PART IV COMPENSATING THE HUMAN
Manager Employee– is one who is vested
RESOURCES
A. PAYROLL MANAGEMENT
Payroll Management considers, foremost, the
different kinds of employees because most
often, the preparation of payroll is categorized
according to pay grades based on position
levels and employment status.
WORK CONDITIONS
Many different artists work in different
conditions whether it be inside or outdoors. A
fine artist may work in a fine or commercial art
studios situated in office buildings, warehouses
or lofts. a personal artist will most likely work in
a private place such as their own house or
private studios. artists can share space where
they can exhibit their artwork. studios or any
rooms are usually well lit and ventilated.
depending on the materials you are using, you
can be exposed to many toxic fumes for
example glue and paint that is why it's best for
the room to ventilated or have windows for
health issues. artists who work at drafting
tables and computers for long periods of time
may be exposed to back pain and can get
fatigue after several hours. artists may have to
travel depending if they are willing to promote
your own artwork.
KINDS OF EMPLOYEES
Employer – includes any person acting in the
interest of employer directly or indirectly
Employee – includes any person in the employ
of an employer.
An Employer can be an employee and an
Employee can be an employer if he acts in the
interest of an employer as the description
above. But when does his classification as
employee ends and when his classification as
employer begins?
CLASSIFICATION OF EMPLOYEES
1.
with powers and prerogative to lay down and
execute management policies and/or hire,
transfer, suspend, layoff, recall, discharge,
assign, or discipline employees
2. Supervisory Employee- is one who, in the
interest of the employer, effectively
recommends such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgement.
3. Rank and File Employees- is one not
falling under managerial and supervisory
employee.
4. Field Personnel refers to non-agricultural
employees who regularly perform their duties
away from the principal place of business or
branch, and whose actual work hours cannot
be certain.
TYPES OF EMPLOYEES IN TERMS OF
TENURE
There are five Types of Employees based on
Art. 280 of the Labor Code.
1. Regular – regardless of any written or oral
agreement, “an employee shall be deemed to
be regular where the employee has been
engaged to perform activities which are usually
necessary or desirable in the usual business
trade of the employer.
2. Probationary– as defined in Art 281 which
states that “Probationary employment shall not
exceed six months from the date the employee
started working, unless it is covered by
apprenticeship agreement stipulating a longer
period. An employee who is allowed to work
beyond six months shall be considered a
regular employee
3. Project – “Where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of engagement of the
employee or where the work or services to be
performed is seasonal in nature and the
employment is for the duration of the season.
4. Casual – an employment shall be deemed
to be casual if it is not covered by the
preceding paragraph. Provided that, any
employee who has rendered at least one year
service, whether such service is continuous or
broken, shall be considered a regular
employee and his employment shall continue
while such activity exists.
5. Fixed contract employee as settled in
jurisprudence – “An employment with a fixed
term. Where there’s a day certain agreed upon
by the parties for the commencement and
termination of their employment relationship, a
day certain being understood to be that which
must necessarily come, although it may not be
known when,
Additional Types of Employees
Part- time employment refers to the workers
employed to render work for a period less than
the normal eight-hour working day or those
who work less than the normal six working
days in a week. This type of worker often
maintains more than one employer to earn
more.
Commission-paid employment is when
workers are paid depending on the income
they brought in for their employer. They earn a
percentage of the income they derived for their
employer.
Illustration:
Mario is hired as factory worker in a shoe
maker company. As soon as he was hired in
January 2009, he started working as a shoe
maker. His work lasts for three months before
he got terminated due to less volume of work.
Will he be considered a regular employee
under this kind of a regular employee?
CLASSIFICATION OF SPECIAL WORKERS
( FROM BOOK TWO)
1. Apprentice– is a worker covered with an
apprenticeship agreement with an individual
employer or any of the entities qualified to
accept apprentice workers.
Apprenticeship – means practical training on
the job supplemented by related theoretical
instruction.
Provisions:
a. The apprenticeable occupation or trade
requires 3 months and not more than six
months in duration.
b. A contract or agreement between the
apprentice and the employer
c. Only highly technical industries can employ
apprentice.
d. Wage is at least 75% of the minimum daily
wage. e. Student apprentice are not paid if the
work is part of curriculum requirement.
Qualifications of an Apprentice:
a. Be at least 14 years of age
b. Possess vocational aptitude
c. Possess ability to comprehend and follow
oral and written instructions.
2. Learners – are persons hired as trainees in
semi-skilled and other industrial occupations
which are non-apprenticeable and which may
be learned through practical training on the job
in a relatively short period of time which shall
not exceed three (3) months.
When Learners Must be Hired.
a. When no experienced workers are available
b. When it is necessary to prevent curtailment
or restriction of employment opportunities
c. When their employment does not create
unfair competition in terms of labor costs, or
impair, or lower working standards.
