CHAPTER 6:BENEFITS AND REWARDS- COMBINING WAGES AND BENEFITSBENEFITS: FINANCIAL, NON-FINANCIAL, STATUTORY, OPTIONAL

BENEFITS AND REWARDS

Benefits, an advantage or profit gained from something (welfare, convenience, service, and etc.)

Rewards, a thing given in recognition of one's service, effort, or achievement (prize, award, bonus)

REMUNERATION PACKAGE

• 1) High wages, low benefits• 2) Low wages, high benefits• 3) High wages, high benefits• 4) Low wages, low benefits

BENEFITS PROVIDED TO EMPLOYEES

Why?> Attract staff to join the organization> Retain existing employees> Increase morale of employees

BENEFITS ARE COMPULSORY UNDER THE FOLLOWING LAWS:• Employment Act• Sabah Labour Ordinance• Sarawak Labour Ordinance• Employees Provident Fund Act• Employees Social Security Act• Workmen’s Compensation Act

MARTOCCHIO’S CLASSIFICATIONS OF BENEFITS1. Protection programmes which promote the health of

employees and guard against loss of income caused by illness, accident and unemployment

2. Paid time-off, whereby an employee receives wages even though he does not work

3. Accommodation and enhancement benefits which relate to assisting employees in maintaining a satisfying lifestyle

FACTORS CONSIDERED DESIGNING A BENEFITS SCHEME - MARTOCCHIO1) Eligibility and waiting periods2) Kinds of benefits3) Level of benefits4) Financing of benefits5) Fixed package or employee choice6) Communication

STATUTORY BENEFITS

• Maternity leave• Sick leave• Annual leave• Paid public holidays• Contribution to Employees Provident Fund• Contribution to Employees Social Security Organization or

Purchase of insurance policy

TIME-OFF PAYMENTS

• A weekly rest day• Public holidays• Annual leave• Sick leave

A WEEKLY REST DAY

• Employment Act stated that employees are entitled to one rest day per week.

• Not be required to work on rest day except in conditions stated in the law.

• Work on rest day will be entitled to premium rates of pay.

PUBLIC HOLIDAYS

• All workers entitled to a minimum 11 paid gazetted public holidays per year.

• Employee is required to work on a holiday will be entitled to two days extra wages

ANNUAL LEAVE

• Employees entitled to a weekly rest day and annual leave during which time they can recuperate and re-energize themselves.

• Employee earns the right to apply annual leave after completed 1 year of service. > Service less than 2 years – 8 days leave per year > 2 to 5 years’ service – 12 days leave per year > More than 5 years’ service – 16 days leave per year• If the annual leave not been used up they shall be paid due to the rate of pay for

each day not taken.

SICK LEAVE

• Employees are entitled to paid sick leave for 14 days per year if less than 2 years’ service, 18 days between 2 to 5 years, and 22 days who have more than 5 years’ service.

• For hospitalization, employee can take up to 60 days sick leave per year with certified sick by registered medical practitioner (panel doctor, medical officer).

THE EMPLOYEES PROVIDENT FUND ACT

• A compulsory savings system for workers so that they would not be impoverished and dependent on the state once they retire from the workforce.

• To ensure every worker has sufficient funds to sustain after retired upon reaching age of 60.

• Employer is required to register the Employees Provident Fund (EPF) Board on setting up business. If fail, liable to imprisonment to 3 years or fine up to RM10,000.

THE EMPLOYEES SOCIAL SECURITY ACT 1969• Provide employees with compensation and financial benefits

should they be involved in.• SOCSO, ensure employers register with the Organization and

pay contributions. Also pays out benefits to eligible claimants.

SOCSO BENEFITS

• Medical for those who suffer from an unemployment injury• Disablement for those who suffer from an employment injury• Dependant for the family of an employee who dies• Invalidity pension• Constant attendance allowance• Survivor’s pension• Funeral benefit• Supply of prosthetic appliances• Facilities for rehabilitation