Overall Employee Effectiveness
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Here are the example of incentive scheme which adopt OEE concept in TPM
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Overall Employee Effectiveness
- 1. YuYudhaSatdhaSatyayaYuYudhaSatdhaSatyaya O v e r a l l E m p l o y e e E f f e c t i v e n e s sO v e r a l l E m p l o y e e E f f e c t i v e n e s s start
- 2. Incentive System Job promotion and salary increment Job promotion and salary increment Types of RewardAssessment Impacts Long Term As a mechanism to build in a performance Objectives of Periodic (Monthly) Incentive System : Incentive Framework SampleIncentive Evaluation Incentive Scheme OEE OEE calculation OEE To incentive YSP 2 incrementincrement Annual bonusAnnual bonus Periodic incentive Periodic incentive Mid Term Short Term As a mechanism to build in a performance based variable portion in individual monthly take home pay Allow a relatively significant different of monthly income between good and bad performers Provide a more frequent periodic assessment on individual performance
- 3. Incentive Framework Incentive scheme form variable portion of Take home pay more dynamic based on his/her performance Individual monthly incentive Individual monthly incentive Incentive system SampleIncentive Evaluation Incentive Scheme OEE OEE calculation OEE To incentive YSP Department performance Department performance Individual incentive rate Individual incentive rate x •A fixed percentage over the basic salary pre-determined by policy •Normally do not change however it can be revised quarterly, semi-annually or yearly •Depends on the combined effect of individual function performance and company performances •Vary from month to month and from individual to individual Basic Salary and allowance Monthly Incentive Commission /overtime Fixed Portion Variable Portion 3
- 4. Incentive Evaluation Incentive system Incentive Framework SampleIncentive Scheme OEE OEE calculation OEE To incentive YSP •The calculation method must be straight forward •The parameters used must be quantifiable or made quantifiable through conversion of qualitative data into quantitative result •As monthly processing is required and the scope of coverage is wide, infrastructure and resources must be allocated to support the performance evaluation process •The data must be readily available and accessible •Ideally, the data can be extracted directly from existing database to avoid double entering AccessibleAccessible ResourceResourceMeasurableMeasurable 4
- 5. Incentive Scheme Incentive system Incentive Framework Incentive Evaluation Background • Necessity to leverage motivation lever of employee to contribute Objectives • To recognize any employees who consistently demonstrate outstanding performance toward achievement of SampleOEE OEE calculation OEE To incentive YSP 5 lever of employee to contribute to corporate strategic objectives by achieving a set of KPIs Target for Cost and Quality performance toward achievement of productivity & error rate • To differentiate clearly between outstanding, mediocre and low performer
- 6. Incentive system Incentive Framework Incentive Evaluation OEEIncentive Scheme OEE is an integrated metrics that measure the level of availability, performance rate, and quality resulting from an employee OEE SampleOEE calculation OEE To incentive YSP 6 Availability Performance Rate Quality Rate 6 Big Losses • absents • lateness • Idling • Reduced Speed/ Capacity Losses • Scrap/ Rework • over SLA
- 7. Incentive system Incentive Framework Incentive Evaluation OEE Calculation Incentive Scheme OEE • Availability = standard working hours – (hours lateness + hours absents) Standard working hours SampleOEE To incentive YSP 7 • Performance rate = Transaction done in that month Targeted transaction in that month • Quality = Transaction within SLA Overall transaction OEE = Availability x Performance Rate x Quality
- 8. Incentive system Incentive Framework Incentive Evaluation OEE to incentive Incentive Scheme OEE OEE calculation Individual Monthly Incentive Sample YSP 8 XDepartmental KPI Individual Incentive Rate = Monthly dept KPI Bonus UnitX = Overall Equipment Effectiveness = Basic Salary/12
- 9. Incentive system Incentive Framework Incentive Evaluation SampleIncentive Scheme OEE OEE calculation OEE To incentive YSP 9 Assume that Department KPI achievement for Loan Processing (Irfan) score is 4.05 or equal to 81% Assume that on that month Irfan never late nor absents OEE = Availability x Performance x Quality OEE = 100% x 131% x 92.1% OEE = 121% If Irfan has gross salary Rp. 4 mio, the incentive received by Ifan is = Dept KPI x OEE x BU = 81% x 121% x (Rp. 4,000,000/12) = Rp. 325,757