International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)


Developing Fairness Quarterly-Annually Bonuses' Formulation for Employees: The Industrial Relations to Treat Equal Rights

Author(s): Hesty Prima Rini, Effnu Subiyanto

This research aims to propose designing fairness formulation of quarter-annual bonuses to distribute welfare for employees in cement industries in Indonesia. This is to end the conflict that annually occurred due to the unavailability of fairness formulation of bonuses. The methodology used a literature study approach and bolstered by an empirical case study at the cement industries in Indonesia. Comparison has been presented by analysing total bonuses given to employees in a-11 biggest cement makers worldwide in its published annual reports. The factors are then evaluated by exploratory and descriptive analyses. The findings are that five variables must be appropriately considered as determinant factors for developing a formula of bonuses. The variable is production, revenue, COGS, cash, and EBITDA. This research was first developed for usage in cement sectors in Indonesia, but it can be adapted to other sectors of industries with adequate adjustments. Type of businesses should holdings-like where it presents headquarter and members of groups as operational companies. The formula was prior implemented in the biggest SOEs Cement Holdings in Indonesia and practically useful to end the conflict between employees and the management for a decade since 2008.

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