Strategic Human Resources Management: Compensation and Benefits for Private and Public Sector (2015) PDF

STRATEGIC HUMAN RESOURCES MANAGEMENT MODULE 6: COMPENSATION AND BENEFITS FOR Comparability of civilian government pay with those PRIVATE AND PUBLIC SECTOR in the private sector SALARY STANDARDIZATION LAW (2015)...

STRATEGIC HUMAN RESOURCES MANAGEMENT MODULE 6: COMPENSATION AND BENEFITS FOR Comparability of civilian government pay with those PRIVATE AND PUBLIC SECTOR in the private sector SALARY STANDARDIZATION LAW (2015) Rationalized and standardized compensation ❖ a legislative measure to modify the compensation across all government agencies; and adoption of a and position classification system of civilian performance-based incentive scheme government personnel and the base pay schedule of military and uniformed personnel. Parameter of SSL 2015 Minimum basic salary (SG 1) shall be raised from ❖ Approved by President Benigno Aquino III. Senate 9,000 to 11,068 a month. President Franklin M. Drilon and Senate Finance Compensation shall be adjusted to at least 70% of Committee chairperson Loren Legarda co-author the market for all salary grades the proposed measure (Senate Bill 3009) To recognize differences in duties and responsibilities, there shall be no salary overlaps ❖ The basis for the proposed compensation The link between pay and performance shall be adjustment of the SSL 2015 is the Compensation strengthened and Benefits Study for the Public Sector – a survey carried out by the DBM pursuant to its Main objective of the SSL 2015 mandate to administer the compensation and To be competitive with the market thereby attract position classification system of the government and retain talent under Presidential Decree No. 985 and RA No. 6758 Strengthen the link between pay and performance or Salary Standardization Law I. Reduce costs and benefits (i.e. GSIS premiums and PhilHealth contributions) while maximizing the ❖ The DB engaged the services of Towers Watson benefits of employees who offers consulting, technology and solutions in Allow higher take home pay, especially for the areas of benefits, talent management, rewards, government personnel belonging to lower salary and risk capital management. grades. ❖ The objectives of the study are: o To compare the competitiveness of government pay in relation to the private sector. o To craft a compensation strategy to bring government pay closer to market rates. Increased by 45% The higher the salary grade the higher the increase an employee may get from its previous level. Works on the premise that the higher the level, there is less opportunity for promotion and the labor pool of critical talents is smaller. P525 – non-agricultural P495 – agricultural P550 – retail Guiding Principle of SSL 2015 Payment of just and equitable compensation to government personnel in accordance with the principle of equal pay for work of equal value.  STRATEGIC HUMAN RESOURCES MANAGEMENT 21,000 and below is non-taxable. Executive Order No. 201, s. 2016: Modifying the Increase of budget: P225.82 B Salary Schedule for Civilian Personnel and Authorizing the Grant of Additional Benefits for Both ALLOWANCE AND BENEFITS THAT PUBLIC Civilian and Military and Uniformed Personnel SECTOR RECEIVES Coverage: Personnel Economic Relief Allowance (PERA) o All civilian personnel in the Executive, Legislative, Budget Circular No. 2011-2 and Judicial Branches. Constitutional Coverage Commissions and Constitutional Offices, GOCCs o All civilian government employee occupying not covered by RA 10149, and LGUs regular, contractual and casual status, whether o Military personnel of the DND elective or appointive, rendering FULL TIME or part o Uniformed personnel of the DILG, PCG, and time basis. NAMRIA Payment o Paid only when basic pay is also paid Exclusion o P2,000.00 per month provided they render full- o Those engaged thru job orders, contracts of time services for eight (8) hours per working day, service, consultancy contracts. service contracts twenty-two (22) working days per month, inclusive with no employee-employer relationship of leave of absence with pay. Step Increment (Executive Order No. 164) Gov: 40 hours Officials and employees of national government Private: 48 hours agencies (NGAs) including state universities and colleges (SUCs), government-owned or -controlled Subsistence, Laundry, and Quarters Allowance corporations (GOCCs), government financial (SLQA) Under the Magna Carta Benefits of Public institutions (GFIs) and local government units Health Workers Pursuant to RA No. 7305 (LGUs), under permanent status, regular agency templates Hazard Pay A one (1) step increment shall be granted to officials to protect and promote the welfare of public and employees for every 3 years of continuous servants by providing them with additional satisfactory service in their present positions compensation considering the nature of their An employee may progress from Step 1 to Step 8 of responsibilities and exposure to hazard or possible the salary grade allocation of his/her position in dangers pertaining to their positions recognition of meritorious performance based on a Coverage Performance Management System. o All employees and officials of the Government shall be paid hazard pay when stationed or assigned to work in or under the following circumstances/conditions o Hazardous or less hazardous areas. o Difficult areas or hardship posts characterized by distance, inconvenience of travel due to bad roads and conditions of the terrain, isolation, inaccessibility and extreme weather conditions o Stations which offer risks to health and safety due to exposure to radiation, contagious diseases and volcanic activity o institutions that tend or care for mentally deranged patients o Those in prison reservations and penal colonics without adequate police protection  STRATEGIC HUMAN RESOURCES MANAGEMENT o Plants and installations of the arsenal doctors, hospital administrator, medical director, o Aboard aircraft and watercraft in crossing bodies chief nurse, head