It was grace that brought us together.

People who are uniquely different yet

are able to work cooperatively with respect and reverence toward each other.

It was also grace that binds us as one,

accepting and understanding each other,

assuring each and everyone

that we are developing lifelong friendships.

Lord, we pray that with the same grace, we will be blessed with persistence and perseverance as we trudge our way

towards the path of righteousness.

Bless us with more love, compassion, and kind-heartedness.

These we pray in your mighty name.

Amen.

Wage Payment Plansand

Salary Policies and

Administration

Prepared by: Mary Leigh Ann C. Perez

Compensation

Refers to every type of reward that individuals receive in

return for performing organizational tasks.

Financial

of, relating to, or involving

finance, finances, or financiers

Non-Financial

not involving financial matters

Compensation

Financial

Direct

•Wages•Salaries

•Commissions•Bonuses

Indirect• Insurance

Plans•Social

Assistance Benefits•Paid

Absences

Indirect

Insurance Plans: Life, Health, Surgical, Dental, Casualty among others.

Social Assistance Benefits: Retirement Plans, Social Security, Worker’s Compensation, Educational Assistance, Employee Services among others.

Paid Absences: Vacations, Holidays, Sick Leave among others.

Non-Financial

The Job• Interesting Duties

• Challenging• Opportunity for

Recognition• Feeling of Achievement

• Advancement • Opportunities

• Etc.

Job Environment• Sound Policies

• Competent Supervision

• Congenial to Workers

• Appropriate Status Symbol

• Comfortable Working Conditions

• Etc.

Nature and Purpose of Wage and Salary Administration

• The basic purpose of wage and salary administration is to establish and maintain an equitable wage and salary structure.

• The wage and salary administration is concerned with financial aspects of needs, motivation and rewards.

• Managers analyze and interpret the needs of their employees so that rewards can be decided to satisfy those needs. The reward may be money or promotion , recognition, acceptance, etc.

A sound wage and salary administration tries to achieve these objectives:

for Employees:

1. employees are paid according to requirements of the job.ie highly skilled jobs are paid more compensation than low skilled jobs. This eliminates inequalities.

2. the chances of favoritism (while fixing wage rates) are greatly eliminated

3. job sequences and lines of promotion are established wherever applicable.

4. employees morale and motivation are increased because a wage program can be explained and is based on facts.

to Employers:

1. They can systematically plan and control labor costs.

2. In dealing with trade union, they can explain the basis of their wage program because it is based upon a systematic analysis of job and wage facts.

3. A wage and salary administration reduces the likelihood of friction and grievances on job inequalities.

4. It enhances an employee’s morale and motivation because adequate and fairly administered wages are basic to his wants and needs.

5. It attracts qualified employees by ensuring adequate payment for all the jobs.

Wage and Salary administration have four major purposes (Beach):

1. To recruit persons for a firm;

2. To control payroll costs;

3. To satisfy people, to reduce the incidence of quitting grievances, and fractions over pay; and

4. To motivate people to perform better.

TYPES OF WAGES

1. NOMINAL WAGES . It is the amount paid to the worker in cash for the efforts of the worker towards production and no other benefits are given to the worker. This is called money wage.

2. REAL WAGES . It represents the amount of necessaries, comforts, luxuries and cash payment a worker gets in return for his efforts. Some organizations provide their employees certain essential commodities, housing with free electric and water charges, uniforms and other such facilities in addition to the money in cash. If these amounts are considered for wages, it becomes the real wage.

3. LIVING WAGE . When the wage rates are such that they are going to fulfill some of the requirements of a family like food, cloths, education and insurance against misfortune along with other basic necessities, they are referred to as living wage.

4. FAIR WAGE. It is a wage which is to be considered as a fair amount of return for the efforts of the employees and should be able to cover the other necessities of food, cloths and shelter for his family. The rate for the fair wage lies between real wage and minimum wage.

5. MINIMUM WAGE . Minimum wage may be defined as the wage, which not only provides for basic subsistence but something more than this. It should be able to keep the employees motivated and it should provide for some measure of education, medical facilities and other essential requirements. It should also consider the cost of living.

Main objectives of minimum wages and salaries are:

• To protect the sections of working population whose wages are very low.

• To prevent exploitation of the workers.

• To improve the general standard of life.

• Satisfactory compensation towards efforts expended by the worker.

FACTORS INFLUENCING WAGE and

SALARY SYSTEM

1. The organization’s ability to pay2. Supply and demand of labor3. The prevailing market rate4. Living wage 5. Productivity 6. Trade union’s bargaining power7. Job requirement 8. Managerial attitude

9. Psychological and social factors (Psychologically-persons perceive the level of wages as a measure of success in life, people may feel secure.

