Compensation Benefit Practices at TELKOM Indonesia

REWARDING BEST TALENT
Compensation & Benefit Practices at TELKOM Indonesia

Chief of Human Capital Development & Retention
TELKOM Group
Bandung, 27th March 2017

AGENDA
TELKOM & ITS CHALLENGE

02

REWARD PHILOSOPHY & STRATEGY

REWARD PRACTICES

04

01

03

MOVING FOREWARD & DISCUSSION

CONNECTING THE WORLD
Telkom Indonesiais listed at Indonesia Stock Exchange (TLKM), NYSE (TLK US) and sustaining growth with 10 International
Footprint
Ownership
Government

52.6%

Public

47.4%

Treasury Shares

2.6%

Employee

Telkom

16.097

Telkom Group

24.785

Market Capitalisation at IDX

IDR 458.6 Tn*

*) 1 Agustus 2016

• TSEL Coverage :± 97% Population • 13,2 Mio Fiber
• 40 cities and more already 4G LTE Optic Homes
passed
• 357 K Wi-Fi
Source: Annual Report

• >82.000 km
Nationwide Fiber
Optic backbone
network

74.000 M2
Data Center

Customer Base:
• 48 Million
Broadband,
• 156 Million Selular
• 10,5 K Fixed Line

EMPLOYER OF CHOICE
April 2014
Most Admired Companies 2014
(TOP Brand)

January 2016

Asian Make Winners
(MAKE)

May 2015
Global Council of Corp. Univ. Award
Best Overall Corporate University
Best Innovative Corporate University

Januari 2016
Indonesian Employers of Choice
Awards (HAY Group & SWA)

September 2016

September 2016
6 Awards in Indonesia Human
Capital Study (Dunamis)

DIVERSE PORTFOLIO IN TIME MARKET

32
Subsidiaries &
Affiliation

KEY PRINCIPLES

01
02
03
04

REFLECT & TRANSLATE CORPORATE STRATEGY

LEVERAGE TOTAL REWARD PERSPECTIVE

ATTRACT & RETAIN BEST TALENTS

DRIVE EXPERIENCE & BUSINESS IMPACT

Telkom Group Corporate Strategy

2015

2016 - 2020

Vision
To Become a Leading TIMES Player in the Region

Vision
Be the King of Digital in the Region

Mission
1. To Provide TIMES Service with Excellent
Quality & Competitive Price.
2. To be the Role Model as the Best Managed
Indonesian Corporation

Corporate Strategy:
•
•

Directional Strategy: Sustainable Competitive
Growth
Business Strategy: Converged TIMES portfolio

•

Parenting Strategy: Strategic Guidance

Objectives
Superior value & IDR 300T Market Cap in 2015

Mission
Lead Indonesian Digital Innovation &
Globalization
Shifting
The
Business

Corporate Strategy:
•

•

•

Directional Strategy: Disruptive Competitive
Growth
Business Strategy: Customer Value through
digital TIMES portfolio
Parenting Strategy: Strategic Control
Objectives
Top 10 Market Capitalization Telco in APAC by
2020

6 Product Portfolios with 5 Customer Facing Units (CFU)
New parenting strategy will see a shift to a CFU based model
Customer Facing Units
(CFU)

Implications:
• Tighter operation integration to

maximize business value by
customer segment
• Need to be more controllability on
subsidiaries including in HCM
activities

THERE IS NO BEST REWARD PRACTICES, THE BEST
PRACTICES ARE WHAT BEST FIT TO YOUR STRATEGY

& CULTURE

Aligning Reward Strategy and Business Strategy

 Managing HCM as a Group Initiatives
 International Remuneration

Challenges in Managing HCM as A Group
Background

1.CSS Parenting Strategy: “Strategic 1. Grading Alignment yaitu melakukan

proses Evaluasi Jabatan untuk Telkom
Control”
dan Anak Perusahaan di seluruh level
2.Masterplan HCM: “Managed HCM
2. Penyusunan sistem Remunerasi &
as a group”
alignment di Level Telkom Group, melalui
3.CHCO Direction: “BoD-1 and BoD-2
proses
Salary
Survey,
mencakup
Belongs to Group”
komponen Cash & Benefit
4.HCM Council Charter

