CHAPTER 2

LITERATURE REVIEW

2.1 Administration Role in Organization

Administration in the organization actually has a key role in the organization

process, even a parameter of the progress of the organization itself. If the

administration can work well, then an organization will experience an increase in

quality. Conversely, if the administration has the problem, then the organization will

experience an identity crisis that must be addressed.

The administration is a comprehensive, process that involves all parties to

achieve a common goal. In other words, the administration is the process of

integration of all the power to make dreams come true together.

Therefore, strengthening the quality of administration in the organization

much needed given the global challenges increasingly complex. Also, there are many

beings of education who do not understand the administrative elements of running an

organization.
2.1.1 The Definition of Administration

Rifai (Suryana, 2015: 2-3) argues, "The administration is using the entire

process and involve; all potential sources are available and Appropriate, both

personal and material in an effort to Achieve Common Goals effectively and

efficiently."

The administration is the whole process that starts from the thought process,

the stats, the regulatory process, the process of mobilization, supervision or control

process until the process of Achieving Goals (Sukarno in Suryana, 2015: 3)

Syamsi (Suryana, 2015: 3) argues that the administration is a whole process of

cooperation of a group of people using the facilities in order to Facilitate and

streamline the achievement of the goals of the organization concerned.

Based on some of the above definition put forward by the experts, I conclude

that the administration is not only limited to administration alone but more broadly

includes a whole event or series of related activities and correspondence of all sources

of potential that exists to Achieve a goal more effectively and efficiently,

2.1.2 The Definition of Organizations

The organization is the unity that allows the community to Achieve a goal that

cannot be accomplished individual as an individual (Gibson in Duha, 2018: 2).

 Mulyadi (Duha, 2018: 2) argues that the organization is essentially a group of

people that are interdependent with each other together to focus Reviews their Efforts

to achieve a particular accomplish a specific goal or task.

Winardi (Duha, 2018: 2) argues, "An organization can be stated as a social

structure that is designed to coordinate the activities of two or more people through a

division of labor and hierarchy of authority, in order to implement a common goal

Attainment Certain."

Based on some of the above definition suggested by experts, I conclude that

the organization is a group of people who work the same in accordance with the

duties and functions of each in order to achieve common goals.

2.2 The Definition of Apprentice

Bartono, Rufino (2010: 310) argues that the apprentice is someone who does

exercises to expand knowledge of the work, although it has long worked. For example, a

worker Front Office became an apprentice at the kitchen because it will follow the Expo

abroad.

Silvia (2013: 367) argues, "Apprentice are apprentices, working people while

learning a skill."

Based on the above understanding, I conclude that the apprentice is someone who is

already working and want to learn other jobs outside of the habits to increase knowledge.
2.3 Compensation Management

Cahayani (Kadarisman, 2012: 3) argues that the compensation management is the

process of development and implementation of strategies, policies, and compensation

systems that help the organization to achieve its goal to obtain and maintain the required and

by increasing their motivation and commitment.

Compensation management means a management process of granting rewards,

usually taking into account the job size, performance, effort, and length of service (Santoso,

Masman, 2016: 3).

Based on the above understanding, I conclude that the compensation management is

the process of development and implementation of strategies, policies and compensation

systems to provide rewards to employees to consider the job size, performance, effort, and

length of service with the aim to retain employees and increase the motivation and

commitment of employees against the company.

2.3.1 Forms of Compensation

The forms of compensation according to Larasati (2018: 98) states:

1. Direct compensation

Is an award called the salary/wages are paid regularly by the deadline fixed

(salary/wages is defined as the price for services that have been provided by one person

to another).
 2. Indirect compensation

Are giving the profits / other benefits for workers beyond the salary or wages remain

either in cash or in-kind, allowances, medical facilities, leave and vacation.

The forms of compensation according to Santoso, Masman (2018: 5) states:

1. Direct compensation

Components are received directly and periodically eg basic wages, allowances,

bonuses, and incentives.

