Senior High School

ORGANIZATION
AND MANAGEMENT
Quarter 2 Week 11 & 12
Functions and Importance of Compensation,
Wages and Performance evaluation,
Appraisal, Reward
system, Employee relations and Movement

Examine the functions and importance of compensation, wages and performance

evaluation, appraisal, reward system, employee relations and movement

K to 12 BEC CG (ABM_AOM11-IIa-b- 20, ABM_AOM11-IIa-b- 21)

Organization and Management
Grade 11
Self-Learning Module
Quarter 2-Week 11 & 12– Functions and Importance of Compensation, Wages and
Performance evaluation, Appraisal, Reward system, Employee relations and Movement

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Borrowed materials (i.e. songs, stories, poems, pictures, photos, brand names,
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Every effort has been exerted to locale and seek permission to use these materials from their
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them.

SENIOR HIGH SCHOOL DEVELOPMENT TEAM OF THE MODULE

Author: Guia C. Sison, LPT, MBA

Content Evaluators: Sharon F. Sanchez, LPT, DBA
Rosemarie DC. Gonzales, LPT, DBA
Christian Paul C. Gutierrez, LPT, DBA
Maricel E. Sanchez, LPT, MBA
Junie J. Gale, LPT, PhD
Jemar P. De Vera, LPT, MBA, EdD
Critic Readers / Language Evaluators:
Ma. Leonor S. Ponce, LPT
Cristina D. Reyes, LPT, MAEd
Layout Evaluators: Rommel B. Ferrer, LPT, MIT
Emmanuel S. Malasan, LPT
Layour Artist: Niño Bert M. Suni

DIVISION MANAGEMENT TEAM:

Schools Division Superintendent-OIC: Ely S. Ubaldo, Ed.D., CESO VI
Assistant Schools Superintendent: Diosdado I. Cayabyab, Ed.D., CESO VI
Chief Education Supervisor, CID: Carmina C. Gutierrez, Ed.D.
Education Program Supervisor, ABM: Lalaine C. Rosario, Ed.D.

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Introductory Message
For the facilitator:
Welcome to the Organization and Management – Grade 11 Alternative Delivery
Mode (ADM) on the Functions and Importance of Compensation, Wages and Performance
evaluation, Appraisal, Reward system, Employee relations and Movement.
This module was collaboratively designed, developed and reviewed by educators,
evaluators and reviewers from public schools to assist you, the teacher or facilitator in
helping the learners meet the standards set by the K to 12 Curriculum while overcoming their
personal, social, and economic constraints in schooling.
The learning resource hopes to engage the learners into guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help learners
acquire the needed 21st century skills while taking into consideration their needs and
circumstances.
In addition to the material in the main text, you will also see this box in the body of
the module

Notes to the Teacher

This contains helpful tips or strategies that will

help you in guiding the learners

As a facilitator you are expected to orient the learners on how to use this module. You
also need to track of the learners’ progress while allowing them to manage their own
learning. Furthermore, you are expected to encourage and assist the learners as they do the
tasks included in the module.

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 HOW TO USE THIS MODULE?
Before starting the module, I want you to set aside other tasks that will disturb you
while enjoying the lessons. Read the simple instructions below to successfully enjoy the
objectives of this kit. Have fun!
1. Follow carefully all the contents and instructions indicated in every page of this module.
2. Write on your notebook the concepts about the lessons. Writing enhances learning, that
is important to develop and keep in mind.
3. Perform all the provided activities in the module.
4. Let your facilitator/guardian assess your answers using the answer key card.
5. Analyze conceptually the post-test and apply what you have learned.
6. Enjoy studying!

PARTS OF THE MODULE

 Expectations - These are what you will be able to know after completing the lessons in
the module.
 Pretest - This will measure your prior knowledge and the concepts to be mastered
throughout the lesson.
 Looking Back to your Lesson - This section will measure what learning and skills did
you understand from the previous lesson.
 Brief Introduction- This section will give you an overview of the lesson.
Activities - This is a set of activities you will perform with a partner.
 Remember - This section summarizes the concepts and applications of the lessons.
 Check your Understanding - It will verify how you learned from the lesson.
 Post-test - This will measure how much you have learned from the entire module

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 Lesson Compensation / Wages and Performance
5 Evaluation

EXPECTATION

As we study and immerse ourselves in “Organization and Management” in the

Compensation/Wages and performance evaluation. The module is focused on Module 11– 12
Lesson 5-8.

