Example:
Personal Target Achievement Weekly Incentive Bonus
4 RM 110
Personal Target Achievement Monthly Incentive Bonus Multiplier Team Target Achievement
4 RM 110 x
0.25 2
Employee incentive = RM 110 per week
= RM 440 per month
Cash bonus per employee = RM 110 x 0.25 per month
= RM 27.5 per month
= RM 330 per year
Page 87 of 100
Models for Performance Incentive 3. Team Ratio Plan (Variable Personal, Fixed Team) Performance Incentive = Weekly Team Ratio x Personal Target Multiplier The management has to fix the Team Ratio for each Team at the beginning of the month. The Team Ratio can be any performance indicator that the management wants to track in a particular team or line e.g. Attendance, Reject Rates, Punctuality etc. The objective of this plan is to ensure that the employees personally match up to the performance of the team in order for any incentive payout to happen.
Team Ratio (attendance)
Weekly Incentive per employee Multiplier Personal Ratio (attendance)
100% 95% 90% 85%
< 85%
RM 170 RM 150 RM 120 RM 100 RM 75
x
1.5 1.25 1.0
0.75 0.5
100% 95% 90% 85%
< 85%
Example:
Team Ratio Weekly Incentive Bonus Multiplier Personal Ratio (attendance)
90% RM 120 x
0.75 70%
Incentive per
Employee = RM 120 per week x 0.75
= RM 90 per week
= RM 360 per month
Page 88 of 100
SHORT TERM Incentives for SALES
Bonus percentage
Bonus % of Base Salary / Midpoint
Branch Branch Manager
Individual Parts Service
Distinguished 30% 25% 20%
Target 20% 15% 10% Threshold 10% 7.5% 5%
Branch Manager Example Base Salary:RM40,000 Performance Measure
Weight Threshold 7.5%
Target 15%
Distinguished 25%
Total Assets 25% Objective: Payout:
RM470,000 750
RM500,000 1,500
RM550,000 2,500
ROA 25% Objective: Payout:
Income 25% Objective: Payout:
Expenses 10% Objective: Payout:
Personal 15% Objective: Payout:
Total 100% RM3,000 RM6,000 RM,10,000
Page 89 of 100
Architecture for Influencable Results incentive 2 – tiered plan
Tier 1: Local (Direct influencable results)
Tier 2: Next level up
Region
Branch Branch Branch Branch
Function Function Function
Tier 1
Tier 2
If we take the Sales function for example, the Tier 1 performance criteria would be Sales Volume or Revenue and the Tier 2 criteria will be Branch Profitability. Some examples of Measurable Criteria:
Revenue Local Gross Profit Local Net Profit Before Tax Cash Management The incentive payout percentage for the Tiers and their respective Criteria cannot be equal. The Relative Importance of each of the criteria would also be differ from Branch to Branch depending of Location, Year and Services Offered. As a summary, we have to recognize that priorities are different, they change overtime and the incentive plans have to reinforce business annual plans.
