Human Resource Management

Introduction:

Human Resource Management (HRM) in the modern world, of work is both challenging and exciting.
The field of Human resource management provides a vast area of insights for all the students and
practitioners in building their career. Strong knowledge in human behavior plays a great role in molding
a human resource foundation, that would bring peace and harmony in the industrial world. The reward
of competence in this area will inevitable be significantly both personally and monetarily.

The role of Human Resource practitioners is getting more complicated in the advancement of
technology.

This module is worked on to prepare young professionals in the field of human resources on the
premise that the modern manager’s job is becoming extremely intricate.

With the continuing development, in human resource planning, training, development and human
research, as well as the intricate management of human resource operations on a daily basis, this
module will help students and practitioners learn to be successful in their chosen career.

Pre-Discussion Activity

CHAPTER 1

The Development of Human Resource Management

At the end of this chapter, you should be able to:

By the end of this module, you should be able to:

Understand what is meant by human resource management (HRM);

Describe the main factors which led to the emergence of HR discipline;
explain how HRM is related to business strategy, organizational behavior, and personnel management;
Comprehend what is meant by strategic HRM;
Explain what is meant by operational HRM;
Describe the main activities involved in operational HRM.
What is Human Resource?

Personnel/Human Resource Management may be defined as the function of management, concerned

with promoting and enhancing the development of work effectiveness and advancement of the human
resources in the organization. These are accomplished through proper planning, organizing, directing,
coordination and controlling of activities related to procurement, development, motivation, and
compensation of employees to achieve the goals of an organization.

Who is a Human Resource Manager?

Member of the top executive group and is responsible for the formulation of personnel policies and
programs which will serve as the foundation for an efficient personnel administration in a company for
it to realize its goals and objectives and allow the employees to develop their individual career goals.
Why do Companies hires a Human Resource Manager?

To help management achieve company objectives and goals in the management of its human resources
Assist top management in formulating sound policies, programs and rules and after approval, administer
them fairly and efficiently
Assist line supervisors and managers in providing employees with a satisfactory work environment and
in promoting harmonious relationships with the employees and unions.
Make managers and supervisor aware of their full responsibilities in the management of human
resources by providing them with technical help needed to handle employees problems.
Help train and develop the human resources of the company in order to equip them with the skills and
knowledge required in accomplishing their jobs efficiently.
Help promote understanding and good relationships by opening the lines of communication between
management and employee thereby creating an atmosphere where workers can be happy and proud to
belong to the organization.
Identify management problems that can be resolved and opportunities that can be realized through
improved and effectiveness in personnel management.
Assist managements and supervisors in handling labor relations, problems utilizing his knowledge and
competence on labor laws, government regulations and court decisions on labor relations
Assist the company in promoting good morale and motivation among its human resources
Assist in crisis management and organizational development
The Challenges of Human Resources

The Challenge of the Global Community- companies nowadays need to compete and defend not only
their local markets and customers; they must broaden their scope to encompass global markets
The Stockholders Challenge- The key to success on today’s business environment is to meet the
investor’s need and those of other stakeholders. The companies are challenged to reach financial
objectives through meeting customer’s and employees’ needs.
The Human Resource Management greatly influences cost reductions, quality management, and
financial systems that are ingredients to profitability and growth.

The Challenge for Productivity- Human Resources became more “smarter workers” with the aid of
computer machines, internets and expert systems. They produce highly quality products that are
demanded by the world market. The introduction of these new technologies needs the reconfiguration
of the employees work design, training program and reward system.
The links of high productivity are:

Human Resource Capabilities

New technology and opportunities
Efficient work structure and company policies allow employees and technology to interact
Growth and Development of Personnel/Human Resource Management in the Philippines

Personnel or Human Resource Management is a relatively new field in the Philippines. It was only in the
early 1950s that t is gradually gained acceptance and recognition in private business and industry.

HRM gain recognition and acceptance under three conditions:

Top management must convinced that personnel management is needed in its business operations
Qualified personnel administrators must be available.
Personnel administrators must demonstrate their capacity to contribute to the company’s objectives
and goals.
With the supply- demand gap for personnel administrators, many “personnel specialists” without
adequate preparations have entered the field, messing up some personnel programs because of
amateurism or plain lack of understanding of what personnel work is.

Personnel (People) Management Association of the Philippines (PMAP)- was established as a nationwide
organization of all the personnel managers and human resource practitioners in the country to uphold
the profession to the fullest

Activities of PMAP are:

Training and developing personnel administrators through seminars, lectures, workshops, meetings,
national conferences, and holding tripartite conferences pertaining to personnel management and
industrial relations
Participation in public hearings to voice support or opposition to, proposed legislation affecting business
and industry
Dissemination of information to upgrade personnel management, offering technical advice through its
special committees and library facilities
Establishment of a public relations program aimed at informing the public about the nature of personnel
work
Government Instrumentalities to assist the association on matters about employer-employee relations:

Department of Labor and Employment (DOLE)

Social Security System
Technical Education and Skills Development Administration (TESDA)

Organization and Human Resources

Organizations values not only profits but also employee growth and satisfaction, additional employment
opportunities, protection of the environment and contribution to community development.
The main goal of the organization is to provide goods and services effectively.
People are vital to an effective personnel management program.
The development of an effective organization hinges on the proper selection development, and
utilization, rewarding, and maintaining capable people.
The organization resources are stretched tightly to come up with the demand of the global environment

Contributing Growth Factors

Increasing Complexity of Business Operations- The post-war period saw the birth of big corporations
where the volume and variety of operations and the size of the labor force demanded specialization on
management. The specialist was called upon to formulate and carry out the organization’s personnel
policies and programs.
Government Regularizations and Labor Laws Promulgated in the Recent years- To safeguard the
worker’s interest, especially those related to wages, working conditions, job security and health, the
government deemed wise to enact a number of Labor laws and government regulations.
Women and Children Labor Law
The Minimum Wage Law
The Eight-hour Labor Law
The Industrial Peace Act of 1953
Other Social and Labor laws which are embodied in the Labor code of the Philippines and its
implementing Rules and Regulations which took effect on November 1, 1974.
Growth of Labor Unions- The passage of the Industrial Peace Act of 1953, otherwise known as Magna
Carta of Labor, triggered the organization of labor unions and the strengthening of the workers’
bargaining power. Collective bargaining and negotiations is best handled with the technical resources of
a personnel department.
Influx of New Concepts in Management- The employee welfare concept is not new, but its nature has
changed from one paternalism to that of employee’s rights through practices that have become
institutionalized. Employee benefits have become varied and far raging, making their administration a
complex function.

Problems and Difficulties of the Personnel/Human Resource Manager

Common Misconception about His role and functions

Inadequate recognition by management of the proper role of the personnel manager in the organization
In the area of the labor relations
Jealousy of the other executives regarding the personnel manager’s duty and authority

The Changing Image of the Human Resource Functions

The Traditional Personnel Image

Disrespect for the position and those who perform it

The low position in the organization
Lack of expertise in performing their functions

The HR in the New Generation

HR Department got the boast of higher recognition and importance with the advancement o in
technology and higher qualifications for employment.
HR practices a means of profitability, quality and other business goals through enhancing and supporting
business operations
Continuing education and seminars are contributory factors that increase the knowledge in the more
efficient and effective management of the HR department.

The Role of HR in the New Millennium

Recruitment and Employment

Interviewing, testing, recruiting and temporary employment
Labor coordination
Training and Development
Orientation of the hire and temporary employees
Performance management training
Productivity Enhancement
Wage and Salary Engagement
Job Evaluation
Wage and Salary Survey
Executive Compensation
Benefits Administration
Vacation and Sick leaves administration
Insurance
Stock Plans
Pension Plans
Retirement plan assistance programs
Employee Service and Recreations
Transportations
Canteen
Athletics
Housing and Relocation
Community Relations
Publication
Community project relation
Record Management
Employment Record
Information System
Performance Record
Health and Safety
Training
Safety Inspection
Dental and Medical Services
Drug Testing
Strategic management
Collaborative Planning
Out-sourcing manpower research
Organizational Planning
Role of the Personnel/Human Resource Manager

Supervisor
Administrative Official
Adviser
Coordinator
Negotiator
Educator
Provider of Service
Employee Counselor
Promoter of Community Relations
Public Relations Man

Personal Qualities of the HR Manager

Can communicate effectively, both orally and in writing

Possesses an above-average intelligence
Enjoy working with people
Grasps the implication of a given situation, understands individual attitudes and the problems of the
employees and of the employer
Aggressive, mature and capable of giving sound advice that will be in the best interest of both the
employer and the employees
Possesses the integrity, industry and courage to earn respect of the employees and his employer
Possesses a pleasing personality and personal warmth and should be approachable

The Skills Needed by Today’s HR Professionals

A higher degree of knowledge on management practices and processes.