2. Indirect compensation

Components are received directly and routine usually accesses often "later" or in case

something to employees, such as transportation facilities.

Based on the above understanding I conclude that direct compensation is an award

given to employees in the form of money as wages, salaries, allowances, bonuses, and

incentives will be paid in accordance with the periodic. Meanwhile, the indirect

compensation is an award given to employees outside the direct compensation, for

example in the form of facilities, leave and vacation.

2.4 Salary and Wage Administration

2.4.1 Understanding Salaries and Wages

Hatta, Mulyapradana (2016: 1) argues that the salary is the employee benefits paid in

a fixed time, while wages are paid the money and so forth as the avenger of services or as a

payer of power that has been issued to grind.

 Mulyadi (Hatta, Mulyapradana, 2016: 16) argues, "The salary is paid for the supply

of services performed by employees who have a certain level of the position as manager,

while wages are payments for the delivery of services by employees and executive

(workers)."

A salary is a form of periodic payment from a company to an employee who may be

based on a contract of employment, while wages are monetary compensation paid by the

company’s to its employees in return for work already done. (Nilasari, 2016: 6.8)

Based on the understanding of some experts, I conclude that the salaries and wages

have in common is the compensation paid for a job. General salary is not only given to

people who have high positions in the company, but also to people who have an employment

contract with the company they work for to be paid in a certain time period such as one

month at the beginning/end of the month. While wages are paid for the services of a person

according to working hours and do not have collateral to be employed on an ongoing basis,

such as carpenters or laborers were paid in accordance with the products they already

produce.

2.4.2 Functions related payroll system

Some functions related to payroll system:

1. Staffing function

"This section is responsible for finding new recruits, selects new candidates, make a

decision letter salary rates, transfer of employees, promotions, and group Gajim dismiss

employees and to monitor the statuses of the payroll." (Rais, 2015: 7)

 "The function of employment is a function that is responsible for finding new

employees, create a letter of appointment prospective employees, decide where

employment, make a decision letter rates in salaries and wages, promotion and salary

class of mutation and dismissal." (Nilasari, 2016: 34)

Based on the explanation of two experts on the above, I conclude that the staffing

function is responsible for finding new employees then selected and placed in a

department that requires new employees. Also, make note of salary/wage to be received

by the employee, and pay attention to the performance of the employees of each

employee to provide promotion, demotion or dismissal.

2. Function timers

This section is responsible for organizing the time comes for all employees of the

company or agency, a good internal control system requires employees present time

recording function should not be executed by operating function or by making functions

payroll. (Rais, 2015: 8)

"The function of the timekeeper is responsible for making a record time of attendance

for all employees, for companies that implement the system of pay based on work time,

timekeeper would be relevant for future rewards received by employees, if the company

implemented a payment system at a certain period, a time only visits the presence of the

employee. "(Nilasari, 2016: 35)

Based on the above understanding, I conclude that the functions of the timekeeper

responsible in record time attendance and there are also companies that provide

wage/salary in accordance with his presence. Employee attendance time recording

functions may not be implemented by the operation or function generator function

payroll, employee time recording is usually done by machine or manual attendance.

3. Making functions payroll

"This section is responsible for making payroll containing the gross income of the

rights and the various pieces to be borne by each employee during the term of payment of

salaries." (Rais, 2015: 8)

"The function of the payroll-makers have a responsibility to make a list of salaries

and wages in the form of gross income that is rightfully and pieces that become a burden

to every employee during the term of payment of salaries/wages." (Nilasari, 2016: 35)

Second opinion expert from above, both the same about making functions payroll.

