The Ministry of Commerce and Industry - Essay Example

?Introduction The ministry of commerce and Industry is an within the Saudi Arabia’s executive arm of the government that deals with issues of commerce and industrialization. I worked in the organization as an intern for six months, a period within which I studied the ministry’s current reward system. My scope of work also involved establishment of a new reward policy in the ministry and updating the old policy. This paper reports on findings about the ministry’s old reward policy. Mission and vision of the organization The ministry’s vision is to be a leader in trade and industries in the nation. Its vision also incorporates operations in a uniform and motivating atmosphere. Its mission identifies facilitating potentials among “trade and industry sector’s capacities” and sustaining other stakeholders’ interests through effective policymaking and development of strategies to empower resource utilization towards expansion of the nation’s economy (Ministry of Commerce and Industry 1). Objectives of the organization The organization has not outlined its explicit objectives, but its scope, vision, and mission statements as well as its core values imply a number of objectives. The mission statement identifies the organization’s goal of playing a leadership role in the nation’s trade and industries. Its mission statement is more diverse and communicates a number of objectives such as to promote abilities of trade and industry in the nation and to develop and enforce policies that are suitable for economic growth. The ministry’s core values, however, imply objectives such as to ensure honesty in the ministry’s undertakings, to ensure transparency in its dealings, and to promote creativity and mastery (Ministry of Commerce and Industry 1). Organizational structure The ministry is organized into geographical branches that undertake its roles and responsibilities across different regions of the nation. The branches, however, operate under consultations and directives from the ministry’s head office (Ministry of Commerce and Industry 1) Reward system Salary, allowances, and benefits Reward is an important concept in organization and influences productivity. The ministry factors in psychological effects of rewards and bases salaries, remuneration and allowances on the value for people, recognition for the efforts and achievements that the people attain in the ministry and the need for employees’ active participation in the ministry’s activities with the aim of fostering and improving its working environment. In order to ensure this perspective, the ministry has developed an attitude under the banner, ‘compensation, performance management, communication, and career advancement.’ The ministry’s value for its human resource is evident in its rewards rates that are comparably better than at other government agencies. Offered salaries in the ministry are also based on well-defined employees’ grades with specified salary ranges. Further, the ministry recognizes its employees’ performances through a rewards system that is based on an employee’s level of success and the employee’s grade. Grading The ministry has permanent and casual employees. It has a formal structure that grades permanent employees by their academic qualifications and their work experience. Salaries scale Employees’ job grades determine their salaries and other rewards. The salaries are further reviewed, annually, to ensure consistency with the market demands and salaries that are offered by other agencies. Every department in the ministry, and with consultations from other departmental heads, undertakes the review. These reviews do not immediately affect each employee’s salary but offer a basis to determining possible changes. New recruits are, however, subjected to the running and approved payment scales though departmental heads, and human resource department can hire an employee at a higher rate than the employee’s scale. Another feature of the ministry salaries is an annual review that increases employee’s salaries based on their performances and received feedbacks on individual employee’s delivery. Salary Payments Payments are bureaucratic and ensure consistency in time of receipt by employees, on a monthly basis, as well as security of over the payments. The ministry undertakes this on the 25th day of the following month, pays in Saudi Riyal, and the salaries are reflexive of cash allowances, legal deductions, accrued allowances, and loans that an employee has accrued or incurred. Salaries are, however, not payable on the specified date if the date falls in a weekend or a national holiday or in case an employee left his or her job within the month. There are, nevertheless, special treatments for days not worked by employees, and a pro rata basis applies whenever an employee is recruited or terminates employment in the course of a month. The ministry is, however, strict on unjustified absenteeism that it regards as leave without pay besides taking disciplinary measures against concerned employees, an approach that ensures discipline and consistency among its human resource. Employees’ salaries are not detained against outside debts unless such a detention is legally warranted. Legal deductions include debts owed to the ministry and subject to predetermined terms of repayment, payments to social funds such as the retirement pension scheme, charges for time inefficiencies and