Compensation and Employee Relations Notes

Compensation and Salary Administration

Compensation is the total monetary and non-monetary pay given to an employee in return for their work.
It includes both pay and benefits.

Objectives of Compensation Management

Compensation costs are a large part of a firm's total costs.
Aims to pay employees fairly while staying within budget.
1. Compliance:
- Must comply with laws like Republic Act No. 602 (minimum wage law).
- Adhering to standards protects against litigation and ensures fairness.
1. Attract Top Talents:
- Competitive compensation plans attract qualified individuals.
1. Retain & Reward Personnel:
- Affects both attracting and retaining employees.
- SHRM survey (2016) showed pay as a top reason for job satisfaction across generations.
1. Boost Employee Motivation:
- Fair compensation leads to engaged, committed, and productive employees.
- Increases job satisfaction.
1. Maximize Return on Investment (ROI):
- Equitable compensation plans that drive productivity through pay-for-performance benefit both the company and employees.

The Compensation System

Includes anything an employee values that the employer offers in exchange.

Compensation components:
- Monetary payments (base pay, allowances, bonuses, commissions).
Non-compensation components:
- Non-monetary rewards (free food, gym membership).

Parts of the Compensation System

Compensation should be perceived as fair based on systematic components.

I. Job Descriptions

Writing of responsibilities, requirements, functions, and other aspects of jobs.
May be developed individually or for job families.

II. Job Analysis

Analyzing jobs to develop job descriptions.
Techniques include interviews, questionnaires, and observation.

III. Job Evaluation

Comparing jobs to determine appropriate compensation levels.

A. Job Ranking

Simplest method.
Jobs are compared based on overall worth to the organization.
Worth is judged on skill, effort, responsibility, and working conditions.

B. Job Classification

Jobs are classified into an existing grade/category structure/hierarchy.
Each level has a description and associated job titles.
Jobs are assigned to the grade/category providing the closest match.
Common job grading standards ensure equity.
Job grading standards are developed along occupational lines.

C. Factor Comparison

Compensable factors determine job worth (typically 4 or 5 factors).
- Examples: Skill, Responsibilities, Effort, Working Conditions
Benchmark jobs are identified.
- Characteristics: Equitable pay, Range of factors (low to high end).

D. Point-Factor

Extension of factor comparison.
Compensable factors are identified and defined.
- 1. Skill
  a. Experience
  b. Education
  c. Ability
- 2. Responsibilities
  a. Fiscal
  b. Supervisory
- 3. Effort
  a. Mental
  b. Physical
- 4. Working Condition
  a. Location
  b. Hazards
  c. Extremes in Environment
Each factor is divided into levels/degrees, assigned points.
Jobs are rated using a job evaluation instrument.
Points are summed to form a total score.
Jobs are grouped by total point score and assigned to wage/salary grades.

IV. Pay Structures

Useful for standardizing compensation practices.
Includes several grades, each with a minimum salary/wage and step increments or grade range.
Step increments are common in union positions with pre-determined pay through collective bargaining.

V. Salary Surveys

Collections of salary and market data.
May include average salaries, inflation indicators, cost of living indicators, and salary budget averages.
Companies may purchase surveys or conduct their own.
Surveys may be industry-specific or cross-industry, within a specific region or across regions.
Types of data gathered:
- Base salaries
- Increase percentages or amounts
- Merit Increases
- Salary Ranges
- Starting Salary
- Incentives/Bonuses
- Allowances and Benefits
- Working Hours

VI. Policies and Regulations

Depends on the company’s or organization’s policies and regulations.

Components of Compensation

Four (4) basic components:

Base pay
- Flat rate (hourly wage or salary).
- Major factor in accepting a job. In the NCR the daily minimum wage rate is Php 537.00.
Wage and salary add-ons
- Overtime pay, shift differential, allowances, premium pay for weekends and holidays.
Incentive pays
- Variable pays, pay for performance.
- Examples: piece work, commissioned sales.
Benefits
- Indirect compensation that provides value.
- Health insurance, retirement contributions, cafeteria service, tuition reimbursement.

Direct Versus Indirect Compensation

Direct compensation: Goes directly to employees (base pay, add-ons, incentive pay).
Indirect compensation: Employees do not receive funds directly (benefits program).
For-profit businesses design compensation programs with direct and indirect components for the best productivity return.
Understanding expectancy and equity theory is essential for motivating workers.

Motivation and Compensation Planning

Expectancy Theory

Process theory of motivation where individuals evaluate a situation.
Employees are motivated when they believe they can accomplish a task and the rewards are worth the effort.
Based on Victor Vroom’s formula: $Motivation = Expectancy × Instrumentality × Valence$
- Expectancy: Perception of ability to accomplish an objective.
- Instrumentality: Perception that performance leads to desired reward.
- Valence: Value a person places on the outcome or reward.
These components are multiplicative; if any are near zero, motivation is low.

Equity Theory

Developed by J. Stacy Adams.
People are motivated to seek social equity in rewards for their performance.
Employees are motivated when the ratio of their perceived outcomes to inputs is roughly equal to that of others.
People compare inputs (effort, loyalty, skills) and outcomes (pay, benefits, recognition) to relevant others.
Employees compare perceived (not actual) inputs and outcomes.
Perceptions of inequity hurt attitudes, commitment, and performance.
Perceived inequity can justify unethical behavior.
When employees perceive inequity, they are motivated to reduce it by decreasing input or increasing outcomes.
Comparison leads to three conclusions: under-rewarded, over-rewarded, or equitably rewarded.
- Under-rewarded: May increase outcomes, decrease inputs, or rationalize.
- Over-rewarded: Usually rationalize and accept it.
- Equitably rewarded: Continue to put forth the same effort.
People are demotivated if equity does not exist.
HR managers need to understand that employees will be demotivated if they feel they are not being treated fairly.

Basis of Compensation

Performance versus Longevity
- Some companies pay for longevity (seniority), regardless of performance.
- Other companies pay for performance (completing tasks faster or better).
Skill-based/Competency-based
- Pay for individual skills or competencies.
- Competencies: knowledge in a particular area (e.g., negotiation).
- Skills: ability to apply that knowledge (e.g., negotiating contract agreements).
- Important to identify if extra skill sets are valuable.
Above/At/Below market
- Crucial to determine pay level relative to the market.
- Above market pay: Attract better workers, enhance employment brand, target better productivity. Efficiency wage theory suggests that higher wages attract more productive employees.
- Below market pay: May result in lower productivity, but can be viable in industries with high unemployment or low-level skillset requirements.

Salary Structure

A system employers use to determine employee compensation.
Considers merit, length of employment, and pay compared to similar positions.

Types of Salary Structure

Traditional salary structures
- Divided into numerous pay grades.
- Salary increases are small jumps between pay grades.
- Prevents employees from capping out too quickly.
- HR uses metrics like performance and length of employment to determine raises.
- Sets minimum and maximum salary range for each employee or group.
Broadband structures
- More flexible.
- Fewer pay grades, wider salary ranges.
- More freedom in deciding salaries.
- Can lead to greater pay inequalities, requiring pay audits.
- Employees may max out and seek other jobs when raises stop.
Market-based structures
- Most popular system.
- Based on what other employers pay.
- Requires external pay audit to determine salary ranges.
- HR uses job boards and resources to research market rates.
- Combination of traditional and broadband.
- Salary ranges can be high like broadband but generally narrow and consistent.

Salary Structures and Wages in the Philippines

Determined by nature of work, workplace location, working hours, type of industry/sector, and others.
Salaries in major cities are higher than in provincial areas.
The Department of Labor and Employment (DOLE) and the National Wages and Productivity Commission (NWPC) enforce labor laws.
Minimum wage rates vary by region; Regional Tripartite Wages and Productivity Boards (RTWPBs) monitor economic activities and adjust minimum wages.

Salary Computation

Computing Pay for Work Done on:

Regular Day Basic _daily _rate = \frac{Monthly _rate × Number _of _months _in _a _year (12)}{Total _working _days _in _a _year}
- Example: Sally has a monthly rate of Php15,000, and there are 245 working days in 2021. $Basic _daily _rate = \frac{15,000 × 12}{245} = Php734.69$
A Special Day $130\% × Basic _daily _rate$
- Example: Sally works on Saturdays (special day). $130\% × 734.69 = Php955.10$
A Special Day scheduled as Rest Day $150\% × Basic _daily _rate$
- Example: Sally works on Saturday, which is her rest day. $150\% × 734.69 = Php1,102.04$
A Regular Holiday $200\% × Basic _daily _rate$
- Example: Sally works on December 24th (regular holiday). $200\% × 734.69 = Php1,469.38$
A Regular Holiday also scheduled as Rest Day $260\% × Basic _daily _rate$
- Example: Sally works on June 12 (regular holiday and rest day). $260\% × 734.69 = Php1,910.19$

Employment Conditions for Employees

Normal working hours should not exceed eight (8) hours a day.
Overtime work is paid with an additional 25% of the regular wage per hour or 30% during holidays or rest days.
Minimum wage rates for Agricultural and Non-Agricultural work vary in every region and should be properly observed.
The minimum age of employment is 18 years old, but those aged 15 to 18 can be employed in non-hazardous environments.
In bankruptcy or liquidation, workers are paid their full salary before creditors.

Developing a Pay System

A pay structure is a hierarchy of jobs and their rates of pay within an organization.
It allows individuals to identify the pay range for each job.
Composed of a job structure (job hierarchy from lowest to highest level).
Pay levels (pay grades) can be made up of different jobs, with a maximum and minimum pay rate.
Product and labor market competitions are important considerations to determine the pay levels

Impact of Labor Supply and Market Demand

When there are more workers than jobs, average compensation goes down due to oversupply.
Equilibrium occurs when labor supply equals labor demand; the market pays what workers demand.
When there are more jobs than workers, pay increases to attract limited workers with the required skillset.
Labor market competition sets the minimum pay.

Impact of Product Market Competition

Product market competition (value of product or service) determines the top of the pay level.
Company expenses (materials, overhead) affect labor pay.
If sales cover labor costs, the job is worth more money.
Product market competition sets the top of the pay level.

Benchmarking Pay Survey Data

Benchmarks from pay survey data are put into pay levels.
The market pay line (pay curve) shows the average pay at different levels in a particular industry.
Benchmarks are used to assess organizational performance.
Rate range provides the maximum, minimum, and midpoint of pay for certain jobs.
Actual pay levels are plotted to see where they fall within the pay structure.
Red-circle rates: Individual pay rates that are outside the pay range on the high side.
Green-circle rates: Individual pay rates that are lower than the bottom of the pay range.
Green-circle rates should be raised to at least the minimum for that pay level.
Red-circle rates may not be increased unless the employee moves to a higher skill level.

Delayering and Broadbanding

Lowering the number of pay levels.
Delayering: Changing the company structure to get rid of some vertical hierarchy.
Broadbanding: Combining multiple pay levels into one.
Benefits: simpler pay process, more flexibility to reward outstanding performers, lowers administrative burden.

Compensation Plan

A complete package listing details about employees' wages, salaries, benefits, and payment terms.
Includes bonuses, incentives, commissions, scheduled raises, and increases for years of service.