4. Accounting function

The accounting department is responsible for noting the obligations arising in

connection with the payment of salaries of employees. (Rais, 2015: 8)

Accounting functions are to be responsible in recorded liabilities arising in

connection with the payment of salaries/wages of employees. (Nilasari 2016: 36)

Second opinion expert from above, both of the same opinion about the accounting

function.
 5. Financial functions

This section is responsible for filling the check to the bank, for payment of salaries

and wages, and then cashed the check at the bank, then put money into the envelope

salaries and wages of each employee to be distributed to those entitled. (Rais, 2015: 9)

The finance function is responsible for providing the funds for payment of salaries or

wages. (Nilasari, 2016: 36)

Based on the above understanding, I conclude that the finance department is

responsible for providing the funds for payment of salaries and wages of employees by

filling out a check, cash a check at a bank, and then insert cash into the envelope salaries

and wages to be distributed to employees

2.4.3 Documents Used in Salary and Wages

The documents used in the payroll and wages based accounting system according to

Mulyadi (2016: 374) states:

1. Supporting documents salary changes

This document generally issued by the staffing function in the form of a decree by

the employee concerned.

2. Present hour card

This document is used by the timekeeper function to record the time of each

employee in the company is present.

3. Card business hours

This document is used to record the time consumed by the factory direct labor in

order to do a specific order.

4. Payroll

This document contains a number of gross salaries and wages per employee, minus

the pieces in the form of income tax Article 21, the employee's debt, contributions to

employee organizations, and others.

5. Recap payroll

This document is a summary of the salaries and wages of each department are made

by payroll.

6. Affidavit salaries and wages

This document was created by the generator function payroll simultaneously with the

creation of payroll or in activities that separate of manufacture payroll.

7. Envelope salaries and wages

Money salaries and wages of employees submitted to every employee using the

envelope salaries and wages.

8. Evidence cash out

This document is spending money orders made by the finance function based on the

information in the list of salaries and wages of the functions of payroll maker.
2.4.4 Payroll procedures

Payroll procedures by Kurniawan (2017: 37) states:

1. Present time recording procedures

This procedure is intended to record employee attendance time. This present time

recording function organized by the timekeeper using the attendance list.

2. The procedure of making payroll

In making functions these procedures make payroll employees. The data used as

the basis for the payroll are the letters about new hires, promotions, employee

dismissal, demotion, the previous month's payroll, and payroll attendance.

3. Salary payment procedures

The procedure involves the financing of salaries accounting and finance

functions. Accounting functions make cash expenditure orders to the finance function

to write a check as payment of salaries. Financial functions and then cashed the

check to the bank and put the money to pay envelope.

Payroll procedures according to Mulyadi (2016: 385) states:

1. Present time recording procedures

This procedure is intended to record employee attendance time, can use regular

attendance list or use a time recorder machine.

2. Work time recording procedures

In a manufacturing firm whose production is based on orders, recording work

time required for employees who work in production for distribution to the employee

wage costs are enjoy order products or services of those employees. The data used as

a basis for making payroll is a decree on the appointment of employees, payroll

previous month, and list of attendees.

3. Distribution procedures salaries and wages

In this procedure, labor costs are distributed to the department who enjoy the

benefits of labor.

4. The procedure of payment of salaries and wages

This procedure involves the accounting and finance functions. Accounting

functions make cash disbursements order to finance function to write a check for

payment of salaries and wages. Financial functions and then cashed the check to the

bank and put the money into envelope salaries and wages made by the paymaster.

Based on the explanation of both experts in the above, I conclude that

1. Present time recording procedures

This procedure is intended to record employee attendance time organized by the

timekeeping function, can use time recorder attendance or a machine.

2. Work time recording procedures

In a manufacturing firm whose production is based on orders, clocking times

indispensable fatherly calculate how wages will be earned by the employee based on

the products/services it produces.

3. The procedure of making payroll

In this procedure making functions make payroll employees based on letters of

the employment contract.

4. Distribution procedures salaries and wages

In this procedure, labor costs are distributed to the department who enjoy the

benefits of the labor force.

5. Salary payment procedures

This procedure involves the accounting and finance functions, accounting

functions make orders cash disbursements to the financial function to write the check

for the payment of salaries and wages, then the finance function to write the check,

then cashed the check to the bank, and put the cash into envelope salaries and wages.