After going through the module, you are expected to:

1. Discuss and differentiate compensation/wages and performance evaluation.

2. Types of compensation.
3. Classification of Employee Benefits and Services
4. Management-Labor Relations
5. Reward System

Let us start your journey in learning.

Thru a Pre-test

Good luck!

PRE-TEST

Fill in the Blank

Directions: Choose the CORRECT word from the table below and write your answer in the
space provided before the number.

Wages Unionism Employee relation

Direct Compensation Indirect compensation

__________________ 1. It refers to a fixed regular payment, typically paid on a daily or

weekly basis, made by an employer to an employee, especially to a
manual or unskilled worker.
__________________ 2. It means a person employed for wages or salary, especially at non -
executive level.
__________________ 3. It refers to the policies and practices of labor unions, particularly
those concerned with protecting and furthering the rights of
workers.
__________________ 4. It means can be in the form of wages, salaries, commissions and
bonuses that an employer provides regularly and consistently.
__________________ 5. It refers to the various forms of non-Monetary pay offered to
employees, that can include everything from common contractual
features to useful, attractive benefits.

LOOKING BACK

As we go further, let us try to recall our lesson about the process of recruiting, selecting, and
training development

 Methods of internal and external recruitment and their advantages and advantages
 Steps in hiring employees effectively
 Types of job interviews and
 Training and development

ENJOY READING!!!

BRIEF INTRODUCTION

Compensation/wages and performance evaluation are related to each other because the
employee’s excellent or poor performance also determines the compensation given to them,
after considering other internal and external factors like the actual worth of the job,
compensation strategy of the organization, conditions of the labor market, cost of living, and
area wage rates, among others.

Definition of terms:
Compensation/wages- all forms of pay given by employers to their
employees for the performance of their jobs
Performance evaluation- a process undertaken by the organization, usually
done once a year, designed to measure employee’s work performance

The essential difference between a salary and wages is that a salaried person is paid a fixed
amount per pay period and a wage earner is paid by the hour.

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Types of Compensation
1. Direct compensation-includes workers’ salaries, incentives pay, bonuses, and
commissions.
2. Indirect compensation-includes benefits given by employers other than financial
remunerations; for example: travel, educational and health benefits.
3. Non-financial compensation- includes recognition programs, being assigned to do
rewarding jobs, or enjoying management support, ideal work environment, and convenient
work hours.

Compensation: Motivational Factor for employees

1. Pay equity/equity theory- focusing on employees’ response to the pay that they receive and
the feeling that they receive less or more than they deserve. Motivates them to perform well
and to do their jobs to the best of their abilities.
2. Expectancy theory- employees motivated to work well because o the attractiveness of the
rewards or benefits that they may possibly receive from a job assignment.

Bases for compensation

1. Piecework basis- when pay is computed according to the number of units produced.
2. Hourly basis- number of hours rendered
3. Daily basis-number of workdays rendered
4. Weekly basis-number of work weeks rendered
5. monthly basis- number of work months rendered

Salary rate in Metro Manila

As of 2018
Sector/ industry Basic wage Basic wage increase New minimum wage
rates
Retail/service 457 25 500
establishment

Salary rate in provinces

As of 2019
Employment size Previous Wage Amount of New Wage Rates
Rates Increase
Non agriculture
A. 30 more
310 30 340
employees
B. 10-29
285 25 310
employees
₱273 upon effectivity
C. 1-9 employees ₱282 After 6 months
265 17
from effectivity

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Purpose of Performance evaluation: administrative and developmental
Administrative purposes- these are fulfilled through appraisal/evaluation programs that
provide information that maybe used as basis for compensation decisions, promotions,
transfers, and terminations.

Developmental purposes- these are fulfilled through appraisal/evaluation programs that

provide information about employees’ performance and their strengths and weaknesses that
maybe used as basis for identifying their training and developmental needs.

Performance Appraisal Methods

Methods of evaluating workers have undergone development to adapt new legal employment
requirements and technical changes. Some appraisal methods used today are the following:

Trait Methods- performance evaluation method designed to find out if the employee
possesses important work characteristics such as conscientiousness, creativity,
emotional stability.

Graphic rating scales- each characteristic to be evaluated is presented by a scale on

which the evaluator or rater indicates the degree to which an employee possesses that
characteristic.

Example:

Graphic rating scale

Name of employee______________
Department___________________
Job title______________________

Performance level Poor Good Excellent

Attendance √
Behavior Toward √
Subordinates
Sincerity √
Dependability √

Forced-choice method- requires the rater to choose from two statements purposely designed
to distinguish between positive or negative performance; example: works seriously-work fast;
shows leadership-has initiative.

Behaviorally anchored rating scale (BARS)-a behavioral approach to performance

appraisal that includes five to ten vertical scales, one for each important strategy for doing the
job and numbered according to its importance.

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Behavioral observation scale (BOS)-a behavioral approach to performance appraisal that
measures the frequency of observed behavior

Why some Evaluation Programs Fail?

 Inadequate orientation of the evaluates regarding the objectives of the program
 Incomplete cooperation of the evaluates (e.g., proper answering of evaluation
questionnaire)
 Bias exhibited by evaluators
 Inadequate time for answering the evaluation forms
 Ambiguous language used in the evaluation questionnaire
 Employees’ job description is not properly evaluated by the evaluation questionnaire
used
 Inflated ratings resulting from evaluators’ avoidance of giving low scores
 Evaluators’ appraisal is focused on the personality of the evaluatee and not his/her
performance
 Unhealthy personality of the evaluator; and
 Evaluator may be influenced by organizational politics.

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 Lesson Employee Relations
6

Employee relations applies to all phases of work activities in organizations, and managers, to
be effective, must be able to encourage good employee relations among all human resources
under his/her care. Employee/workers are social beings who need connections or relations
with other beings.

Effective Employer Relations and Social Support

Social support is the sum total of perceived assistance or benefits that may result from
effective social employee relationships. Therefore, without social support, effective employee
relations is not possible, and without effective social employee relationship, social support.

Barriers to good employee relations

 Anti-social personality: refusal to share more about oneself to co-employee; being a
loner
 Lack of trust in others
 Selfish attitude; too many self-serving motives
 Lack of good self-esteem
 Not a team player
 Being conceited
 Cultural/sub cultural differences
 Lack of cooperation
 Communication problems: refusal to listen to what others seek to communicate
 Lack of concern for others’ welfare

Ways to overcome barriers to good employee relations

 Develop a healthy personality to overcome negative attitudes and behavior
 Find time to socialize with co-workers
 Overcome tendencies of being too dependent on electronic gadgets
 Develop good communication skills and be open to other’s opinions.
 Minimize cultural/sub cultural tension

THREE TYPES OF EMPLOYEES

 Employees who work with passion and feel a

deep connection with their company
Engaged
 They drive innovation and move the organization
forward

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  Employees who are essentially “checked out”
Not Engaged  They put time, but not energy or passion, into
their work
 Employees who are not only unhappy at work,
Actively but also act out their unhappiness
Disengaged  They undermine what their engaged coworkers
accomplish

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 Lesson Employee Movement
7
Labour union is a formal union of employees/workers that deals with employers, representing
workers in their pursuit of justice and fairness and in their fight for their collective or
common interests.

Definition of terms:
Employee movement- series of actions initiated by employee groups toward an
end or specific goal

Unionism- the principle of combination for unity of purpose and action

Employees or workers unionize because of.

1. Financial needs-complaints regarding wages or salaries, and benefits given to them by
the management.
2. Unfair management practices- unfair or biased managerial actions (e.g. lack of fairness
or favoritism related to promotion
3. Social and leadership concerns-some join unions for the satisfaction of their need for
affiliation with a group and for the prestige associated with coworkers’ recognition of
one’s leadership qualities.

A collective bargaining agreement (CBA) is a written legal contract between an employer

and a union representing the employees. The CBA is the result of an extensive negotiation
process between the parties regarding topics such as wages, hours, and terms and conditions
of employment.

A collective bargaining is a process where both parties, labor and management, agrees to fix
and administer terms and conditions of employment which must not be below the minimum
standards fixed by law. This also sets a mechanism for resolving the parties' grievances.

An example of a collective bargaining is a labor union engaged in negotiations with

management over salaries.

Strike, collective refusal by employees to work under the conditions required by employers.
Strikes arise for several reasons, though principally in response to economic conditions
(defined as an economic strike and meant to improve wages and benefits) or labour practices
(intended to improve work conditions).

