HRM - Pre finals

Compensation Management

Total amount of monetary and non-monetary pay provided to an employee by an employer, return to work performed.

Compliance

compensation must comply the law, Such as republic act no. 602 Or any act to help company against litigation, ensure fairness.

Attract Top Talents

To recruit qualified talents

Retain and Reward Personnel

Employees identify pay as one of the top reasons for job satisfaction.

Boost employee motivation

Employees who knows that they are fairly compensated for their work feel appreciated and stay productive motivated and committed.

Maximize return on investment (ROI)

Organization can create compensation plan that stay within budget while driving productivity that pay for performance and motivational tactics.

Compensation components

All rewards classified as monetary payments. Example: Base pay, allowance, Bonus and commissions.

Non-compensation components

All rewards other than monetary payments. Example: Free foods, gym membership etc.

Job description

Define in writing the responsibilities, require requirements, functions, duties, locations, environment, and conditions of job.

Job Analysis

Process of analyzing jobs from which job descriptions are developed. It includes interviews, questionnaires, observations.

Job Evaluation

System of comparing jobs to determine appropriate compensation level for individual job.

Job ranking

Compared to each other based on the overall worth of the job it is based on the judgment of skills, efforts and responsibilities.

Job classification

Jobs are classified into a existing grade/category/structure/hierarchy.

Factor comparison

Set of compensable factors are identified as determining the worth of job. Factors: Skills, responsibilities, efforts, working conditions.

Point Factors

Extensions of factors comparison method identified. Factor: Skills - Experience, education, ability.

Pay structure

Includes several grades, which each grade containing minimum salary and increments or grade range.

Salary Surveys

Includes collection of salary and markets data. We also include average salaries, inflation indicator, cost-of-living indicator, salary budget average.

Policies and regulations

Parts depends on the company’s and organizations Policies and regulations.

Base pay

Typically flat rate, either as on hourly wage or salary. Example, Minimum wage rate is 537 pesos.

Wage and salary add-ons

Includes overtime, shift parental, allowances, premium pay, holidays and so on.

Incentive Pays

Also known as “Variable pay” Is a pay for performance.

Benefits

It is indirect compensation that provides something of value to the employee. It may include health insurance, retirement contributions, tuition reimbursement and many other others.

Direct compensation

Form of compensation that goes directly to the employees as part of their paycheck. Example: Base pay, Add-ons, incentive pay.

Indirect compensation

Compensation where employees do not get any funds, such as benefits program. Employees never see these funds.

Expectancy Theory

It is a process theory of motivation which means that an individual goes through a cognitive process to evaluate a situation. It proposes that employees are motivated when they believe they can accomplish a task and that the rewards are worth the effort.

Equity Theory

Developed by J. Stacy Adams proposes that people are motivated to seek social equity in their rewards they receive (Outcomes) for their performance (Input).

Performance versus longevity

Companies pay people more for longevity or seniority, which means accumulating years of service with the firm by promotions and recess overtime regardless of performance.

Skill based/Competency based

It means the company pays members of the workforce for individual skills or competencies that they bring to work, whether those skills are necessary for individuals to do their current jobs.

Above/at/Below Market

It is also crucial to determine whether the company will be a Above, at, or below market.

Salary Structure

It is a system that employers used to determine an employee’s compensation. It considers merit, length of employment, and pay compared to similar positions.

Traditional salary structure

These are divided into numerous pay grades. Salary increases are relatively small jobs between pay grades.

Broadband structures

These salary structures utilize fewer pay grades, and each pay grade has a wider salary range than traditional structures.

Market based structure

These are based on what other employers pay employees. It conduct an external pay audit to determine your salary ranges for each position.

Pay Structure

Is a hierarchy of jobs and their rates of pay within the organization. It allows individuals to identify what the pay range is for each job. It is composed of job structure or the workers job hierarchy from the lowest to highest level.

Labor market competitions

Refer to the labor supply and demand in the market that should be recognized to set the minimum value for a particular pay level.

