BOUSTEAD HOLDINGS BERHAD

HISTORY OF BOUSTEAD

Boustead Holdings Berhad, one of Malaysia's oldest conglomerates, can trace its roots to 1828 when Edward Boustead founded a modest trading company in Singapore, shortly after Sir Stamford Raffles established the British Settlement in 1819.

Its core business during those pioneering days was primarily import and export, as well as shipping and insurance agents. With trade growing between the two territories and as the Straits of Malacca became more important as a primary waterway between Europe and the Far East, Edward opened a branch in Penang in 1864.

At the turn of the 20th century, Boustead in the year 1911 diversified its business interest and began trading in rubber. Moving up the value chain, the company expanded into the management and ownership of rubber estates while exporting sheet rubber and latex. As the new nation, Malaya grew rapidly, Boustead expanded its business interest to import and distribution of a variety of goods.

In 1961, Boustead consolidated its various businesses to form a new public listed company known as Boustead & Co. Limited. In 1966, the entity changed its name to Boustead Holdings Berhad and in 1976, the Group became a wholly-owned Malaysian entity.

BOUSTEAD TODAY

Today the Boustead Group has an active interest in six primary sectors of the Malaysian economy, namely plantation, property, finance & investment, pharmaceutical, trading & industrial, and heavy industries.

The Group has grown from strength to strength and is a firm believer in delivering shareholder value. This is reflected by its profitability over consecutive years, which has been in excess of half a billion Ringgit on the back of an annualised turnover that has been growing in the billions.

The Group's strength lies in the ability to seek opportunities, deliver consistent growth and build talent. With more than 17,000 employees, Boustead is committed to raising the bar in developing Malaysia's human capital. We continue to strive for excellence to become the preferred choice for customers, shareholders and employees.

The success of Boustead Holdings Berhad is a reflection of the commitment, dedication and integrity of its major shareholder, Lembaga Tabung Angkatan Tentera.

Source: http://www.boustead.com.my/

BHIC CORPORATE VIDEO

BOUSTEAD HEAVY INDUSTRIES CORPORATION BERHAD

Source: http://www.bhic.com.my/index.php

BHIC COMPENSATION & BENEFITS PRACTICES

How BHIC determine compensation:

1.    Salary

They use Salary Bands. The band range is based on positions. The bands are SA, M1, E1, E2, E3, E4, E5, E6, E7, E8, E9, E10, E11, N1 (A), N1(B), N2, N3, N4 and N5. A band has a min and max salary. This is based on their job responsibilities, qualifications, certifications, experiences or age.

   

2.    Allowance

Depends on professional certificates, qualifications and experiences.

3.    EPF

The EPF Act 1991 requires employees and their employers to contribute towards their retirement savings, and allows workers to withdraw these savings at retirement or for special purposes before then.

4.    SOCSO

BHIC is required to contribute SOCSO for its staff/workers according to the SOCSO Contribution Table & Rates as determined by the Act. BHIC will pay 1.75% while the staff/workers’ will contribute 0.5% of their wages for the Employment Injury Insurance Scheme and the Invalidity Pension Scheme. Both the rates of contribution are based on the total monthly wages paid to the employee and contributions should be made from the first month the employee is employed.

5.    Overtime

Employee with salary band between N1 (A) and N5 are qualified to claim overtime work. The rate depends on weekdays, weekend or public holidays.

6.    Bonus

There are some factors to determine bonus. Employee’s performance appraisal is a method for the employer to determine who will receive a bonus. According to Pn Sharifah, it also depends on the performance of the company. However, it some rare cases, bonus is also given to a performer even if the company is not doing well financially. This is done to retain the talent.

7.    Long serving award

This award will be given to loyal employees that have been working in BHIC for 15 years. They receive cash and a plaque for their loyalty.

8.    Paid leave

Type of paid leave offered: Annual leave, compassionate leave, sick/medical leave, emergency leave and examination leave.

9.    Medical and Insurance

As per interview, all employees get the same medical and insurance benefit equally.

10.  Training

BHIC’s Group Human Capital Management is actively encourage employees to go for training. Many employees do not know that training is also part of the compensations offered by BHIC.

11. Non-financial

BHIC develops mentorship program for their talents. For example, Board of Engineers IR mentorship program and Project Management Professional Certificate program.

12. Comfortable and safe working environment

BHIC always prioritise safety. BHIC spends a big amount of money to ensure the safety of their employees. There is also a plan to make BHIC a more comfortable place to work. However, this depends on the higher management and BHIC working culture.

13. Permanent position

Skim Latihan Satu Malaysia (SL1M) and contract workers can be rewarded a permanent position if they perform. This depends on the vacancy and manpower requirements.

14. Promotion

Employee will be rewarded a promotion if they perform very well.

Compensation Structure Awakens in BHIC!