Learner Agreement
1. Duration shall not exceed three (3) months
2. The wage or salary shall begin at no less
than seventy-five percent (75%0 of the
applicable minimum wage
3. Commitment to employ learners as regular
employee after completing the three (3)
months learnership. If Learners have
completed two (2) months work, and the
employer suddenly terminated the training
before the end of the stipulated duration at no
fault of the learner, the Learner shall be
deemed as regular employees.
*the learnership agreement is subject to
inspection by the Secretary of Labor and
Employment or his duly authorized
representative.
4. Learners in Piecework Learners employed in
piece during the training period shall be paid in
full for the work done.
3. Handicapped Workers – are those whose
earning capacity is impaired by age or physical
or mental deficiency or injury.
When to Employ Handicaped Workers
When their employment does not create unfair
competition in terms of labor costs, or impair,
or lower working standards.
Handicap Agreement
1. Duration of the period
2. The wage or salary shall begin at no less
than seventy-five percent (75%) of the
applicable minimum wage
3. The work to be performed. Eligibility-
Handicap can be employed either as
apprentice or learner if their handicap does not
impede job performance.
HOURS OF WORK
Art. 83 NORMAL HOURS OF WORK. The
normal hours of work of any employee shall not
exceed eight (8) hours a day.
For Health Personnel, they shall hold regular
office hours for eight (8), for five days a week,
exclusive of time for meals, if they work in
cities and municipalities with population of at
least one million (1M), or in hospital and clinics
with 100 bed capacity.
Except in some cases where they are
required to work for six (6) days or for forty
eight (48) hours, in such case, they are entitled
for additional compensation or pay of 30% of
their regular wage for the sixth (6th) day. (See
the Labor Code for the list of Health Personnel)
Art. 84 HOURS WORKED. This include (a) all
the time the employee is required to be on
duty, or to be at a prescribed workplace; and
(b) all time during which the employee is
suffered or permitted to work.
Rest periods of short duration during work
hours shall be counted as hours worked.
Example: Coffee/snack break typically for 15
minutes in the morning and afternoon. Or,
when the employee goes to the comfort room
to relieve the self. Or, to get some drinking
water. Or, pauses from work
Art. 85 MEAL PERIODS– a sixty (60) minute
time off for meals is allowed, wherein the
employee stops working. This is not part of the
paid 8 hours. This can be reduced to twenty
(20) minutes for employees working on rotation
night shift. Such that it is part of the 8 hours
paid work.
Art. 86 NIGHT SHIFT DIFFERENTIAL. An
employee who works between ten o’clock in
the evening and six o’clock in the morning,
shall be paid an additional payment of not less
than ten percent (10%) of his regular wage for
each hour of work performed
Some companies requires employees to work
on rotation for 24 hours, such that, there are
three shifts working for eight (8) hours. In this
case, the Meal Period is reduced to twenty (20)
minutes and included in the 8 hours paid work
Example: The first shift starts at 8am to 4pm;
The second shift starts at 4pm to 10pm; the
third shift starts at 10pm to 6am. Question? If
all employees are earning a minimum wage of
P300 per day, how much does the 3rd shift
earn?
Art. 87 OVERTIME WORK. Overtime work
refers to the additional hours permitted to be
performed beyond the normal work of eight (8)
hours. Overtime pay refers to the additional
payment for the authorized work performed
beyond, or in excess of, the eight (8) hours.
I. Computing Overtime Pay for Work Done
on a. Normal/Ordinary/Regular Days
Formula: OT = Number of Hours in excess of
8 hours (25% or 125% X hourly basic rate)
(Turn to next page for sample computation)
*Basic Rate shall refer to the regular rate of the
employee.
For example: Employee Ricardo’s
Normal/Ordinary/Regular work days are from
Monday to Friday; from 8:00am to 5:00pm.
Ricardo was asked to perform overtime of 5
hours on Friday, from 5pm to 7pm. Therefore,
the accumulated overtime hours Ricardo
worked for that day is 2 hours. A.) How much is
the OT rate for the 2 hours? B.) How much is
the total earnings of Ricardo for that day?
Step 1. Basic Rate per day is P300.00 ÷ 8
hours of work Result: Basic Rate per hour =
P37.50
Step 2. Basic Rate per hour is P37.50 x
25% = P9.375 (Premium Pay per hour)
Result: P37.50 + P9.375 = P46.875 (Hourly
OT Rate) Option is to also use 125% for
straight away computation Same Result:
P37.50 x 125% = P46.875
Step 3. Hourly OT rate of P46.875 x 2 hours
= P93.75
A.) Answer: Total OT Pay for the Day is
P93.75 B.) Answer: P300.00 + P93.75 =
P393.75
II. Computing Premium Pay and Overtime
Pay for Work Done on
a. Rest Day or Special Day
Formula: Number of Hours in excess of
8 hours (30% or 130% X hourly rate)
*For this purpose, we shall use “Rest
Day Rate”, “Special Day Rate” instead
of “Basic Rate”
For example: Same employee, Ricardo’s Rest
Days are Saturday and Sunday. Ricardo was
asked to perform work on Saturday from 8am
to 5pm. However, the boss let him finish the
work until 7:00pm. Therefore, the excess hours
after 8am-5pm is 2 hours.
