Changes in Personnel Status

Changes in Personnel Status

Changes in employment status are bound to take place during the period of
employment. There is a continuous movement of employees in the form of
promotion, transfer, demotion, or separation. This movement is the function
of placement wherein the objective is to fined or assign the right person to
the right job.

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Promotion

It involves the reassignment of an employee to a higher job position. This also

refers to the upward or vertical movement of employees in an organization from
lower-level jobs to higher level jobs involving increases in duties and
responsibilities, higher pay, and privileges. Promotion serves as encouragement and
inspiration to other employees to exert their maximum effort. This can also help
instill loyalty to the firm.

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 Demotion

This is the reassignment of an employee to a lower job involving fewer skills and responsibilities. It is also the
movement of an employee to a less important job from a higher-level job in the organization. It may not involve
a reduction in pay but a reduction in status or privileges.

As a general rule, demotion should be cautiously resorted to for it badly affects individual and group morale and
productivity. The alternative to demotion should be re-training or reorientation on the job and attitude toward
work, or as a last resort, termination of employment if no improvement is achieved.

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Transfer
This is the reassignment of an employee to a job with similar pay, status, duties, and
responsibilities or to another work shift, or from one unit to another in the same
company just like being an invoice clerk to a sales clerk. The right to transfer an
employee is part of management's inherent power or prerogatives.

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Separation
Different kinds of separation occur depending on whether the employee or the employer decides to terminate the
employment relationship. Lo

Governing Laws Regarding Separation from the Service

1. Art. 297. Security of tenure
2. Art. 282. Termination by employer (Dismissal)
3. Art. 283. Closure of establishment and reduction of personnel/layoffs
4. Art. 284. Disease as ground for termination
5. Art. 285. Termination by employee (Resignation)
6. Art. 297. Retirement

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Type of Employment
 Regular Employment
 Probationary Employment
 Part-time Employment
 Commission-paid Employment
 Casual Employment
 Contractual Employment

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Compensation
Employee Benefits and Services
Basic labor law, employee relations and discipline
Employee morale and motivation
 • Objectives of compensation
• Determining pay rates

Compensation • Different forms of

compensation
Objectives of Compensation
Compensation is the set of rewards that organizations provide to individuals in return for their willingness to perform
various jobs and tasks within the organization. It includes all forms of financial returns and tangible services and
benefits employees receive as part of an employment relationship. It also includes various elements such as base salary,
incentives, bonuses, benefits, and other rewards.

The objective of compensation is to create a system of rewards that is equitable to the employer and employee alike.
The desired outcome is an employee that is attracted to the work and motivated to do a good job for the employer. The
following are suggestions to make the compensation policy more effective. Compensation should be:

1. Adequate to meet the needs of the employees and to acquire and retain qualified personnel.
2. Equitable - Each person should be paid fairly, in line with his/her efforts, abilities, and training.
3. Balanced
4. Cost effective
5. Secure
6. Incentive-providing
7. Acceptable to the employee
8. Compliant with legal regulations

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Determining Pay Rates
Most wage and salary systems establish pay ranges for certain jobs based on the relative worth of the job to the
organization. An employee's performance on the same job should then determine where that employee's pay
falls within the job's range.

The key here is the establishment of different pay ranges for the various jobs within the organization. A pay
range for a given job establishes a range of permissible pay, with a minimum and a maximum. Establishing pay
ranges involves two basic phases:

1. Determining the relative worth of the different jobs to the organization (thereby ensuring internal equity)
2. Pricing the different jobs (thereby ensuring external equity)

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Determining Pay Rates
The following are some of the basic determinants of pay:

I. External factors- Supply and demand, economic conditions and unemployment, existing pay level in the
community, government regulations and laws
II. Organizational factors- Type of industry, profitability of the company, size of the company, capital or labor
intensive, value of the job.
III. Job factors- Skill, responsibility, effort, working conditions
IV. Individual factors- Performance, experience, seniority, length of service, potential promotability.
Different forms of compensation
1. Payment for time worked
2. Incentive forms of compensation
3. Performance-based rewards
4. Spot bonuses
5. Skill and knowledge-based pay/competency-based pay
6. Merit pay plans
7. Profit sharing
8. Stock ownership plans
9. Executive compensation

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Employee Benefits and
Services

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A. Employee Benefits and Services

Indirect financial compensation is called benefits and services. It represents an important part of just about every
employee's pay. Benefits are generally available to all the firms and include such things as time off with pay,
health and life insurance, and retirement funds.

