{ "success": true, "data": { "id": 1828724, "msgid": "salary-and-wage-compensation-the-key-to-employee-performance-1782654731", "date": "2026-06-28 20:18:00", "title": "Salary and Wage Compensation: The Key to Employee Performance", "author": "Retizen", "source": "REPUBLIKA", "tags": "", "topic": "Economy", "summary": "Adequate compensation, encompassing both financial and non-financial rewards, is crucial for boosting employee motivation and productivity. Indonesian law, specifically Government Regulation No. 36 of 2021 on Wages, guarantees fair compensation as a worker's right. A case study of PT Perta Multi Energi Satu Daan Mogot revealed that non-compliance with minimum wage standards and lack of benefits led to significant employee dissatisfaction.", "content": "

In the working world, compensation is one of the most scrutinised\naspects by employees. After dedicating their time, energy, thoughts, and\nskills to a company, every employee naturally expects a suitable reward\nfor their contributions. This reward is known as compensation, which\nencompasses all forms of remuneration provided by the company to\nemployees, whether financial or non-financial. Compensation is not\nlimited to the salary or wages received each month. Companies may also\nprovide allowances, bonuses, incentives, work facilities, and\nopportunities for training or career development. Therefore, the\ncompensation system is a critical aspect of human resource management as\nit can influence employee welfare, motivation, and performance (Adiyanti\n& Nugraha, 2023). Providing adequate compensation enables employees\nto channel their abilities to increase work productivity because they\nfeel motivated in carrying out their duties. For company operations to\nrun smoothly, firms need to boost employee morale to achieve maximum\nresults. Companies will reap many benefits if they consistently improve\ntheir employees\u2019 work spirit. These benefits include faster completion\nof tasks, reduced employee absenteeism, and minimised staff turnover\n(Ratnasari et al., 2023). Besides serving as a form of appreciation for\nemployee contributions, providing compensation is also a worker\u2019s right\nguaranteed by Indonesian laws and regulations. The government regulates\nwage policies, wage structures and scales, wage protection, and workers\u2019\nrights to create a fair and balanced working relationship between\nworkers and employers, with the implementing provisions set out in\nGovernment Regulation Number 36 of 2021 on Wages. Many people still\nconsider salary and wages to be the same thing, though they differ. A\nsalary is generally a fixed amount given over a specific period, usually\nmonthly, to permanent employees based on their position and\nresponsibilities. Meanwhile, wages are paid based on working time or the\nresults of completed work. In the wage system, companies can use several\nmethods, such as a time-based system calculated on hours or working\ndays, a results-based system based on production volume, a piece-rate\nsystem based on the completion of specific tasks, and an incentive\nsystem awarded when workers achieve set targets. The choice of system\nmust be tailored to the type of work and the company\u2019s objectives to\ndeliver optimal results. Compensation is often perceived as solely\nconcerning money, but its impact is far broader than just the income an\nemployee receives. Employees who receive appropriate compensation tend\nto have higher work motivation because they feel their contributions are\nvalued by the company. Conversely, when compensation is deemed unfair or\ndisproportionate to the workload, morale can decline and affect\nproductivity. Research discussed in the paper indicates that both\nfinancial and non-financial compensation influence employee performance.\nThe better the compensation system implemented, the greater the\ncompany\u2019s chance to enhance its workforce\u2019s loyalty and productivity.\nNot all employees receive the same amount of compensation. Various\nfactors influence the level of compensation a company provides,\nincluding education level and skills, work experience, job\nresponsibilities, the company\u2019s financial condition, government policies\non minimum wages, employee performance, and labour market conditions.\nTherefore, companies must consider these factors to ensure the\ncompensation system remains fair and competitive. Despite its important\nrole, the implementation of a compensation system in a company does not\nalways run smoothly. Various problems are still frequently encountered,\nsuch as a mismatch between salary and workload, a lack of transparency\nin the payroll system, compensation disparities perceived as unfair, and\ndelays in salary or wage payments. These conditions can lead to negative\nimpacts for the company, ranging from decreased work motivation to\nincreased internal conflict, ultimately affecting overall organisational\nproductivity. A concrete example of the importance of a compensation\nsystem can be seen at PT Perta Multi Energi Satu Daan Mogot. Based on\nresearch by Indah Palupi and Nopi Oktavianti (2025), several\ncompensation-related issues were found to impact employee satisfaction\nand loyalty. The problems identified included salaries still below the\nCity Minimum Wage (UMK), the provision of Religious Holiday Allowance\n(THR) that did not fully consider employees\u2019 length of service, and the\nunavailability of BPJS Kesehatan and BPJS Ketenagakerjaan for all\nworkers. As a result, approximately 85% of employees expressed\ndissatisfaction with the company\u2019s compensation system. They felt that\nthe compensation received was not commensurate with their daily workload\nand responsibilities. This case demonstrates that compensation is not\nmerely about the amount of salary an employee receives, but also relates\nto a sense of fairness and regulatory compliance.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/salary-and-wage-compensation-the-key-to-employee-performance-1782654731", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }