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BICOL UNIVERSITY

CBEM

HUMAN RESOURCE DEVELOPMENT AND MANAGEMENT

 

TOPIC NO. 8:

COMPENSATION PLAN

BICOL UNIVERSITY CBEM HUMAN RESOURCE DEVELOPMENT AND MANAGEMENT TOPIC NO. 8: COMPENSATION PLAN Reporters: Alexandro M.
BICOL UNIVERSITY CBEM HUMAN RESOURCE DEVELOPMENT AND MANAGEMENT TOPIC NO. 8: COMPENSATION PLAN Reporters: Alexandro M.

Reporters:

Alexandro M. Novora Cesario Raehl B. Bandong

Master in Management

DISC U SSION OB JE CTIVES
DISC U SSION OB JE CTIVES

1. To define compensation and compensation plan

  • 2. To enumerate and discuss the different factors affecting the compensation program

  • 3. To briefly discuss the legal basis and requirements regarding employee compensation and benefits based on Labor Code of the Philippines

D I SCUSSION OBJEC T IVES con t.
D I SCUSSION OBJEC T IVES con t.

1. To present the latest daily minimum wage rate per DOLE (Region 5 & NCR)

  • 2. To present the suggested steps in formulation of a compensation administration plan

  • 3. To provide a sample computation of employees salaries/wages presenting deductions on mandatory employment contributions

I . D EFI N ITION
I . D EFI N ITION

Compensation

– Is the equivalent in any form that is given to the individual for his work

– Also called as “the Job Reward”

Compensation Plan – presents the reward structure of a certain entity, organization, or agency including its philosophy and bases.

TY PES OF R EWAR D AN D REWAR D STRUCTURE
TY PES OF R EWAR D AN D
REWAR D STRUCTURE

1. INTRINSIC Participation in decision-making Greater Job Freedom & Discretion More Responsibility More Interesting Work Opportunities for Personal Growth Diversity of Activities 2. EXTRINSIC Direct Compensation Indirect Compensation Non-financial Compensation

TY PES OF R EWAR D AN D REWAR D STRUCTURE co nt.
TY PES OF R EWAR D AN D
REWAR D STRUCTURE co nt.

2.1.Direct Compensation Basic Salaries or Wages Overtime & Holiday Performance Bonuses Profit Sharing Stock Options 2.2. Indirect Compensation

• Protection programs • Pay for Time not Worked • Services and Perquisites

TY PES OF R EWAR D AN D REWAR D STRUCTURE co nt.
TY PES OF R EWAR D AN D
REWAR D STRUCTURE co nt.

2.3.Non-financial Compensation

• Preferred Office Furnishings • Preferred Lunch hours • Assigned Parking • Preferred Work Assignments • Business Cards • Own Secretary • Impressive Titles

II. FACTORS AFF ECTING COM PENSATION PLANS AND A DMINISTRA TION PROGRAMS
II. FACTORS AFF ECTING COM PENSATION
PLANS AND A DMINISTRA TION PROGRAMS

1. Institutional Factors

The financial condition of the organization, size of the organization’s work population, management-labor relations, internal politics, union demands and the collective bargaining agreement in unionized firms either facilitate or stymie program

II. FACTORS AFFECTIN G COMPENSATION PLANS A ND ADMINISTRATION PROG RAMS cont.
II. FACTORS AFFECTIN G COMPENSATION PLANS A ND
ADMINISTRATION PROG RAMS cont.

2. Environmental Factors

Pertain to external environment for variables like standard and cost of living, labor supply and demand, reward structure of other organizations, political and economic conditions in the country, national policies, laws, statutes and government regulations affecting wages and salaries.

II. F ACT ORS AF FECT ING COMPENSAT ION PLANS AND ADMINISTRATION PROGRAMS cont.
II. F ACT ORS AF FECT ING COMPENSAT ION PLANS
AND ADMINISTRATION PROGRAMS cont.

3. Personal Factors

The values of the owners and managers influence their decision on that type, number, and amount of the compensation packages that are given to the employees. “Enough is enough” is a statement that both parties utter in deciding compensation issues.

III. LEGAL BASIS/ REQUIREMENTS REGARDIN G EM PLOYE ES’ COM PENSA TION A ND BEN EFITS
III. LEGAL BASIS/ REQUIREMENTS REGARDIN G
EM PLOYE ES’ COM PENSA TION A ND BEN EFITS

SIX (6) BASIC EMPLOYEE BENEFITS AND

LEGAL BASIS (under Philippine Labor Code)

Social Security Systems (SSS) and Government Service Insurance System (GSIS) Contributions

Contribution to National Health Insurance Program (NHIP)/Philhealth

Contribution to Home Development and Mutual Fund (HDMF)

The 13th Month Pay

Service Incentive Leave

Meal and Rest Periods

• Please Note : Citations in the Labor Code of the Philippines regarding Employee Benefits will

Please Note:

Citations in the Labor Code of the Philippines regarding Employee Benefits will be briefly discussed by the reporter, Mr. Bandong.

SUGGESTED STEPS IN FORMULAT ION OF COMPENSATION ADM INISTRAT ION PROGRAM
SUGGESTED STEPS IN FORMULAT ION OF
COMPENSATION ADM INISTRAT ION PROGRAM

1) Determine a clear-cut philosophy of the program.

2) Make a study and analysis of each job including job description and job specification.

3) Determine the money worth of each job by doing job evaluation.

4) Conduct a local, national and, if possible, an international survey of pay policies.

5) Determine supply and demand of labor. 6) Formulate overall compensation policies.

Source: HRM by C.R. Martires

VI . MAN DATORY EMPLOYMENT C ON T RI BUT IONS
VI . MAN DATORY EMPLOYMENT
C
ON T RI BUT IONS

Please see attached tables

Note: Sample computation of salaries & wages showing deductions for mandatory contributions will be presented by the reporter, Mr. Novora.

Refe renc es
Refe renc es

Human Resources Management Principles and Practices by Dr. Concepcion R. Martires, 3 rd ed.

• Labor Code of the Philippines

THANK YOU FOLKS!

THANK YOU FOLKS!
THANK YOU FOLKS!