The HR practitioner is a service provider to other line managers. He must possess a high degree of
human and public relations.
A great knowledge of human psychology and social relations. It is a great asset to effective coordination
He is a consultant on labor relations. A working knowledge of labor laws and regulations is of great
advantage
As a management practitioner. A thorough knowledge of management and its relations to effective
organizations is a must for all HR managers to plan out strategic approaches to problems andtheir
solutions
A community relations officers. The HR manager develops greater linkage with government and other
stakeholders. He has to coordinate with schools and other agencies for their manpower pooling and
other services.

The Career Path to HR Management

Entry Level- fresh graduates/interns

Assisting in interviewing applicants
Giving tests and scoring tests results in personality inventory and other skills test
Assisting in employee orientation and training programs
Record keeping
Supervisory level- The promotion to a higher level depends on the capability of the Personnel Assistant
Skills in writing job description, job analysis and job analysis
Knowledge of employee benefits program related to vacation and sick leaves, pensions and other
mutual benefits
Skills in testing and interpreting test results and making recommendations as to the fitness of applicants.
Job evaluation and wage administration skills and relating pay to the differences in job requirements
Skills in determining training needs and develop training modules and differences in job requirements
Skills in basic research related to manpower planning
The Managerial Level- Has acquired the above skills. The concentration of the HR is the effective
management of the different areas of personnel functions.
Leadership and Conceptual Ideas Visioning- HR manager is part if the strategic management team that
participates in organization strategies planning for improved products and services as they relate to
employees’ productivity and its relation to technology enhancement programs.
Analytical of the facts as basis for Decision Making- HR Manager is saddled with analysis of the
employees’ development program and finding alternative solutions to improve employee’s performance
level as it relates to global competitiveness.
Compliance Administration and Control- This includes labor laws, environmental regulations, safety and
security employee services including recreation and other manpower demands for a better working
environment.

Interpersonal Team Work- The introduction of new technology in the work place brought about varied
HR problems. Global competitiveness, being the essence of new mandate for industries, needs
employees who are dedicated and work oriented.
The Changing Landscape in HR Management

Top management believes HRM practices are directly related to the companies to gain competitive
advantage both in domestic and foreign market through productive and committed personnel.
To compete in the global economic arena, companies need to put greater effort towards accelerating
and retaining talented personnel.
Employees should be empowered towards productive endeavor and be guided according to the need for
competitive advantage if the economic development of this country is to be attained.
The politics of divisiveness in the work environment must be replace with cooperative undertakings that
will contribute to work efficiency.

Exercises:

Case Study
The New Human Resource Manager

The Prime Manufacturing Company is a garment factory that employs about 1250 employees of varied
skills. About 75 percent are women who are mostly in the production department. Men employees are
assigned in the maintenance department and as operators of machines used in the garment production.
Women are mostly in sewing department, packaging and quality control.

Mr. Rod Santos was hired to head the HR department. Prior to his assignment at Prime Manufacturing
Company, Rod was in construction firm, a medium size organization. His main concern was preparing
the payroll and handling employee’s records.

The Human Resource Department was composed of 5 employees, a payroll clerk, a personnel assistant
and two supervisors and MR. Rod as a manager. The record of Mr. Rod Santos in his academic
achievements is quietly satisfactory. His bachelor’s degree is in the field of Engineering. Performance in
the previous employment is quite satisfactory. The construction company of his previous employment
was closed due to an economic slowdown, this cause his separation from employment.

The garment business is globally competitive and customer’s satisfaction is of prime importance.
Employee’s commitments to performance standard are high priority. In the three- month span of Mr.
Rod Santos’ employment, 20 percent of women employees and 12 percent of male employees resigned
for unknown reasons, as there was no exit interview conducted. Production schedule was delayed and
foreign customers were alarmed.

The general Manager, Mario Mabilangan, called Rod Santos regarding the problem. He noted Rod’s
indecisive approach to the HR problem and actions that he failed to take. He pointed out to Rod Santos
that he exactly did not know what to do regarding the current situation. His subordinates began to
complain to Mr. Mabilangan about Rod Santos’ indecision.
Rod Santos became more withdrawn from his subordinates and other managers in the plant. He showed
little interest in his job and concentrated in mental jobs concerning the department. In general he lost
control of his job of managing the department.

Note:

Use Case Analysis Format

II. Essay.

Discuss the personal qualities of the human resource manager that are essential in the success of a
company.

CHAPTER 2

Strategic Human Resource

At the end of this lesson, you should be able to:

Discuss the role of the human resource in strategic planning

Explain the two important components in human resource planning and the important Elements in
Strategic Human Resource Planning
Determine the different kinds of human resource planning and the important elements in Strategic
Know the advantages in using the elements of human resource planning
Enumerate the five steps in human resource planning
Discuss the different kinds of planning techniques in human resource management

Human Resource Planning (HRP)

A process of systematically reviewing human resource requirements to ensure that the number of
employees matches the required skills
It is the process of matching the internal and external supplies of people with job openings anticipated
in the organization over a specific period of time.
HRP is recognized as an important component of Human Resource

What is Strategic Planning

The determination of the overall organizational purpose and goals and how they are to be achieved.
HR is the integral component of a strategic plan, which greatly affects productivity and organization
performance.
After the strategic plans have been formulated, human resource strategic planning is to be undertaken.
The HRD shall determine the total manpower component to execute the planned strategic activities.

Two Important Components of the Human Resource Planning

Requirement-
Forecasting human requirements involves determining the number and types of employee needed. The
level of skills has to be determined and matched with the plan operations. The analysis will reflect
various factors such as production plans, and changes in productivity together with the introduction of
the new technology if there is any.
The HRD, in order to forecast availability must look to both internal and external sources. Internal
sources refer to existing manpower that could be re-assigned to new positions or be promoted to higher
vacant positions. External sources refer to positions that are not available inside the organization and
need to be sourced out.
Availability
If there is a surplus, ways must be instituted to reduce the number of employees. Some of these
methods include restricted hiring, reduced work hours, early retirement of old employees, and the
worst is to layoff some employees.
If the manpower forecast reveals shortage, the HRD must obtain the proper quantity and quality of
workers outside the organization after exhausting efforts to find from within.
Human resource planning must be continuous, as changing condition could affect the entire
organization thereby requiring extensive modifications of forecasts.
Aspects of Human Resource Planning

Systematic Forecasting of Manpower Needs- On the basis of business conditions and forecasts,
manpower needs are planned and monitored closely
Performance Management- Analyzing, improving and monitoring the performance of each employee
and of the organization as a whole
Career Management- Determining, planning and monitoring the performance of each employee and of
the organization and developing them for improved productivity
Management Development- Assessing and determining the development needs managers for future
succession requirements
Advantages in Using the Elements of HR Planning

Through a systematic planning of human resources, a company can be better assisted in attaining its
goals and objectives
It helps the company determine its manpower needs and provides a method of meeting them
It can be an effective mean of planning the development and growth of the employees
It can assist in placing the employees properly in jobs where they can maximize the use of their skills and
potentials.
It can assist the company to attract and retain better qualified employees
Five Steps of Human Resource Planning

Determining the workload inputs based on the corporate goals and objectives
Once the company’s objectives are known, the operating executives can determine what they are
responsible for in the common endeavor of attaining the corporate goals. The kind and magnitude of
workload determine the organizational structure, the number and quality (skills) of employees needed
to man the organization or department under a desirable level of performance.
Several Factors that should be considered in determining work inputs:

Business Development and Assumptions

Corporate Planning
Economic forecasts
Changes in Plans and products
New Product Lines
Mergers and Consolidations
Studying the jobs in the company and writing the job description and job specifications
Forecasting of manpower needs
Determination of the number and skills of people required for the work
Forecasting manpower needs comes next after determining the work input, and is known as a planned
and logical method of determining both quantitively and qualitatively the employees needed to man the
work inputs to enable the company to attain its goals.
Inventory of Manpower
An analysis of the present manpower complement of the company to determine whether it has enough
or less or more personnel (both qualitatively and quantitatively the employees needed to man the work
inputs to enable the company to attain its goals.
This fourth step in the planning process is the inventory (audit) of available current manpower. What
happens in this step is the assessment of the skills, career aspirations, strengths and weaknesses of each
of the current employees and their potentials for promotion.
The net result of this operation is that you either find:

Enough manpower
Excess in the number of available manpower, but lacking the skills required
The number of available manpower is insufficient, and the skills are also inadequate to meet the needs
of the work inputs.
Improvement plans
Determination of the appropriate steps to implement the HRP in order to insure that the company has
the right number and right quality of people, properly assigned to jobs for which they are most useful.
This includes action plans to improve the capabilities of current personnel thru training and
development. This plan can be part and parcel of the total development programs, succession programs,
etc.
Planning Techniques in HR Management