Steps in Creating a Compensation Plan

Develop a program outline
- Set objective, establish target dates, determine a budget.
Designate an individual to supervise the design of the compensation program
- Determine if position will be permanent or temporary.
- Determine oversight and review process.
Create a compensation philosophy
- Form a compensation committee.
- Decide if differences should exist in pay structures for different employee groups.
- Determine market positioning and extent to which benefits should supplement cash compensation.
Conduct a job analysis of all positions
- Conduct general task analysis, get input from senior VPs and managers.
- Interview managers and key employees to determine job functions.
- Decide which job classifications should be exempt and which should be non-exempt.
- Develop model job descriptions.
Evaluate jobs
- Rank jobs within each department, then rank jobs between departments.
- Verify ranking by comparing it to industry market data.
- Prepare a matrix organizational review.
- Compare the matrix with data from both the company structure and the industrywide market.
- Prepare flow charts of all ranks for each department for ease of interpretation and assessment.
- Present data and charts to the compensation committee for review and adjustment.
Determine grades
- Establish the number of levels (senior, junior, intermediate, and beginner) for each job family and assign a grade to each level.
- Determine the number of pay grades, or monetary range of a position at a particular level, within each department.
Establish grade pricing and salary range
- Establish benchmark (key) jobs.
- Review the market price of benchmark jobs within the industry.
- Establish a trend line following the company philosophy (i.e., where the company wants to be in relation to salary ranges in the industry).
Determine an appropriate salary structure
- Determine the difference between each salary step, a minimum, and a maximum percent spread.
- Slot the remaining jobs, review job descriptions, and verify the purpose of each position.
Develop a salary administration policy
- Develop and document the general company policy and specific policies for selected groups.
- Develop and document a strategy for merit raises and other pay increases.
- Develop and document procedures to justify the policy.
Obtain top executives' approval of the basic salary program
- Develop and present cost impact studies.
- Present data to the compensation committee and the executive operating committee for review and approval.
Communicate the final program to employees and managers
- Present the plan to the compensation committee and executive staff managers for feedback and approval.
- Develop a plan for communicating the new program to employees.
- Implement the program by designing detailed systems, procedures, and forms.
Monitor the program
- Monitor feedback from managers, make changes where necessary, and find and address flaws or problems.

Employee Benefits and Labor Relations

Classifications of Employee Benefits

Employees are entitled to benefits categorized into:
1. Employee minimum wage and additional pays due to varying factors.
2. Leave benefits (paid absence from work).
3. Mandatory government contributions.

1. Employee Minimum Wage (April 2021)

Minimum wage rates vary by region.

2. Overtime Pay

Additional compensation for service beyond the contract schedule.
Equivalent to regular wage plus at least a 25% premium.
Sample computation:
- Monthly salary: Php20,000.00
- Working days per month: 26
- Daily salary: Php769.23
- Per hour rate: Php96.15
- Overtime rate: 125%
- Per hour rate-overtime: Php120.19
- Employee overtime (in hours): 3.50
- Total Overtime pay: Php420.67

3. Premium Pay

Overtime pay for rest days and official holidays.
Employee paid additional compensation from the rate of the first eight (8) hours on holiday or rest day plus at least 30%.
Types:
- Regular Holidays:
- Fixed dates.
- Special Holidays:
- Flexible dates.
- Double Holidays:
- Regular and Special holiday fall on the same day.

Computations Differ for Each Type

A. Working on Rest day Premium / Working on Special Holiday Premium
$(\text{Hourly rate} × 130\% × 8 \text{ hours})$
B. Working on Special Holiday and at the same time Rest day Premium
$(\text{Hourly rate} × 150\% × 8 \text{ hours})$
C. Working on Regular Holiday Premium
$(\text{Hourly rate} × 200\% × 8 \text{ hours})$
D. Working on Regular Holiday and at the same time Rest day Premium
$(\text{Hourly rate} × 260\% × 8 \text{ hours})$
E. Working on a Double Holiday Premium, and Working on a Double Holiday and at the same time Rest day Premium
$(\text{Hourly rate} × 300\% × 8 \text{ hours})$

4. Night Shift Differential

Applies to employees working between 10:00 PM and 6:00 AM.
Additional 10% premium applied for every hour at work.

