Salary Structure

- least amount of compensation an employer is required to pay it's employees.

- undergone reform in 2012

Minimum wage

Minimum wage is set by:?

1. A decree

2. Wage board or council

3. Reputable authority

4. Labor court

Purpose of minimum wage?

To avoid any unfair low pay

- Who are task to implement the provisions of the labor code of the Philippines on labor law?

- implemented (2) two-tiered wage system (2TWS) aim at promote productivity and minimizing inadvertent outcomes.

DOLE AND NWPC

maintains the mandatory minimum wage under R.A 6727 or the WAGE RATIONALIZATION ACT.

1st TIER

- supplemented by the voluntary productivity based pay scheme

- this tier encourages employer to reward their employees additional pay based on the quality of their performance

2ND TIER

- monitors the economic activities of each region and recommends adjustment based on regions growth rate and unemployment rate and other factors.

RTWPB

- define as the hierarchy of jobs with corresponding salary ranges

Salary Structure

- a salary Structure is decided upon by the top management based on the organizations ability to pay. To remain competitive is to provide competitive salary and invest in it's employees.

Organization ability to pay

- there are certain jobs that are hard to find skill

- if low supply = there's a need to raise these job to a higher level than that suggested by job evaluation.

Supply and Demand of Labor

- it is necessary for the organizations salary to conform to the industry players. Aside from competitive it allows uniformity of salary given and helps in employee retention and loyalty.

Prevailing Market Rate

- salary Structure should reflect the ability of employees to provide for their personal and family needs.

Living Wage

- means the employees contribution to the organization.

Productivity

- organization a capability to provide competitive salaries and benefits by giving utmost attention to pay grades, competencies, employee performance, and position.

Internal Equity

- performance delivery dwells on salary increases based on performance or promotion increases based on meritorious performance

Meritocracy

- salary Structure are based on not only job evaluation but also on benchmark jobs by market rate analysis

Competitiveness

- the organization should for see how pay rates can drive success to the organization. Rates can attract high performance individuals and retain them. This is significant in the achievement of the org goals and objectives.

Return on investment

- pay the workforce lower than the market average

- the org implement salary Structure based only on the current date.

- an organization using this strategy may not attract high caliber candidates, but offer training and development instead.

Lag the market

- Salary structures are set to be at the market rates for the middle of the compensation planning year so at the beginning of the year the pay rates will be leading the market until the middle of the year, then lagging the market the second half of the year.

- you're not too worried over six months of slippage

Lead-Lag the market

- paying above the market rate

Lead the Market

- it completes the salary structure

- grouping the job into grades

- it is define as groupings the job which have been determined by any job evaluation method and approximates the group level of difficulty and importance.

Pay Grade

- interval between the minimum and maximum salary base for each job or group of jobs.

Salary Range

Number of salary structure depends on the guildlines of?

1. The number of skills distinct and evident in the heirarchy

2. The extent of emphasis on career development and progression

3. The number of supervisor-subordinate relationship

4. The capacity of the org to pay and administer salary structure

- it can be norror or broad graded.

- job ranges: 20%-40% ranges for narrow graded (job grades: 10 above), 40%-50% ranges broad graded (job grades: 6-9)

Graded pay Structure

- there's a separate pay grade for each job family.

- can cause conflicts among employees because of the division of jobs and salaries.

- it clearly differentiate pays based on the jobs done

- provides better set of idea to promote employees

Job family Structure

- similar to graded structure but with a few bands of five to six and a pay ranges of 50% - 80%

- usually adapted by organization that respond to the environment of changing business conditions

- it aims to reward performance more on salary progression and career development without promotion

- flatten the hierarchy

Broadband