Week 11-12

November 3-7, 2022

Objectives
1. Identify the policy guidelines on compensation and wages and performance evaluation or appraisal;
2. Discuss the importance of employees relations and differentiate various employee movements ;
3. Realize the importance of adopting an effective rewards system.
 PRE-TEST: Direction: Unscramble the
letters below.
1. CASONMOPIETN - all forms of pay given by employers to their
employees for the performance of their jobs
2. ERFOPRMCAEN VTIELNUAOA - a process undertaken by the
organization, usually done once a year, designed to measure employees’
work performance
3. MEPLYEOE ERLTIAOSN - the connection created among
employees/workers as they do their assigned tasks for the organization
to which they belong
4. PELMOEYE EOVMEMTSN - series of actions initiated by employee
groups toward an end or specific goal.
5. NUIMNIOS – the principle of combination for unity of purpose
and action
6. WRADRE - gift, prize, or recompense for merit, service, or
achievement, which may have a motivating effect on the
employee
7. OMNTERYA WERADR - refers to money, finance, or
currency reward
8. NNOMAOETRYN AERDWR - refers to intrinsic rewards
which do not pertain to money or finance
COMPENSATION/WAGES and PERFORMANCE EVALUATION
Compensation/wages and performance evaluation are
related to each other because the employees’ 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. Compensation may
come in different forms. It may be direct, indirect, or
nonfinancial.
 Types of Compensation
Direct compensation – includes workers’ salaries, incentive pays,
bonuses, and commission
Indirect compensation – includes benefits given by employers
other than financial remunerations; for example travel, educational
and health benefits, and others
Nonfinancial compensation – includes recognition programs,
being assigned to do rewarding jobs, or enjoying management
support, ideal work environment, and convenient work hour
global), required skills from workers, and changes in technology,
among others. Along with these, organizations’ pay philosophies
have also changed. Instead of paying employees based mainly on
their job position or titles, they are now given pay according to their
competencies or according to how much they could contribute or
have contributed to their company’s success. Wage experts now
prepare compensation packages to create values for both the
organization and its employees.
Figure 1.
Pay equity is among the important considerations in
preparing compensation packages. As illustrated in
this diagram, pay equity is based on the idea that an
employee’s pay must be commensurate to his or her
effort.
 Compensation: A Motivational Factor for Employees

Compensation pay represents a reward that an employee

receives for good performance that contributes to the company’s
success. With this, the following must be considered:
Pay Equity – related to fairness; the Equity Theory is a
motivation theory focusing on employees’ response to the pay
that they receive and the feeling that they receive less or more
than they deserve.
Expectancy Theory – another theory of motivation which
predicts that employees are motivated to work well
because of the attractiveness of the rewards or benefits
that they may receive from a job assignment. The
employee’s perception of the compensation or pay
attached to a job position is an important factor in
ascertaining the motivational value of compensation.
 Bases for Compensation may be compensated based on the ff:
Piecework basis – when pay is computed according to the number
of units produced.
Hourly basis – computed according to the number of work hours
rendered.
Daily basis – computed according to the number of workdays
rendered.
Weekly basis – when pay is computed according to the number of
workweeks rendered
Monthly basis – pay is computed according to the number of work
months rendered
Compensation rates are influenced by internal and external
factors. Among the internal factors are the organization’s
compensation policies, the 6 importance of the job, the
employees’ qualifications in meeting the job requirements,
and the employer’s financial stability. External factors, on
the other hand, include local and global market conditions,
labor supply, area/regional wage rates, cost of living,
collective bargaining agreements, and national and
international laws, among others.
Purposes of Performance Evaluation: Administrative
and Developmental
Improving individual job performance through performance
evaluation is just one of the reasons why employees are
subjected to assessments on a continuous basis. There are
other purposes behind employee assessment that are
beneficial to the company and employee.
Administrative Purposes – These are fulfilled
through appraisal/ evaluation programs that
provide information that may be used as a basis
for compensation decisions, promotions,
transfers, and terminations. Human resource
planning may also make use of it for the
recruitment and selection of potential employees.
Developmental Purposes – These are fulfilled
through appraisal/ evaluation programs that
provide information about employee’s
performance and their strengths and weaknesses
that may be used as a basis for identifying their
training and developmental needs.
Through this approach, the workers become
more receptive to explanations given by the
organization’s management regarding the
importance of having evaluations at regular
intervals – that these are conducted to
improve their competencies to prepare them
for future job assignments.
 EVALUATION: I. Direction: Identify the answer of each meaning.
1.These are fulfilled through appraisal/ evaluation programs
that provide information about employee’s performance and
their strengths and weaknesses that may be used as a
basis for identifying their training and developmental needs.
2. These are fulfilled through appraisal/ evaluation programs
that provide information that may be used as a basis for
compensation decisions, promotions, transfers, and
terminations.
3. When pay is computed according to the number of
workdays rendered.
4. Theory of motivation which predicts that employees are
motivated to work well because of the attractiveness of the
rewards or benefits that they may receive from a job
assignment.
5. It represents a reward that an employee receives for
good performance that contributes to the company’s
success.
6. It includes benefits given by employers other than
financial remunerations; for example travel, educational
and health benefits.
7. It includes workers’ salaries, incentive pays, bonuses, and
commission.
8. includes recognition programs, being assigned to do
rewarding jobs, or enjoying management support, ideal work
environment, and convenient work hour.
9. When pay is computed according to the number of
units produced.
10. When pay is computed according to the number of
workweeks rendered.
II. Make a computation of salary/wage (15pts.).