1.) How much does Ricardo earn that Saturday
from 8am to 5pm?
2.) How much does Ricardo earn for the 2
hours overtime?
3.) How much is the combined earnings of
Ricardo for that Saturday?
Note: Working on Rest Day already is entitled
to 30% or 130%. Therefore, compute first the
Day Rate for Saturday. (Next Page)
*Premium Pay refers to the additional
amount paid of work on Rest Day, Special
Day, and Regular Holiday.
Computations:
1.) Compute for Rest Day Earning from
8am-5pm
 Step 1. Basic Rate per day is P300.00 X
30% = P90.00 (Amount of Premium Rate)
Step 2. Add Daily Rate and Premium Rate:
P300.00 + P90.00 = P390.00 Answer:
P390.00 is the Rest day earning of Ricardo
from 8am, to 5pm.
2.) Compute for the Overtime of 2 hours on
Rest Day
Step 1. Rest Day Rate is P390.00 ÷ 8 hours
of work Result: Rest Day Rate per hour =
P48.75
Step 2. Rest Day Rate per hour is P48.75 x
30% = P14.625 (Premium Pay per hour)
Result: P48.75 + P14.625 = P63.375 (Hourly
Restday Overtime Rate) Option is to also use
130% for straight away computation Same
Result: P48.75 x 130% = P63.375
Step 3. Total OT Earning: P63.375 x 2 hours
overtime = P126.75 Answer: P126.75 is the
total overtime earning on Saturday restday.
3.) Answer: P390.00 + P126.75 = P516.75
Ricardo’s total earning for that Saturday
restday
III. Computing Premium Pay and Overtime
Pay for Work Done on
b. Rest Day which falls on Special Day
When Rest day falls on Special Day, the
additional pay is 50% or 150% percent.
For example: Ricardo’s Rest Days are
Saturday and Sunday. Ricardo was asked to
perform full day work on November 1, All
Saint’s Day, which falls on his Sunday, his rest
day, from 8am to 5pm. However, the boss let
him finish the work until 7:00pm. Therefore,
the excess hours after 8am-5pm is 2 hours
1.) How much does Ricardo earn that Sunday
from 8am to 5pm?
2.) How much does Ricardo earn for the 2
hours overtime?
3.) How much is the combined earnings of
Ricardo for that Sunday?
(Go to next page for computation)
Computations:
1.) Compute for Rest Day falling on a
special day Earning from 8am-5pm
Step 1. Basic Rate per day is P300.00 X
50% = P150.00 (Amount of Premium Rate)
Step 2. Add Daily Rate and Premium
Rate: P300.00 + P150.00 = P450.00
Answer: P450.00 is the Rest day & Special
day earning of Ricardo from 8am, to 5pm.
2.) Compute for the Overtime of 2 hours on
Rest Day
Step 1. Rest Day & Special Day Rate is
P450.00 ÷ 8 hours of work Result: Rest Day
Rate per hour = P56.25
Step 2. Rest Day & Special Day Rate
per hour is P56.25 x 50% = P28.1275
(Premium Pay per hour) Result: P56.25 +
P28.125 = P84.375 (Hourly Restday &
Special Day Overtime Rate) Option is to
also use 150% for straight away
computation Same Result: P56.25 x 150%
= P84.375
Step 3. Total OT Earning: P84.375 x 2
hours overtime = P168.75 Answer: P168.75
is the total overtime earning on Sunday
restday & Special Day.
Answer: P450.00 + P168.75 = P618.75
Ricardo’s total earning for that Sunday
restday & Special Day
III. Computing Premium Pay and Overtime
Pay for Work Done on
c. Regular Holiday
Regular Holiday pays additional 100%
or 200% percent.
For example: Ricardo was asked to perform
full day work on November 30, Bonifacio Day,
which falls on normal day, Monday, from 8am
to 5pm. However, the boss let him finish the
work until 7:00pm. Therefore, the excess
hours after 8am-5pm is 2 hours
1.) How much does Ricardo earn that Monday
from 8am to 5pm?
2.) How much does Ricardo earn for the 2
hours overtime?
3.) How much is the combined earnings of
Ricardo for that Monday?
(Go to next page for computation)
Computations: 1.) Compute for Regular
Holiday earning from 8am-5pm
Step 1. Basic Rate per day is P300.00 X
100% = P300.00 (Amount of Premium Rate)
Step 2. Add Daily Rate and Premium Rate:
P300.00 + P300.00 = P600.00 Answer:
P600.00 is the Regular Holiday earning of
Ricardo from 8am, to 5pm.
3.) Compute for the Overtime of 2 hours on
Rest Day
Step 1. Regular Holiday Rate is P600.00
÷ 8 hours of work Result: Regular Holiday
Rate per hour = P75.00
Step 2. Regular Holiday Rate per hour is
P75.00 x 100% = P75.00 (Premium Pay
per hour) Result: P75.00 + P75.00 =
P150.00 (Hourly Regular Holiday Overtime
Rate) Option is to also use 200% for
straight away computation Same Result:
P75.00 x 200% = P150.00
Step 3. Total OT Earning: P150.00 x 2
hours overtime = P300.00 Answer: P300.00
the total overtime earning Monday, Regular
Holiday
Answer: P600.00 + P300.00 = P900.00
Ricardo’s total earning for that Monday,
Regular Holiday
IV. Computing Premium Pay and Overtime
Pay for Work Done on
d. Regular Holiday which falls on a Rest
day or Special Day The premium pay is
160% 0r 260%.
Let’s use the same example of Ricardo
and proceed to the computation.
1.) Compute for Regular Holiday falling
on a Rest Day or Special Day earning
from 8am-5pm
Step 1. Basic Rate per day is P300.00 X
160% = P480.00 (Amount of Premium
Rate)
Step 2. Add Daily Rate and Premium
Rate: P300.00 + P480.00 = P780.00
Answer: P780.00 is the Regular Holiday
falling on a Rest Day or Special Day
earning of Ricardo from 8am, to 5pm.
2.) Compute for the Overtime of 2 hours
on Rest Day
Step 1. Regular Holiday falling on Rest
Day or Special Day Rate is P780.00 ÷ 8
hours of work Result: Regular Holiday Rate
per hour = P97.50
Step 2. Regular Holiday Rate per hour is
P97.50 x 160% = P156.00 (Premium Pay
per hour) Result: P97.50 + P156.00 =
P253.50 (Hourly Regular Holiday Overtime
Rate) Option is to also use 260% for
straight away computation Same Result:
P97.50 x 260% = P253.50
 Step 3. Total OT Earning: P253.50 x 2
hours overtime = P507.00 Answer:
P300.00 the total overtime earning
Monday, Regular Holiday
Answer: P780.00 + P507.00 = P1,287.00
Ricardo’s total earning for that Monday
,Regular Holiday
IV. Computing Night Differential Just add
10% for all the hours work between
10:00pm and 6:00am.
a.) For Normal days, just add the 10%
b.) For rest day or special day, compute first
the rest day or special day rate (+30% or
130%) then add the 10%.
c.) For rest day which falls on special day,
compute first the rate for that day (+50% or
150%) then add the 10%
d.) For regular holiday, get the regular holiday
rate (+100% or 200%) then add the 10%
LIST OF HOLIDAYS THE 13 REGULAR
HOLIDAYS
 New Year’s Day–Jan 1
 Araw ng Kagitingan – April 9
 Maunday Thursday (movable date)
 Maundy Friday (movable dates)
 Labor Day – May 1
 Independence Day – June 12
 National Heroes Day – last Monday of
August
 Bonifacio Day–Nov 30
 Christmas Day-Dec 25
 Rizal Day – Dec 30
 Eid’l Fitr and
 Eidul Adha (movable dates)
CHANGE IN EMPLOYMENT STATUS
 Changes in employment status are bound to
take place during the period of employment.
There is a continuous movement of employees
in the form of promotion, demotion, transfer,
and separation.
The objective of these movement is to find or
assign the right person to the right job.
The change could be initiated by
management, by immediate boss, or as
requested by employee.
PROMOTION
 It involves the reassignment of an employee
to a higher job position.
 It refers to the upward or vertical movement
of employees in an organization from lower
level jobs to higher level jobs involving
increase in duties and responsibilities, higher
pay, and privileges.
 It serves as encouragement and inspiration
to other employees to exert their maximum
effort.  This can also help in still loyalty to the
firm.
Approaches to Recruit Employees for
Promotion
Closed Promotion System -The responsibility
is on the management, or boss to identify
promotable employees for the position to be
filled.
Open Promotion System -also known as job
posting - enhances participation and the
achievement of equal opportunity goals.
CRITERIA USED IN PROMOTING
EMPLOYEES
1. Seniority – based on length of service
a. Straight seniority – the length of service of
an employee is the sole basis for determining
who gets the promotion.
b. Qualified seniority – the competence and
performance of employee is considered more
than the length of service. This also happens
when the rating of candidates is equal.
2. Current and past performance –based on
previous job performance and evaluation.
‘’UNOFFICIAL’’ PROMOTION CRITERIA
1. Personal Characteristics
2. Nepotism – showing of favoritism or
patronage to relatives
3. Social factors/ friendship
DEMOTION
 It is the reassignment of an employee to a
lower job or movement to a less important job
from a higher-level job involving fewer skills
and responsibilities.
 It may not involve a reduction in pay but a
reduction in status or privileges.
 It should be cautiously resorted to for it badly
effects individual and group morale and
productivity.
 There should be re-training or reorientation
on the job and attitude toward work.
 Or as a last resort, termination of
employment if no improvement is achieved.
REASONS BEHIND DEMOTION
1. Reorganization, company merger, or
business reverses resulting to fewer jobs
forcing some employees to accept demotion.
2. Inability of employees to perform their job
based on acceptable standards
3. As a form of disciplinary action or a way
to handle disciplinary problems, also viewed as
a routine form of punishment for wrongdoing
4. The tool used to inform the employee
concerned that he or she is beginning to be a
‘’liability’’ rather than an ‘’asset’’ to the
organization
TRANSFER
 It is the reassignment of an employee to a
job with similar pay, status, duties, and
responsibilities or to another work shift, or from
one unit to another in the same company just
like being an invoice clerk to a sales clerk.
 The right to transfer an employee is part of
management’s inherent power or prerogatives.
REASONS FOR TRANSFER
1. Due to job dissatisfaction
2. In conflict with supervisor or co-workers
3. For employee’s convenience
4. Organizational needs may require transfer
due to business expansion, retrenchment,
erroneous placement, or to meet departmental
requirements during peak season.
5. For an employee to be better suited or
adjusted to the job (remedial transfer)
SEPARATION
 Employee Separation
 Different kinds of separation occur
depending on whether the employee or the
employer decides to terminate the employment
relationship.
 Termination of Employment in the
Philippines
 It is a complex process, especially if the
employee subject for termination is already a
regular employee.
GOVERNING LAWS REGARDING
SEPARATION FROM THE SERVICE
1. Art. 279. Security of tenure. In cases of
regular employment, the employer shall not
terminate the services of an employee except
for a just cause or authorize cause and only
after due process of law.
2. Art. 282. Termination by employer
(Dismissal)
An employer may terminate an employment for
any of the ff. causes:
a. Serious misconduct or wilful disobedience
by the employee of the lawful orders of his
employer or representative in connection with
his work;
b. Gross and habitual neglect by the employee
of his duties
c. Fraud or wilful breach by the employee of
the trust reposed in him by his employer or
duly authorized representative.
d. Commission of a crime or offense by the
employee against the person of his employer
or any immediate member of his family or his
duly authorized representative, and
e. Other causes analogous to the foregoing.
3. Art. 283. Closure of Establishment and
Reduction of Personnel/Layoffs
The employer may also terminate the
employment of any employee due to the
following authorized causes:
a. Installation of labor-saving devices;
b. Redundancy;
c. Retrenchment to prevent losses; and
d. Closure or cessation of business
Factors Behind Downsizing Leading to
Layoff
The recent trends toward downsizing leading to
massive layoffs have been triggered by three
factors:
a. Decline or crisis in the firm
b. Technological advances
c. Organizational restructuring
The following are some of the alternatives
to layoff:
a. Freeze hiring e. Use
unpaid vacations
b. Restrict overtime f. Use a
shorter workweek
c. Re-train/redeploy g. Use to pay
reductions
d. Switch to job sharing h. Use
sabbaticals
i. Implement early retirement programs
Separation pay In authorized cause of
terminations, separation pay is the amount
given to an employee terminated due to
retrenchment, closure or cessation of business,
or incurable disease. The employee is entitled
to receive the equivalent of one month pay or
one-half month pay, whichever is higher, for
every year of service.
Art. 285. Termination by employee
(Resignation)
 The Philippine Constitution says no
involuntary servitude in any form shall exist
except as punishment for a crime whereof the
party shall have been duly convicted. In view of
prohibition on involuntary servitude, an
employee is given the right to resign under Art.
285 of the Labor Code.
This provision recognizes two kinds of
registration – without cause and with
cause.
 An employee may put end to the relationship
without serving any notice on the employer
for any of the following causes:
a. Serious insult by the employer or his
representative on the honor and person of the
employee;
b. Inhuman and unbearable treatment
accorded the employee by the employer or his
representative;
c. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family and;
d. Other causes analogous to any the forgoing.
Art. 287. Retirement. Any employee may be
retired upon reaching the retirement age
established in the collective bargaining
agreement or other applicable employment
contract.
Article 280. SECTION 14. Retirement
benefits.
a. An employee who is retired pursuant to a
bona-fide retirement plan in accordance with
the applicable individual or collective
agreement or established employer policy shall
be entitled to all the retirement benefits
provided therein or to termination pay
equivalent to at least one-half month salary for
every year of service, whichever higher, a
fraction of at least six (6) months being
considered as a whole year.
For the purpose of computing retirement pay,
‘’one-half month salary’’ shall include all of
the following:
a. Fifteen (15) days salary based on the latest
salary rate;
b. Cash equivalent of 5 days service incentive
leave; and
c. One-twelfth (1/12) of the thirteenth-month
pay
PART IV C. EMPLOYEE MORALE AND
MOTIVATION
WHAT IS MORALE?
Morale is the mental attitude which makes the
individual perform his/her work either willingly
and enthusiastically or poorly and reluctantly.
Employee morale is…
 A mental attitude
 It cannot be seen 
But it is manifested through manners and
reactions to his/her job, work conditions, the
company policies and programs, colleagues,
immediate boss, pay, and etc.
Ꝍ Every person has different (personal)
reasons for working. But we all work to obtain
something we need such as pay, career,
recognition, opportunities, etc. And these
impact our morale, motivation, and the quality
of life. To build positive impact, managers must
treat employees as if they matter – because
employees matter.
Ꝍ Individuals react and respond differently to
the conditions of work. While some employees
may be highly satisfied with a particular job,
other employees may find the same job
conditions as extremely dissatisfying.
Ꝍ The important issues are; how will HR
influence the level of employee morale? Will it
increase or decrease as a result of different
recruiting strategy? A better benefit package?
A new training program? Or some other
changes in HR practices?
Ꝍ Low Morale contributes to labor problem,
and attempts to organize unions, excessive
employee turnover*, labor grievances, and
organizational climate**.
* (turnover means, employees resignations and
replacements)
**(org. climate means the MOOD or repeated
patterns of behaviour, attitudes, and feelings of
employees in an organization. Example:
friendly climate, competitive climate,
dissatisfied climate)
Ꝍ Grievances, absenteeism, and turnover are
often used as measures of employee morale.
(When many employees leave the company for
no reason at all, then perhaps it is because of
low morale).
MOTIVATION Is the internal condition that
activates behaviour and gives it direction;
energizes and directs goal-oriented behavior.
The heart of motivation…
 Is to give people what they really want most
from work.
 The more people’s want is provided for, the
more you can expect for what you want from
them such as ; productivity, quality, and self-
service.
Motivation explains why people do what they
do. Motivated employees work harder to
achieve organizational objectives.
History of Motivation
• It was said that in the past, the technique
used was the carrot-and-stick method. This
name evolved from a stubborn donkeys that
can only be moved by taunting them with
carrots. Thus, this method was passed on for
generation and became rooted part of society.
So that it seems that MONEY (as replacement
for carrot) is a motivator to work harder. But
Managers realized that past methods like this
is not effective. So that the field of Psychology
find ways for new methods of motivation.
• It was in 1923, when Elton Mayo made clear
the inadequacy of the carrot-and-stick method,
so that psychological theory begins to trickle
down into management.
• Based on his experiment in Philadelphia
Textile Mill, Elton Mayo concluded that the
cause of low productivity was the lack of
opportunity for the Spinners to communicate
with one another.
• Financial or cash incentives given failed to
increase productivity. • Thus, Elton Mayo
changed the atmosphere of the workplace by
introducing two (2) ten-minute breaks for the
Spinners which produced immediate results:
morale improved and output increased
tremendously.
• Mayo’s belief was confirmed that manager’s
must consider the psychology and well-being
of the worker.
• Thus, a new era of partnership between the
managers and psychology began.
The Era of Industrial Psychology
• Douglas McGregor, in the 1950’s was
influenced by Elton Mayo and he questioned
the old beliefs of managers that workers have
no rights beyond their paycheck or
salary/wage; their duty was only to work hard
and obey orders.
• McGregor believed that workers actually
cared about doing good work, thus,
management must align jobs with worker’s
needs.
• Industrial Psychology shaped HR’s
framework by focusing on the symbiotic
relationships between organization and
workers; That organization exists to serve
human needs and not the other way around.
Organization and people need each other.
Organization needs ideas, energy, and talent;
people need careers, salaries, and
opportunities.
Symbiotic means denoting a mutually
beneficial relationship between different people
or groups.
Performance-based Rewards
Means, that when rewards are associated with
higher levels of performance, employees will
presumably be motivated to work harder to
achieve those rewards.
Factors Influencing Motivation
1. Individual Differences – people have
different characteristics (personal needs,
values, attitudes, interests, and abilities) that
they bring in the organization. Example: One
employee may be motivated by money and go
for highpaying but non-regular job which
provide opportunity to earn big time such as
real-estate agent, and other sales job that
gives high commissions on sales. Another
employee may be motivated by security and
accept a low-paying but regular job that has
less risk of unemployment.
Example: One employee may be motivated
with a position that requires variety of skills
such as communication, decision-making,
interpersonal relationship, planning, creating,
managing, etc.; and tasks that require high
level of thinking and deadlines; and the
autonomy to do/plan his work schedule and
independently decide; receiving feedbacks
from the boss. Another employee may be
motivated by routine work that require basic
skills such as typing and filing, and which does
not requires decision-making and is
guided/supervised closely by a boss.
2. Job Characteristics – this refers to
aspects of the position and its limitations and
challenges.
