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COMPENSATION ADMINISTRATION
WAGE SUPPLEMENTS
GROUP 1

People are a vital asset to an organization, and compensation and benefits are essential
pillars of a team member's satisfaction in the workplace. Offering a wage supplements can be a
competitive advantage, motivate employees, and help contribute to employees' financial security.

Wage Supplements
When some workers are benefitted by payments and contributions of their employers
which are not direct payments for work performed on the job, although in an indirect way, they
represent rewards for services rendered.
Some of the major types of extra remuneration or benefits received by employees are pay
for vacations and holidays wherein work was not rendered, sick and old age benefits that are
provided by law, and bonuses other than those paid as a reward for extra output or time spent on
the job.

FORMS & EXAMPLES OF WAGE SUPPLEMENTS

I. Profit Sharing
Profit sharing is an “agreement (formal or informal) freely entered into by which
employees received a share fixed in advance of the profits.”
Others describe it as “payments in the form of cash, stock, options, or warrants.
TYPES OF PROFIT SHARING SCHEMES
1. Profit sharing alone
2. Profit sharing with co-partnership
3. Profit sharing with some kind of co-partnership through ownership of shares in the company by
employees.
ADVANTAGES OF PROFIT SHARING
1. To encourage employee efficiency and stimulate more production.
2. To secure more flexibility in the payroll
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3. To reduce labor turnover.

4. To encourage unionism or at least minimize its militancy, strikes and other forms of industrial
unrest become prevented since employees feel they have a stake in the profitable operation of the
enterprise.

II. EMPLOYEE COVERAGE AND BENEFITS

Employee groups such as officers and top executives, department head and supervisors,
salaries clerical workers, and hourly paid workers, professionals and production and maintenance
employees (non-union) are often covered.
 KIND OF BENEFITS
 VESTING
 DISBURSEMENT
 GROWTH OF PROFIT SHARING PROGRAMS
III. SPECIAL BONUSES
Some employees secure other types of bonuses which are not directly related to production
standards or work schedules.
 Christmas Bonuses
 Production Bonus System
 Halsey Plan

IV. COST OF LIVING ALLOWANCES

-Under the Labor Code of the Philippines, a "cost of living allowance" is granted to workers
as a lump sum payment that is adjusted based on the cost of living index.
-Its purpose is to maintain wage levels during times of recession and provide workers with
additional income equivalent to the increase in the cost of living.
-Paid sick leave is also provided under labor laws and collective bargaining agreements.