Types of NSD

A. Night shift on an ordinary day = $(per _hour _rate × 10\% × 8 _hours)$
B. Night shift on a rest day = $(per _hour _rate × 130\% × 10\% × 8 _hours)$
C. Night shift on a regular holiday = $(per _hour _rate × 200\% × 10\% × 8 _hours)$
D. Night Shift on Special Holiday = $(per _hour _rate × 130\% × 10\% × 8 _hours)$
E. Night Shift on a double holiday = $(per _hour _rate × 330\% × 10\% × 8 _hours)$
F. Night Shift on a regular holiday plus rest day = $(per _hour _rate × 260\% × 10\% × 8 _hours)$
G. Night Shift on special holiday plus rest day = $(per _hour _rate × 150\% × 10\% × 8 _hours)$
H. Night Shift on double holiday plus rest day = $(per _hour _rate × 390\% × 10\% × 8 _hours)$

5. 13th-Month Pay

Monetary bonus mandated by law (not Christmas Bonus).
Given in two (2) installments (May and December) or in full before December 24.
Eligible for private employees with fixed salary working at least one month.
Computation:
$(\text{Gross Monthly Salary} × \text{months worked}) / 12$
Pro-rated if not perfect attendance.
Taxable over Php90,000 (under TRAIN law).

6. Separation Pay

Given to employees terminated (except for misconduct or crime).
Types:
- 1/2 Month Pay per Year of Service:
- Retrenchment, closure, bankruptcy, grave illness.
- One-Month Pay per Year of Service:
- Installation of devices, redundancy, impossible reinstatement.

7. Retirement Pay

Granted to employees 60+ years old served at least five years.
Equivalent to at least one-half month of salary for every year of service.
Includes 15 days salary, cash equivalent of five days service incentive leave, one-twelfth of 13th-month pay.
Computation:
$(1/12 x 365/12 = .083 x 30.41 = 2.5)$
$\text{Minimum Retirement} _ Pay = \text{Daily Rate} _x 22.5 _days _x \text{ number of years in service}$

Understanding Labor Relations

Relationship between employees, management, and labor unions.

Management Prerogatives

Inherent right to regulate employment aspects (hiring, assignments, methods, supervision, transfer, layoff, discipline, dismissal, recall).

Workers' Rights

Constitutional rights (organize, collective bargaining, peaceful concerted activities, security of tenure, humane conditions, living wage, participation in decision-making).

Law / CBA

Relationships governed by existing laws and Collective Bargaining Agreement (CBA).

Labor Movement in the Philippines

1901: Isabelo delos Reyes formed the Union de Litografos e Impressores de Filipinas.
Up to the 1960s: Farm laborers burdened with debt, Agricultural Land Reform Code (R.A. No. 3844) improved conditions.
May 1, 1974: Ferdinand E. Marcos issued Presidential Decree No. 442 (Labor Code), giving protection to labor.
EDSA Revolution: New constitution drafted, protection of labor policies enacted.

Basic Labor Laws on Employer-Employee Relationship

Determined by applying the four-fold test:
1. Selection and engagement of the employee.
2. Payment of wages.
3. Power of dismissal.
4. Employer's power to control the employee.
Control test is the most important element.
Evidence of employment status: appointment letters, employment contracts, payrolls, organizational charts, SSS Registration, personnel lists, and testimonies of co-employees.

DOLE and The Philippine Labor Code

Presidential Decree No. 442 (Labor Code) revises and consolidates labor and social laws.
Labor Legislation: Broader category than labor law protecting and promoting society's welfare or segments for social justice.

Principles

Construction in Favor of Labor: Doubts in implementation/interpretation are resolved in favor of labor.
Rules and Regulations: The Department of Labor and Employment (DOLE) makes the rules.
Applicability: All rights and benefits apply to all workers.

Labor Disputes

Questions or controversies regarding employment terms and conditions.