Sociologically and ethically workers should feel that they are not

exploited and that no distinction is made on the basis of caste, color, sex or religion.)10. Skill level available in the market

The Giving Tree

Salary Policies and

Administration

Article VIII: Social Justice and Human Rights

Sec. 3: Labor. The State shall afford full protection to labor…and promote full employment and equality of employment opportunities for all.

…They shall b entitled to security of tenure, humane conditions of work, and a living wage…

Right to Living Wage

A worker has a right to receive a fair and just compensation for his work. He is entitled to equal remuneration for work of equal value (Art. IX, B-Sec. 5)

A man works to make a living to support himself and his family. His wage or income must be sufficient to enable him and his family to live in reasonable and frugal comfort, provide education for their children, make some savings to meet unexpected contingencies, and eventually acquire something a man can call his own.

Forms of Payment

• No employer shall pay the wages of an employee by means of promissory notes, vouchers, tokens, tickets, chits or any other legal tender, even when expressly requested by the employee.

• Payment of wages by bank checks or money orders is allowed where such manner of wage payment is customary on the date of the effectively of the Labor Code, where it is stipulated in a collective bargaining agreement.

Time of Payment• Wages shall be paid at least once every two weeks

or twice a month, at intervals not exceeding sixteen (16) days.

Direct Payment of Wages• Wages shall be paid directly to the workers to whom

they are due.

Place of Payment• As a general rule, the place of payment shall be

at/or near the place of undertaking.

No employer shall make payment with less frequency than once a month.

(Art. 103, Labor Code of the Philippines)

Regulations Regarding Wages. Specifically intended to protect workers from possible exploitation by their employers, the Labor Code of the Philippines has promulgated certain regulations with respect to wages. They are the following:

1. Non-Interference in Disposal of Wages. No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel, or oblige his employees to purchase merchandise, commodities, or other property from the employer of from other person or otherwise make use of any store or services of such employer or any other person.

B. Wage Deduction

No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:

In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance.

In cases where the right of the worker or his union to check off has been recognized by the employer or authorized in writing by the individual concerned; and

In cases where the employer is authorized by law or regulations by the Secretary of Labor and Employment.

C. Deposits for Loss or DamageWhere the employer is engaged in trade,

occupation or business where the practice of making deductions or requiring deposits id recognized, to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may make the wage deductions or require the employee to make deposits from which deductions shall be made, subject to the following:

• The employee concerned is clearly shown to be responsible for the loss or damage;

• The employee is given reasonable opportunity to show cause why deduction should not be made;

• That the amount of such deductions is fair and reasonable and shall not exceed the actual loss or damage; and

• That the deduction from the wages of the employees does not exceed 20% of the employee’s wages in a week.

(Sec. 14, Rule VII, Rules and Regulations Implementing the Labor Code)

Withholding of Wages

Likewise, it is unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or dismissal or by any other means whatsoever without the worker’s consent.

It is likewise unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment.

Moreover, it is unlawful for any employer to refuse to pay or to reduce the wages, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding against the former.

Hours and Working Conditions

Henry Ford initiated the eight-hour day in his company in 1914 and the five-day week in 1926.

Hours of Work in the Philippines

In the Philippines, Commonwealth Act No. 444 approved on June 3, 1939, provided the legal working day not to exceed eight hours daily in any industry or occupation, whether public or private, with the exception of farm workers, laborers who prefer to be paid on piece work basis, domestic servants in the personal service of another and members of the family of the employer working for him.

Under the Labor Code of the Philippines which took effect on November 1, 1974, the normal hours of work of any employee shall not exceed eight in a day.

Hours worked shall include:

All time during which an employee is required to be on duty or to be at a prescribed workplace, and

All time during which an employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

Determining Hours Worked. In determining whether the time spent by an employee is considered hours worked, the following general principles shall apply:

1. All hours are hours worked which the employee is required to give to his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion;

2. All employees need not leave the premises of the workplace in order that his rest period shall not be counted, it being enough that he stops working, may rest completely, and may leave his workplace, to go elsewhere, whether within or outside the premises of his workplace;

3. If the work performed was necessary, or if it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.

4. The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working tie either if the imminence of the resumption of work requires the employee’s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee’s own interest.

Waiting Time. Waiting time spent by an employee shall be considered as working time under the following conditions:

• If waiting forms an integral part of the employee’s work or the employee is required or engaged by the employer to wait.

• When an employee is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purposes.

• However, an employee who is merely required to remain in the employer’s premises but is merely required to leave word at his home or with company officials where he may be reached is not working while on call.

Paid Legal Holidays. The rules implementing Presidential Decree No. 850 have clarified the policy in the implementation of the ten paid legal holidays.

Before PD No 850, the number of working days in a firm was considered important in determining entitlement to the benefit. Thus, where an employee was working for at least 313 days, he was considered already definitely paid. If he was working for less than 313 days, there was no certainty whether the ten paid legal holidays were already paid to him or not.

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