Page 90 of 100
Example of using different Weightings for various locations and branches. Functional
Criteria Region
1 Region
2 Branch
1 Branch
2 Sales Service Parts
Revenue 30 35 45 30 45 25 20
Gross Profit
40 40 25 45 30 45 35
NBIT 15 15 10 10 5 25 15 Stocks in hand
15 10 20 15 20 5 30
100 100 100 100 100 100 100
There should ideally be around 3 to 6 criteria and each criteria should not weigh more than 40-50%
Further split weightings
E.g. Revenue weigthing in country X = 40%; of which 25% Product A and 15% Product B
Page 91 of 100
Criteria Matrix Construction: An example
Weight Adequate Performance
Meets Target
Superior Distinguished
Criteria 1 40 4.8% 10% 13.2% 16.8%
Criteria 2 30 3.6% 7.5% 9.9% 12.6% Criteria 3 15 1.8% 3.75% 4.95% 6.3%
Criteria 4 15 1.8% 3.75% 4.95% 6.3%
Regional Manager 70% local 30% tier 2 (national)
Branch Manager 80% local 20% tier 2 (regional)
Functional Team Leader 90% local 10% tier 2 (branch)
2 Tier Example
Branch Manager earns locally: 10% from Criteria 1 7.5% From Criteria 2 1.8% From Criteria 3 4.95% from Criteria 4 24.25% x 80% = 19.40%
And from Region 13.2% from Criteria 1 7.5% From Criteria 2 4.95% From Criteria 3 1.80% from Criteria 4 27.45% x 20% = 5.49%
Total = 19.40% + 5.49% = 24.89%
Page 92 of 100
Incentives for LONG TERM RESULTS - SALES Milestones (deferred incentive) to ensure tracking and monitoring of Long Term growth Milestones
Time Periods
For example, a new Start-up branch may want conserve cash for the initial years and pay out to staff after the initial years of accumulation once the Branch operating revenue and costs have
stabilized Pay Branch
Group
Time
As a sample strategy, the Branch may only pay out 50% of the annual bonus and reserve the other 50% as deferred until a strategic milestone has been achieved by the company, e.g. 200 car sales per moth for a period of 6 months.
Page 93 of 100
Long Term Payout Matrix Example: A long term incentive performance achievement matrix established to measure achievement at the end of five years.
E.g. Branch Manager
Unit Sales Target Achievement Payout of Target Long Term Award as a percent of base
salary
2x
200% 400% 1000%
150% 200% 500%
X
100% 100% 250%
75% 50% 175% 0.5x
50% 25% 88%
Another example of using Return On Investment (ROI) as a performance measure to adjust pay matrix
ROI ROI as % of target % adjustment in award 36% 150% 200%
30% 125% 140% 24% 100% 100%
18% 75% 75%
12% 50% 50%
Leverage Deferred “Accumulated Bonus/Incentive” against long term performance
Achievement of Long term performance target
Multiply Accumulated Bonus by factor
150% 1.5
130% 1.3 110% 1.1
100% 1.0 90% 0.9
80% 0.8
Page 94 of 100
Long-Term Incentive Plans (LTIP) LTIP Description
Stock Options*
An award granting the right to purchase a specific number of shares of stock at a predetermined (grant) price. Grants become exercisable once they are fully vested (typically three to four years from date of grant). The value of stock options depends on the number of stock awarded and their subsequent appreciation – the exercise price less the grant price. Of the companies that grant stock options, a majority grant awards annually
Performance Plans
Examples include performance shares and performance cash. In any performance plan, a reward is contingent upon how well performance objectives are achieved over a given performance cycle – typically three to five years. Most companies who use a performance plan grant awards annually. The value of the award depends on the plan type: - Performance Shares – The amount of stock awarded depends on the achievement of specific performance objectives. The value depends on the stock price at the end of the performance cycle. - Performance Cash – A specific cash opportunity expressed in Ringgit (RM) or a percentage of base salary or cash compensation that is tied to the achievement of performance objectives
Restricted Stock*
A Restricted Stock Award Share is a grant of company stock in which the recipient's rights in the stock are restricted until the shares "vest" (also know as a "lapse in restrictions"). This period of restrictions is called a vesting period. Once the vesting requirements are met the employee will own the shares outright and may treat them as they would any other share of stock in their account.
Phantom Stock
Typically cash-based equivalent of restricted stock or stock options. Most companies that use phantom stock are subsidiaries of public companies, are privately held, or are companies that do not have equity available for use in an incentive program. The value of phantom stock can be equal to the value of the business, determined by appraisal, formula, or other means, or can be tied to other criteria (like performance plans)
*Note: How does a restricted stock award differ from a stock option grant? Both have a vesting period. The difference is at the end of the vesting period. When a stock option vests, you have the option of purchasing or not purchasing the stock at a specific price (the strike price). You do not own any company stock until you exercise the option and purchase the stock. As soon as you purchase it, you can do anything you want with it, including sell it. When a restricted stock award vests, you own the stock and you can do whatever you want with it.
Adapted from: “Using Long-TermIincentives to Retain Top Talent” by Conly, Lassonde, and Larson; The Talent
Management Handbook
Page 95 of 100
Benefits Survey: Example
No
.B
en
efits
SE
RV
ICE
MA
NU
FA
CT
UR
ING
&
AU
TO
MO
TIV
E
CO
NS
TR
UC
TIO
NA
UT
OM
OT
IVE
&
DIS
TR
IBU
TIO
N
FIN
AN
CIA
L S
ER
VIC
ES
Mark
et P
ractic
eR
eco
mm
en
de
d P
ractic
e
1W
ork
ing d
ay
-5 1
/2 d
ay w
eek-5
1/2
day
week
-5 1
/2 d
ay w
eek-5
1/2
day
week
-5 1
/2 d
ay w
eek65
% o
f com
pan
ies hav
e a five d
ay w
ork
week
-5 1
/2 d
ay w
eek
2W
ork
ing h
ou
rs -N
ot exceed
ing 4
8 h
ours p
er week
-Not exceed
ing 4
8 h
ours p
er week
-Not exceed
ing 4
8 h
ours p
er week
-No
t exceedin
g 48 h
ours p
er week
No
t exceedin
g 48 h
ours p
er week
(8.3
0 a.m
- 5.3
0 p
.m)
Office staff w
ork
betw
een 3
9-4
0 h
ou
rs per w
eek
in 7
2%
of co
mp
anies
Not exceed
ing 4
8 h
ours p
er week
(8.3
0 a.m
- 5.3
0 p
.m)
3P
rob
ation P
eriod
6 m
on
ths
3-6
mon
ths
3-6
mon
ths
6 m
on
ths
-3 to
6 m
ths d
epen
din
g on
qu
alification
& exp
erience
6 m
onth
s-3
to 6
mth
s dep
end
ing o
n q
ualificatio
n &
experien
ce
-Exten
sion
of 3
-6 m
ths
-Exten
sion
of 3
-6 m
ths
4N
otice o
f Term
inatio
n3 m
onth
1 m
onth
1 m
on
th3
mon
thF
or S
enio
r Mgm
t : 3 m
onth
s1 - 3
mon
ths
For S
enio
r Mgm
t : 3 m
onth
s
Fo
r oth
er Exec : 2
mo
nth
sF
or o
ther E
xec : 2 m
onth
s
5A
nn
ual L
eave
Th
e pro
visio
n o
f ann
ual leav
e ranges
from
19-3
0 d
ays. T
he m
ost co
mm
on
practice is as fo
llow
s:
The p
rovisio
n o
f ann
ual leav
e ranges
from
14-2
7 d
ays. T
he m
ost
com
mo
n p
ractice is as follo
ws:
The p
rovisio
n o
f ann
ual leav
e is as
follo
ws:
The p
rovisio
n o
f ann
ual leav
e ranges
from
14
-23
day
s. Th
e mo
st
com
mo
n co
mp
any
practice is as
follo
ws:
Less th
an 5
years: 1
8 d
ays
5 to
10
years : 2
0 d
ays
More th
an 1
0 y
ears : 24 d
ays
84
% o
f com
pan
ies vary
annual leav
e entitlem
ent
by
either y
ears of serv
ice & m
anagem
ent lev
el.Th
e
practice o
f com
pan
ies is as follo
ws:
Less th
an 5
years: 1
8 d
ays
5 to
10 y
ears : 20 d
ays
Mo
re than
10
years : 2
4 d
ays
< 5
yrs o
f service : 2
2 - 2
4 d
ays
Fo
r Sen
ior M
gmt: 2
7 d
ays
Sen
ior M
gt: 21
-28
day
s<
5 y
rs of serv
ice - 20
day
s5-1
0 y
rs : 18-2
1 d
ays
>5 y
rs of serv
ice : 25 - 3
0 d
ays
Fo
r oth
er exec. : <5y
rs : 14 d
ays
Oth
er Exec: 1
4-2
1 d
ays
> 5
yrs o
f service - 2
3 d
ays
>1
0 y
rs: 21
-25 d
ays
<5
yrs : 1
4 d
ays
>5
yrs : 1
6 d
ays
71
% o
f com
pan
ies allow
emp
loy
ees to accu
mulate
their u
nu
sed leav
e subject to
restriction
s
6M
aternity
Leav
e6
0 d
ays (u
p to
5 su
rviv
ing ch
ildren
)60 d
ays (u
p to
5 su
rviv
ing ch
ildren
)6
0 d
ays (u
p to
5 su
rviv
ing ch
ildren
)6
0 d
ays (u
p to
5 su
rviv
ing ch
ildren
)60
day
s for each
child
(inclu
din
g Pub
lic Holid
ays)
83
% o
f com
pan
ies grant 6
0 d
ays m
aternity
leave
60 d
ays fo
r each ch
ild (in
cludin
g Public H
olid
ays)
7P
ilgrimage L
eave
3 w
ork
ing w
eeks fo
r com
pleted
service o
f 10 y
ears.