3. Organizational Practices – this refers to
the rules, HR policies, managerial practices,
and compensation-benefits and reward
systems which can attract new employees and
make existing employees happy.
 It is not enough that a job is challenging, it
must also be compensated well according
to the job requirements and level of skills of
the employee.
Ꝍ It will be useless to be working hard on
difficult assignment if the employee will be paid
the same amount as the other employee who
does easy job of answering the phone and
encoding/typing ready information.
Suggestions to Motivate Employees
1. Recognize Individual Differences
2. Match People with Jobs. High performers
want autonomy, thus, running a unit within a
larger business will be attractive to them.
3. Use Goals. High performers are challenged
with goals and feedbacks on how well they are
doing.
4. Make Sure that Goals are Perceived as
Attainable. A challenging but hard to achieve
goals will reduce employee’s efforts.
5. Give Individualize Rewards. A free
vacation travel with accommodation & pocket
money may not be attractive for those who has
fear of travelling.
6. Link rewards to performance. Pay
increases and promotions must be based on
what the employee has achieved and not on
favouritism. 7. Check the system for Equity.
Employees must clearly see/perceive that
differences in salaries, rewards,
responsibilities, and outcomes are based on
experience, ability, efforts, and inputs.
8. Don’t Ignore Money. Cash rewards,
bonuses, and incentives have greater impact
on employee’s motivation.
9. Reward Only for Surpassing Business
Goals Incentives, increases, and bonuses
must be given only for superior performance.
10. Encourage Team Results. Aside from
individual rewards, track down the unit with
outstanding performance. It encourages
working together rather than just thinking of
self. 11. Extraordinary rewards. Beyond the
ordinary plaques, even the non-monetary
reward must be unusual that awardees would
love and cherish to keep. If it is money, it must
be 20% or more of the base pay.
12. Don’t Ignore Money. Cash rewards,
bonuses, and incentives have greater impact
on employee’s motivation.
Two Major Approaches to Work Motivation Example: Employees want public recognition of
their achievement to build pride and prestige
Content Approach
1. Abraham Maslow’s Hierarchy of Motivation • Self-actualization– the desire for personal
2. Clayton Alderfer ERG Model growth to achieve one’s potential and self-
3. David McClelland’s Three Needs Theory fulfillment. This is a person’s drive to become
4. Frederick Herzberg’s Motivation Hygience what he/she is capable of becoming.
Theory Example: This are employees who are not
concerned with lower needs.
Process Approach
1. Victor Vroom’s Expectancy Theory
This theory applies when organization helps
2. John Stacey Adams Equity Theory
employees achieve the first 2 lower levels so
3. B.F. Skinner Reinforcement Theory
that the 3 higher level needs would not
4. Edwin Locke’s Goal Setting Theory
influence on-the-job behaviour. Thus, manager
must continually re-evaluate what motivates
Content Approach to Motivation
the employees.
This is the best known Theory of Motivation.
Clayton Alderfer’s ERG Model
Maslow hypothesized that people have a
This model looks at motivation as following a
complex set of five categories of needs which
hierarchy and describes how Need Satisfaction
he arranged in order of priority (see figure).
and Need Frustration affect motivation based
Maslow suggested that, as a person satisfies
on three (3) categories;
each level of needs, motivation shifts to
• Existence Needs – desire for material and
satisfying the next higher level of needs.
physical well-being (lowest-level need).
Abraham Maslow’s Hierarchy of Needs
• Relatedness Needs – desire to establish and
• Physiological Needs – are food, clothing,
maintain interpersonal relationships with other
shelter, and other physical requirements.
people.
Example: A hungry person is motivated to find
• Growth Needs – desire to be creative, to
food rather than seek recognition for
make useful and productive contribution, and
achievements.
to have opportunities for personal
development.
• Security or Safety Needs – protection from
physical and emotional harm. Employees
This theory applies when managers know
express this desire in the form of having a
when employees are frustrated in fulfilling their
stable job, with medical, unemployment and
needs, and what cause the frustration, then
retirement benefits.
work to remove the blockages. If blockages
cannot be removed, managers whould redirect
• Affiliation or Social Needs – the desire for
the employees’ behaviour toward satisfying
affection, belongingness, acceptance, love,
lower level needs.
and friendship. Example: Employees need to
enjoy working closely with others.
David McClelland’s Three Needs Theory
This theory proposed that there are three major
• Esteem Needs – the desire for self-respect, a
motives or needs in work situations;
sense of personal achievement, status,
recognition, and attention from others.
• Need for Achievement – the drive to excel,
to achieve in relation to a set of standards or in
competitive situations.
• Need for Power – the drive to influence and
control others and the social environment.
• Need for Affiliation – the drive for friendly
and close interpersonal relationships with
others.
This theory applies when employee’s needs
are assessed. The achievement-oriented can
succeed in an increasingly competitive
environment. The power-oriented can succeed
in taking leadership roles. The affiliation-
oriented can easily work with teams.