unpermitted absenteeism, and judicially approved deductions such as debts and alimony payments. This protects employees from unreasonable claims by debtors. The salaries are then received by employees’ banks on the first day of the month following the payment date. The date of receipt may vary for payment outside the kingdom that may further be subjected to bank charges. Experts, before transfer of their sponsorships, are paid in cash and on a monthly basis. Compensation package structure Basic salary Basic salary is the core for employees’ compensation, depends on each employee’s job group, and is reviewed alongside reviews of salary scale and an employee’s advancement in position, responsibility, or results. Housing allowance House allowance is part of reward packages that aims at ensuring employees’ utility for high productivity levels. The ministry’s employees receive housing allowance, 25 % of total salary, alongside their monthly salaries to facilitate their accommodation. The ministry further provides a 21-day accommodation during employees’ transfers and a two-day sitting allowance to allow the subject employees find accommodation in their new workplaces. In such cases, the ministry also offers a six months house allowance advance to the employees to facilitate their settlement. Transportation allowance The ministry also offers a transport allowance that amounts to ten percent of an employee’s salary and is paid on a monthly basis. The allowance covers employees’ travelling costs up to SR 25 per day, beyond which an employee’s travelling expenses are reimbursed. Reimbursement also applies after 50 kilometers in cases of use of employees’ personal vehicles and is done at a rate of SR 0.50 per kilometer. Medical coverage In order to ensure its employees’ welfare and that of their family members, the ministry provides employees, together with their spouses and children, with medical cover while they are in Saudi Arabia and while on international duties. The ministry organizes treatments in reputable hospitals and can upgrade an employee’s medical cover should the employee chose to supplement the cover cost. Vacation air ticket The ministry also offers vacation air tickets to employees, their spouses, and their children. The covered cost includes travel cost from the nearest airport to the employee’s workstation and the nearest airport to the employee’s destination, for foreign employees. The vacation tickets for natives on international assignments cover the transport to attache or Saudi Arabian embassy of destination. Senior staff and Ministry deputies are entitled to business class tickets after a year of service while the ministry offers economic class tickets to other employees. The vacation air tickets are limited in cost, beyond which employees take responsibility. Tickets may only be accumulated to the following year with approval from departmental head. Unused tickets are otherwise reimbursed as lowest market price. Educational fees The ministry appreciates employees’ need to advance their careers and offers allowances for employees’ further academic initiatives. Employees, upon completion of two years of service, are entitled to 80% refund on their tuition fees. The employee’s head of department and human resource department head from the ministry must, however, approve of the education program with consistency. Further conditions to the refund include the relevance between the education and the employee’s current job and good grades from the course, a minimum of a C grade for undergraduates and B grade for graduate students. Mobile phone Communication is core to the ministry’s operation, and it provides for mobile phones and communication cost. Senior employees receive mobile phones from the ministry. The phones are only meant for official communication, and the employees are liable for negligent and private use of the phones. Social insurance In its efforts to enhance its employees’ satisfaction in jobs and their future welfare, the ministry pays for its employees’ social security subscriptions, and payments are effective from an employee’s employment date. The insurance covers for injuries sustained at work and occupational hazards and applies for all employees, and annuity payments to natives are subject to the Saudis Social Insurance law. The ministry contributes nine percent for annuity and two percent for occupational hazards to the natives while the native employees contribute nine percent of their earnings to the fund. The ministry only contributes two percent of foreign employees’ earning to the fund, and the employees do not contribute towards annuity. Business travel & expenses The ministry also facilitates its employees’ movements and accommodation in their course of duty. It does this through allowances that are defined under business travel. Business travel, under the ministry, defines travels outside an employee’s primary city of work and within the scope of work, as well as travels for trainings. General rules Expenses are reimbursed on a monthly basis, within six months, and in local currency subject to a documented report with supportive documents. The reports should be submitted by 20th of the month. Employees are further expected to be economical in their expenses and managers ensure accuracy and validity of all approved expenses for reimbursement. Transport The ministry pays for transportation costs to and from airports of assigned locations, subject