3. Pergerakan karir untuk Talent Telkom
Group

1. Keselarasan antar entitas Telkom Group dalam:

1. Grading System
2. Remuneration system and structure
Sebagai prasyarat dalam pengelolaan HCM
secara Group
2. Desain carrer roadmap Telkom Group dengan
memperhatikan Job Family, kesetaraan grading
dan remunerasi

Benefits

Fact Findings:

Execution Challenge

1. Non standard Remuneration practices in
group level

1. Grading alignment among Telkom group

2. Non Standard Banding system in group
level

Objectives

Challenges

2. Remuneration alignment among Telkom group

1. Smooth talent supply for business
2. Challenging career

3. Competitive and attractive remuneration
4. More Manageable and controllable

12

Evaluate 500 Benchmark Positions of TELKOM Group
Using Mercer’s IPE Method
Selecting 500 benchmark
positions as anchor for define
grading alignment and develop
slotting tools

1.Organization size
2.Impact
3.Contribution

Impact

Risk
1.Risk
2.Environment

Internationa
l Position
Evaluation
By Mercer

Knowledge
1.Knowledge
2.Team
3.Breadth

1.Communication
2.Frame

Communicati
on

Innovation
1.Innovation
2.Complexity

The objective of the project was to align Telkom group’s
grading through systematic method
From...

To...
Telkom Group’s Grading Alignment

Non Standard Banding system in group level
LEVEL

TELKOM

EGM/EVP/
BOD-1 SVP/SGM/ BP I
VP/Dy EGM
GM/AVP/S
M/ Func.
BOD-2 Expert/ BP II
OSM/Dy
GM

BOD-3

BOD-4
…
BOD-7

TELKOMSEL
EVP/SVP/
VP/ Senior BP VI
Business BP V
Expert

GM

…

…

EVP/EGM/
KADIV

BP I

EGM/ SGM/
VP/GM/ Dy
BP IV
BP II
KADIV/ HEAD
OF/ GM

MANAGER/
SENIOR BP III MANAGER BP III
OFFICER
BP
IV …
BP
VII

INFOMEDIA/ PINS/
TELIN/ METRA/
GSD/ AKSES/
INFRA/MITRATEL
PATRAKOM/
Others

BP II
…
BP I

MANAGER

…

EGM/OVP/
VP/GM/
HEAD OF

BP II

AVP/GM/
PM/ JUNIOR
PM/
BP III
BP III
MANAGER/
ACCOUNT
MGT
BP IV
…

…

BP IV
…

TELIN/ METRA/
LEVE TELKO TELKOMS
INFRA/MITRAT
L
M
EL
EL
EGM/EV
P/
BOD-1 SVP/SG
M/VP/Dy
EGM
GM/AVP/
SM/
Func.
BOD-2
Expert/
OSM/Dy
GM
MANAG
ER/
BOD-3 SENIOR
OFFICE
R

New
INFOMEDIA/
PINS/ GSD/
AKSES/
PATRAKOM/
Others

Mercer Position Class 6x – 6x
EVP/SVP/
VP/ Senior
EVP/EGM/ KADIV
Business
Expert
Mercer Position Class 5x – 6x
EGM/ SGM/
VP/GM/ Dy
EGM/OVP/VP/GM/
GM
KADIV/ HEAD
HEAD OF
OF/ GM
Mercer Position
Class 5x – 5x
AVP/GM/ PM/
MANAGE
Mercer Position
Class ≤ 5xJUNIOR PM/
MANAGER
R
MANAGER/
ACCOUNT MGT

BOD-4
…
…
…
…
Telkom Group Job Evaluation
BOD-7

Using International Position Evaluation
(IPE)

…

Job
Prefix

Telkom Group
Banding
Structure

EVP/SVP
/VP/EGM/
SGM

VI

VP (AP)
SM/AVP/G
M

V

MANAGE
R/
SENIOR
OFFICER

IV

OFFICER

III - I

Uncover Talent Mobility Opportunities Among Group
Implementation of Telkom Group Remuneration and Grading Alignment as Talent Mobility Enabler

