Compensation and Benefits Overview

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Questions and Answers

How many paid gazetted public holidays are entitled to workers in Sarawak per year?

14 days

16 days (correct)

18 days

11 days

What is the total annual leave entitlement for an employee who has worked for 4 years?

8 days

10 days

12 days (correct)

16 days

Which of the following is NOT one of the specified public holidays required by the Employment Act?

Labour Day

Malaysia Day

National Day

Election Day (correct)

How many days of paid sick leave is an employee entitled to if they have worked for 3 years?

18 days Signup and view all the answers

Which of the following is NOT a type of compensation?

Employee recognition programs Signup and view all the answers

What percentage of their monthly wages do employees contribute to the Employees Provident Fund (EPF)?

11% Signup and view all the answers

If an employee is hospitalized, what is the maximum number of days of sick leave they can take in a year?

60 days Signup and view all the answers

What system of payment compensates wages based on the number of items produced?

Piece rated system Signup and view all the answers

What is the maximum number of working hours per week established in Malaysia as of January 1, 2023?

45 hours Signup and view all the answers

What is the minimum contribution an employee who is self-employed must pay to the EPF monthly?

RM50 Signup and view all the answers

What is the purpose of bonuses in an employee’s compensation package?

To reward performance Signup and view all the answers

What is the purpose of contributions to the Employees Provident Fund (EPF)?

To ensure workers have funds upon retirement Signup and view all the answers

What rate is applied for overtime worked on a public holiday in Malaysia?

3 times the normal hourly rate Signup and view all the answers

Which of the following is considered an indirect financial payment?

Paid vacation Signup and view all the answers

What type of payment includes flexibility in scheduling or access to onsite gyms?

Non financial reward Signup and view all the answers

Under the Malaysian labor regulations, how often must employees receive a rest day?

Once a week Signup and view all the answers

What percentage of monthly wages do employees under 60 years old contribute to the Employment Injury and Invalidity Schemes?

0.5% Signup and view all the answers

Which type of benefit specifically provides compensation for occupational diseases?

Employment Injury Scheme Signup and view all the answers

What is a non-statutory benefit that employers might offer to support their employees' education?

Educational assistance Signup and view all the answers

Which of the following is a benefit usually associated with the rising cost of medical care?

Health Care Insurance Signup and view all the answers

What is the maximum voluntary payment an employee can make towards their benefits?

RM5,000 Signup and view all the answers

What type of payment can be made for personal emergencies under non-statutory benefits?

Time-off payments Signup and view all the answers

What type of insurance do employers commonly purchase for their employees?

Life and accident insurance Signup and view all the answers

Which of the following is a financial service that employers may offer to employees?

Loans for buying items Signup and view all the answers

What is one of the key objectives of incentive and reward systems?

Drive behavior to higher levels Signup and view all the answers

Which type of reward is directly tied to company performance and profit?

Profit-sharing schemes Signup and view all the answers

What must be true for reward schemes to be effective?

They must be perceived as fair Signup and view all the answers

Which of these is an example of a financial reward?

Bonuses Signup and view all the answers

How do benefits like scholarships impact employee retention?

They encourage employees to pursue further studies Signup and view all the answers

Which of the following is NOT a type of reward mentioned?

Social rewards Signup and view all the answers

What effect do employee benefits have on morale?

They increase employee morale Signup and view all the answers

Which of the following benefits can help attract staff to join an organization?

Childcare facilities Signup and view all the answers

What defines a part-time worker under the Employment Act in Malaysia?

Must work less than 70% of normal hours of a full-time worker Signup and view all the answers

Which of the following statements about maternity leave in Malaysia is correct?

Eligible for 98 days of maternity leave for every confinement Signup and view all the answers

What is a characteristic of flexitime working hours?

Employees design their own working hours within limits set by the employer Signup and view all the answers

Which of the following is NOT a statutory benefit under Malaysian law?

Performance bonuses Signup and view all the answers

How long is paternity leave for fathers in Malaysia?

7 days limited to five children Signup and view all the answers

What does the Employment Act require concerning rest days for employees?

Employees are entitled to a weekly rest day Signup and view all the answers

Which of the following describes shift work?

It involves two or more groups of workers taking turns on workstations Signup and view all the answers

What is meant by the term 'core hours' in a flexitime system?

Hours during which all employees must be present Signup and view all the answers

What is a key characteristic of a time-related wage system?

Wages are paid for a set period regardless of productivity. Signup and view all the answers

Which of the following is considered a non-financial reward?

Letters of appreciation Signup and view all the answers

What happens in a differential piece-rate system when a worker exceeds the standard output?

The worker is paid a higher rate for units produced over the standard. Signup and view all the answers

Which of the following examples illustrates a performance award?

Being named Employee of the Month Signup and view all the answers

How are workers compensated in a piece-work payment system?

For the number of units produced in a given timeframe. Signup and view all the answers

What type of reward includes sponsorship to attend conferences?