Kirk is working as an accountant in a company. If he was

paid of 1,250.00 per day within 24 working days and has
over time payment of P156.00 per hour. In every month,
he rendered a total of 15hrs. of over time. How much his
total annual salary?
 Performance Appraisal Methods
Methods of evaluating workers have undergone
development to adapt to new legal employment
requirements and technical changes. Some appraisal
methods used today are the following:
1. Trait Methods – performance evaluation method
designed to find out if the employee possesses
important work characteristics such as consciousness,
creativity, emotional stability, and others.
2. Graphic rating scales – performance appraisal method
where each characteristic to be evaluated is represented
by a scale on which the evaluator or rater indicates the
degree to which an employee possesses that characteristic
3. Forced-choice method – performance evaluation that
requires the rater to choose from two statements purposely
designed to distinguish between positive or negative
performance; for example: works seriously – works fast;
shows leadership – has initiative
4. 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
5. Behavior observation scale (BOS) – a behavioral
approach to performance appraisal that measures the
frequency of observed behavior.
 ADVANTAGES OF PERFORMANCE APPRAISAL

➢ Promotion: Performance Appraisal helps the supervisors to

chalk out the promotion programs for efficient employees. In
this regard, inefficient workers can be dismissed or demoted
in case.
➢ Compensation: Performance Appraisal helps in chalking
out compensation packages for employees. Merit rating is
possible through performance appraisal.
➢ Employees Development: The systematic procedure
of performance appraisal helps the supervisors to frame
training policies and programs.
➢ Selection Validation: Performance Appraisal helps
the supervisors to understand the validity and
importance of the selection procedure. The supervisors
come to know the validity and thereby the strengths and
weaknesses of the selection procedure. Future
changes in selection methods can be made in this
regard.
➢ Motivation: Performance Appraisal serves as a
motivation tool. Through evaluating the performance
of employees, a person’s efficiency can be
determined if the targets are achieved. This very well
motivates a person for a better job and helps him to
improve his performance in the future.
 Why Some Evaluation Programs Fail
• the inadequate orientation of the evaluatees regarding
the objectives of the program;
• incomplete information of the evaluatees (e.g. proper
answering of the evaluation questionnaire);
• bias exhibited by evaluators;
• inadequate time for answering the evaluation forms;
• ambiguous terms used in the evaluation questionnaire; •
employee’s job description is not properly evaluated by
the evaluation questionnaire used;
• inflated ratings resulting from the evaluator’s avoidance
of giving low scores;
• evaluator’s appraisal is focused on the personality of the
evaluatee and not his or her performance;
• the unhealthy personality of the evaluator; and
•the evaluator may be influenced by organizational
politics.
 REWARD SYSTEM
 Pay/Salary
Benefits
Incentives
Executive Pay
Stock Options
Nonmonetary Rewards – rewards that do not
pertain to money, finance, or currency; refer to
intrinsic rewards that are self-granted and which
have a positive psychological effect on the
employee who receives them.
a.Award – a 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 extrinsic rewards.
b. Praise – a form of nonmonetary, intrinsic reward
given by superiors to their subordinates when they
express oral or verbal appreciation for excellent job
performance.
 EMPLOYEE RELATIONS
Employee relationships apply 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 or her care.
Social support is the sum of perceived assistance or
benefits that may result from effective social employee
relationships.
Below are some barriers to good employee relations:
• Anti-social personality: refusal to share more about
oneself to coemployees; 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/subcultural differences • Lack of cooperation •
Communication problems: refusal to listen to what others
seek to communicate • Lack of concern for others’
welfare
Here are some ways to overcome barriers to good
employee relations:
• Develop a healthy personality to overcome negative
attitudes and behavior.
• Find time to socialize with coworkers.
• Overcome tendencies of being too dependent on
electronic gadgets.
• Develop good communication skills and be open to
others’ opinions.
• Minimize cultural/subcultural tension
The Benefits of Strong Employment Relations Having a strong
employer and employee relations reaps a lot of benefits for your
business. The most advantages are listed below: (Enriquez, 2016)