Types of Labor Disputes

Rights Disputes: involves an alleged violation of a right recognized by law
Interest Disputes: economic or bargaining dispute where the issues involved are not mandated by law and could be negotiated.
Labor Standards Disputes: include underpayment of wages, health and safety violations.
Labor Relations Disputes: involve unfair labor practice, deadlocks, strikes, etc.
Welfare and Social Legislation Disputes: claims for failure to comply with welfare obligations.

National Policy on Labor Dispute Settlement

1987 Constitution:
- Promotes shared responsibility and voluntary modes of settling disputes.
Labor Code:
- Promotes free collective bargaining and negotiations, including voluntary arbitration, mediation, and conciliation.
- Provides administrative machinery for the expeditious settlement of labor disputes.

Early Policies Adopted by the Government on Settling Labor Disputes

Commonwealth Period (1936-1953):
- Established the Court of Industrial Relations.
Industrial Peace Act Period (1953-1972):
- Changed focus from compulsory arbitration to collective bargaining.
Martial Law Period (1972-1986):
- Voluntary arbitration became integral, strikes banned in vital industries.
Post-Martial Law Period (1986-present):
- Emphasis on voluntary modes of dispute settlement; National Conciliation and Mediation Board (NCMB) created.

Different Modes of Settling Labor Disputes

Negotiation: Parties control the process.
Collective Bargaining: Decision-making between union and management.
Grievance Machinery: Internal rules to resolve issues from CBA implementation.
Mediation: Mediator proposes settlement; parties decide.
Conciliation: Conciliator facilitates meeting of minds between parties.
Arbitration: Third party (arbitrator) decides on the agreement.

Two kinds of Arbitration

Voluntary arbitration. The parties agree to submit themselves to arbitration.
Compulsory arbitration. The parties are compelled or ordered to submit themselves to arbitration if there is a deadlock during collective bargaining.

Authority of an Arbitrator

Investigate and hear the case upon notice of the parties.
Render an award based on the contract and record of the case.
Set and conduct hearing, attendance of witnesses, and proof documents.
Conduct fact-finding and other modes of discovery.
Conduct reopening of the hearing.
Modify any provision of the existing agreement upon which a proposed change is submitted for arbitration.

Unfair Labor Practices

Acts against the right to organize or engage in lawful concerted activities.

Elements

An employer-employee relationship exists between the offender and the offended.
The act done is expressly defined in the Code as unfair labor practice.

Unfair Labor Practices of Employers

Interfere with, restrain, or coerce employees in self-organization.
Require non-union membership for employment.
Contract out services to interfere with self-organization.
Dominate or assist any labor organization.
Discriminate wages based on union membership.
Dismiss or prejudice an employee for giving testimony.
Violate duty to bargain collectively.
Pay negotiation fees to the union.
Violate a collective bargaining agreement.

Unfair Labor Practices of Labor Organizations

Restrain or coerce employees in self-organization.
Cause discrimination against an employee.
Refuse to bargain collectively.
Attempt to cause an employer to pay or deliver money.
Ask for fees from employers.
Violate a collective bargaining agreement.

General Principles

No ULP without employer-employee relationship.
Non-union member cannot charge management for discrimination against union members.
Discrimination is not illegal "per se."
ULP is a question of fact.
Transfer should not be used to bust the union.

Collective Bargaining

Representatives of a firm and the employee representatives negotiate to arrive at a mutually acceptable agreement

Essential Elements

Legal: Negotiating an agreement.
Economic: Specifies employment terms (salary, benefits).
Political: Proof of labor-management negotiation.
Moral: Shared responsibility in decision-making.

Who are the Parties Involved? - The union is the workers' representative, and the management is the employer's employees involved in collective bargaining.

Who may be Covered in a Collective Bargaining Agreement? - According to the Labor Code, only Rank and File employees can be covered in a CBA. (casual, contractual, probationary, and regular employees).

Negotiable Issues

Check-off of members in good standing.
Working days and hours of work.
Salary or wage increases among regular employees.
Allowances, bonuses, and profit-sharing.
Leaves for legitimate grounds.
Overtime, holiday, and shift premiums.
Employee welfare e.g. hospitalization benefits and dental benefits (Corpuz, 2016).