Product market competition

Is a function of the value of the product or service sold to the customer that means the top of the pay level.

Delayering

Is changing the company structure to get rid of some of the vertical hierarchy in an organization.

Broadbanding

Is accomplished by combining multiple pay levels into one.

Compensation plan

Is a complete package that list details about employee’s wages, salaries, benefits and payment terms. It includes details about bonuses, incentives and commissions that may be paid to employees.

Steps in creating a compensation plan

1. Develop a program outline

2. Designate an individual to supervise the design of the compensation program.

3. Create a compensation philosophy

4. Contact a job analysis of all positions

5. Evaluate jobs

6. Determine grades

7. Established great pricing and salary range

8. Determine an appropriate salary structure

9. Develop a salary administration policy

10. Obtain top executives approval of the basic salary program

11. Communicate the final program to employees and managers

12. Monitor the program

Overtime pay

Employee renders service beyond the schedule indicated in the contract will be given additional compensation equivalent to his regular wage, including at least 25% premium.

Premium pay

It is overtime pay for rest days and official holidays. Employee shall be paid an additional compensation from the rate of the first eight hours on holiday or rest day plus at least 30%.

Regular holidays

These refers to fixed dates like Christmas, independence, or New Year’s Day. However, Nationals Heroes Day and Holy week are considered regular holidays despite changing dates.

Special holidays

These are also known as “Special Non-working holiday holidays”. They fall on flexible dates, depending on the circumstances. Example: ASEAN summit, or regional events like festivals or class suspensions.

Double holidays

This is a rare occurrence were in a regular holiday and a special holiday fall on the same day. For example: President prodigal the third declared August 21, 2018, as a non special working and regular holiday Ninoy Aquino at the same time.

13th month pay

Is often mistaken as the Christmas bonus, but technically it is a monetary bonus mandated by law. Is given either into installments (May & December) Or fool before December 24.

Separation pay

Is also part of the lab code and is given employees terminated from the company. The only exemption is those terminated because of misconduct or crime involvement.

Two types:

1. ½ month pay per year of service

2. One month pay per year of service

Retirement pay

Find the age of 60 years or more, an employee who has serve as the establishment for at least five years may be granted retirement pay equivalent to at least ½ month of salary for every year of service.

Labor relations

Refer in a broader sense, to the relationships between the employees on the one hand and the management on the other hand, or the relationship between management and labor unions.

Management Prerogations

Under the doctrine of management prerogative, Every employer has the inherent right to regulate according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work serve for be Sean, transfer of employees, layoff of workers and discipline, dismissal and recall of employees.

Workers rights

These are constitutional rights their derive from sec. 3, art. XIII of the 1987 Philippine Constitution, namely: The right to organize; To conduct collective bargaining or negotiation with the management; To engage in peaceful concerted activities, Including a strike under the law; To enjoy the security of tenure; To work under human conditions; To receive a living wage, and to participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

Law/CBA

Such relationships between management and employees are governed by the existing laws and other agreement under the collective bargaining agreement (CBA)

The selection and engagement of the employees

Employment status is defined and prescribed by the law and not by what the parties say it should be. The existence of an employer – employee relationship cannot be avoided simply by repudiating in the employments contract.

The payment of wages

The kind of compensation does not decide whether a worker is an employee or not. The compensation may be determined according to time spent on the job order the result of the effort.

The power of dismissal

The termination of an individual’s employment by the employer.

The employers power to control the employee concerning the means and methods the work is to accomplish

Known as the “ Control test” Is the most important element. It’s absence means there is no employer - employee Relationships between parties. Not every form of control has the effect of establishing unemployment – employee relationship.

Presidential decree no. 442

A decree Instituting labor code, thereby revising and consolidating labor and social laws to afford protection to labor, promote employment in human resources development and ensure industrial peace based on social justice.

Article 1. Name of decree

This decree shall be known as the “Labor Code of the Philippines” It is the principal labor law of the country that had gathered in the volume 60 pieces of law that were in force when the codification began in 1968, such as the 8 hour labor law, the minimum wage, and the Termination pay law.