1. Tax advantages of benefits

2. Nontaxable benefits under the code
3. Employee allowance

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B. Mandatory employee/legally required benefits
1. Social security system (SSS)
2. Maternity benefit
3. Retirement benefit
4. Disability benefit
5. Government service insurance system (GSIS)
6. Home development mutual fund (HDMF)
7. Philippine health insurance corporation (Philhealth)
8. Employees compensation (EC)
9. 13TH month pay
10. Service incentive leave
11. Paternity leave
12. Meal and rest periods
13. Right to holiday pay under article 94 of the labor code
14. Premium payment
15. Night shift differential

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C. Benefits given because of management generosity

1. Holiday/Christmas Bonus
2. Midyear bonus
3. Cost of living allowances
4. Paid holiday and vacation leaves
5. Sick leave
6. Emergency/Bereavement leave
7. Birthday leave
8. Healthcare/HMO coverage
9. Group life insurance
10. Pension plans

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D. Executive Compensation

1. Cash compensation
2. Long-term incentive plans
3. Retirement packages
4. Executive perks

E. Employee Services
1. Personal services benefits such as credit union, counseling service, and legal service
2. Job-related services benefits such as free uniforms, food services or cafeteria, educational subsidies or grants,
and stock ownership options.

All these benefits are equivalent to 30-50% of an employee's yearly wage, sometimes more. In the end,
companies who know how to take good care of their employees will have a lower employee turnover rate than
those that give no more than government-required benefits.

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 Basic Labor Law affecting
employer- employee relationship
The worker’s basic right
 Equal work opportunities for all
 Security tenure

Every employee shall be assured security of tenure. No employee can be

dismissed from work except for a just or authorized cause, and only after
due process.

Just cause refers to any wrongdoing committed by an employee

including:

1. serious misconduct
2. willful disobedience of employers' lawful orders connected with work
3. gross and habitual neglect of duty
4. fraud or willful breach of trust
5. commission of crime or offense against the employer, employer's
family member/s or representative
6. other analogous cases

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 The worker’s basic right
Authorized cause refers to an economic circumstance not due to the employee's fault,
including:

1. redundancy
2. retrenchment to prevent losses
3. closure of business

Due process in cases of just cause involves:

1. notice to employee of intent to dismiss and grounds for dismissal
2. opportunity for employee to explain his or her side
3. notice of decision to dismiss

In authorized causes, due process means written notice of dismissal to the employee
specifying the grounds, at least 30 days before the date of termination.

The inability of a probationary employee to meet the employer's prescribed standards

of performance made known to him or her at the time of hiring is also a just.

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The worker’s basic right

 Workdays and work hours

 Weekly rest day
 Wage and wage-related benefits
 Employment of women
 Employment of children

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Employee Relations and
Employee Discipline

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The importance of labor relations
The objective is to provide an atmosphere in which all employees can perform their jobs to the best of their
abilities and creatively contribute to the organization. Employee relation activities affect efficiency where
potential reasons for performance problems are confronted, and help is offered to remove these problems.

Employee discipline is an employer's actions against an employee for infraction of company policy or
rules. An employee may also be disciplined for misconduct that adversely affects the efficiency of the
organization. Conduct problems typically stem from employees who fail to comply with the written and
unwritten rules of the workplace such as coming to work on time, obeying orders, protecting the company
property, and generally supporting and not interfering with the efficiency of the company. Employees may
also exhibit problems with their performance that may stem from the lack of knowledge, skill, or ability
(KSA) to successfully perform the duties of their position.
The importance of labor relations

The goal of discipline is to correct misconduct and modify unacceptable behavior, rather
than to punish an employee. Discipline, if imposed, should be progressive, beginning
with the minimum discipline necessary to correct the offense. In addition, penalties
should be reasonably consistent with those imposed on other employees for similar
offenses.
Prevention of employee misconduct
Discipline is something that can only be imposed after an act of misconduct has already occurred, but managers and
supervisors can use strategies to prevent misconduct before it occurs. When an act of employee misconduct does
occur, supervisors should know how to deal with the situation effectively. Certain actions by supervisors can serve to
prevent employee misconduct from ever occurring. Managers may help to prevent the necessity for disciplinary action
by recognizing the fundamental worth and dignity of the individual employee and by communicating their belief that
all employees should strive for and reach their highest potential. Some examples of ways in which supervisors may be
able to prevent employee problems include:

• setting an example by their own conduct; maintaining high professional and ethical standards as leader of the
organization;
• providing a high-quality work environment that is conducive to innovation and increased productivity;
• establishing and communicating clear guidelines concerning their expectations for the operations of their office;
• establishing objective, understandable, obtainable, and measurable performance standards and communicating
them clearly to employees;
• monitoring performance and giving frequent feedback;
• holding employees accountable for result and recognizing and rewarding good performance; providing
opportunities for individual growth and development through training and seminars.

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Addressing Employee Conduct Problems
If an employee is exhibiting conduct problems, there are many steps that a supervisor may take to help that employee
to improve. Below are some examples:

1. Discuss any misconduct or performance problems directly with the employee. Give the employee an opportunity
to provide an explanation, and carefully listen to and consider what the employee has to say.
2. Clearly explain expectations to the employee and review any rules, regulations, or policies in the area where the
employee is exhibiting problems. Provide the employee an opportunity to ask any questions and offer assistance
in complying with your expectations.
3. If applicable, develop a plan with the employee directed at helping to improve misconduct. If possible, set time
limits for improvement and be very clear about the consequences.
4. Give the employee periodic and specific feedback. Be firm and clear about what improvement you expect to
occur. Tell the employee you may have to take further steps if behavior does not improve.
5. If misconduct continues, the supervisor may choose to orally admonish the employee, providing a strong
message that further incidents of similar misconduct may lead to a more formal action. If after all informal
attempts have failed and the misconduct continues, the supervisor, following consultation with HR, may decide
to formally discipline the employee.

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 Elements of Discipline System
 Fair
 Consistent
 Reasonable

Scale of penalties
• Counselling/Coaching
• Verbal or oral warning- too small or insignificant, usually given to first time offender where the offense committed is light.
• Written warning- usually given to employee who previously received a verbal warning.
• Suspension- demonstrate the seriousness of offense
• Demotion – it becomes necessary to use against employee before termination
• Transfer- there is no demotion in rank, salary and benefits
• Probation- sometimes called performance management plan

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Termination by employer (Dismissal)

Due process is the mechanism that ensures both rights of management, i.e., o employee
discipline and the prerogative to dismiss employee, and the right of an employee to a
security of tenure, is respected.

It is the process affording the employee of the opportunity to be informed of his/ her alleged
violation(s) and to be heard or to explain his/her side.

 Substantive due process provides the ground for disciplinary action, i.e., corrective
or retributive.
 Procedural due process provides the procedure on how to go about hearing the side
of the employee and evaluating all facts and evidences against the allegation.

Procedural due process must follow the twin notice rule: (1) notice to explain and (2) notice
of decision.

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Termination by employer (Dismissal)

In a termination for an authorized cause, due process means a written notice

of dismissal to the employee specifying the grounds given, at least 30 days
before the date of termination. A copy of the notice shall be furnished by the
Regional Office of the Department of Labor and Employment of the
Philippines (DOLE).

When due process is not observed, it will result to any or combination of the
following:
1. Illegal dismissal or suspension
2. Illegal dismissal will result to reinstatement and payment of back wages.
3. Illegal suspension, on the other hand, will result to payment of lost wage.

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Employee Grievances

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Grievance Defined

Grievance is a disagreement between an employee and the employer on the terms or conditions of
employment. The causes for a grievance may include, but are not limited to, complaints concerning
wages, hours of work, working conditions, performance evaluations, job assignments, or the
interpretation or application of a rule, regulation, or policy

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Causes of Grievances
1. Perceived unfair treatment of the employee by the supervisor or ineffective or
inadequate supervision
3. Unfair labor practices of the employers
4. Violation by management of the labor agreement or violation of the law
concerning the workers
5. Grievances inspired by the union leaders
6. Lack of a clear-cut company labor policy
Handling Employee Grievances at the Level of the Supervisor
Most grievances are resolved at the first step of the process by competent supervisors who are willing to listen and act fairly. To
reduce the number of grievances that are appealed, supervisors are encouraged to follow these recommendations:

1. Receive and treat all complaints seriously and give the employee a full hearing. The way supervisors receive a complaint
or grievance is important because this may have a lot to do with the ease or difficulty in settling the problem. It is also
important to assure the grievant or complainant of prompt action and when he/she can expect an answer. Determine if there
is a genuine grievance and if there is, whether the same is justified or not.
2. Get the facts by investigating and handling each case as though it may eventually result in arbitration. This can be done by
means of checking every angle of the complaint, checking the provisions in the existing BA, the company policy, and
examining the employee's record. Thus, there is a need to examine the labor agreement carefully and obtain clarification
from the HRD if necessary. Collect evidence and determine if there were witnesses. Most grievances are contract violations
and if the supervisor does not know the contract or the company personnel policies, he/she will not recognize a violation
when he/she sees one. Be sure to investigate the five W’s: Who, When, Where, Why, What
3. Carefully examine all the evidence before making a decision. Avoid lengthy delays. When all the information is in, make a
decision and communicate it.
4. Make correction if the employee or the company is wrong. Whatever is the decision, it should be clearly explained to the
employee concerned.
5. Follow up to make sure the plan of action is properly carried out by means of correcting conditions which could result in a
similar grievance happening again.

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Grievance Procedure
A company must formulate a grievance procedure for the guidance of its supervisors and employees. The different steps in the
grievance procedure usually involve the following:

1. Presentation of employee problem/s to the supervisor who is expected to settle the problem within the specified period
2. If not satisfied, the employee can elevate the complaint to the next higher level to resolve the grievance.
3. The problem or case may be taken to arbitration for final decision if no satisfactory solution has been reached by the above
procedures.

Procedures in the handling of grievances vary among companies. Some firms have established grievance committees, members of
which are either appointed by top management or elected by the employees. Such committees hear the evidence and issue a
judgment. In some cases, the committee makes a recommendation to the president, rather than making a binding decision on its
own.

Another way in handling grievance is the use of grievance appeal procedure. It allows employees to submit grievances to
successively higher levels in the organization where the aggrieved employee is represented by an attorney, a peer, or a member of
the personnel office. The hearing is normally conducted by a neutral company executive, who hears the evidence and makes a
judgment.

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Employee Morale and
Motivation

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Morale and Job Satisfaction
 Morale is the mental attitude which makes the individual perform his/her work either willingly and
enthusiastically or poorly and reluctantly.
 Employee morale is an attitude, a state of mind. It cannot be seen but is manifested by the employee's
manner and reactions to his/her job, his/her work conditions, the company policies and programs, his/her
colleagues, immediate boss, pay, and the like.
 Low morale contributes to labor problems, attempts to organize labor unions, excessive employee turnover,
labor grievances, and organizational climate. Grievances, absenteeism, and turnover are frequently used as
indirect measures of employee morale.

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Basic Factors Influencing Employee Morale

1. Nonwork-related factors such as age, sex, and work values

2. Management practices or the qualitative aspects of the job
3. Outside factors
4. State of communication in the firm

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Suggestion to motivate employees
1.Recognize individual differences. Employees are not homogeneous; they have different needs; they differ in terms of attitudes,
personality, and other important individual variables that affect their level of motivation.

2. Match people to jobs. For example, high achievers should be sought for a job running a small business or an autonomous unit within a
larger business. Such jobs are most attractive and motivating to employees with a higher growth need.

3. Use goals. Managers should ensure that employees have hard specific goals and feedback on how well they are doing in pursuit of these
goals.

4. Ensure that goals are perceived as attainable or else it will reduce employees' efforts.

5. Individualize rewards. Because employees have different needs, what acts as a reinforcer for one may not be the same for another.

6. Link rewards to performance. Key rewards such as pay increases and promotions should be given to serve as incentive to employees to
attain their specific goals.

7. Check the system for equity. Employees should perceive that rewards or outcomes are equal to the inputs given. This simply means that
experience, ability, effort, and other obvious inputs should explain differences in pay, responsibility, and other obvious outcomes.

8. Don't ignore money. Allocation of performance-based wage increase, piecework bonuses, and other pay incentives is important in
determining employee motivation. A review of 80 studies evaluating motivational methods and their impact on employee productivity
supports this claim.

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thank you