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BP Amoco Finland Team 10: Compensation

BP Amoco Finland Team 10: Compensation. Elina Laurila Iiro Paajanen Teemu Saxen Taija Tanskanen Soot Yin Yow. Agenda. Taija: Introduction, Compensation objectives and policies and wage mix Soot Yin: Government regulations and other factors influencing compensation, job ranking table

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BP Amoco Finland Team 10: Compensation

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  1. BP Amoco FinlandTeam 10: Compensation Elina Laurila Iiro Paajanen Teemu Saxen Taija Tanskanen Soot Yin Yow

  2. Agenda • Taija: Introduction, Compensation objectives and policies and wage mix • Soot Yin: Government regulations and other factors influencing compensation, job ranking table • Elina: Compensation instruments, traditional compensation model • Teemu: Recommended compensation model, additional benefits • Iiro: Benefits for expatriates

  3. Compensation Objectives • Match employees’ future performance with organizational goals • Reward employees’ past performance • Employ and retain most talented people • Improve productivity • Remain competitive in the labor market • Control the compensation budget • Maintain salary equity among employees

  4. Compensation Policies • Pay for performance • Competitive base salaries • Incentives (merits, bonuses, stock options) • Indirect compensation • Salary ranges for each management level • No pay secrecy - open policy

  5. Wage Mix • Internal factors: • Compensation policy of organization • Worth of job • Employee’s relative worth • Employer’s ability to pay • External factors: • Conditions of the labor market • Area wage rates • Cost of living • Collective bargaining • Legal requirements

  6. Finnish Government Regulations • Regulated working hours • Paid vacation • Minimum wage • Occupational health service • Retirement benefits • Maternity benefits • Right for paternity leave • Insurance (accidents, unemployment)

  7. Other Influencing Factors • High tax rates • High cost of living • Inflation • Decrease in real wage • Unemployment rate

  8. Job Ranking Table

  9. Compensation Instruments Direct Compensation • salaries • incentives (merits, bonuses, stock options) Indirect Compensation • benefits (company car, petrol, cellular phone etc.) • retirement insurance • relocation assistance • flexible working hours • self development program

  10. Merits - Allocation by superior based on performance appraisal Bonuses - Goals set by superior - Based on the profit Stock option plan for top management Incentives

  11. Traditional Compensation Model CEO Country Functional Regional Facility Asst. Facility Base Merit Bonuses Stock Indirect Salary options compensation

  12. RecommendedCompensation Model

  13. Salary Ranges for Each Management Level • CEO: FIM 600 000-750 000 • Country VP: FIM 450 000-550 000 • Functional VP: FIM 430 000-530 000 • Area Manager: FIM 270 000-350 000 • Facility Manager: FIM 200 000-250 000 • Ass. F. Manager: FIM 150 000-180 000

  14. Additional Benefit Packages • Addition to base salary • Value of package according to position • Range: FIM 20 000-65 000 • Employee chooses the content of the package • Country Club membership, Car, Pension plan, Household services, Holiday packages, etc…

  15. Benefits for Finns Working Abroad • 20 % premium on top of base salary • Basic health care for the family • Child care and school placement • Housing arrangements

  16. Benefits for non-FinnsWorking in Finland • Housing arrangement • Basic health care for family • Child care and school placement

  17. Thank You!Questions?

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