Salary and Wage Administration with Labor

Name: Chrislyn D. Porlares

Subject: MPA-HRM 208
Date: December 5, 2020

Chapter I. Overview of the Position Classification and Compensation System

Executive Summary

Overview of the Position Classification and Compensation System basically focuses on the
development of the Position Classification and Compensation System starting from the American regime
until to the enactment of Republic act no. 6758 known as Compensation and Position Classification Act
of 1989 which prescribes a revised compensation and position classification system in the Government.
Prior to that, various acts have been enacted to enhance the compensation system in the country. This
includes the enactment of Act No. 102 mandated the PCSB to conduct a survey of salaries in the civil
service during the American Regime and also the enactment of Commonwealth Act no. 402 which
mandates on providing classification of positions and standardization of Salaries in the Government that
covers the officers and employees during the Commonwealth Regime.

Republic Act No. 6758 or be it known as the Compensation and Position Classification Act of
1989 also popularly known today as the Salary Standardization Law. It implies to provide equal pay for
substantially equal work and to base differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions for all government entities based upon a
unified Compensation and Position Classification System administered by the Department of Budget and
Management (DBM).

This act further mandates that all government personnel shall be paid just and equitable wages,
the ratio of compensation for those occupying higher ranks and lower ranks should be in proportionate
levels. Also, basic compensation for all government personnel and GOCC’s and financial institutions shall
be similar with those in the private sector subject to the prevailing laws on minimum wages. However,
the total compensation provided must be maintained at a reasonable level in proportion to the national
budget in order not to undergone inflation and other underlying factors.

The Position Classification and Compensation System provided shall cover all government,
GOCCs and financial institutions positions it may be appointive or elective, full time or part-time in
nature excluding those hired under contract, paid under piecework or job order basis. In addition, this
system comprises two parts which includes the Position Classification Plan (PCP and Compensation Plan
(CP). Some other features of this system are categorization of positions into four classes, revised salary
schedules up to SG 33 with prescribed rules and regulations for its implementation, assigned salary
grades of constitutional officials with their equivalent rank as predetermined by the DBM, establishment
of benchmark positions for position classification and salary grade allocation and step increments as
well.

Overall, the PCCS serves as a tool for effective management, organizational analysis, budgeting
and fiscal control, and as an information tool for the general public or taxpayers.