Skills Inventory- involves the listing of all the skills pressed by the workforce and they are made to relate
to the requirements of the organization. This technique requires detailed information of the experience
and training of every individual in the organization.
Ratio Analysis- This is a technique wherein the personnel who are promotable to the higher positions
are identified together with their backup or understudy.
Cascade Approach- The setting of objectives flows from the top to bottom in the organization so that
everyone gets a chance to make his contribution. This approach results in the formulation of a plan
wherein the objectives of the rank and file get included in the blueprint for action.
Replacement Approach- The HRP is done to have a body of manpower in the organization that is ready
to take over existing jobs on a one-to-one basis within the organization.
Commitment Planning Approach- This technique involves the supervisors and personnel in every
component of the organization on the identification of manpower needs in terms , skills, replacements,
policy, working conditions and promotion so that human resource in the organization may be up to the
challenge of current and future operation.
Successor Planning Approach- The approach known as successor planning takes into consideration the
different components of the old plan and increase them.
Common Weaknesses in Human Resource Planning

Over-Planning- A plan is likely to fail through an inherent weakness of having covered too many aspects
of personnel management at the very early stage of HRP in the firm or government office.
Technique Overload- The use of so meant techniques sometimes leads to the gathering of so much
information.
Bias for the Quantitative- there are planners in HRP who sometimes make the mistake of being drawn
towards emphasizing the quantitative aspects of personnel management to the neglect of the
qualitative side.
Isolation of the Planners- when top management has a low regard for human resource activities and for
the HR staff, they give little encouragement to HRP activities, ignore the plan and withdrawn support for
plan implementation.
Isolation from Organizational Objectives- When HRP is pursued for its own sake or for narrow viewpoint
of concentrating on HRD, the effort leads to the formulation of a plan that does not interphase with
organizational development.
Lack of Line Supervisors’ Inputs- Any plan to develop the personnel and to improve the conditions of
work must use the feedbacks from the line supervisors, since they are the ones who are handling the
personnel in the organization.

Four Basic Terms of Manpower Forecasting

Long Term Trend- Long term forecasting is usually done for a period of five years or more depending on
the company operations and customer demands.
Cyclical variations- refers to reasonable and predictable movement that occur over a period of one year
more.
Seasonal Variations- this is a reasonable prediction change over a period of one year. This covers firms
who manufacture seasonal products and hire temporary workers for temporary increase in demand, like
Christmas and other special occasions.
Random Variations- this is one occasion where there is no special pattern and it is quite difficult to
predict or determine. The HR practitioner must be careful in his manpower forecast especially in the
hiring of employees.

Human Resource Forecasting Techniques

The Zero-Base Forecasting Approach- It uses the organizations’ current level of employment as the as
the starting point for determining future staffing needs. The usual references point is the organizational
structure pattern based in company production forecast on market and customer demands.
The Bottom-Up Approach- the forecast uses the progression upward methods from the lower
organization units to ultimately provide the aggregate forecast of employment needs.
Use of Predictor Variable- This method uses the past employment level to predict future requirements.
Simulation- it is technique for the testing for alternatives on mathematical models representing the real
world situation.

The Improvement Elements in Strategic Human Resource Planning

Organizational Goals- The human Resource planning process should be tied up with the organizational
strategic goals. It must rest on solid foundation of information about sales forecasts, market trends,
technological advances, and major changes in processes and productivity.
Human Resource Forecast- the second element in the planning process is the forecasting of human
resource needs based on business strategies, production plans and the various indicators of change in
technology and the organizations’ operating methods. Forecasting is usually accomplished by utilizing
historical data and reliable ratios.
Employee Information- the third element in the planning process is maintaining accurate information
concerning the composition, assignments and capabilities of the current workforce. This information
includes job classification, age, gender, status, organizational level, rate of pay and functions.
Human Resource Availability Projections- The fourth element of the human resource planning process is
estimating the number of current employees and those that could be available in the future.
Analyzing and Evaluating Human Resource Gaps- the fifth element in the human resource planning
process is comparing what is needed with what is available in terms of numbers, mix, skills and
technologies. The comparison permits the human resource manager to determine gaps and evaluate
where the most serious mismatches likely appear.
This type of analysis should help management address issues such as:

Are there imbalances developing between projected human resources needs and availability
What is the effect of current of current productivity trends and pay rates on the workforce levels and
costs
Do turnover problems exist in certain jobs or age levels?
Are there problems of career blockage and obsolescence?

Human Resource Role in Providing Competitive Advantage

HR can provide strategic competitive advantage in two ways:

Emergent Strategies- consist of strategies that evolve from the grassroots of the organization and can be
thought of as what the organizations actually do. It is usually the lower rank and file employees who
provide ideas for new markets, new products and new strategies being at the front line of operations.
Intended Strategies- are the results of the rational decision-making by the top management as they
develop strategic plans. It is a pattern of plans that integrates an organization’s major goals, policies and
action sequences in a cohesive whole.

Human Resource Information System (HRIS)

Any organized approach to obtaining relevant and timely information on which to base human resource
decisions. An effective HRIS is crucial to sound human resource decision-making. It is designed to
provide information that is – SMART.

Systematic- information must be systematically arranged and contain the needed data.

Management Oriented- The information are essential tools for effective manpower planning, retention,
development, and separation of employees

Applicable- the data and information stored in file must be applicable in making human resource
decisions. Irrelevant data must be discarded. Information must be updated from time to time to be
relevant to the current manpower needs requirements.

Result-Oriented- The results from the information and the decisions derived thereat must be both
acceptable to management and the employer’s concern.

Time-bound- Relevant human resource information are necessary for effective decision-making. The
need for timely decisions are crucial to the effective management of human resource.

-The absence of these characteristics reduces the effectiveness of HRIS and complicates the decision-
making process.

-HRIS also produces and forecasts several important reports related to business operations.
1. Routine Reports- these are human resource data summarized on scheduled bases, like current
manpower status, regular employees, contractual employees, supervisors and managerial employees on
a regular payroll.

2. Exception Reports- This information may contain confidential data that are available only for
managerial decision-making and needs immediate attention. This may pertain to violations of existing
company rules and procedures, policies and management programs.

3. On Demand Reports- Management may demand some reports for analysis. This may pertain to
productivity index, individual performance records, and other information that may lead to downsizing,
and other personnel actions.

4. Manpower Forecast- applies to predictive models based on specific situations. This may cover
increase or decrease in manpower requirements due to seasonal demand or increase customer order.

Software Application for HRM

The advent f the different HRM software application has made the human resource manager’s functions
for decision-making just a click on the computer programs. The following are the major functions of HR:
Staffing Applications- Common applications used in the area of staffing include the following:
Application recruiting and tracking
DOLE reporting requirements
Developing a master employee data base
Staffing applications for decision-making
Human Resource Planning Application- This involves company specific applications in determining future
employee turnover, growth rate and promotion patterns and other personnel movements. This includes
the following applications:
Work-force Profile Analysis- it refers to work-force labor supply and demand analysis or work-force
profile analysis review.
Work-force dynamic Analysis- Number of new hires, transfer and promotion. Number is still needed in
the future and those employees who are available to fill up job openings in the future.
Human Resource Planning for Decision- Making- This application pertains to information about
employees who are about to retire, job classification of employees for promotions and those
departments that lack basic skills for the job.
Performance Management Application- employee performance ratings, disciplinary actions, work-rule
violations and the daily productivity index could now be restored in the computer database as bases for
management decisions.
Training and Development Applications- These are used primarily to track down the need for employees
training programs, courses to attend, certified skills and educational qualifications. Career applications
assess the employees’ career interest, work values and career goals.
Compensation and Benefits Applications- these includes payroll, job evaluation, salary planning and
analysis of executive compensation planning and management benefits.
Exercise:

Case Study
Use the case study format

Chapter 3
Human Resource Recruitment

After this chapter, you should be able to:

Discuss recruitment process

Discuss the advantages of the different methods of recruitment
Identify the two major sources of manpower
Illustrate the different methods which one is more effective, appropriate, applicable and less expensive
to use in recruiting manpower
Recruitment Process

Recruitment is a process of attracting the best individual to join the company on a timely basis in
sufficient numbers and meeting the qualification requirements, thereby encouraging them to apply for
the jobs in the organizations.
Two Major Sources of Recruitment

The Internal Source- These are the qualified candidates within the company and within the ranks of its
present employees. They have the advantage of boosting the morale of the other employees and
encouraging them to perform well. The recruitment from within the company is also less expensive of
time and resources because incumbent employees are already familiar with the organizational rules and
policies and regulations and the functions related to the new position.
The External Source- The hiring from the outside source is a management option. If it thinks that no one
from within among the next rank of employees can successfully perform the job or deliver the required
output, then hiring an outsider would be inevitable. Another reason why management may resort to
hiring from outside is to eliminate dissensions of the culture of conflict employees who are vying for a
new position.
Different methods of Human Resource Recruitment

Job Posting- the process by which internal recruitment is accomplished. When a position becomes
available, it is posted in the company bulletin board. Qualified employees are given preference for
promotion or transfer to another section.
The Word-of-Mouth system- this method of recruitment is found to be effective in local situations. It is
one of the least expensive recruitment system.
Advertising Media- One popular and often effective means soliciting applicants is advertising it through
the media, like newspapers, magazines, radio or television. Careful planning in terms of content, timing
and location can generate a large response, usually resulting in hiring.
Walk Ins and Unsolicited Applicants- possible source of outstanding employees. However, this applicants
are not treated very seriously and sometimes applications are filed without even checking on it.
Campus or University Recruitment- Recent graduates are considered highly desirable for companies to
select, groom and develop recruits from top schools in the country. Campus recruitment requires careful
planning and preparation.
Job Fair and Open House- The job fair and open house are popularly increasing as recruitment sources.
An advertisement announcing the location of the job fair is posted at least one week ahead of schedule
to attract more applicants. Brief interviews are conducted during the job fair.
Government Agencies- the DOLE has an agency that compiles applications for referral to the different
companies. They screen and refer many applicants usually for manual or unskilled positions. This kind of
referrals are sometimes difficult to handle due to political pressures.
Radio and Television- Radio and television is a medium with great magnitude, more qualified applicants
can be reached and could even tempt other applicants who are not actually looking for jobs.
The Internet- Another source of employment opportunities. Company profiles and job placement could
eventually come into the internet.