Telkom Group Remuneration Alignment
Uncover Talent
Mobility Opportunities Among
Group

Telkom Group Grading Alignment

Reward Management
“New Game for Group & Global Compensation”

Building career
pipeline

Talent
Diversity

Development
tools

Career paths

Aligning Reward Strategy and Business Strategy
 Managing HCM as a Group Initiatives

 International Remuneration

Telkom Indonesia International Footprints

Type of International Remuneration Framework

International Remuneration Framework
By Using
Several

References

BALANCE
SHEET

Remuneration method from TOWER WATSON which aims to find the compensation
value in the host country based on the remuneration of the employee in home
country.

• Monthly frequent
• Currency Conversion
• Base Salary 75%
• Base Allowance 25%

•COLD
•Local Transport

SALARY
BENEFIT
FACILITIES

Local
Regulation
Living
Facilities and
Expatriates
Needs

• CEO Roles
• Salary Benchmark
• Cost of Living Index
• Business Segment
• Revenue Size

How much
Salary when
repatriated?

1.
2.
3.
4.
5.
6.

Incidental Allowance (THR)
Incentive
Annual Bonus
BPJS (JHT & JP)
Country Social Security
Annual Leave

1.
2.
3.
4.
5.
6.
7.

Life Insurance
Health Insurance
Accomodation
Communication Allowance
Home Trip
Children Education
Relocation Allowance

Host TANI

AGM
Resolution

Int’l
Benefit
Int’l
Facilities

Using the same method, we just substracted the Cost of Living
Differences (COLD) and host local transportation from Host TANI then
adjust it with salary increment happened in home country during
overseas assignment.

Remuneration
for host
country will be
documented,
reviewed and
decided in
AGM
Subsidiary
which held
every year

Running with Multigenerational Workforce
 Architecting Reward Strategy
 Employee Reward Strategy
 Attract New Talent

 Motivate Employee
 Retain Employee

External trends in HR

Attract and retain talent are priorities
The development of career paths is crucial

Source: Mercer report

TOTAL REWARD
Total Reward Approach & Deploy

1

Career & Environment Reward

Rewards yang diberikan dalam bentuk dengan peningkatan karir, pengetahuan,
keahlian serta kenyamanan karyawan atas suasana kerja.

Attract
Motivate
Retain

2

Employee:
•
Satisfaction
•
Task Behaviour
•
Engagement

Foundational Rewards

Business Performance
and Result

3

Performance Based Rewards

*) Total reward framework
by Willis Towers Watson

Using a total reward system to control employee
rewards cost as well as enhancing employee
satisfaction
Compensation

Benefit

Work-life
effectiveness

Recognition

Performance
Management

Talent
Development

Improve Pay Mix and
Pay Level to minimize
gap based on nature
of Industry

Rewards yang memenuhi kebutuhan dasar
karyawan atas rasa aman dan stabilitas.

Rewards yang pemberiannya dikaitkan dengan
performansi dan kontribusi dari employee yang
dapat terukur dengan jelas.

Running with Multigenerational Workforce
 Architecting Reward Strategy
 Employee Reward Strategy
 Attract New Talent

 Motivate Employee
 Retain Employee

Current Telkom’s Component of Compensation

1. Base Salary (12x)
2. THR (1.5 x THP*)

*) THP consist of:
• Base Salary
• Ins. Premium
• Ins. Jabatan

1.
2.
3.
4.
5.
6.
7.

