WINTER

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Module 3

COMPENSATION

Allan Shane J. Cawag ~ Jocelyn Catalan ~ Renalyn

Garcia ~ Maybelle Mina ~ Noraisa Tudon ~ Regis
Bartolo ~ Karen Dable ~ Liza May Mata
 Introduction
Pay and benefits are fundamental way that attract, reward, and
retain employees.

Pay setting takes place on the basis of job evaluation and market
comparisons, through different processes depending on the
personnel system involved and the philosophy of the employer.

Depending on the personnel system

• Employee benefits are regarded as an important motivator of
employee retention.

• An increasing cost to employers.

• At least for civil service systems that define employees as a

public resource, the emphasis is on providing a range of flexible
benefits that will enhance the performance of an increasingly
diverse workforce.
-Klingner & Nalbandian, 1998
Introduction
FOR A LONG TIME organizations in the Philippines have
been trying to:

• increase worker productivity by increasing pay, providing

better working conditions and offering greater fringe
benefits.

• But still the industrial output is stagnant or even lags

behind. Perhaps the major motivation of the employees is
not monetary. It may be related to their work environment
or to the way they are treated by their superiors.

- Andres, 1991
Introduction
• Business organizations are profit-oriented and the main concern is
how to keep the employee contributing at their highest level.

• The pay that an employee gets from his employer is the primary
reason for his being on a job.

• For this reason, wage and salary administration must be a major

concern of management.

• Determining wages and salaries for different jobs has long been a
problem not only of management and employees but also of the
government.

-Andres, 1991
Introduction
• The government has been taking the initiative in setting the
minimum wage.

• The high cost of living has sparked the granting of emergency

allowances and other forms of economic aid to the worker. This
phenomena have disrupted salary structures of business
enterprises.

•Job evaluation and wage-salary administration are the answers to

this critical problem of establishing an equitable relationship
between jobs and wages.

•This involves determining the relative values or worth of jobs and

paying the workers according to the level of difficulty, complexity
and responsibility of the jobs they perform.