HUMAN RESOURCE ENVIRONMENT “The good news is they’re also going to be the most high-performing workforce in the history
y’re also going to be the most high-performing workforce in the history of the
Chapter 1- Introduction
I. The Challenge of Managing Human Resources Today
Business organization are operating in this dynamic environment and the world today are
characterized by a constant unprecedented CHANGE.
A. Changing Employee Expectations
Values: Today’s Employees vs. a Generation ago
Today’s workforce comprises of several generations, each with different set of values,
aspirations and each with unique perspective and attitude towards work.
•Generations have been classified into five categories:
The SILENT GENERATION (1925 – 1945)
 born before 1946
 veterans, entered the workforce in the 1950s and early 1960s.
 retired and unheard from.
 “Loyal to the organization”
The BABY BOOMERS (1946-1964)
 born after the 2nd world war when the economy was booming are the people who never
experienced the hardships of the war days
 aggressive and ambitious
 “Loyal to their careers”
The GENERATION X (1965 – 1979)
 born before the advent of the information age.
 “Concerned about work/life issues”
The GENERATION Y (1980-1994)
 referred to as the NEXTERS
 Fortune Magazine dated May 28, 2008:
In hipster clothes: jeans, sneakers, hoodie and a jacket Love the modern gadgets:
headphones, yoga mat, laptop, designer coffee, blackberry, digital camera and iPod.
 known for talking back to their bosses, ambitious, demanding and questions everything.
 LOYALTY; companies they are working for are the last on their list – behind families,
friends, communities, coworkers and of course, themselves.
 Self-absorbed, gregarious, multitasking, loud, optimistic, pierced.
 The most high maintenance workforce in the history of the world
 Nesters placed high value on their financial success.
world. They walked with more information in their fingertips and sure, they have high expectations
first and foremost for themselves” – Bruce Tulgan
The GENERATION Z (1995-2012)
 Called as TECH-SAVVY
 RISK – AVERSE - this period of major economic decline affected their
families on a deep and personal level, fundamentally impacting their
worldview.
 INDEPENDENT - cares about autonomy and independence, and this
mindset is reflected in the way they work.
 COMPETITIVE - know what they want and are willing to work hard to get
it.
 OPEN MINDED - deeply invested in diversity and inclusivity.
 FOCUSED ON AUTHENTICITY – cares about ethical consumption, and they
often avoid brands that are involved in scandals or that refuse to take a
stand on important issues.
 GEN Z know what they want and demand a lot from their employers — but they
work hard in return.
 Money really matters to them, but it’s not everything. Who they work for is an
extension and reflection of their personality, so they want employers who will share
their values.
B. Rapidly Changing Technology
 Advent of computer has fundamentally change jobs.
 Automation has eliminated huge number of jobs in manufacturing, finance, sales
and marketing and administration and human resources.
 Technology has led to shorter cycle times in manufacturing and made customer
more demanding.
C. Emphasis on increase productivity
 The shrinking global village has liberalized tariffs in almost all parts of the world
 Alternative goods are available in the world market at lower prices.
 Global competitiveness has spurred organizations to take care of their labor costs
by increasing productivity, eliminating redundant jobs or jobs which have no value.
 Increased competition has prompted managers to focus more on competencies of
their employees.
D. New Modality of Employment–Outsourcing
 Organizations today, wherever possible, prefer to adopt flexibility in the acquisition
of human resources.
*Companies depend on the cyclical demands of their products or services
must also be flexible in their hiring process.
 *It is not easy under the law to terminate services of employees when no
longer needed.
 Outsourcing has changed the human resource dimension in many organizations,
some employees are laid off, some are hired on a contractual basis or some
others are on a fixed or definite period of employment.
 BPO (Business Process Outsourcing)
E. Flatter Organization
 People are expected to produce more using fewer resources.
 Multitasking is required as they are asked to perform a variety of ever-changing
roles, taking new responsibilities and significantly changing the job contents of the
incumbents.