Exercise

Case Study (Follow Case Study Format)

Chapter 4

Selection of Human Resources

After this chapter, you should be able to:

Identify future Human Resource Managers/personnel most qualified in the position

Develop appropriate planning strategies in preparing up-to-date procedures for hiring

Selection- is the process of determining from among the other applicants who can meet the job
requirements and can be offered the vacant position in the job.

The Personnel Requirement Form (PRF) specifies the following:

The position and the number recquired

The job specifications- What is recquired in the job. (knowledge, abilities, skills, or licenses.
The personal qualities needed for a worker to do the job successfully.

The HRD determines the selection procedure on how to get the most qualified applicants. The following
stage may be implemented:

Stage 1- Establishing selection procedure

Stage 2- Identifying and choosing selection criteria, predictors and instruments used.
Stage 3- Gathering and evaluating information about applicants.
Stage 4- Making communication decisions to select or reject.

Who makes the Selection Decisions?

-The HRD staff department has a functional authority to assist line managers in all related personnel
functions.

Selection and Job Matching

Selection tries to match the personal qualities of the applicants with the job requirements.

The Selection Process

The employer can think of the election process as a series of hurdles that applicants mist clear in order
to obtain the job.

Preliminary screening- This is the initial interview. It deals with the voice, physical appearance, personal
grooming and educational background, professional training and experience that needs to be assessed.

These are some styles of interview:

Structured interview- follows set up a procedures and the interviewer sets the lead.

Unstructured interview- is where the applicants takes the lead.

Panel or round-table interview- is usually done for managerial and supervisory employees.

The Application Form

The applicants is required to fill our company's official application form after passing the preliminary
interview.
Testing and Evaluation of Results
Testing is the parlance of HRM, is commonly associated with the prediction and selection of subsequent
performance in the job.

Test can be classified on the basese of personal characteristics sought from the applicant. They are the
following:

Intelligence test- used to measure mental ability or general learning ability.

Aptitude Test- It measures the person's capacity to learn a given job, provided there is adequate
training.

Interest Test- It is deprived from hereditary and environmental factors.

Personality Test- It is considered as an important instrument to test the personality of the applicant
especially for supervisory and managerial positions, as they have to relati with their so-workers in the
industry.

Achievement or Proficiency Test- It tries to measure th applicant's knowledge of a given job.

What are the requirements for effective testing?

-It should be properly tested and validated

-It should be used with proper discretion and used along with other instruments.

-Use a battery tests to determine the person's real worth.

-Set the critical cut - off score in advance.

-Do not use raw scores; interpret them.

In-Depth Interview
The most important part of the selection process.

Three important characteristics that the interviewer must possess.

Knowledge- Better understanding of the psychology of the person is an important factor of the
interview.
Empathy- The interviewer must be able to discover the inner behavior of the individual by
understanding his own personality and relate this with the feelings of the applicant.

Communications Skills- The interviewer must have facility of communication.

Evaluating References
References are important in finally assessing the applicant's worth for the position.

Three kinds of reference:

Academic Reference- This may be requested from applicants who are new graduates.

Character Reference- This reference may come from some persons in the community that are familiar
with the individual in their place of residence.

Work or Experience Reference- To get the most valid information about the applicant, the work
reference check must be mailed to the previous employer stating the confidentiality of the information.

Physical Examination
The last hurdle of the application. Applicants undergo physical examination at the company or clinic.

Placements
The applicants who is cleared in all requirements finally offered the job.

Types of Employees:

Probationary

Regular or Permanent Employee

Contractual Employee

Casual or Seasonal Employee

Apprenticeships

Exercise:
I. Case Study

Mr. Pedro de la Cruz was strongly recommended by Mayor Punongbayan to work at the ABC Company
located in municipality. Mr. Dela Cruz was a new graduate of management of the local municipal
university where the mayor himseld as the President. His transcript of records reveal that he is an
average student and had no extracurricular activity in school. His father happens to be the supporter of
the mayor in his political career. Mr. Dela Cruz took the examination given by the company and he failed
to make it due to his poor communication skills. To give in to tha mayor's request, the human resource
manager gave him a position in the production department as the machine operator and not a clerical
position that the mayor would like him to have. But Mr. Dela Cruz did not want to accept the position
and insisted that he should get the job because of the mayor's recommendation.

Use the case format.

II. Essay

Discuss the personal qualities of the human resource manager that are essential in the success of a
company (5 pts)

CHAPTER 5

Training and Development of Human Resources

After this lesson, you should be able to:

Enumerate and explain varied types of employees training.

State the difference between trainin and development.
Discuss training and development of employees for efficient continued membership on the organization
Reason out why management must consider training as one of its major functions; and
Internalize the responsibilities of the personnel department and the supervisors in the orientation
program.

Training- The process where people acquire capabilities to aid in the achievement of organizational
goals.

Productivity enhancement- Both the employer and employee want to start right and becme productive
as soon as possible

Turnover reduction- Employees with effective orientation programs tend to stay longer in the company.
Organization effectiveness- Well-oriented employees can immediately contribute to the goals and
objective of the organization

Favorable employee impression- A good orientation program creates a favorable impression of the
organization and it's work.

Enhancement interpersonal acceptance- It tries to ease the employee's entry in the work group.

A Systematic Approach to Training

Conducting needs assessment

Organizational analysis
Person analysis
Task analysis
Ensuring employee's readiness for training

Attitude and motivation

Basic skill
Creating the learning environment

Identification of training objectives and training outcome

Meaningful materials
Practrice
Feedbacks
Observation of others
Administering and coordinating programs
Ensuring transfer of training

Self-management strategies
Peer and manager support
Sekecting training methods

Presentational methods
Hands-on method
Group method
Evaluatuating training program

Identification of trainin outcome and evaluation designs

Cost-benefit analysis
1. Assessment phase
a. Organizational Analysis- the specific source of information and operational measures or an
organization levels of analysis, which includes the ff:

Grievances
Accident record
Observations
Exit interview
Customer's complaints
Equipment utilization and breakdown
Material wastage, scraps, and quality control data
Training committee, observation and need assessment data
b. Task Analysis- the job description and the job specidications provide information on the performance
expected and the skills necessary for employee to accomplish the required work.

c. Individual Analysis- The use of performance appraisal data in making this individual analysis is the
most common approach.

2. Employees Readiness for Training

a. Self-efficacy
b. Understanding the Benefits or Consequences of Training
c. Awareness of Training Needs, Career Interest and Goals
d. Basic Skills

3. Learning Environment
a. Emplyees need to know why they should learn
b. Emplyees need to use their own experiences as a basis of learning
c. Employees need to have the opportunity to practice
d. Employees need feedback
e.Employees learn by observing and interacting with others
f. Employees need training programs to be properly coordinated and arranged.

Analyzing Training Needs

The need for training is usually indicated in the following instances:

1. when required skill is not possessed by anyone in workforce;

2. when an employee's performance is below standard, but he has the potential to improve the
productivity;
3. when morale or production is low;
4. when there is fast turnover of the personnel;
5. when the rate of absenteeism or accident is high;
6. when restiveness or dissatisfaction mounts;
7. when supervision is lax;
8. when new technology is introduced;

4. Transfer of Training

5. Selecting of Training Methods

a. Presentation Method
b. Hands-on Training
c. Group Building Method

6. Evaluating the Training Program

a. Learning
b. Behavior
c. Results

Training programs are usually evaluated on the basis of their intended objectives. Five steps to a
meaningful evaluation:

1. Determine what to Measure

2. Establish the Base Line
3. Isolate Variables
4. Measure Attitudes
5. Measure Performance

Human Resource Development- refers to a formal education, job experiences, relationships and
assessments of personality and abilities that employees prepare for the future.