Nil
30 w
ork
ing d
ays fo
r com
pleted
service o
f 10 y
ears
15-2
1 d
ays fo
r com
pleted
service o
f
10 y
ears.
After 1
0 y
ears wo
rkin
g in th
e com
pan
y fo
r a perio
d
of 3
week
s
50
% o
f com
pan
ies pro
vid
e unp
aid leav
e for
emp
loy
ees to go
on p
ilgrimage
After 1
0 y
ears wo
rkin
g in th
e com
pan
y fo
r a perio
d
of 3
week
s
BE
NE
FIT
S C
OM
PA
RIS
ON
(SE
CT
OR
BA
SE
D)
Page 96 of 100
Benefits Survey: Sample Components Working Days Probation Period EPF Employers Contribution (%) Employees Contribution (%) Retirement Age Retirement Scheme/Plan/Pension LEAVE Annual Leave (per annum) Marriage Leave Maternity Leave (Female) Paternity Leave Examination Leave Pilgrimage Leave Compassionate Leave (per annum) Paid Medical Leave (per annum) Prolonged Illness Leave Leave without Pay Leave Passage MEDICAL Outpatient Medical Visit Hospitalisation & Medical Treatment Maternity - Delivery Dental Treatment Optical MEMBERSHIP i) Professional ii) Club MILEAGE CLAIMS DEATH/FUNERAL BENEFITS NEW AGE BENEFITS i) Flexi Time/Work from Home ii) Handphone iii) Laptops/PCs iv) Gym membership v) Others
INSURANCE includes "Family Coverage" Group Personal Accident Group Term Life Other Insurance Coverage provided (please specify) What other Insurance Coverage not included in the current plan would benefit the organisations employees? LOAN SCHEME (● Indicate types of loan, eligibility, amount granted, interest rate, maximum repayment period, etc) (eg: Housing Loan, Car Loan, personal loan,etc) ALLOWANCES (● Indicate types of allowances, amount, etc according to eligibility) (eg: Entertainment allowance, Housing allowance, shift allowance transport allowance, etc) BUSINESS TRAVEL i) Air Travel Domestic International ii) Accomodation Domestic International iii) Subsistance Allowance Domestic International MEMBERSHIP i) Professional ii) Club TRANING BENEFITS I) Which Training and development programs do you provide for the employees of the organisation? (across the board) (Please Tick all the applicable choices) II) Do you have a Talent Management program as part of your organisations retention/motivation strategy? III) Is your organisation open to look at up-to-date tools and methodologies to enhance your organisations commitment in "caring for its employees"?
Page 97 of 100
GEN Y
Generation Y employees' ranking of job considerations in order of importance, with 10 being most important
Salary 9.05
Benefits 8.86
Opportunities for advancement 8.74
Company location 8.44
Company leadership 7.95
Company reputation/brand recognition 7.56
Job title 7.19
In-house training programs 6.95
Tuition reimbursement 6.44
Diversity 6.07
Company's philanthropic efforts 6.06
Note: Survey of 1,007 college-educated employees ages 21 to 28.