 Restructuring of organizations, impacts in HRM in many ways:
*HR must develop and implement policies to minimize the pain in
downsizing.
*Those being given with “pink papers” (the euphemism for layoffs), must
be let go with dignity.
*Extreme care must be addressed to remaining employees. Security of
tenure is jarred.
F. Fall of the Command-and-Control Manager
 Barking orders to subordinates are no longer an effective way of getting things
done by people.
 Workforce are getting more educated, better informed, and aware of their rights.
 Interpersonal relations must be strongly developed to get support and cooperation
if the subordinates.
 Under the people empowerment philosophy, supervisors and managers must act
like coaches.
II. Concepts of Human Resources
 Human Resource in the business are the people who do the actual work in the
organization.
 They were once viewed as COSTS and therefore people were treated the way
they treated other costs – by CUTTING.
 Early ‘90s – organizations are beginning to go beyond the usual mantra “People
are our greatest assets.” In a higher form, people are no longer treated as costs
but ASSETS.
 Managing the Human Resource or Human Capital has been a growing focus in our
highly competitive world of business
HUMAN RESOURCE MANAGEMENT (HRM)
 is the effective use of the organization’s human resources to improve its
performance.
 HRM is also defined as:
• The strategic and coherent approach to the management of an organization’s
MOST VALUED ASSETS– the people.
• The productive use of people in achieving the organization’s strategic business
objectives and the satisfaction of the individual.
• The function of management, concerned with promoting and enhancing the
development of work effectiveness and advancement of the human resources in
the organization.
 Human Capital – the people in the organization with different values,
aspirations, cultural and family background, education, attitudes and temper.
HUMAN RESOURCE (SCIENCE) (ART)
SCIENCE
- A systematic accumulation of facts, their analysis and interpretation to arrive at a
satisfactory conclusion.
•It involves systematic gathering of data derived from surveys, statistics, interviews and
observations.
•Applied science - because it utilizes scientific principles in analyzing and interpreting data
for application in the management of the people at work
ART
- Proficiency in the practical application of knowledge acquired through study, experience or
observation.
• After required knowledge are gathered and analyzed, the possible problems are
formulated, a good executive needs to select the best from among alternative solutions.
• Needs to implement his choice at the right time to achieve the desired result and to
foresee the probable success or failure of his line of action, and institute needed corrective
measures promptly.
• Art – it involves the making of sound decision.

CHAPTER 2
THE CONSTITUTIONAL AND LEGAL FRAMEWORK
 Managing human resources is oftentimes with legal implications.
 Jurisprudence in our country is replete with countless examples of companies at
the losing end of legal suits.
 It is the responsibility of management to become educated in labor laws.
 Should violation of the law occur, ignorance is no excuse
“Ignorantia legis, nimenem excusat”
The Constitutional and Statutory provisions protecting labor are derived from:
 Police Power of the state – the right of the state to regulate labor relations for the
general welfare and to maintain industrial peace.
 Social Justice – to ensure protection of the weaker social partner – labor
I. The Constitutional Basis
• The Philippine Constitution laid the basis for protecting the rights and
welfare of employees.
Article II, Section 18. “The state affirms labor as a primary socio-
economic force. It shall protect the right of workers and promote their
welfare.”
 The constitution protects the right of employees to form unions,
associations or societies for purposes not contrary to law.
Article III, Section 3 expands its policy:
• The state shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
• Shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law.
• The state shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in setting disputes, including conciliation, and
shall enforce their mutual compliance therewith to foster
industrial peace.
• The state shall regulate the relations between workers and
employers, recognizing the right of labor to its jus share in the
fruits of production and the right of enterprises to reasonable
returns to investments, and to expansion and growth.
II. Statutory and International Basis of the Right to Self-Organization
• Article 211 – the labor code reinforces this constitutional to self-
organization.
Self-organization. A process of some type of overall order or coordination occurs
from the local relations among the components of an originally chaotic system.
• Entitlement of workers and employees to form join or assist unions, organizations or
associations for reasons of collective bargaining and negotiation as well as for common
assistance and protection.
• The privilege to employ peaceful combined activities or to join in policy and decision-
making processes concerning their rights and benefits.
III. The Labor Code
Labor code of the Philippines was enacted during Martial Law by virtue of
Presidential Decree 442.
Divided into 6 major parts:
Book One: deals with Pre-Employment
Book Two: Human Resources Development Program
Book Three: Conditions of Employment
Book Four: Health, Safety and Social Welfare Benefits
Book Five: Labor Relations
Book Six: Post-Employment
IV. Kinds of Employees-Definition
• Employer - includes any person acting in the interest of the employer directly or indirectly.
• Employee – includes any person in the employ of an employer
Classifications:
• Managerial Employee – the one who is vested with powers or prerogatives to lay down
and execute management policies and/or hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees.
• Supervisory Employees – is one who, in the interest of the employer, effectively
recommends such managerial actions. If the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment.
• Rank and File Employee – is one not falling under any of the preceding definitions of
managerial or supervisory employee.
V. Types of Employees in Terms of Tenure
 1. Regular
• The employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer.
• Any employee who has rendered at least one year of service, whether
continuous or broken and his employment shall continue while such activity exists.
2. Project
• The employment has been fixed for a specific project or undertaking the
completion.
• Termination of which has been determined at the time of the
engagement of the employee where the work or services to be performed
is seasonal in nature
• The employment is for the duration of the season.
3. Casual
• (an employee is considered casual if it is not covered by the definition of
a regular employee)
4. Probationary
• Art. 281 – shall not exceed six months from the date of an employee
started working unless it is covered by an apprenticeship agreement
stipulating a longer period.
5. Fixed contract employee as settled in Jurisprudence
• An employment with the fixed term, where there’s a certain agreed upon
by the parties for the commencement and termination of their employment
relationship.
VI. Health Safety and Social Welfare Provisions
• Responsibility of the employer to provide a safe & healthy working conditions in the
workplace.
• Article 156-161 of the Labor Code Requirements:
 Employer shall take steps in training of sufficient employees in first aid
treatment.
 To have services of full-time registered nurse (1: 50 – 200).
 If exceeds 200 but not more than 300 : full-time registered nurse, part-
time physician and dentist and an emergency clinic.
 If exceeds 300 - 1 full-time registered nurse, 1 fulltime physician and
dentist and dental clinic, infirmary with one bed capacity for every 100
employees.
 The physicians, dentists and nurses employed shall have necessary
training in industrial medicine and occupational safety and health.
 It shall be the duty of the employer to provide all necessary assistance to
ensure adequate medical and dental attendance and treatment to an
injured or sick employee in case of emergency
VII. Labor Relations
• The aspect or quality that holds together the social partners, labor and capital in the
attainment of their mutual goal-just and equitable pay and treatment and fair return on
investments.
• Refers to a relationship between employers and employees in industry, and the
political decisions and laws that affect it.
Sources of Conflicts:
 Manner by which hierarchical demands are made or executed. It is the manner a
directive is done that hurts the sensibilities of a subordinate and causes friction in
labor-management relations.
 Clash between Management Prerogatives and Labor Rights. Management should
not surrender its rights for the sake of industrial peace but it must also understand
and respect the rights of employees.
 Just share in fruits of Production. The law requires management, upon demand of
the employees thru the union, to show the financial statements of the company.
 Fair return investments, expansion and growth. The constitution and the enabling
law give allowance in the allocation of the fruits (profits) of production, a fair return
in the investments, and a reserve for expansion and growth.
VIII. Unfair Labor Practice (ULP)
• Covered under Articles 247, 248 and 249 of Labor Code
• Can be committed by the employer or employee
Concepts:
 Violates constitutional rights of workers to self-organization
 Is inimical in the legitimate interests of both labor and management and labor’s
right to bargain collectively with freedom and mutual respect.
 Disrupts industrial peace
 Hinders promotion of healthy labor management relations
 Violates civil rights of the parties
 Is a criminal offense
IX. Strikes & Work Stoppages / Lockouts
Employees can only strikes in two grounds:
1. Deadlock in Collective Bargaining Negotiations
2. Unfair Labor Practice
• Further conditions before a strike can be staged
 A strike notice must be filed with the DOLE:
 30 days before intended strike in case of deadlock in CBA negotiations;
 15 days in case of ULP;
 Strike must be approved through balloting by the majority of the members in the
bargaining unit in a meeting called for the purpose.
 The National Conciliation and Mediation Board (NCMB) of the DOLE must be
notified 24 hours before such meeting as well as the results of the voting at least 7
days before the intended strike.
• Lock out – a weapon that can be availed by the company under the above conditions. It
must be approved by twothirds vote of the Board of Directors.
• Strikes - Collective, organized, cessation or slowdown of work by employees, to force
acceptance of their demands by the employer.
• Illegal Strike - “strike is a right guaranteed by our Constitution and law but it is not a right
that is absolute”.
If it was attended to in picketing “by violence, coercion or intimidation or
obstruct the free egress to or egress from the employer’s premises for
lawful purposes or obstruct the public thoroughfares.”
X. The Law on Terminations
Just Causes. (Art. 282 of the Labor Code):
• Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
• Gross and habitual neglect by the employee of his duties;
• Fraud or willful breach by the employee of the trust reposed on him by employer or duly
authorize representative;
• Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and
• Other causes analogous to the foregoing.
Authorized Causes (Art. 283 of the Labor Code)
• Installation of labor saving devices or redundancy provided the terminated employee is
given one (1) month pay for every year of service.
• Retrenchment to prevent losses or closing or cessation of operation of the establishment
or undertaking unless the closing is for the purpose of circumventing the law, provided, that
the employee to be retrenched is given one0half (1/2) month pay per year of service.
Other Authorized Causes (Art. 284 of Labor Code)
• When one suffers a disease wherein his continued employment is prohibited by law or
prejudicial to his health or to the health of his co-employees provided there is certification by
a competent public health authority that the disease is of such nature or stage that it cannot
be cured within the period of six (6) months even with proper medical treatment.
• The Retirement Pay Law (R.A 7641), amending Art.287 of the labor Code authorizes the
employer to terminate services of employees upon reaching the age of 60 but not beyond
65 years of age provided he receives retirement pay.
XI. The Wage Rationalization Law (RA6727)
The Standard criteria for the minimum wage fixing are the following:
1. Demand for living wages;
2. Wage adjustment vis-à-vis the summer price index;
3. The cost of living and changes or increases therein;
4. The needs of workers and their families;
5. The need to induce industries to invest in the countryside;
6. Improvements in the standard of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and capacity to pay of the employers;
9. Effects on employment generation and family income; and
10. The equitable distribution of income and wealth along the imperatives of economic and
social development.
XII. Anti-Sexual Harassment (RA7877)
Sexual Harassments
• Defined as any work, education or training related sexual harassment committed by
employer, employee, manager, supervisor, agent of the employer, teacher, instructor,
professor, coach, trainer, or any other person having authority, influence or moral
ascendancy over another in a work or training or education environment, demands,
requests or otherwise requires any sexual favor from other, regardless of whether the
demand, request or requirement for submission is accepted by the object of the said act.
• Is a criminal offense punishable, upon conviction ,by imprisonment of not less than one (1)
month nor more than sic (6) months, or a fine of not less than Php 10,000.00 nor more than
Php20,000.00 or both such fine and imprisonment at the discretion of the court.