Planning and Choosing a Development Approach

The ff processes are used in the assessment:

1. Assessment Centers
2. Psychological Testing
3. Performance Appraisal

Human resource Development Approach- In - House or on Comapany Site - The planned activities within
the company or while the employee is at work are those activities that will enhance employees'
potential to assume other jobs that the company needs in its operation.

1. Management Coaching

2. Committee Assignments
3. Job Rotation

4. Assistant-to-the Position

5. Job enlargement

6. Mentoring

Off-site or Outside Development Interventions- This technique can be effective because the individuals
are given the opportunity to get away from the job and concentrate solely on what is to be learned.

The following are some of the development programs:

1. Formal Education- the company sends the employee to formal seminars, workshops and other
training programs.

2. Team Building- These organizational interventions are usually conducted away from work about three
to four days.

3. Case Studies- A classroom type of training techniques that provides a medium through the application
of management behavios concepts and analysis.

4. Role Playing- A development techniques requiring the trainee to assumes a role in a given situation
and act the behavior associated with it.

5. Simulation- These are business games developed by human resource experts that require the
participants to analyze a situation and decide the best course od action based to the given data.

Exercise:

1. Case Study

The ABC Training Program

The ABC Corporation has engaged in the manufacture of electronic components for automobiles for the
last five years. The company employs 350 employees and about 30 supervisors and managers. The
increase in technology requires the employees be sent to training to cope with the increasing demand
for updated new products consistend with the demand of local anf foreign customers.
The HR Manager suggested that three of the managers and eight supervisors be sent to other company
in Japan for updates in technology on car electronics. The vice president for finance and the operation
manager opposed the recommendation on the basis of cost-cutting and lack of personnel to haqndle the
operations while they were away for two months. They suggested that technicians from the mother
company be invited instead to handle the training in the Philippines. The cost of training by the salaries
that will be charged to the local company.

Use the Case Format

Chapter 6

Job Evaluation and Work Flow Analysis

After this lesson, you should be able to:

Establish and document the "job relatedness" of employment procedures;

Identify the develop training content, assessment tests to measure effectiveness of training;
Identify or determine skill levels, compensable job factors work environment, responsibilities and
required level of education;
Identify duties in advertisements; appropriate salary lever for positions; minimun requirements;
interview questions; selection test/instruments; appraisal/evaluation forms; orientation material for
applicants/new hires and;
Identify or develop goals and objectives, performance standards, evaluation criteria, length of
probationary periods and duties to be evaluated.
The Rationale for Job Analysis
-The conduct of job analysis has behind it several reasons that the vital human resource management
and the supervision of the work to be done by the workers in the shop or office.
The Job Analysis Program and Organizational Structure
-Job analysis starts with a careful study of organizational structure
The Role of Human Resource in Job Evaluation

-Job analysis is not the sole responsibility of the Human Resource Department but a cooperative effort
of all operating departments.
The Gathering of Job Information

Job Analyst- The study of jobs is the responsibility of the personnel department thru the job analyst who
is trained to conduct the job evaluation program.

A good job analyst must have the following qualifications:

Good knowledge of organizational system

Good intelligence and analytical skills.
Good judgement and acumen
Clarity and facility of language
Familiarity with organizational and company policies
Good personality and good relationship with others in the organization
Tact and diplomacy in getting along with others

Getting Process in job information

- Job analysis starts with a careful understanding of the relationship of the job in the organizational
structure.

The importance of a Job Title

- The correct title of a particular job is very important in the organization.

The Nature of Job Analysis Information

- Job analysis focuses on the two important data or information that managers must have the right
information about the nature of the employee's job.

1.The Job Description

2. Job Specification- contains information about the employee's qualifications and traits required in the
effective performance of the work assigned.

Job Analysis Method

The Job Questionaire Method
The Interview Method
The Combination of Interview and Questionnaire Methods
3. The Combination of Interview Questionnaire Methods

4. Observation and Interview Methods

Chapter 7

After this lesson, you should be able to:

Enumerate the different theories of wages

Explain the significance of wages to the worker, labor and labo relations, to the national economy and
society
Discuss the procedures of a wage and salary survey
Compare the procedures of a wage and salary survey
Deduce the advantages of the wages and salary structures
Theories of Wages

Classical Wage Theory

The Just Wage Theory of St. Thomas Aquinas
The Wage Fund Theory
Bargaining Theory of John Davidson
The Maginal Productivuty Theory
The Purchasing Power Theory
Labor Theory of Value
The Standard of Living Theory of Wages
Procedure in Conducting Wage and Salary Surveys

Defining the Labor Market

List of key Job Positions
Detailed Description of Jobs
Collection of Salary Data
Compilation of Salary Data
Results of Surver
The Development of Wage and Salary Structure

- The design and operation of wage and salary structure is the concern of management and employees

Wage Structure Design

-The design of the wage and salary structure is the establishment of the job classes and rate ranges.

Salary Range

-The salary that is paid to an employee doing similar functions that has a minimun and maximum pay
and a series of adjustments.

Salary Adjustment with Hugh Seniority

- Reverse situation is when the employee with high seniority, is either so competent or has receives so
many increase that his salary is above the maximum the pay grade.

Methods of Wage Payment

-The main purpose of a formal wage and salary is management plan is to have a systematix method of
payment to ensure that employees receive a fair wage and salary for the work they perform.

By the Time Worked

HxR=W in which

H - Hours actually worked

R- Rate per hour in pesos

W- Total wages earned

By the Amount of Work Produced

NxU=W in which

N- Number of units produces

U- Rate per unit in pesos

W- Wages earned per day or per week

Wage and Salary Policies

-The company or any organization must have a clear-cut wage and salary policy

Morale Renewal in the Workplace

Know the leaders have limitations

Choose character
Walk the talk
Avoid compromising
Use the same measures on yourself
Face the mirrir
Show the mirror to your leaders
Don't just admit mistakes; correct them
Have an improvement plan
Rebuild and do not slide back
Other information related to wages

Labor and wages

Blue collar- Manual laborer

White collar- Office workers
Pink collar- Job associated with women like nursing, secretarial, etc.
Skilled labor- are workers who received specializing training to do their jobs.

Unskilled labor- are workers who received no specialized training and have few specific skills.

Professionals- arguably the elite of the labor grades, these are workers who needs an advanced degree
to do their jobs.

Case study

The Unhappy Supervisor

Miss Joan Santos, a computer programmer in Mannadel Corporation for more than six years now, was
discussing her salary situation with Mr. Rodercick Santiago, her manager. Miss Joan was unhappy becaus
she did not receive any salary increase last salary evaluation, while some employees who recently hired
got increase from ten to fifteen percent.
Miss Joan's performance has been considered very satisfactory for the last five years and previous to
this she got very substantial increases in salary due to the important programs that she made for the
corporation related to accounting and personnel matters. She made a lot of improvement in the
purchasing systems and systematized inventory records in materials management.

The management had recently started a comprehensive job evalution program and some positions are
aligned within the salary grade approved by the management committe, where Mr. Roderick Santiago is
also a member. Mr. Santiago explained to Joan that her salary was already way more above the salary
grade for the position evaluated and allocated in the salary plan; hence, she will not get any increase at
the moment until the salary range can catch up to her level in salary plan. Mr. Santiago also explained
that she is the most senior among the programmers and that instead of cutting her slary back to the job
range, they are considering her for an incentive bonus, which is not as substantial as that of her co-
worker's in the department who are new in the positions.

Miss Joan is not satisfied with the program explained by Mr. Santiago. The whole night she planned to
file a leave of absence despite the many rush programsn assigned to her.

Note: Use the Case Format

Chapter 9

The Management of Employee Benefits and Services

After this lesson, you should be able to:

Define what employee's fringe benefits are;

Discuss the principles governing fringe benefits;
Know the reasons why benefits and services are granted tp employees in addition to employee's
salaries;
Identify the types of benefits given to emplyees; and
Distinguish employee's benefits and services from company benefits and sevices

The Concept of Benefits

- are anything that is not covered by regular salaries and wages.

The Governing Philosophy in Granting Fringe Benefits

-Company Benefits are additional costs in the company operations.

- Company benefits should be based on the financial conditions and the capability of management to
pay additional cost of operations, as benefits granted cannot withdrawn when already granted

Benefits granted should no interfere with the company operation and management has the prerogative
to control the same.
Benefits should be fair to all employee of equal rank and position, and should be capable of the uniform
implementation.
The benefits must have mutual value to both employees and employers concerned.
The employee must understand the cost benefit implementation and they should work so hard that the
company will maintain its ability to pay added fringes.
Benefits must be measured in terms of employee's service to the company.
a. Length of service

b. Retirement benefits

c. Other Benefit Programs

Benefit programs should be a cooperative effort of top management and employees.

The Classification of Benefits

Statutory Benefits- are benefits mandated by law such as

a. 13th month pay given half in June and half in December

b. 5 day incentive leave

c. Birthday leave

d. Maternity lrsve with pa for married women

e. Paternity leave with pay when husband's wife gives birth

f. Pag-ibig Fund- housing loans through employer-employee contributions

g. Medicare Fund- for medical expenses of employees and dependents

h. Social Security Benefits- retirement, pension, death , burial, disability, sickness, medical rehabilitation,
employee compensation in case of accident in the performance of work

i. Cost of living allowance

Company Benefits- These benefits granted by the company outside of those mandated law.
a. Vacation leave with pay

b. Sick leave with pay

c. Bereavement leave

d. Hospitalization plan

e. Sickness and accident insurance plan

f. Life insurance and pension plans

g. Christmas and year bonus

h. Housing equity allowance

i. Educational plan

j. Recreational and fitness facilities

k. Legal aid

l. Car plan

m. Company Service and transportation

n. Stock option plan

o. Management Bonus

p. Emergency leave

q. Personal leave

r. Union leave

s. Production sharing plan

t. Profit - sharing
Profit Sharing Plans

- is an incentive plan under which an employee agrees top share with his personnel a specified portiong
of the net profits of his business at the end of each fiscal perion or over given period.

Purpose of Profit-Sharing

It is believe that employees would feel they have stake in the company if they get a direct share in the
profits of the enterprise in which they work.
It aims to modify employee's attitudes to achieve greater employee efficiency, productivity and loyalty
to the firm and keener interest in its welfare.
Employers who subscribe to the concept of profit-sharing look upon their workers as partners or co-
workers of the enterprise

Types of Plans

The Cash Plan

The deferred Distribution Plan
The Purchase Plan

Managing Benefits: Planning and Administration

-Managing a fringe benefits program is an adminitrative and a financial problem to the employer

1. Strategic Benefit Implementation

-Management has to analyze the benefit payoff of any benefits management program.

Benefit survey and benchmarking- Benefits should be within the level of the industry in the community
and those of the competitors in business as any added cost should affect product-pricing strategy.
2. Cost Control Strategy

3. Staffing Cost Strategy

4. The Demographic Composition Cost Strategy

5. Organization of Employees Cooperatives

6. Communicating Benefits to Employees

Corporate Policy Guidelines on Benefits

Corporate policy must follow the following guidelines:

It must specify over covered policy

It must relate to the family and individual assistance to levels of need
It must make cost of work-related benefits as a part of cost production
It must provide security in such forms as compensation during work-related illness and retirement
benefits
It must promote healthy and safe work environment
It must provide morale-building programs and develop employee's esprit de corps.
It must be of mutual benefit to both employees and employer.

Benefits Program Evaluation

-Effective program management of employee benefits is an important means by which organizations

successfully compete.

Exercise:

Case Study

The Tennis Match

Noel is a computer programmer at Jonadel Corporation, He was delighted to know that the part of the
company's athletic program is a mixed double tennis tournament to be held at the corporate tennis
court. Grace, who works in the same department, used to play with Noel in many occasions and the two
would like to compete in the tournament. They feel that there is a great chance to wing the annual
tennis competition.

There is a growing interest among the employees who are tennis players in the corporation as it
develops more productivity at work. The management themselves are all tennis enthusiasts. The
tournament is scheduled on Friday afternoon and management declared this as a "tennis holiday". It is a
day of fun and workers can cheer for their respective teams. Management supported the program with
free snacks and fun fairs to make the occasion memorable. It was a four-consecutive-Fridays
tournament.
Noel and Grace advance to the final round. They were leading in the third set which was the deciding
point. On a smash, Noe; twisted his ankle badly. Despite the injury Noel and Grace continued the game
until they won the set and were declared tennis champion. Noel's injury became worse and he had to be
confines in the hospital for 2 days as the X ray results showed hairline fractures.

Noel missed two days of his work activities. He has no more sick leave and vacation leave because
company policy and ECC policy do not cover non-related work accidents. Workers' compensation
provides payment if the worker is "functioning within the scope of employment"

Note: Use Case Format

Chapter 12

After this lesson, you should be able to:

recognize the importance of morale;

Tell how employee morale is the corporate version of good health
Explain the difference between motivation morale; and
Tell why treatment must be firm and fair.

Employee Morale

Factors that influence the Development of morale

Employee Factor
Management Practice
Environmental Communication
Social and Environmental Factors
a. Recreational Activities

b. Social Activities

c. Athletic Programs

d. Training Program

The Role of Motivation in the Development of Employee Morale

The following are indicatie of good performance and personal satisfaction:

Personal accomplishments
Praise for good work
Getting along with co-workers
Getting credit for good ideas implemented by the management
Having a capable supervisor
Having challenging work responsibilities
Being kept informed
Participating in decision-making
Company location and availability in transport
Knowing the parameters of what is expected of them.

Theories of Motivation that Affect Morale and Performance

1. Maslow's Hierarchy of Needs

Psychological Needs
Safety and Security Needs
Social Needs
Esteem and Status Needs
Self-actualization Needs
. Herzberg's Motivation Hygienic Theory

3. McClelland's Achievement Motive Theory

4. Expectancy Theory

Improving Employess Self-Perception

1. Factors of Production Approach

General lazy
Dislikes work and would avoid is possible
Avoids resoponsibility
Needs to be coerced to perform effectively
2. Human Relations Approach

3. Human Resource Approach

How a Supervisor Can Motivate

Job Rotation
Cross Training
Job Enlargement
Job Enrichment
Having High Expectation

-Effective supervision can lead performance beyond an employee's expectation of himself.

Provide Employee Rewards that are Valued

-Rewards are motivating factors of an employee to perform but not all reward have same effect on all
employees.

Treating Emplyees as Individual

- Most theories of motivation as discussed earlier, emphasize different things that motivate an individual
to perform to different degrees.

Money as Motivator

The following are additional incentive pay system:

Price Rate
Production Bonus System
Commissions
Payment for Suggestion System
Group Incentive Plan
Profit Sharing Plan
Gain Sharing

Exercise

I. True or False. Write T on the space provided if the statement is correct and F if the statement is
incorrect.

______1. Morale can be messured in terms of team spirit, loyalty, and employee's goodwill.

______2. The kind of employee's education, social environment and economic status determines an
emplyee's values and activities.

______3. Management and supervisors get things done through the work of people under their direct
supervision.

______4. Managers and supervisors get things done through the work of the people under their
direction supervision.
______5. The motivation for performance in the job must come from the supervisors.

______6. Employees are resources of the production and we must help them grow as individuals.

______7. Autocratic supervisors perform better that democratic ones due to the Filipino orientation.

______8. To motivate employees to be productive, the supervisor must respond in varying ways.

______9. Motivating employees to perform better is the major concern of supervisors.

______10. The sports program of the company must focus on team work.

Chapter 13

Statutory Benefits fot Workers in Industry

After this session, you should be able to learn to:

Know existing Labor Laws of the Philippines;

Know the definition of Basic Wage Implementation;
Know the Retirement Law and Benefits;
Learn the Employer-Employee Relationship;
Learn the Causes of Employee Termination; and
Familiarize yourself with the Different Legal Forms.
Minimum Wage

Republic Act No. 6726 (also known as the "Wage Rationalization Act") mandates the fixing of the
minimum wages applicable to different industrial sectors namely; non agriculture, agriculture plantaion,
and non-plantation, cottage/handicraft and retail/service, depending on the number of workers or
capitalization or annual gross sales in some sectors.

The rules implementing RA 6727 defines the industrial sectors as follows:

Agriculture- farming in all its branches and among other includes the cultivation and tillage of the soil,
production, cultivation growing and harvesting of any agricultural or horticultural commodities, dairying,
raising of livestock or poultry, the culture of fish and other aquatic products in farms or pons. and any
activities performed by a farmer on a farm as an incident to or in conjunction with farming operations
but does not include the manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple,
aquatic and other farm products.
Retail Establishment- is one principally engaged in the sale of good to end users for personal or
household use.
Service Establishment- is one principally engaged in the sale of service to individuals for their own or
household use and is generally recognized as such.

A. Coverage

The wage increases prescribed under Wage Orders apply to all private sector workers and employees
receiving the daily minimum wage rates or those receiving up to certain wage seiling where applicable
regardless of their position, designation, or status of employment and irrespective of the method by
which their wges are paid except workers of duly registered Barangay Micro Business Enterprise
(BMBEs) with Certification of Authority issued by the Office of the Municipal or City Treasurer.
Upon Application with and as determined by an RTWPB based on documentation and other requirement
in accordance with applicable rules and regulations issued by the National Wages and Productivity
Commission (NWPC).

C. Basis

The basis of minimum wage rates prescribed by law shall be the normal working hours of eight hours a
day.

D. Monthly-Paid Employees and Daily-Paid Employees

Monthly-Paid Employees are those who are paid everyday of the month including unworked rest days,
special days and regular holidays.

E. Minimum Wage and Right of Kasambahay

Two thousand five hundred pesos a month for those employed in the National Capital Region
Two thousand pesos a month for those employed in chartered cities and municipalities; and
One thousand five hundred pesos a month for those employed in other municipality.
Right and Benefits of Kasambahay:

Minimum wage
Other mandatory benefits such as the daily and weekly rest periods
Service Incentive Leave
13th month pay
Freedom from employers interference in the disposal of wages
Coverage under the SSS, Philhealth and Pag-Ibg laws
Standard of treatment
Board, lodging and medical attendance
Right to privacy
Access to outside communication
Access to education and training
Right to form, join or assist labor organization
Right to be provided a copy of the employment contract
Right to certificate of employment

F. Effect of Reduction of Workdays on wages

-In situation where the employer has to reduce the number of regular working days to prevent serious
losses the employer may deduct wages corresponding to the days taken off from the work week,
consistent with the principle of "no work, no pay".

G. Penalty and Double Indemnity for Violation of the Prescribed Increases or Adjustment in the Wage
Rates (RA8188)

- Any person, corporation, trust, firm , partnership, association on entity which refuses or fails to pay any
other prescribed increases of adjustment in the wage rates made in accordance with RA 6727 shall be
punished by a fine not less than Twenty-five thousand pesos nor more than One hundred thousand
pesos or imprisonment of not less than 2 years nor more than 4 years.

H. Barangay Micro Business Enterprises (BMBEs)

-BMBEs enterprises must engaged in the production, processing or manufacturing of products or

commodities includinh agro-processing, trafin and services whose total assets excluding the land on
which the particular business entity's office, plant and equipment are situated not more than Three
Million Pesos shall be exempt from the coverage of the Minimum Wage Law.

I. Minimum Wage of Workers Paid by Results

-All workers paid by results, including homeworkers and those who are paid on piece rate, takay,
pakyaw or task basis, shall receive not less the prescribed minimum wage rates under the Regional
Wage Orders for normal working hours which shall not exceed eight hours a day, or a proportion
thereof.

J. Minimum Wage of Apprentices, Learners, and Persons with disability

-Wage of apprentices and learners shall in no case be less than seventy-five percent of the applicable
minimum wage rate.

Holiday Pay

A. Definition

Holiday pay refers to the payment of the regulat daily wage for any unworker regular holiday.

B. Coverage

Government employees, whether employed by the National Government or any of its political
subdivisions, including those employes in government owned and/or controlles corporations with
original charters or created under special laws.
Those of retail and service establishment regularly employing less than ten workers
Kasambahay and persons in the personal service or another
Managerial employees if they meet all of the following conditions
a. Their primary duty is to manage the establishment in which they are employed or of a deparment of
subdivision thereof.

b. They customarily and regulary direct the work of two or more employees therein

c.They have the authority to hire or fire other employees of lower rank

Officers or members of a managerial staff

Field personnel and other employees whose time and performance is unsupervised by the employer
including those who are engaged on task or contract basis.
C. Regular Holidays

Every employee covered by the Holiday Pay Rule is entitled to the minimum wage rate.

D. Muslim Holidays

Amun Jadid (New Year) first day of the lunar month of Muharram
Maulid-un-Nabi (Birthday of the Prophet Muhammad) 12th day of the third lunar month of Rabi-ul-
Awwal
Lailatul Isra Wal Mi'raj(Nocturnal Journey and Ascension of the Prophet Muhammad) 27th day of
seventh lunar month of Rajab.
E. Absences

All covered employees shall be entitled to holiday pay when they are on leave of absence with pay on
the workday immediately preceeding regular holiday.

F. Successive Regular Holidays

Where there are two successive regular holidays like Maundy Thursday and Good Friday an employee
may not be paid both holidays if he/she absents himself/herself from work on the day immediately
preceding the first holiday unless he/she works on the first holiday in which case he/she is entitled to
his/her holiday pay on the second holiday

G. Temporary or Periodic Shutdown/Cessation of Work

In cases of temporary or periodic shutdown and temporary cessation of work an establishment, as when
a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken.

H. Holiday Pay of Certain Employees

Where the covered emplyee is paid on piece-rate basis his/her holiday pay shall not be less his/her
average daily earnings for the last seven actual working days preceding the regular holiday.

Premium Pay

A. Definition

Premium pay refers to the additional compensation for work performed within eight hours on nonwork
days, such as rest days and special days.

B. Coverage this benefits applies to all employees except:

Government employees whether employed by the National Government or any of its political
subdivisions, including those employed in government owned and/or controlled corporations with
original charters or created under special laws.
C. Special Days

Special Days
Special Work Days
D. Premium Pay Rates
The COLA shall not be included in the computation of premium pay.

Overtime Pay

A. Definition

Overtime pay refers to the additional compensation for work performed beyond eight hours

B. Coverage

Same as those covered under 3. Premium Pay

C. Overtime Pay Rates

The COLA shall not be included in the computatuion of overtime pay.

D.Stipulated Overtime Rates

Generally, the premium pay for work performed on rest days, special days or regular holidays is included
as part of the regular rate of employee in the computation of overtime pay for overtime work rendered
in said days, especially if the employer pays only the minimum overtime rates prescribed by law.

Night Shift Differential

A. Definition

Night Shift Differential ( NSD ) refers to the additional compensation of ten percent of an employee's
regular wage for each hour of work performed between 10p.m and 6a.m

B. Coverage

Government employees, whether emplyed by the National Government or any of ita political
subdivisions, inclusing those employed in government owner and/or controlled corporations with
original charters or created under special laws
Those of retail and service establishments regulary employing not more the five workers
Kasambahay and other persons in personal sevice of another
Managerial employees
Officers or members of a managerial staff
Field personnel and those whose time and performance are unsupervised by the employer

Service Incentive Leave

A. Coverage

.Government employees, whether emplyed by the National Government or any of ita political
subdivisions, inclusing those employed in government owner and/or controlled corporations with
original charters or created under special laws
Persons in personal sevice of another
Managerial Employees
Officers or members of a managerial staff
Field personnel and those whose time and performance are unsupervised by the employer
Those already enjoying this benefit
Those enjoying vacation leave with pay of at least five days
Those employed in establshment regularly employing less than ten employees
B. Meaning of "one year of service"

The phrase "one year of service" of the employee means service withing 12 months, whether
continuous or broken.

C. Usage/Conversion to Cash

The service incentive leave may be used for sice and vacation leave purposes

Maternity Leave

A. Coverage

The benefits applies to all female employees, whether married or unmarried

B. Entitlement

Every pregnant employee in the private sector, whether married or unmarried, is entitled to maternity
leave benefit of 60 days in case of normal delivery or miscarriage, or 78 days, in case ceasarian delivery,
with benefits equivalent to one hundred percent of average daily salary credit of the employee as
defined under the law
Paternity Leave

A. Coverage

Paternity Leave is granted to all married male employees in the privater sector, regardless of their
employment status.

B. Paternity Leave Benefit

Paternity leave benefit shall apply to the first four deliveries of the employee's lawful wife with whon he
is cohabiting.

C. Conditions of Entitlement

He is an employee at the time of delivery of his child

He is cohabiting with his spouse at the time that shi gives birth or suffers a miscarriage
He has applied for paternity leave with his employer within reasonable period of time from expected
date of delivery by his pregnant spouse.
His wife giver birth or suffered a miscarriage
D. Application for Paternity Leave

The married male employee shall apply paternity lealeave with his employer within reasonable period of
time from expected date of delivery by his pregnant spouse.
E. Nonconversion to Cash

In the event that the paternity leave is not availed of, it shall not be convertible to cash and shall not be
cumulative.

F. Crediting of Existing Benefits

If the existing paternity leave benefit under the collective bargaining agreement, contract, or copany
policy is greater than seven calendar days as a provided in RA 8187, the greater benefit shall prevail
If the existing paternity leave benefit is less than that provided RA8187, the employer shall adjust the
existing benefit to cover the difference
Paternity Leave for Solo Parent

A. Coverage

Giving birth as a result of rape or, as used by the law, other crimes against chastity
Death of spouse
Spouse is detained or serving sentence for a criminial conviction for atleast one year
Physical and/or mental incapacity of spouse as certified by a public medical prantitioner
Legal separation or de facto from spouse for at least one year.
Declaration of nullity or annulment of marriage as decreed by court or by a church
Abandonment of spouse for atleast a year
Unmarried father/mother who has preffered to keep and rear his/her child/children instead of having
others care for them of give them up to welfare institution
Any other person who solely provides parental care and support to a child/ children: Provided that
he/she is duly licensed as a foster parent by the Department of Social Welfare and Development(DSWD)
or duly appointed as a legar guardian by the court.
Any family member who assumes the responsibility of head of family as a result of death, abandonment,
disappearance, or prolonged absence of the parents or solo parent
B. Definition of Terms

"Parental Leave" shall mean leave benefits granted to a solo parent to enable him/her to perform
parental duties and responsibilities where physical presence is recquired.

"Child" refers to a person living with and dependent on solo parent for support

C. The Parental Leave Benefit

The parental leave in addition to leave privileges under existing laws shall be for seven eork days every
year with full pay consisting of basic salary and mandatory allowances fixed by the Regional Wage Board
if any provided that his/her pay shall not be less than mandated minimum wage.

D. Conditions for Entitlement

He/She has rendered at least one year of service whether continuous or broken
He/She has notified his/her employer that he/she will avail himself/herself of it
He/She presented to his/her employer a Solo Parent Identification Card
E. Nonconversion to Case

In the event that the paternity leave is not availed of, it shall not be convertible to cash, unless agreed
on previously

F. Crediting of Existing Leave

If there is an existing or similar benefit under a company policy or a collective bargaining agreement, the
same shall be credited as such.

G. Termination of Benefit
A change in the status or circumstance of the parent claiming benefit under the law, such as he/she is no
longer left alone with the responsibility of parenthood shall terminate his her eligibility for this benefit

H. Protection Against Work Discrimination

No employer shall discriminate aginst any solo parent employee with respect to terms and conditions
employment on account of his/her being a solo parent

Leave for Victims of Violence Against Women and their Children

A. Definition

"violence against women and their children used in Republic Act 9262 refers to any act or a series of acts
committed by any person against woman who is his wife, former wife, or against a woman with whom
the person has or had a sexual or dating relationship, or with whom he has common child, or against her
child whether legitimate or illegitimate within or without the family abode, which will result in or is likely
to result in physical, sexual, psychological harm or suffering, or economic abuse including threats of such
acts, battery, assault. coercion, harassment or arbitrary deprivation of liberty.

B. Coverage and Purpose

Private sector women employees who are victim as defined as RA9262 shall be entitled to be paid leave
benefit under such terms and conditions provided herein.

C. Requirement for Entitlement

To be entitled to the lease benefit, the only requirement is for the victim employee to present to her
employer a certification from the barangay chairman or barangay councilor or prosecutor or the Clerk of
the Court

D. The Benefit

In addition to other paid leaves under existing labor laws, company policies, and/or collective bargaining
agreements, the qualified victim-employee shall be entitled to a leave of up to ten days with full pay,
consisting of basic salary and mandatory allowances fix by the Regional Wage Court.

E. Usage of the Benefit

The usage of the ten-day leave shall be at the option of the woman employee.

Special Leave for Women

A. Coverage

Any female employee regardless of age and civil status shall be entitled to a special leave benefit under
such terms and conditions provided herein

B. Definition of Term

"Gynecological disorder" refers to a disorder that would require surgical procedures such as, but not
limited to dilatation and curettage and those involving female reproductive organs such as the vagina,
cervix, uterus and fallopian tubes, ovaries, breast, adnexa, and pelvic floor as certified by a competent
physician.

C. Conditions for Entitlement

She rendered at least six months continuous aggregate employment service for the last twelve months
prior to surgery
She has filed am application for special leave with her employer within a reasonable period of time from
the expected date of the surgery or within such period may be provided by company rules and
regulations or collective bargaining agreement
She has undergone surgery due to gynecological disorders as a certified by a competent physician
D. The Special Leave Benefit

The employee is entitled to a special leave benefit for 2 months with full pay based on her gross monthly
compensation

E. Usage

The special leave shall be granted to the qualified employee after she has undergone surgery without
prejudice to an employer allowing an employee to receive her pay before or during surgery

F. No conversion to Cash

The special leave shall be non-cumulative and non-convertible to cash unless otherwise provided by a
collective bargaining agreement (CBA)

Thirteenth-Month Pay

A. Coverage

All employers are required to pay their rank and file employees thirteenth-month pay, regardless of the
nature of their employment and irrespective of the methods by which their wages are paid, provided
they worked for at least one month during a calendar year.
B. Definition of Rank-and-File Employees

The Labor Code as amended, distinguishes a rank-and-file employee from a managerial employee.

C. The thirteenth-month pay shall not be less than one-twelfth of the total basic salary.

D. Exempted Employees

Government owned and controlled corporations

Employers who are already paying their employees thirteen-month pay
Persons in personal service of another relation to such workers
Employers who are paid on purely commission, boundary or task basis
E. Time of Payment of Thirteen-Month Pay

The Thirteen-Month Pay shall be paid not later than December 24 of every year.

F. Thirteen-Month Pay for Certain Types of Employees

Employees who are paid on piecework basis are entitled to the thirteen-month pay
Employees who are paid a fixed guaranteed wage plus commission.
Employees with multiple employers
G. Thirteen-Month Pay of Resigned or Separated Employee

An employee who has resigned or whose service are terminated at any time before the time of payment
on the thirteen-month pay

H. Non-inclusion in Regular Wage

The mandated thirteen-month pay need to be credited as a part of the regular wge of employees for
purposes of determining overtime and premium payments, fringe benefits, as well as contributions to
the State Insurance Fund, Social Security System, National Health Insurance Program and private
retirement process.

Separation Pay

A. One-Half Month Pay per Year of Service

Retrenchment to prevent loses

Closure or cessation of operation of as establishment not due to serious loses or financial reverse
When employee is suffering from a disease not curable within period of six months and his/her
continues employment is prejudicial to his/her health or to the health of his/her co-employees
B. One-Month Pay

Installation by employer of labor-saving devices

Redundancy, as when the position of the employee has been found to be excessive or unnecessary in
the operation of the enterprise
Impossible reinstatement of the employee to his or her former position or to a substantially equivalent
position for reasons not attributable to the fault of the employer.

C. Notice of Termination

The employer may terminate the employment of any employee due to the above-mentioned authorized
causes by serving a written notice on the employee and the Department of Labor and Employment
through its regional office having jurisdiction over the place of the business of at least one month before
the intended date thereof.

D. Basis of Separation Pay

The computation of separation pay of an employee shall be based on his/her salary rate

E. Inclusion of Regular Allowance in the Computation

In the computation of separation pay, it would be error not to integrate the allowance with the basic
salary.

Retirement Pay

A. Coverage

Employees shall be retired upon reaching the age of 60 years or more but not beyond 65 years old
Government employees
Employees of retail, service and agricultural establishments regulary employing not more than 10
employees

B. Amount of Retirement Pay

The minimum retirement pay shall be equivalent to one-half month salary for every year of service, a
fraction of at least six months being considered as whole year

C. Retirement Benefits under a Collective Bargaining Agreement and Applicable Contract

Any employee may retire or be retired by his or her employee upon reaching the retirement age
established in the collecting bargaining agreement.

D. Retirement Benefits of Workers who are Paid by the Results

The basis of the salary for 15 days shall be their average salary.

E. Retirement Benefit of Part-time workers

Part-time workers are also entitled to retirement pay of "tone-month salary".

F. Retirement Benefit of Underground Mine Employees under RA 8558

The retirement age of the underground mine employees has been reduced to a much lower age.

G. Other Benefits upon Retirement

The retirement benefits under RA7641 and RA 8558 are separate distinct from those granted by Social
Security System

Benefits Under the Employees' Compensation Program

A. The Employees' Compensation Program

Is a government program designed to provide a compensation package to public and private sector
employees or their dependents in the event of work-related sickness, injury, disability, or death

B. Coverage

The ECP covers all workers in formal sector

Coverage in the ECP starts on the first day of employment
Employees in the private sector who are compulsory members of the SSS, with employer-employee
relationship
C. The Benefits

Loss of income benefit

Medical Benefit
Rehabilitation services
Career’s allowance
Death Benefits
D. Kinds of Disability

Temporary Total Disability

Permanent Partial Disability
Permanent Total Disability
E. Filing of Claims

Employees can claim only for work-connected sickness, injuries or death.

F. Obligations/Responsibilities of Employers

Contribution to the State Insurance Fund

Registration
Safety Devices
Employer's Logbook
Provision of Medical Services

Philhealth Benefits

A. National Health Insurance Program

A health insurance program for SSS members and their dependents whereby the healthy subsidize the
sick who may find themselves in need of financial assistance when they get hospitalized

B. Coverage the program covers the following:

Employed Members
Individual Paying Members
Non-paying members
Indigent Members
C. The Benefits

Inpatient Hospital care:

Room and Board

Services of health care professionals
Diagnostic, laboratory and other medical examination services
Use of surgical or medical equipment and facilities
Prescription drugs and biologicals
Inpatient education packages
Outpatient care:
Services of health care professionals
Diagnostic, laboratory and other medical examination services
Personal preventive services
Prescription drugs and biologicals
Emergency and transfer services.

Final Exercises/Course Requirements

1. Students should conduct a seminar/webinar about the following topics:

a. Human Resource and the management

b. Human Resource and the employees

c. Labor Statutes

d. Employee benefits

e. Impact of an effective Human Resource Planning

f. Development of employee Morale

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