The Harvest Bonus, also called Harvest Premi, system.

Introduction

In this document, we discuss how the Harvest Premi system works within the IES Business Implementation for Oil Palm Plantation, and together with the Payroll Implementation for Oil Palm Plantation.

Basic Principles of the Harvest Premi system

Employees who perform the Harvesting Activity achieve a certain work result, and based on this work result, a formula is applied to calculate the Harvest Premi payable to the Employee. This is the direct Harvest Premi, but there is also an indirect Harvest Premi for Supervisors and others who do not achieve a direct work result, but rather derive their bonus from the performance of the group.

The Harvest Bonus, as calculated for each Employee, becomes a payable on the Employee payslip, and is part of the ‘Man Cost’ for this Employee, and which is

optionally recoverable to the Activity Cost Centres where performed, when using the

automatic Mancost Recovery system.

Primary Inputs of Harvest Premi data

The primary data input towards Harvest Bonus is found on the Physicals Man Journal form. The version of the Man Journal shown here includes selection of a Gang (Work Group) within a Division, and upon this selection the ‘man list’ is populated.

Each detail line lists the Activity Detail for that ‘man’, and where the Main Allocation

Account is for a Harvesting Activity (that appears on the Harvesting Activities list in the set up for Harvest Premi), then this line qualifies for Harvest Premi calculation.

We note that the Man Journals is used to record Man Activities, other premi or bonuses, overtime AND possibly Harvest Bonus input. Therefore, Harvest Bonus is sensed only IF the implied Activity is a qualifying (Harvesting) Activity for Harvest Bonus.

The WR Type may or may not be specified, and can be a specific Work Result for Harvesting, or not. The WR Total (Work Result Total) is used for calculation of DIRECT harvest bonus on this line, for this Employee. If the correct harvest activity is sensed, but there is no work total, then this will result in INDIRECT premi being sensed, i.e. for Supervisors, Administrators and or other persons who get harvest bonus based on the group performance of the individuals in the group, i.e. those who earn DIRECT harvest bonus.

[How to get to this option: -

Choose Physicals, Transaction Processing, Physicals: Man]

How Harvest Premi is calculated

The basic Harvesting Performance Premi is calculated like this: -

Work Result * Komidal - Basis Borong

For example, if the work result is 150 (kg), this is multiplied by the

Komidal to yield 1500 (where Komidal = 10 kg), and from this we deduct the

Basis Borong (in our example 700kg).

So, a typical result would be:

150 * 10 = 1500

Deduct -700

Result = 800

To realize the actual Premi paid, we have 2 rates. Rate 1, when = 300 Kg (up to),

is applied for the 1st 300kg of the 800 above, and Rate 2 is applied for all

kg above the 300 Kg, in this case for 500kg (of the 800).

So, with Rate 1 @ 10, and Rate 2 @ 12, our result will be: -

300 * 10 = 3,000

500 * 12 = 6,000

Total = 9,000 (Payment)

The work result is learned from the Man Physicals Journals, and applied

for Harvesting Activities as listed. The above example of 9,000 may be seen

as a typical daily result for an Employee performing Harvesting. This is the

DIRECT Premi.

There is also an INDIRECT Premi, which is calculated for Supervisors and others

who qualify for a Premi based on the group result. This Premi is calculated

on a day basis, for all Employees earning the above-stated Premi, in a Division.

Then, on the Total Day Result for the Division (which could include a number

of Blocks or Fields, which are Depts performed for on the Man Physical Journals),

there is a total DIRECT Premi. Employees who qualify for INDIRECT Premi will

earn the Premi based on the following caluclation: -

Total Day Premi Result / Num of Employees performed * Indirect %

There are 2 of these Indirect %. Number 1 is for the Harvesting Supervisor Level 1

found on the Man Journals that include the Harvesting Activities. Number 2 is

used for all others who qualify, and this includes all Employees listed on the

Man Journals as Supervisor Levels 2 and 3, PLUS all Employees listed for the

Harvesting Activities on the day, in the same Division, but without a DIRECT

Premi. (It IS necessary to list all Employees eligible for indirect premi on a journal with lines for these Employees, where the main allocation is Harvesting, but where there is NO work result.)

So, if #1 % = 150, and #2 % = 125, then if the total day result is 300,000 and

performed by 200 people, then the INDIRECT Premi will be calculated like this:

300,000 / 200 = 1,500

For #1 %, this is: 1,500 * 150% = 2,250 (payment)

For #2 %, this is: 1,500 * 125% = 1,875 (payment)

Note (1): Komidal and Basis Borong are specified as main parameters in the

Payroll system, and applied for all Blocks except where it is separately

specified for the Block (on the Field Master), in which case the local

Block parameters are used.

Note (2): It is possible for an Employee to earn DIRECT premi more than once for the same day, if so captured, but INDIRECT premi will only be calculated by the system ONCE for any Employee per day – if more than 1 ‘indirect’ line is sensed for the same Employee, it is disregarded.

Below, we show the main (default) settings for Komidal and Basis Borong.

[How to get to this option: -

Choose Payroll, Set Up and Controls, Harvesting Premi Parameters]

Above, we see the various parameter settings for Harvest Premi calculation, and also which Activities qualify for calculation of Harvest Premi.

However, the Komidal and Basis Borong may vary by Block and by Plant Year, and where this applies, it is specified on the Field Master (Blocks). Therefore, when no Komidal and Basis Borong is sensed for the Block and Plant Year (according to the main Allocation Account), then the system will use the default parameters (shown above).

Below, we see how the Komidal and Basis Borong may be specified by Pant Year on the Block (Field Master) –

[How to get to this option: -

Choose Physicals, File Maintenance, Fields Master]

Execution of the Calculation and Reports

The Calculation of all Harvest Premi is always performed by (calendar) Month, but on a day basis within the month. In other words, the system will always calculate each day, but all days in the month. This is done by inspection of all the Man Journals, by day, for line entries that qualify. In each case, the Division is sensed (based on the Block where performed, which is derived from the Main Allocation Account), because the bonus and especially the group bonus (indirect premi) is based on the performance of the day for a Division.

This calculation can be performed on demand or daily, or whenever reports are required. When the Payroll is performed for the month, the system will automatically re-perform all Harvest Bonus calculations for the month in order to ensure that the correct payment values are available to the Payroll.

Options for “On Demand Calculation” and Reports on the Harvest Premi can be found by choosing Payroll, Payroll Activity, Harvest Bonuses.

And below, we show a part of a typical ‘day report’ of Harvest Premi results.