RECOMMENDATION ON CURRENT PRACTICE

Recommendation on Compensation Strategy

1. Budget Allocation

The strategy should include the organization’s approach to allocating compensation budget into salary and benefits. This strategy will determine how much of the total compensation budget will be spent on salary and what percentage will be spent on benefits and other incentives.

For example, for a budget of $1000 for compensation, if 90% is salary and 10% is benefits, determine how that 10% is spent – one scenario might be – 7% on health benefits, 2% on retirement savings and 1% on tuition reimbursement.

Allocating specific budget to pay and benefits can help control labour, health care and other miscellaneous benefit costs.

2.  Salary Audits

Markets change therefore it is important to perform routine salary audits to ensure salary ranges reflect current compensation trends in a particular industry.

When performing an audit, the goal is to determine how competitive are those particular jobs and what is the external market demanding.

Ask the question, is it a growing or dying profession?

It is important to pay attention to market changes and to stay current because failing to keep up with the competition can lead to loss of talent and valuable employees.

3.  Benefit Package

Many organizations use benefit packages, in addition to salary, to attract and retain employees.

Their goal is to be competitive with health, retirement, tuition reimbursement and other benefits because they understand that it can be the determining factor for a job candidate who is deciding whether to accept a position with an organization, or an employee who is considering leaving.

4.  Performance Management System

It is important to have a structured performance management process to ensure employees are meeting corporate objectives and are assessed on a regular basis.

This process should include development of annual goals, annual performance appraisals and a structured process for coaching and mentoring employees.

Compensation strategies can positively influence employee engagement and improve employee productivity.

5.  Legal Compliance

A well defined compensation strategy will incorporate legal requirements to ensure the organization is in compliance with all federal and state laws.

The goal is to eliminate natural biases made in hiring decisions and ensure compliance with Employment Act 1955 and etc.

6.  Structured Administration

As with any other business process, structure is important.  Developing an annual review process, salary audit, raise process timeline and making sure someone is responsible to ensure all areas are completed is critical to successful compensation management.

Finally, a comprehensive compensation strategy can be the foundation for creating an environment that recognizes and rewards employee performance and helps to establish a strong culture of employee engagement.

Organizations are only as successful as their approach to hiring the right people, setting clear expectations, managing performance and recognizing and rewarding employees for a job well done.

LIMITATION

1.    Based on budget

Any decision regarding to improvement of compensation & benefits must get approval from Board Of Directors at Boustead and will be consult by Human Resources Department based on financial capacity.

2.    Bonus

In Boustead, bonus based on company performance on the profit, employee bonus paid out based on their KPI and KPI quota based on “Curved Bell”

3.    Perks / Claim / Allowances

Different position & different ranking will get the different perks. The higher position get better benefits eventhough they do less work rather than production worker.

4.    Medical benefits

Boustead applies minimum medical benefits to the staff such as Out Patient claim RM2000.00 per year. This will incurred some difficulties to the families that have a large family members. Same goes to single employees, they can’t cover their parents for the medical benefits, so it sort of unfairness practices. But this practices has been implemented for most of companies in Malaysia.

5.    Overtime

At Boustead, only non-executive level are qualified to claim overtime work due to nature of work. Engineers are consider executive & professional level, so the overtime did not paid due to their high salary given rather than non-exec.

6.    Salary based on qualification / working experience

The basic cash amount Boustead agreed to pay an employee is that worker's base or guaranteed pay. In most companies, base pay is determined by an employee’s job description and position. The company sets a minimum and maximum range that an employee for a specific position may earn for the year. This amount can increase, decrease or stay the same, depending on the employee’s performance.

7.    Training & Development

Training usually for all employees, but for the development, only selected talents will undergo this programmes because it is costly & for long term engagement for their career path.

8.    Security & work safe environment

Depends on the higher management approval & BHIC working culture. For the safety requirement they will apply the minimum requirement of OSH Act due to financial budget.

9.    Product-Cost Factor

All the aviation heavy duty equipment is very high cost for price and maintenance. So Boustead spent sum of cost on buying, servicing & maintenance & it will indrectly lesser down the profit

10. Non-financial

BHIC develops mentorship program for their talents. For example, Board of Engineers IR mentorship program and Project Management Professional Certificate program. However, its limited only for the sum of talent pool. Non executive rarely to join this programme.

11. Promotion

At Boustead, the top performers will be rewarded for a band range position. However, for the position promotion, it depends on the vacancy of the position and if the company opening the new section or department or enlarging their business such as opening new branches/ factory.

12. Permanent Position

Permanent position will be awarded to a contract worker if they performed well and by recommendation of their superior depends on vancancy of manpower requirement.. But it applies only for worker under term of “Contract of Employment” not for “Contract of Services”

13. Psychological and Social Factors

Sociologically and ethically, people feel that equal work should carry ‘equal wages’, that wages should be commensurate with their efforts, that they are not exploited and that no distinction is made on the basis of caste, colour, sex or religion. To satisfy the conditions of equity, fairness and justice, a management should take these factors into considerations.