Labor Legislation

Is a broad category than labor law that means to protect and promote society’s welfare or segments in the furtherance of social justice.

Labor standards law

Set out the minimum terms, conditions and benefits of employment that employers must provide or comply with and which employees are entitled as a matter of legal right. Example: The laws wages and work hours, Safety and health of employees and employment benefits.

Labor Relations Law

Defines the status, rights and duties and the institutional mechanism that govern the individual and collective interactions between employers, employees and their representatives. Example: Unionization, negotiation and dispute settlements.

Article 2. Date of effectivity

This code shall take affect six months after it’s promulgation.

Article 3. Declaration of basic policy

The state shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers.

Article 4. Construction in favor of labor

All doubts in the implementation and interpretation of the provision of this code, including it’s implementing rules and regulations, shall be resolved in favor of labor. It is also known as the star provision.

Article 5. Rules and regulations

The department of labor and employment, other government agencies charge with the administration and enforcement of this code or any of its parts shall promulgate the necessary implementing rules and regulations.

Department of Labor and Employment (DOLE)

Is the lead agency in enforcing labor laws, and it possesses the rule making power in the enforcement of the code. A rule or regulation that exceeds the department role making authority is void.

Article 6. Applicability

All rights and benefits granted the workers under this code shall, except as may otherwise be provided here in, apply similarly to all workers, whether agricultural or non-agricultural.

Labor Disputes

Refers to questions or controversies regarding the terms and conditions of employment, including how such terms and conditions are negotiated, fix, arrange or modified over the above minimum standards.

Rights Disputes

Involve an alleged violation of a right recognize bylaw, collective bargaining agreement, contracts or company policy.

Interest Dispute

Economic or bargaining dispute where their issues involve are not mandated by law and could be negotiated.

Labor Standards Disputes

Include nonpayment or under payment of wages and which related benefits and violation of health and safety standards.

Labor Relations Disputes

Involve employee discipline, unfair labor practice, deadlocks, strikes.

Welfare and social legislation Disputes

Refer to claims arising from the failure of the employer to comply with the social and welfare obligations under the law.

1987 Constitution Sec. 3, Article XIII

The state shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including consolidation and enforce their mutual compliance their with to foster industrial peace.

Labor Code, as amended by Republic act 6715

It is the policy of the state, to promote an emphasize the importance of free collective bargaining and negotiations, including voluntary arbitration, mediation and consolidation moves of settling labor or industrial disputes.

Unfair Labor Practices

Refers to acts opposed to the right to organize or to engage in lawful concerted activities for collective bargaining or the workers mutual aid and protection.

Collective Bargaining

Is a process by which the representatives of a firm and the employee representatives discuss and negotiate the terms of their relationships to arrive at a beautiful acceptable labor – management agreement.

Four essential elements of collective bargaining

1. Legal

2. Economic

3. Political

4. Moral

Legal

Collective bargaining is the process of negotiating an agreement.

Economic

Its contents a specify the terms and conditions of employment.

Political

The agreement is proof of negotiation between Labor and management

Moral

It involves a system of shared responsibility in decision-making

Bargaining deadlocks/lockout

These occurs when neither side is willing to give in. It refers to the failure of both the employer and the employee to arrive at the terms and conditions of a latter’s employment despite previous efforts to arrive at a compromise.

Strikes

Occurs when employees refuse to work to make greater concessions at the bargaining table.

Injunctions

The employer obtaining a court order or restraining order to prevent the workers from engaging in strikes in specified situation.

Lockout

The employer refuses to furnish work to their workers by getting non-union members as a substitute for the plant’s continuous operation.

Picketing

When union calls a strike, it usually establishes picket lines to advertise the strike and discourage the employer from continuous operations. It is the act of strikers where they patrol back and port, carry black cards or banners with statement relating to the dispute and distribute kinds of literature at the entrance of the company’s gate.

Third-party Intervention

Both parties have to agree to use any third-party interventions: Mediation and consolation, fact finding or arbitration. Hi Salama