The main types of strikes covered by the National Labor Relation Act
 Unfair labor practice strikes, which protest employers' illegal activities.
 Economic strikes, which may occur when there are disputes over wages or benefits.
 Recognition strikes, which are intended to force employers to recognize unions.

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  Jurisdictional strikes, which are concerted refusals to work to affirm members' right to
job assignments and to protest the assignment of work to another union or to
unorganized employees.

A unionized employee's right to reinstatement after a strike end varies based on the type
of strike and the underlying reason for the strike. Employers are allowed to assignment of
work to another union or to unorganized hire replacement workers during unfair labor
practice strikes and economic strikes.

Economic strikers who are striking as a result of the employer's failure to reach an
agreement over wages or other working conditions may be permanently replaced but cannot
be terminated. Strikers who are striking because of an unfair labor practice cannot be
permanently replaced or terminated.

At the end of a strike, unfair labor practice strikers are entitled to be reinstated to their
former positions (even if that means the employer has to terminate replacement workers) as
long as they have not participated in any misconduct. Economic strikers who offer to return
to work after the employer has hired permanent replacement workers are not entitled to
reinstatement. However, if they can't find equivalent employment elsewhere, they are entitled
to be recalled as job openings become available.

Union members lose protection when they engage in strikes considered unlawful under
the NLRA (e.g., sit-down strikes, strikes that endanger employer's property, strikes during
cooling-off periods or strikes to force acceptance of featherbedding practices). The right to
strike also may be limited by any agreements employees may have with the employer to
submit disputes to arbitration for a specified period before striking.

Figure 1.

Company owners must make sure that they make their employees satisfied in order to prevent
a labor strike

Source: @dole.nwpc.gov.org,http://www.shrm.org,http://www.nlrb.gov.rights-we-
protect/rights/nlrb-and-right-strike

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 Lesson Reward System
8
Organizations offer competitive rewards systems to attract knowledgeable and skilled people
and to keep them motivated and satisfied once they are employed in their firm. Further,
rewards promote personal growth and development and present fast employee turnover.
Management offers different types of rewards:

Definition of terms:
Reward- gifts, prize or recompense for merit, service, or achievement,
which may have a motivating effect on the employee
Monetary reward- refers to money, finance, or currency reward
Non-monetary reward- refers to intrinsic rewards which do not pertain to
money or finance

Monetary rewards- rewards which pertain to money, finance, or currency.

a. Pay/salary-financial renumeration given to exchange for work performance that will help
the organization attain its goals; example: weekly, monthly, or hourly pay.
b. Benefits- indirect forms of compensation given to employees/workers for the purpose of
improving the quality of their work and personal lives; health care benefits, retirement
benefits, educational benefits, etc.
c. Incentives- rewards are based upon a pay-for-performance philosophy; examples;
bonuses, merit pay, sales incentives, etc.
d. Executive pay- compensation package for executives of organization which consists of
five components: basic salary, bonuses, stock plans, benefits, and perquisites
e. Stock options- are plan that grant employees the right to buy a specific number of shares
of the organization’s stock at a guaranteed price during a selected period.

Non-monetary rewards- rewards which do not pertain to money, finance or currency; refer
to intrinsic rewards that are self-granted and which have positive psychological effect on the
employee who receives them.
a) Award- nonmonetary reward that may be given to individual employees or groups/teams
for meritorious service or outstanding performance; trophies, medals, or certificates of
recognition may be given instead of cash or intrinsic rewards
b) Praise- a form of non-monetary, intrinsic reward given by superiors to their subordinates
when they express oral or verbal appreciation for excellent job performance

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 REMEMBER

 Compensation/wages- all forms of pay given by employers to their employees for the
performance of their jobs
 performance evaluation- a process undertaken by the organization, usually done once a
year, designed to measure employee’s work performance
 Types of Compensation are.
 Direct compensation-includes workers’ salaries, incentives pay, bonuses, and
commissions.
 Indirect compensation-includes benefits given by employers other than financial
remunerations; for example: travel, educational and health benefits.
 Non-financial compensation- includes recognition programs, being assigned to do
rewarding jobs, or enjoying management support, ideal work environment, and
convenient work hours.
 Employee relations applies to all phases of work activities in organizations, and
managers, to be effective, must be able to encourage good employee relations among all
human resources under his/her care.
 Three types of employees are Engaged, Not Engaged and Actively disengaged
 Employee movement- series of actions initiated by employee groups toward an end or
specific goal
 Unionism- the principle of combination for unity of purpose and action
 Reward- gifts, prize or recompense for merit, service, or achievement, which may have a
motivating effect on the employee
 Monetary reward- refers to money, finance, or currency reward
 Non-monetary reward- refers to intrinsic rewards which do not pertain to money or
finance