Source: Robert Half Technology
Page 98 of 100
Sample H&S Provider Comparison Sheet (page 1) H&S PROVIDER COMPARISON CHECKLIST
Proposed Current
1
c
} In-house Yes Using TPA
} 24 hours/7 days Yes ?
} Toll Free Line Yes ?
} Medical Staff 1 Medical Doctor, 3 nurses ?
} Isssuance of Guarantee Letter Yes
} Emergency Assistance Yes
} Benefit enquiries Yes
} SMS GL issuance notification Yes
} Telephone system monitor service levels & turnaround time
e Yes, Provider issue Guarantee Letter Yes
f Single (Platinum) card for access to GP,
Specialist and Hospitals
g
} Comprehensive analysis on
medical claims data and
benchmarking against industryTri annually
} Ad-hoc reports yes upon request
h Insurer and Administrator under one roof
i
j
} E-Banking claim reimbursement
into employee's bank accountYes (MEPS Network)
} E-Notification (notify employee via
internet e-mail address on status
of member claim)
Yes
k
} Member details Yes
} Reports, claims & billing details Yes
} Policy details, plans & benefits Yes
l
} Member's particulars Yes
} Claim status and details Yes
m Yes Yes
n Yes
o Yes
Client Portal - Access to company data by
HR
Disaster Recovery Plan / Business
Continuity
Member Portal - Access to Personal data
by member
Dedicated Manager to manage client
Health Talk
ADMINISTRATIVE SERVICES
Call Centre
Cashless Admission to hospitals
Special cards for VVIP
Reports
One Stop Center
Financial Back-Up
E-Solutions
Page 99 of 100
Sample H&S Provider Comparison Sheet (page 2)
2
a waived ?
b waived ?
c waived ?
d As Charged, subject to overall limit,
Covered under H&S-Prior to admission
60 days
90 days
e As Charged, subject to overall limit,
Covered under H&S-Days from discharge
date 60 days
31 days
f As Charged, subject to overall limit
g RM80 RM80
h Covered after 6 hours
i Members have to pay only the difference
in Room & Board charges. No co-
sharing of 20% on overall bill
Co-sharing 20% on the overall bill
j yes, Post Retirement Plan & I-Health
k Covered
l Covered under Hospital Miscellaneous
m Covered
n Covered
o Covered
p No cap-pay As Charged (Pre-negotiated
with hospital)
q Not required
3
Medical department with in-house
doctors and nurses
Volume Purchasing
Processing Turn Around Time (TAT)
} Member Claims 21 days
Bill Itemisation & Review
4
a Covered worldwide up to RM H&S limit,
for member who is travelling for not more
than 90 days. If more than 90 days,
please declare.
5
a
b No of members
Diagnostic X-Ray & Lab test
Medical Report Fee
Portable insurance plans
OVERSEAS COVERAGE
Hospitalization Overseas Coverage
(Insurance)
Personal Health Declaration
MEDICAL COST MANAGEMENT / INFLATION
In-hospital Physician's Visit
Related Investigative tests (ie
endoscopy/CT Scan/Stress test)
OTHERS
No of corporate clients-Employee Benefits
Nursing care charges
Operations done in one surgey
Known conditions
Post-Hospitalization
Room & Board upgrade
Daycare Procedure
Pre-existing conditions
Hospitalization & Surgical
Pre-Hospitalisation
a
Initiatives
30 days waiting period
Hospital Registration Fee
Specified Illness
COVERAGE
Page 100 of 100
Sample H&S Provider Comparison Sheet (page 3)
3
Medical department with in-house
doctors and nurses
Volume Purchasing
Processing Turn Around Time (TAT)
} Member Claims 21 days
Bill Itemisation & Review
4
a Covered worldwide up to RM H&S limit,
for member who is travelling for not more
than 90 days. If more than 90 days,
please declare.
5
a
b No of members
OVERSEAS COVERAGE
Hospitalization Overseas Coverage
(Insurance)
MEDICAL COST MANAGEMENT / INFLATION
OTHERS
No of corporate clients-Employee Benefits
a
Initiatives