Wages and Salary Management Practice Flashcards

This set of vocabulary flashcards covers key concepts in wages and salary management, including different salary structures, wage categories, and the institutional mechanisms used in the Philippines.

Salary Structure (Pay Schedule)

A system used by employers to determine employee compensation by taking into account merit, length of employment, and comparative pay, typically utilizing pay grades with defined minimum and maximum salaries.

Traditional Structure

A salary system divided into numerous pay grades with relatively small salary increases between them; used by $24\%$ of businesses to prevent employees from reaching the maximum salary too quickly.

Broadband Structure

A flexible salary structure utilized by $5\%$ of companies that features fewer pay grades with wider salary ranges, allowing for more leeway in setting salaries but potentially leading to greater pay inequalities.

Market-based Structure

The most popular salary system, used by $55\%$ of businesses, which determines salary ranges based on external pay audits and competitive data for similar positions from resources like Glassdoor.

Wage

A remuneration provided to labor for work done or services rendered to an employer, categorized into living wage, fair wage, and minimum wage.

Living Wage

The income level required for a family to afford a basic but decent standard of living; in the Philippines, the average for a family of five is approximately $₱1,207$ per day as of March 2024.

Fair Wage

A wage rate that acts as a mean between the living wage and the minimum wage, fixed by considering the economic position and future prospects of the industry.

Minimum Wage

The lowest remuneration that employers pueden legally pay their workers, set by region in the Philippines; for example, the National Capital Region (NCR) rate is $₱645$ per day as of January 2025.

Wage Rationalization Act (Republic Act No. 6727)

The primary act in the Philippines that establishes the framework and institutional mechanisms for determining the minimum wage.

National Wages and Productivity Commission (NWPC)

The national advisory body that formulates policies on wages, incomes, and productivity, and reviews regional wage levels to ensure alignment with national development plans.

Regional Tripartite Wages and Productivity Boards (RTWPBs)

Regional bodies responsible for setting minimum wage rates for agricultural and non-agricultural workers by conducting public hearings and assessing economic factors like inflation and cost of living.

Wage Order

The official document issued by the RTWPBs based on data collection and public consultations that sets the specific minimum wage rates for a particular region.