1.Productivity Strong employment relations create a pleasant

atmosphere within the work environment; it increases employee
motivation and can also be increased through improved employee
morale.
2.Employee Loyalty Creating a productive and pleasant work
environment has a drastic effect on an employee’s commitment
to the firm, it encourages a loyal workforce. Having such a labor
force improves employee retention, in doing so the cost of
recruitment, hiring, and training are cut drastically.
3.Conflict Reduction When a work environment is efficient
and friendly, the extent of conflict within the workplace is
reduced. Fewer conflict results in the employees being to
concentrate on the tasks at hand and they are therefore more
productive.
 EMPLOYEE MOVEMENTS
A labor 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.
Financial needs – complaints regarding wages or salaries and
benefits given to them by the management are the usual
reasons why employees join labor unions
b. Unfair management practices – perceptions of employees
regarding unfair or biased managerial actions are also the reason
why they join mass movements; examples of lack of fairness in
management are favoritism related to promotion and giving of
training opportunities and exemption from disciplinary action
c. Social and leadership concerns – some join unions for the
satisfaction of their needs for affiliation with a group and for
the prestige associated with coworkers’ recognition of one’s
leadership qualities
Steps in Union Organizing
Terry Moser, an expert union organizer was credited by Snell and
Bohlander (2011) for the following union-organizing steps:
Step 1. Employee/Union Contact – to explore unionization
possibilities, employees weigh the advantages and disadvantages of
seeking labor representation while the union officers gather more
data about the employee’s complaints, as well as data about the
employer’s management styles, financial stability, policies, etc.
these actions by employees and union.
the employer’s management styles, financial stability, policies,
etc. these actions by employees and union officers are necessary
to build a case against the employer and defense for the
employees’ decision to unionize.
Step 2. Initial organizational meeting – This is conducted to
attract more supporters and select potential leaders among the
employees who can help the union organizers.
Step 3. Formation of the in-house organizing committee – this
starts with the identification of employees who are ready to
act as leaders in campaigning for their goals, in trying to get
the interests of the other employees to join their movement,
and in convincing employees to sign an authorization card to
show their willingness to be represented by a labor union in
collective bargaining with their employer.
Step 4. If a sufficient number of employees support the
union movement, the organizer requests for a representation
election or certification election – a representation petition
is filed with the NLRC asking for the holding of a secret
ballot election to determine the employees’ desire for
unionization.
Step 5. End of union organizing – when a sufficient
number of votes is garnered, the NLRC certifies the union
as the legal bargaining representative of the employees.
Contract negotiation or collective bargaining agreement
(CBA) negotiations follow the certification. The CBA
process involves the following procedures:
a. Prepare for negotiations – data to support bargaining proposals are
collected and arranged in an orderly manner by both parties – the union
and the employer’s groups.
b. Develop strategies – management proposals are developed and limits
of concessions are determined, while also considering the union’s goals
and their possible strike plans.
c. Conduct Negotiations – this consists of bargaining, analyzing
proposals, resolving issues related to the proposals, and remembering
to stay within their respective bargaining zone.
d. Formalize agreement – after the negotiation process, the union
and the management group have to formalize their agreement.
This agreement is a formal binding document that lists down the
terms, conditions, and rules under which employees and
managers agree to operate; the clear language must be used in
the contract, which has to be ratified by the majority of the
employees.
Grievance Procedure The grievance procedure is a formal
procedure that authorizes the union to represent its members
in processing a grievance or complaint. Such grievance must
be expressed orally or in writing to the employee’s
immediate supervisor and the union steward.
Answer the following questions succinctly. Write your answer in
a 1 whole sheet of paper.

1. Do you agree with the statement that the evaluator’s bias may
cause the evaluation program to fail? Explain your answer.
2. How important is effective employee relations in achieving
the goals of the company?
3. Give the reasons why employees organize a labor
union. Support your answer.
4. In this time of the pandemic, what do you think is/are
the best reward(s) an employer can offer to their
employees especially to the frontliners (e.g. medical
workers, sales staff, security guards, etc.) who are
risking their lives for the benefit of all? Explain your
answer