Non-financial reward Signup and view all the answers

In which situation would a worker earn RM2,500 in a differential piece-rate system?

By producing 400 units with a standard rate for 300 units at RM5. Signup and view all the answers

What is a common non-financial tool to recognize loyalty and long service?

Tokens of appreciation such as a gold watch Signup and view all the answers

Study Notes

Compensation & Benefits

Compensation encompasses all forms of pay or rewards given to employees due to their employment.
Compensation packages include wages, incentives, bonuses, and rewards.
Compensation can be categorized into:
- Direct financial payment (e.g., wages, salaries, incentives, commissions, bonuses)
- Indirect financial payment (e.g., insurance coverage, paid vacation)
- Non-financial payment (e.g., rewards with no monetary value, flexible work schedules, on-site gyms)

Types of Compensation

Direct Financial Payment:
- Wages/salaries: Cash payments given to employees on a regular basis.
  - Time-related systems : Payments based on time worked (hourly, daily, weekly).
  - Piece-rated systems: Payments based on the number of units produced.
- Incentives/commissions: Payment based on performance; individual incentive programs, examples include incentives for salespersons and executives.
- Bonuses: Additional payment as a reward for good job performance.
Indirect Financial Payment: Other forms of compensation, not including direct financial payment. Most employer benefits fall into this category.
Non-financial: Rewards that don't have a monetary value, but provide comparable satisfaction.
- Examples include flexible work schedules and on-site gyms.

Working Hour Systems in Malaysia

Previously, in Malaysia, the maximum number of weekly working hours was 48 (approximately 8 hours per day, 6 days a week).
As of January 1, 2023, this has been reduced to 45 hours per week (excluding meal breaks).
Employees can't be required to work more than five consecutive hours without a 30-minute break.
Employees can't be required to work more than eight hours in a single day.
Employees are entitled to one complete rest day per week.
Overtime: Working longer hours than normal.
- Rates increase based on time worked (e.g., hourly rate doubles for overtime on rest days, and triples for public holidays).
Shift work: Different work hours, including double day shift, three-shift work, rotating, and permanent shifts.
Flexitime: Workers set their own start and stop times within employer-defined limits.
Part-time: Workers' hours typically are less than the normal hours, and are calculated per week. The average hours worked cannot exceed 70% of a full-time worker's normal hours.

Types of Benefits

Statutory Benefits: Legally required benefits under the Employment Act and related laws (Employment Act, Social Security Organisation Act (SOCSO), Employees Provident Fund (EPF) Act ).
- Maternity Leave
- Paternity Leave
- Rest Day
- Public Holidays
  - This includes gazetted/specified public holidays, in regions like Peninsular Malaysia, Sabah, and Sarawak.
- Annual Leave
- Sick Leave
- Contribution to EPF: Employees and their employers contribute to the Employees Provident Fund (EPF).
- SOCSO: Employee and Employers make social security contributions to Employees Social Security Organisation.
Non-statutory Benefits: Voluntary benefits offered by employers. These are not legally mandated but enhance workplace environment and employee satisfaction.
- Time-off payments: Include benefits associated with marriage, personal emergencies, pilgrimages, and the death of a relative.
- Health care: Benefits for rising cost of medical care, payment of medical bills, hospitalization, optical bills, dental bills.
- Insurance other than SOCSO: Employer-provided accident and life insurance policies combined with medical provisions.
- Financial services: (loans, interest rates from employers)
- Retirement benefits: Some employers add extra contributions to employees' EPF accounts.
- Educational assistance: Companies providing resources (libraries, training courses, etc.) to encourage employees' development.
- Subsidies and services: Employers providing services like work transportation, childcare, staff quarters, or employee engagement activities.

The Importance of Benefits

Attracting new staff
Retaining existing staff
Increasing employee morale (leading to higher productivity).

Rewards Systems

Objective of Incentives and rewards:
- Drive behaviour to higher levels
- Create competition
- Help retain the best performers
To be effective, reward schemes must:
- Many employees perceive them as winners.
- Be perceived as fair.
- Drive suitable employee behaviors.
- Be perceived as attractive.
Types of rewards:
- Financial: Wage increments, bonuses, profit sharing, commissions
- Non-financial: Performance awards, letters of appreciation, long service awards, sponsorship, attend conferences.

Wage Systems

Time-related system: Wages paid for a set period of work (hourly, weekly, or monthly). There is no direct link between the employee's work and the amount, and a worker who works hard will earn the same pay.
Piece-work/piece-related system: Payment based on the number of units produced or completed.
- Straight piece-rate: Pay is per unit.
- Differential piece-rate: The employee's pay differs based on the number of units produced (e.g., a higher rate for producing over a set standard).

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Description

This quiz explores the various forms of compensation and benefits provided to employees. It covers direct financial payments, indirect financial payments, and non-financial rewards. Test your knowledge on how compensation packages are structured and categorized.