to proof of expenditure. For use of personal vehicle or a rental vehicle, the vehicle must be a class B or a mid-size car; the ministry reimburses for travels beyond 50 kilometer at a rate of SR 0.5 per kilometer. Employees are, however, responsible for events in their travels. Air travel Ministry deputies and senior staff are accorded first class flights for flights that go for seven or more hours and business class for shorter flights. Other employees travel in economic class but can travel in the higher classes if there are no tickets for economy class or if the employee is expected to attend a meeting immediately after the flight. The ministry’s travel office and its agents coordinate official travels. Accommodation The ministry is responsible for employees’ room charges and cost of official calls plus a maximum of 10 minutes private calls per day. Deputies and senior employees are entitled to five-star hotels while other employees are entitled to four-star hotels. Trips that take more than a fortnight, however, require approval from an employee’s departmental head and approval from the human resource department. Per Diem  This allowance is meant for other expenses that an employee may incur. For trips within Saudi Arabia, SR 500 are allowed per night for hotel use and SR 300 per night in cases of personal arrangements. SR 750 per night for hotel use and SR 500 for personal arrangements are allowed within the Middle East while exact expenses are allowed for any other country. Non-overnight trips do not attract the allowance but can receive SR 300 if they go beyond 12 hours. Trips that extend to two or more weeks, however, require special arrangements by line managers with confirmation from the human resource department. Cash advances for business Cash can be advanced for official undertakings but in foreign currency and must be accounted for. The concerned departmental head with approval from the human resource department must, nevertheless, approve of such a transfer. Visa for travel The ministry arranges for employees’ travel visa subject to prior notifications. For multiple reentry visas, at least three weeks notification is necessary. Mobile phone expenses Mobile phone expenses are taken care of by the ministry up to a given amount per month. Deputies are allowed SR 1000 per month, senior employee allowed SR 750 per month while other employees are allowed the incurred costs. The amounts include rental fees for phone lines. Employees can, however, claim excess expenses on official telephone calls, but such claims must be formal, accounted for, and must be approved by departmental heads. Benchmark The table shows percentage house allowance and travelling allowance in benchmark countries. Data from Bahrain identifies a similar and constant percentage for house allowance while its transport allowance percentage, unlike in Saudi Arabia, has a decreasing trend with a increasing job grade. Kuwait identifies a house allowance percentage that increases along the job group ladder. The percentages are higher than those in Saudi Arabia are while percentage in transport allowance is constant and equivalent to that of Saudi Arabia. In the United Arabs Emirates, the percentage for house allowance increases along the job group ladder before decreasing. The percentages in house allowances across the job groups, however, lack a pattern and are therefore independent of basic salaries. Still, it is important to note that deputies in Saudi Arabia receive higher allowance percentages compared to deputies the United Arabs Emirates. The remuneration approaches in the benchmark countries, therefore, identify flexibility that can be associated with efforts to harmonize the employees’ total pays across job groups. The percentage housing and transport allowances in Saudi Arabia are constant. Benchmark from Bahrain, Kuwait, and United Arabs Emirates: United Arab Emirates Job title Basic Housing   Transp.   Total Inspector 4500 1250 0.27778 500 0.11111 6250 Shift Inspectors supervisor 5500 1750 0.31818 750 0.13636 8000 Area Inspectors supervisor 6500 2000 0.30769 750 0.11538 9250 General Supervisor 8500 3000 0.35294 1000 0.11765 12500 Assistant Manger 10500 3750 0.35714 1500 0.14286 15750 Manger 13000 5000 0.38462 2000 0.15385 20000 Senior Manger 22500 6000 0.26667 2500 0.11111 31000 Deputie 37500 9167 0.24445 3000 0.08 49667 Kuwait Job title Basic Housing   Transp.   Total Inspector 6000 1667 0.27783 600 0.1 8267 Shift Inspectors supervisor 7000 2000 0.28571 700 0.1 9700 Area Inspectors supervisor 8500 2834 0.33341 850 0.1 12184 General Supervisor 10000 3334 0.3334 1000 0.1 14334 Assistant Manger 14000 4667 0.33336 1400 0.1 20067 Manger 18000 6000 0.33333 1800 0.1 25800 Senior Manger 23000 7667 0.33335 2300 0.1 32967 Deputie 35000 11667 0.33334 3500 0.1 50167 Bahrain Job title Basic Housing   Transp.   Total Inspector 4500 1125 0.25 600 0.13333 6225 Shift Inspectors supervisor 5750 1438 0.25009 600 0.10435 7788 Area Inspectors supervisor 8000 2000 0.25 600 0.075 10600 General Supervisor 9500 2375 0.25 600 0.06316 12475 Assistant Manger 12000 3000 0.25 750 0.0625 15750 Manger 14000 3500 0.25 750 0.05357 18250 Senior Manger 16500 4125 0.25 1000 0.06061 21625 Deputie 20000 5000 0.25 1300 0.065 26300 Works Cited Ministry of Commerce and Industry. “About the ministry.” Ministry of Commerce and Industry. April 6, 2013. Web. April 10, 2013. < http://www.mci.gov.sa/en/AboutMinistry/Pages/default.aspx >. Read More