BANDUNG, itb.ac.id—The transformation in the field of HCM that is being carried out by ITB demands improvements in other aspects of ITB’s human resource management, including the remuneration system. The process of restructuring the remuneration system at ITB was carried out in stages and has now entered a transition period to stage 1.
The presentation on the results of the ITB stage 1 remuneration system strengthening was delivered by the ITB Deputy Chancellor for Resources, Dr. Ir. Gusti Ayu Putri Saptawati S., M.Comm., at the ITB Remuneration Strengthening socialization event on Monday (4/4/2022). This socialization was attended by around 1,000 participants from lecturers and staff. The event was guided by the Director of Personnel of ITB, Dr. Dea Indriani Astuti, S.Si.
According to Putri, ITB’s remuneration conditions prior to this transformation process had many shortcomings, such as a system that referred to the civil servant system instead of industry best practice so that it was not in line with the competency-based HR system. In addition, the administrative burden is also high due to too many payroll components and there are quite large differences in income levels between locations/work units. Therefore, it is necessary to arrange a more competitive remuneration system in order to increase the motivation and performance of ITB employees.
“Before starting the overall transformation, we have conducted many interviews about the remuneration system and several issues were raised. Especially regarding the performance appraisal system, it is less effective and also complicated because there are many components. So, we adopt a more professional best practice regarding remuneration with guiding principles set by ITB,” said Putri.
The nine guiding principles that are the reference in the restructuring process are contained in the Rector’s Regulation no. 178 of 2022, including compliance with laws and regulations, easy to administer, and competitive with the market. Putri also emphasized that there will be no reduction in employee salaries during the repair process because the main focus of the restructuring phase 1 is to simplify the payroll component and strengthen performance-based components, so that the Total Guaranteed Cash (TGC) received by employees will remain.
In its implementation, the compensation strategy applied at ITB considers many factors. First, pay-mix , where the salary composition between fixed and variable components must be balanced and can provide a sense of security. Second, the compensation system must be competitive in the industry. Remuneration received must also be able to describe the level of performance ( pay-performance function ) and can be linked to other things such as the number of patents or citations ( link to performance ).
The simplification process in phase 1 of the restructuring merged the payroll components from 39 to only 15 components. Of the 15 components, there are 10 components that make up Total Guaranteed Cash (TGC), namely the fixed income that ITB employees receive every month. Meanwhile, the variable component as performance compensation is given in the form of extra expenses and incentives. The last component of the total remuneration that can be received is facilities and benefits such as BPJS health, Taspen, Health Insurance, Post-Employment Benefits, plus BPJS Employment and Medical Check Up which are valid from 2022.
“However, because we are currently still in transition, this formula is still temporary because we need time to accumulate performance scorecard data for 6 months and are considering a more comprehensive fee-for-hire model,” Putri explained.
Furthermore, Putri admitted that there are still “PR” that must be completed regarding the restructuring process, such as finalizing the Rector’s Regulation to implement the new remuneration system, strengthening the performance management system ( performance scorecard, process, linkage ), and building communication and socialization programs. In addition, Putri also said that her team would build a scorecard system for lecturers who had not been touched last year to strengthen the performance appraisal system.
Putri also conveyed the focus of adjustments to be achieved in the restructuring phase 2, namely the adjustment of the value of the components on the results of the restructuring phase 1 based on the results of the survey and the ability of the ITB budget by prioritizing the performance-based variable components. In stage 2, the salary component will be proposed to change so that the total guaranteed cash (TGC) can be changed so as to increase ITB’s competitiveness against comparison institutions.
“The process for ITB’s remuneration to reach the ideal condition is long, it takes time and patience. ITB leaders want competitive remuneration, the goal is for us to increase employee motivation so that performance increases and can produce useful works for the nation,” concluded Putri.
Source: Institut Teknologi Bandung