ACTIVITY

Activity
Directions: Write your answers on a separate sheet of paper.
1. Give the reason why employees organize a labor union. Support your answer.
2. Create a performance evaluation criterion for each position that you will open for your
future business
3. What will be your programs to help your employees meet the standards that you’ve
cited?

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Rubrics
15 points 10 points 5 points
Gives best answers or on Does clearly Explains little
point and clearly explanation explanation information

CHECK YOUR UNDERSTANDING

True or False
Directions: Before each statement, write TRUE if the statement is correct or FALSE if the
statement is incorrect.
_____________1. Wages a fixed regular payment, typically paid on a daily or weekly basis,
made by an employer to an employee, especially to a manual or unskilled
worker
._____________2. Reward a thing given in recognition of one's service, effort, or
achievement.
______________3. Labor strike is a work stoppage caused by the mass refusal of employees
to work.
_____________4. Employee Movement within an organization result from several factors.
Movement can result from training programs, expansion, ups killing,
termination and the voluntary departure of other employees.
_____________ 5. Employee is a person employed for wages or salary, especially at non-
executive level.

POST-TEST

MULTIPLE CHOICE

Direction: Choose the letter of the best answer. Write your answer in the space
provided.

____1. Employees who work with passion and feel a deep connection with their company
they drive innovation and move the organization forward
a. Engaged
b. Non engaged
c. Employee
d. Job

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____2. series of actions initiated by employee groups toward an end or specific goal
a. Union
b. Employee movement
c. Strike
d. Development

____3. the principle of combination for unity of purpose and action

a. Strikes
b. Employee relation
c. Unionism
d. Dis engaged

____4. is a formal union of employees/workers that deals with employers,

representing workers in their pursuit of justice and fairness and in their fight for
their collective or common interests.
a. Unionism
b. Strikes
c. Movement
d. Labour union
____5. is the sum total of perceived assistance or benefits that may result from effective
social employee relationships.
a. Social support
b. Personal support
c. Spiritual support
d. Employee support

____6. Employees who are essentially “checked out” They put time, but not energy or
passion, into their work
a. Dis engaged
b. Not engaged
c. Engaged
d. Evaluation

____7. Employees who are not only unhappy at work, but also act out their unhappiness they
undermine what their engaged coworkers accomplish
a. Engaged
b. Not engaged
c. Actively disengaged
d. Actively not engaged

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____8. a process undertaken by the organization, usually done once a year, designed to
measure employee’s work performance
a. Employee relation
b. Compensation
c. Development
d. Performance evaluation

___9. includes recognition programs, being assigned to do rewarding jobs, or enjoying

management support, ideal work environment, and convenient work hours.
a. Non-financial Compensation
b. Compensation
c. Pay equity
d. Direct compensation

____10. includes benefits given by employers other than financial remunerations; for
example: travel, educational and health benefits.
a. Pay equity
b. Indirect compensation
c. Direct compensation
d. Non-financial compensation

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 15
PhD, and Riaz Benjamin
Copyright 2016 by Vibal group Inc. And Helena Ma. F. Cabrera, Anthony DC. Altajeros,
ISBN 978-971-07-3860-1
Textbook for Senior High School
Book: Organization and Management
REFERENCES
Key Answer
Pretest Activity 1
1. Wages Answer may vary
2. Employee relation
3. Unionism
4. Direct compensation
5. Indirect compensation
Check your understanding
True or false Posttest
1. T 1. A 6. B
2. T 2. B 7. C
3. T 3. C 8. D
4. T 4. D 9.A
5. T 5. A 10. B
For Inquiries and Feedback, please write or call

Schools Division Office I Pangasinan

Alvear St., Lingayen, Pangasinan

Phone No.: (075)-522-2202

Email Address: pangasinan1@deped.gov.ph

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