Abstract:
Service industry is a unique industry that is different from production industry. It needs special treatment and has flexible works because it deals with many personal skills and relies on human works. Especially in service industry needs skilled labors to be worked with. Reward and recognition are the ways to get them productive and satisfied, but according to Niebel, 2003 only 25 percent of manufacturing employees are now on incentives. Experience has proven that workers do not give extra effort or high productivity unless some incentives. Current productivity of the workers is only 61.2 %.Formulation of the fair wage payment should be adapted in the company and also correcting the unit labor cost. The current unit labor cost is based on the length of the frame produced, while the length is not affect the time, the joint assembly is. After the correct unit labor cost is determined, calculation of wage payment and incentives could be resulted. Benefits of these methods are to increase the productivity of employee up to 129% and suppress the outsource usage. By this means, company will result better output and save the cost by not fully relying on outsource workers.