Ins. Premium
Ins. Jabatan
B. Kemahalan
BBP
Telekomunikasi*
BBM*
Driver*

1. Jasa Produksi
2. Mid Term Insentif
3. Ins. Sales & Marketing
(ISM)*
4. Diskresi Mgt**
No Long Term Incentive

*) untuk level dan posisi
tertentu

*) untuk posisi tertentu
**) diberikan ssi
kebijakan Mgt

1. Fasilitas kesehatan
2. COP/ BPFKJ*
3. Pasca Kerja
*) untuk level dan posisi
tertentu

Running with Multigenerational Workforce
 Architecting Reward Strategy
 Employee Reward Strategy
 Attract New Talent

 Motivate Employee
 Retain Employee

Drive Employee Performance by Variable Pay
Job Level

Career Track
Managerial

BOD-1

BOD-3

BOD-4

Managerial Track

BOD-2

BOD-5

BOD-6

Entry Level

Professional

Expertise

Fixed Pay

Ins. Jabatan based on
job level and roles &
responsibilities (RC)

Ins. Jabatan based on job
level

Should pass C&Q
Test

Variable Pay

Jasprod/ MTI (tahunan)

• Jasprod/ MTI (Tahunan)
• Ins. Sales & Marketing
(per TW)

Jasprod/ MTI
(tahunan)

Managerial
Fixed Pay
Variable Pay

Professional

Expertise

Ins. Jabatan based on job level
Jasprod/ MTI (tahunan)

Jasprod/ MTI dipengaruhi oleh:
1. Performansi perusahaan
2. THP
3. Perfomansi Unit
4. Performansi Individu
5. Kontribusi karyawan

• Jasprod/ MTI (tahunan)
• Ins. Sales & Marketing
(per TW)

Jasprod/ MTI
(tahunan)

ISM dipengaruhi oleh:
1. THP
2. Revenue Ach.
3. Sales Ach.
4. Collection rate

Recognize Employee Achievement: Telkom Award
 Telkom give reward & recognition to employee for their achievement based on certain criteria
Reward and Recognitions
Formal
Penerima Penghargaan

Unit Telkom Group

Individu Telkom Group

Kriteria Penghargaan
Innovative
1. Best Innovator
2. Most Inspiring Role Model
3. Most Inspiring Culture Agent
4. Best Knowledge Worker
Performance
1. Best Leader
2. Best Manager
3. Best Officer
Dedication
1. Karyawan Daerah terpencil
2. EVP
Unit
1. Best Unit
2. Best WITEL
3. Most Admired Culture Activation

Informal
Penghargaan lain (dari BOD atau Kepala UBIS)

Penghargaan Eksternal
Level Penghargaan

Basic

Intermediate

Advance

Contoh:
Satya Lancana

Running with Multigenerational Workforce
 Architecting Reward Strategy
 Employee Reward Strategy
 Attract New Talent

 Motivate Employee
 Retain Employee

Top Talent Retention Plan: Incentive Top Talent
Remuneration for Top Talent
POTENTIAL
75%

Philosophy

 Ensure Top Talent’s remuneration competitiveness with
market.
 Influenced by performance

Medium

 Competitive as Talent Retention
Market Reference

Low

POTENTIAL (CHARACTER)

High

VERY HIPO
5%

BoD-1 and BoD-2

IMPROVE
5%

POTENTIAL
75%

Incentive for Top Talent
Inc. IWT

Low

Medium

High

PERFORMANCE

All high potentials are high performers, but not all high performers are high potentials.
-Andre Lavoie on https://www.entrepreneur.com/article/248018-

“When performance is the only criteria employees are evaluated on, high performers will
be the only ones moving up–and your high potentials will be moving out.”
- Brian Knight, Director of Performance at Focus 3-

“Principle in designing incentive's amount is to maintain employee’s annual income meet target
market range to ensure competitiveness with market”

Conclusion

Conclusion
1.

2.
3.

4.

Reward strategy must align with corporate strategy so reward system can work effectively and deliver
value to company
Telkom Indonesia use Total Reward Framework that integrate foundational reward, Performance
based reward, and Career & Environmental reward to attract, motivate, and retain employee
Based on Telkom Indonesia internal survey and analysis, career and environmental rewards have the
highest effect to drive employee task behaviour, followed by Performance-based reward, and
Foundational Rewards.
Telkom reward strategy:
a. Attract new talents:
• remuneration system that align, comparable, and competitive with market
b. Motivate Employee:
• using different type of variable pay for each career track, based on roles and responsibilities
• Recognize employees achievement by awarding them
c. Retain employee:
• Opportunity for employee development
• Incentive for Top Performer as retention plan

Terima kasih