Frederick Herzberg Motivation Hygiene
Theory
This theory suggests that factors leading to job
satisfaction (motivators) are distinct and
separate from those that lead to job
dissatisfaction (hygiene factors);
 Motivating Factors – are associated with
positive feelings about the job
characteristics (challenge of the work,
responsibility, recognition, achievement,
advancement, and growth) that, when
present should create higher level of
motivation.
 Hygiene Factors – are the factors that
eliminate dissatisfaction; such as the work
environment outside of work (working
condition, company policies, supervision,
coworkers, salary, and job security) that,
when adequate. Maintain a reasonable
level of satisfaction but do not necessarily
increase it.
This theory applies when managers do not
focus only on relying on hygiene factors to
motivate employees, but rather on real
motivators to solve human problems such as
grievances, low productivity, and the like.
Process Approach to Motivation
Victor Vroom’s Expectancy Theory
This theory assumes that people choose
among alternative behaviors because they
anticipate that a particular behavior will lead to
one or more desired outcomes, and that the
other behaviors will lead to undesirable
outcomes. It has three variables;
1. Expectancy or Effort Performance
Linkage – the expectation perceived by the
employee is that exerting effort would lead to
certain level of performance.
2. Instrumentality or Performance Reward
Linkage – the degree to which an individual
believe that performance level is instrumental
in leading to attainment of a desired outcome.
3. Valence or Attractiveness of Reward – the
importance that the employee places on the
potential outcome or reward that can be
achieved on the job.
This theory applies when manager’s determine
what rewards are valuable to each employee,
what is acceptable level of performance, and
making sure it is attainable. To perform well,
employees must know what to do, be able to
do it, and want to do it. Reward is for
performance, not on hard work or effort. If job
is too difficult and their hard work will not be
rewarded, they will not increase output, then
they will not increase their effort.
John Stacey Adams’ Equity Theory
This theory assumes that a major factor in job
satisfaction is the employee’s evaluation of the
equity or fairness of the reward received.
Means, the rewards must be equal to the
effort.
Employees are satisfied after evaluating that
the reward is equal to the effort exerted.
It must be noted that inequities occur in
promotions, salary increases, perquisites and
other HR actions. Thus, managers must treat
employees equally by regularly communicating
with them, by explaining the reasons for the
actions to lessen negative reactions.

B.F Skinner’s Reinforcement Theory
This theory is based on Thorndike’s (1898) the
“Law of Effect’ – the idea that behavior with
positive consequences tends to be repeated
(strengthened), while those with negative
consequences tend NOT to be repeated
(weakened/ extinguished). Or, it states that the
behavior of an individual is a function of its
consequence. Skinner believed that the best
way to understand behavior is to look at the
causes of an action and its consequences
(also called Operant Conditioning).
There are Three (3) Types of Responses;
1. Neutral operants (or responses) – are
responses from the environment that neither
increase nor decrease the probability of
behaviour being repeated.
2. Reinforcers- are responses from the
environment that increase the probability of
behaviour being repeated. Reinforcers can
either be positive or negative.
3. Punishers – are responses from the
environment that decrease the likelihood of a
behavior being repeated. Punishment weakens
the behaviors.
Examples of Reinforcements
Stimulus Response
Consequences Future
Response (Situation) (Behavior)
(Rewards or Punishment)
A. Example of Positive Reinforcement: Cash
Superior Cash Incentive
Repeat Superior Incentive
Performance
Performance
B. Example of Negative Reinforcement:
Redo Poor
Redo Work Repeat
Superior Work w/o incentive Performance
w/o incentive Performance
Punisher: (This is not reinforcement but a
response) Demotion Poor
Demotion Avoid Poor
Performance
Performance/ Change Behavior
This theory can be applied by positive
reinforcement to influence work behavior,
through these guidelines;
1. Do not reward all individuals equally;
2. Inform employees what they can do to
receive reinforcement;
3. Let them know what they are doing wrong;
4. Do not punish employees in front of others;
5. Be fair to all.
Edwin Locke’s Goal SettingTheory
This theory (published in 1968 entitled,
Toward a Theory of Task Motivation and
Incentive) assumes that clear and specific
goals increase performance, and difficult goals,
when accepted, result in higher performance
than easy goals.
Locke and Latham’s Five Principles of
Effective Goal Setting
1. CLARITY. A goal must be specific and clear.
2. CHALLENGE. An easy or tedious goal is
demotivating. But keep a realistic balance;
don’t expect anyone in your team to spin straw
into gold.
3. COMMITMENT. Your employees must
understand and buy in to the goal from the
start. 4. FEEDBACK. Provide regular
feedback throughout the whole process. This
helps to keep track of the goal.
5. TASK COMPLEXITY. Think about realistic
timescales, and break down the process into
sub-goals with regular reviews.
This theory applies when employees are
allowed to participate in setting goals, to
encourage them in working toward the goals,
and provide them accurate feedback.