Local and Expatriate Workers: Similar but Not the Same (A Study Case on Compensation in Paxocean Graha Trisaka Industri Batam) A
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LOCAL AND EXPATRIATE WORKERS: SIMILAR BUT NOT THE SAME (A STUDY CASE ON COMPENSATION IN PAXOCEAN GRAHA TRISAKA INDUSTRI BATAM) A THESIS Presented as a Partial Fulfillment of the Requirement to Obtain Bachelor Degree in Management Department on Faculty of Economics Written By: Name : Winie Kurnia Ningrum Student Number : 13311279 Department : Management (International Program) Concentration : Human Resource Management INTERNATIONAL PROGRAM FACULTY OF ECONOMICS UNIVERSITAS ISLAM INDONESIA YOGYAKARTA 2018 ii iii iv ACKNOWLEDGEMENT Assalamu’alaikum Warahmatullahi Wabarakatuh. Alhamdulillah, all praises and gratitude, author prayed to Allah SWT who has bestowed His grace, blessings, and guidance so that author can finish writing this thesis entitled “Local and Expatriate Workers: Similar But Not The Same (A Study Case On Compensation in PaxOcean Graha Trisaka Industri Batam” well. The preparation of this thesis, author aims to fulfill the final task and complete one of the graduation requirements at the Faculty of Economics, International Management Program, Islamic University of Indonesia. In an effort to complete this thesis, author is fully aware of the limitations of time and knowledge so that without the help and guidance from all parties it is not possible to succeed well. Therefore, on this occasion, author would like to express the gratitude to: 1. Mr. Agus Harjito, Dr., Drs., M.Si as a Dean of Economic Faculty of Islamic University of Indonesia. 2. Mr. Ir. Wiryono Raharjo, M.Arch, Ph.D, as a Director of International Program in Islamic University of Indonesia. 3. Mr. Anas Hidayat, Drs., MBA, Ph.D, as a Head of Business and Economic Department. v 4. Mr. Rokhedi Priyo Santoso, S.E, MIDEc, as a Deputy of Business and Economic Department. 5. Mrs. Trias Setiawati, Dr., Dra., M.Si, as my content advisor who patiently gives direction to author so that author can complete this thesis. 6. Mrs. Ata Muftihah, S.S, as my language advisor who patiently waits me to have consultation and correct my grammar so that author can complete this thesis perfectly. 7. All the lecturers of the International Program who have given their time and knowledge to author so that the author gets a lot of knowledge that will be useful for author now and in the future. 8. Mr. H. Tukiman, S.E and Mrs. Hj. Nitawati, the author's parents who always give prayers and support to author in order to complete the thesis immediately to graduate as soon as possible. 9. The elder and the younger sister of author, Hening Rizky Permata, S.K.M, M.P.H and Ragiel Intan Haq who always provide support and cheerfulness to author so that author feels entertained during the process of writing this thesis. 10. Mr. Robertus Sudarsono, as Head of Department Human Resource at PaxOcean Graha Trisaka Industri who has given permission for author to conduct research in the company. 11. All the main informants and supporting informants who are willing to be asked for time to be interviewed by author so that the author can complete this thesis. vi 12. All staff of the International Program, Mr. Ahmad, Mrs. Alfi, Mr. Erwan, Mr. Kandri, Mr. Kusnoto who always provide assistance and make it easier for author to take care of all the needs that author need. 13. Author’s friends, Dannu Yoga Wibawa, Waode Siti Mukmin, Riska Intan Ramadhani, Veany Aprilia, Dita Dwi Agustina who have given encouragement and spirit to finish this thesis. Thank's a lot guys!! 14. Author’s friends from KKN Unit 127 Gebang (Riska, Ve, Devi/Depong, Riyan, Isnan, Tahta, and Anis), thank you for the togetherness and excitement created for a month until now. Please, don’t break our excitement up forever. See you on top my dear friends. 15. Author’s friends from International Management Program 2013 who have accompanied the author's days during the study process especially Alma Nuriski who became a friend who always listened to author’s story in the class. Author hopes for suggestions and constructive criticism from various parties for this thesis to be more useful for the community. Wassalamu’alaikum Warahmatullahi Wabarakatuh. Yogyakarta, February 23rd, 2018 Author, Winie Kurnia Ningrum vii TABLE OF CONTENTS Title Page ............................................................................................................... i Approval Page ....................................................................................................... ii Legalization Page .................................................................................................. iii Declaration of Authenticity ................................................................................. iv Acknowledgement ................................................................................................. v Table of Contents .................................................................................................. viii List of Tables ......................................................................................................... xii List of Figures ....................................................................................................... xiii List of Appendices ................................................................................................ xiv Abstract ................................................................................................................. xv CHAPTER I: INTRODUCTION ........................................................................ 1 1.1. Research Background .................................................................................. 1 1.2. Problem Statement ....................................................................................... 5 1.3. Research Objectives .................................................................................... 6 1.4. Research Contributions ............................................................................... 6 CHAPTER II: THEORETICAL BACKGROUND .......................................... 8 2.1. Literature Review ........................................................................................ 8 2.2. Theoretical Basis ......................................................................................... 26 2.2.1. Human Resource Management .............................................................. 26 2.2.2. International Human Resource Management ........................................ 27 2.2.3. Staffing in International Human Resource Management ...................... 29 2.2.4. Types of International Assignment ........................................................ 37 2.2.5. Compensation ........................................................................................ 38 2.2.6. Form of Pay ........................................................................................... 40 2.2.7. Objectives of Compensation .................................................................. 43 2.2.8. Strategic Policies of Compensation ....................................................... 43 2.2.9. The Approach of Setting Pay Rates ....................................................... 45 viii 2.2.10. Factors Affecting Compensation ......................................................... 47 2.2.11. Components of International Compensation for Expatriates .............. 50 2.2.12. The Approach of International Compensation of Expatriates ............. 54 2.2.13. Motivation ........................................................................................... 57 2.2.14. Motivation Theory ............................................................................... 58 2.2.15. Job Performance .................................................................................. 65 2.2.16. Factors Affecting Job Performance ..................................................... 66 CHAPTER III: RESEARCH METHODS ......................................................... 70 3.1. The Research Approach .............................................................................. 70 3.2. Location of the research .............................................................................. 71 3.3. Description of the Company ....................................................................... 71 3.4. The Research Informants ............................................................................. 72 3.5. Research Focus ............................................................................................ 74 3.6. Research Instrument .................................................................................... 74 3.7. Data Collection ............................................................................................ 78 3.8. Data Analysis ............................................................................................... 81 3.9. Data Validity Test ........................................................................................ 82 CHAPTER IV: EXPATRIATE IS POWERFUL .............................................. 87 4.1. Introduction ................................................................................................. 87 4.2. Centralized Management ............................................................................. 88 4.3. Transfer Knowledge ..................................................................................... 90 4.4. Communication Needs ................................................................................ 94 4.5. Expatriate Workers Have Discipline Personality .......................................