Non-Economic

Union recognition or the determination of the coverage of such agency by a competent body or the Bureau of Labor Relations; and the definition of the category of employees covered e.g. probationary, regular, casual, or contractual, which may affect security of tenure (Corpuz, 2016).

Bargaining Deadlock / Lockout

When neither side is willing to give in.

Actions Taken

Strike
Injunction
Lockout
Picketing
Third-Party Intervention

Employee Relations and Grievance Machinery

Importance of Employee Relations

Definition

Managerial activity to establish and maintain positive relationships, contributing to satisfaction, productivity, motivation, morale, and positive environment.

Benefits

Affects efficiency, addresses performance problems, improves attitude toward work, and reinforces discipline.

Four Pillars of Employee Relations (Shriar, 2014)

Open Communication
- Transparency builds trust, helps employees understand roles.
Gratitude and Appreciation
- Simple words reinforce good work.
Consistent Feedback
- Helps employees grow, understand strengths and weaknesses.
Investing in Employees
- Activities make employees happy, improving productivity.

Understanding Employee Discipline

Definition

Employer actions against employee for policy/rule infraction, or misconduct affecting efficiency.

Objectives

Remedy problems, help employees succeed, enforce organizational standards.

Goal

Correct misconduct, modify unacceptable behavior.

Principles

Progressive, starting with minimum discipline.
Consistent with penalties for similar offenses.

Approaches to Discipline (Corpuz, 2016)

A. Hot Stove Rule by Douglas McGregor
Provides immediate discipline, with a warning, consistent, and impersonal.
Consequences includes:
A warning system
An immediate burn
Consistency
Impersonal

Elements of a Disciplinary Program (Corpuz, 2016)

An effective, comprehensive, and successful disciplinary program should contain the following elements:
Code of Conduct
Knowledge of disciplinary punishments
Appeal procedure
Reservation of right
Fair discipline

The Disciplinary Process should follow a sequence of increasing severe penalties for the wrongdoing. The process is called progressive discipline because the disciplinary action becomes increasingly severe.

An informal talk
Verbal warning
Verbal reprimand
Write a written reprimand
Suspension
Demotion
Discharge/dismissal

DUE PROCESS OF DISCIPLINARY ACTION

Due process is the mechanism that ensures both rights of management and employee's right to security of tenure are respected. It is the process that allows the employee to be informed of his/ her alleged violation(s) and to be heard or to explain his/her side. Due process has two (2) elements:

Substantive Due Process – This is the element that provides the ground for disciplinary action
Procedural Due Process – This is the element that provides the procedure on how to go about hearing the employee's side and evaluating all facts and evidence against the allegation.
Procedural due process must follow the Twin Notice Rule

Categories of Difficult Employees (Corpuz, 2016)

Rules and regulations governing personnel discipline may contain the following infractions covering the following subjects:

Against Perso
Against Property
Orderliness/Good Conduct
Attendance and Punctuality
Morality
Conflict
Nonperformance
Honesty/Integrity

Prevention of Employee Misconduct (Corpuz, 2016)

Certain actions by supervisors can serve to prevent employee misconduct from ever occurring.
• setting an example by their own conduct
• maintaining high professional and ethical standards as leaders of the organization.
• providing a high-quality work environment that is conducive to innovation and increased productivity
• establishing and communicating clear guidelines concerning their expectations for the operations of their office
• monitoring performance and giving frequent feedback
• holding employees accountable for result and recognizing and rewarding good performance

Steps in Addressing Employee Conduct Problems (Corpuz, 2016)

If an employee is exhibiting conduct problems, there are many steps that a supervisor may take to help that employee to improve

Discuss any misconduct or performance problems directly with the employee
Clearly explain expectations to the employee and review any rules, regulations, or policies in the area where the employee is exhibiting problems
If applicable, develop a plan with the employee directed at helping to