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Compensation Plan Overview by Alexandro Novora & Cesario Bandong

This document discusses compensation plans and administration programs. It begins by defining compensation and compensation plans. It then lists the different factors that affect compensation programs, such as institutional, environmental, and personal factors. It outlines the six basic employee benefits required by the Philippine Labor Code, including Social Security, PhilHealth, and Pag-IBIG contributions. Steps for formulating a compensation administration program are provided. Sample computations of salaries and wages with mandatory contribution deductions are also included. The document aims to provide an overview of compensation plans and requirements in the Philippines.

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ALEXANDRO NOVORA
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772 views16 pages

Compensation Plan Overview by Alexandro Novora & Cesario Bandong

This document discusses compensation plans and administration programs. It begins by defining compensation and compensation plans. It then lists the different factors that affect compensation programs, such as institutional, environmental, and personal factors. It outlines the six basic employee benefits required by the Philippine Labor Code, including Social Security, PhilHealth, and Pag-IBIG contributions. Steps for formulating a compensation administration program are provided. Sample computations of salaries and wages with mandatory contribution deductions are also included. The document aims to provide an overview of compensation plans and requirements in the Philippines.

Uploaded by

ALEXANDRO NOVORA
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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BICOL UNIVERSITY CBEM HUMAN RESOURCE DEVELOPMENT AND MANAGEMENT

TOPIC NO. 8:

COMPENSATION PLAN

Reporters:

Alexandro M. Novora
Cesario Raehl B. Bandong
Master in Management
DISCUSSION OBJECTIVES
1. To define compensation and
compensation plan
2. To enumerate and discuss the different
factors affecting the compensation
program
3. To briefly discuss the legal basis and
requirements regarding employee
compensation and benefits based on
Labor Code of the Philippines
DISCUSSION OBJECTIVES cont.

1. To present the latest daily minimum wage


rate per DOLE (Region 5 & NCR)
2. To present the suggested steps in
formulation of a compensation
administration plan
3. To provide a sample computation of
employees salaries/wages presenting
deductions on mandatory employment
contributions
I. DEFINITION
• Compensation
– Is the equivalent in any form that is given to
the individual for his work
– Also called as “the Job Reward”
• Compensation Plan – presents the
reward structure of a certain entity,
organization, or agency including its
philosophy and bases.
TYPES OF REWARD AND
REWARD STRUCTURE
1. INTRINSIC
 Participation in decision-making
 Greater Job Freedom & Discretion
 More Responsibility
 More Interesting Work
 Opportunities for Personal Growth
 Diversity of Activities
2. EXTRINSIC
 Direct Compensation
 Indirect Compensation
 Non-financial Compensation
TYPES OF REWARD AND
REWARD STRUCTURE cont.
2.1.Direct Compensation
Basic Salaries or Wages
Overtime & Holiday
Performance Bonuses
Profit Sharing
Stock Options
2.2. Indirect Compensation
• Protection programs
• Pay for Time not Worked
• Services and Perquisites
TYPES OF REWARD AND
REWARD STRUCTURE cont.
2.3.Non-financial Compensation
• Preferred Office Furnishings
• Preferred Lunch hours
• Assigned Parking
• Preferred Work Assignments
• Business Cards
• Own Secretary
• Impressive Titles
II. FACTORS AFFECTING COMPENSATION
PLANS AND ADMINISTRATION PROGRAMS

1. Institutional Factors

The financial condition of the


organization, size of the organization’s
work population, management-labor
relations, internal politics, union demands
and the collective bargaining agreement in
unionized firms either facilitate or stymie
program
II. FACTORS AFFECTING COMPENSATION PLANS AND
ADMINISTRATION PROGRAMS cont.

2. Environmental Factors
Pertain to external environment for
variables like standard and cost of living,
labor supply and demand, reward
structure of other organizations, political
and economic conditions in the country,
national policies, laws, statutes and
government regulations affecting wages
and salaries.
II. FACTORS AFFECTING COMPENSATION PLANS
AND ADMINISTRATION PROGRAMS cont.

3. Personal Factors
The values of the owners and managers
influence their decision on that type,
number, and amount of the compensation
packages that are given to the employees.
“Enough is enough” is a statement that
both parties utter in deciding compensation
issues.
III. LEGAL BASIS/ REQUIREMENTS REGARDING
EMPLOYEES’ COMPENSATION AND BENEFITS

• SIX (6) BASIC EMPLOYEE BENEFITS AND


LEGAL BASIS (under Philippine Labor Code)
• Social Security Systems (SSS) and Government
Service Insurance System (GSIS) Contributions
• Contribution to National Health Insurance Program
(NHIP)/Philhealth
• Contribution to Home Development and Mutual Fund
(HDMF)
• The 13th Month Pay
• Service Incentive Leave
• Meal and Rest Periods
• Please Note:

Citations in the Labor Code of the


Philippines regarding Employee Benefits
will be briefly discussed by the reporter,
Mr. Bandong.
SUGGESTED STEPS IN FORMULATION OF
COMPENSATION ADMINISTRATION PROGRAM

1) Determine a clear-cut philosophy of the


program.
2) Make a study and analysis of each job including
job description and job specification.
3) Determine the money worth of each job by
doing job evaluation.
4) Conduct a local, national and, if possible, an
international survey of pay policies.
5) Determine supply and demand of labor.
6) Formulate overall compensation policies.
Source: HRM by C.R. Martires
VI. MANDATORY EMPLOYMENT
CONTRIBUTIONS
• Please see attached tables

• Note: Sample computation of salaries &


wages showing deductions for mandatory
contributions will be presented by the
reporter, Mr. Novora.
References
• Human Resources Management Principles and
Practices by Dr. Concepcion R. Martires, 3rd ed.
• Labor Code of the Philippines
• http://www.sss.gov.ph
• http://www.bir.gov.ph
• http://www.dole.gov.ph/laborcode/book6.asp
• http://www.coa.gov.ph/tsolmp/TSOIntra/Manpower(labo
• http:www.philhealth.gov.ph

• http://www.pagibigfund.gov.ph
• http://www.nwpc.dole.gov.ph
THANK YOU FOLKS!

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