of billing section, medical social of water services and the personnel officer who handles the accounts of PhilHealth. The other 50 percent is divided among the rank and file employees (75 percent), senior nurses, supervisors and quality teams (15 percent) and all the hospital department heads who are members of the management circle (10 percent) o Varies on collection of hospitals o May share sila sa PhilHealth collection na nakukuha nila, meaning an employee may get additional salary/incentive depende Longevity Pay kung gaano karami nag-avail ng PhilHealth. A monthly longevity pay equivalent to five percent (5%) of the present monthly basic pay shall be paid Night shift Differential Pay to public health workers for every five (5) years of Compensation premium granted to government continuous, efficient and meritorious services personnel whose regular working hours fall wholly rendered as certified by the Head of Agency/Local or partly within 6:00 PM to 6:00 AM of the following Chief Executives commencing after the approval of day. the Act. (April 17, 1992) Hourly Basic Rate - The basic salary rate per hour After 10 years, then every after 5 years. derived by (a) dividing the monthly rate by 22 working days, and-dividing the quotient derived in Representation and Transportation Allowance (a) by-S haurs. RATA 20% of the hourly basic rate of the employee A collective term for two distinct but o For private: 10pm to 6am, only 10% complementary allowances. Both allowances are o BPO: 25-30% provided to select government official to cover related expenses incidental to and in connection 13th Month Pay (Mid-year Allowance) with the actual performance of their respective Coverage: All positions in the government whether functions. regular, casual or contractual in nature, elective or For those in higher positions. appointive Official functions/business. Guidelines: o Equivalent to ONE (1) month basic pay as of MAY 15 o Rendered at least a total or an aggregate of FOUR (4) months of service from July 1 of the immediately preceding year to May 15 of the current year o Remains to be in the government service as of May 15 of the current year o With at least a SATISFACTORY performance rating in the immediately preceding rating period Medicare Sharing (PhilHealth Sharing) 14th Month Pay (Year-End Allowance) and The new sharing scheme, which was implemented Cash Gift starting last month, is divided to the medical department (50 percent) that would include  STRATEGIC HUMAN RESOURCES MANAGEMENT Coverage: All government employees whether This may be granted to both management and rank- regular, contractual, or casual in nature. appointive and-file employees of agencies with approved and or elective. successfully implemented CNAs in recognition of Guidelines: their efforts in accomplishing performance targets o Year-End-Bonus equivalent to one (1) month at lesser cost, in attaining more efficient and viable salary as of October 31 and Cash Gift of P5000- operations through cost cutting measures and given not earlier than November 15 of the systems improvement. current year Conditions: Should not exceed 25,000 o Must have rendered at least a TOTAL or AGGREGATE OF FOUR (4) montas of service Performance Based Bonus (PBB) from January 1 to October 31 of the current year Subject to the achievement by departments, o Must remain in the service as of October 31 of agencies of performance targets and compliance the same year with good governance and other conditions o Private sector: No 14th month pay, only 13th Based on a progressive rate system as the position month pay. and responsibility goes higher, so does the amount of PBB. Clothing Allowance Section 40 of the General Provisions of Republic Act (R.A.) No. 10155, the Fiscal Year (FY) 2012 General Appropriations Act (GAA), provides that appropriations for each department, bureau, office, or agency may be used for uniform or. clothing allowance of employees at not more than P5,000 per annum. subject to the rules and regulations o Dito daw nag-umpisa yung “No Person is Left issued by the DBM. Behind” kasi kapag may estudyanteng bumabagsak, babagsak din ratings ng Productivity Enhancement Incentives (PEI) school. So ipapasa na lang yung mga Pursuant to Executive Order (EO) No. 201, s. 2016 bumabagsak para hindi rin bumagsak Beginning FY 2016, the Productivity Enhancement ratings. incentive shall be given not earlier than December o Performance Based Bonus is depending on 15 of every year to all qualified government how satisfactory the performance is. employees at Five Thousand Pesos (P5,000) each for the purpose of improving the government Loyalty Award employee’s productivity The provision for the cash gift component of the Exclusions Loyalty Award for qualified officials and employees, o Consultants and experts hired for a limited in addition to the loyalty memorabilia/souvenir, on period to perform specific activities or services the incumbent's milestone year. with expected outputs: 10th year anniversary and every 5 years thereafter o Laborers hired through job contracts (pakyaw) Shall be computed at P500.00 but not more than and those paid on piecework basis P1,000.00 for every year of service, in accordance o Student workers and apprentices; and with CSC MC No. 06, s.2002 o Individuals and groups of people whose services are engaged through job order, Anniversary Bonus contracts of service, or others similarly The provision for Anniversary Bonus (AB) at situated. P3,000.00 per qualified personnel shall be made only on the agency's milestone year. Collective Negotiating Agreement (CNA) 15th anniversary and every 5 years thereafter Administrative Order (AO) No. 1351 s. 2005 Overtime Pay  STRATEGIC HUMAN RESOURCES MANAGEMENT A duly authorized work rendered beyond the regularly scheduled normal hours of work, such as Salary Grade Increase Prior to Retirement work during the day beyond the 8 hours of work Upon Retirement, Personnel shall automatically be required from daily paid workers or work during the granted one (1) salary grade higher tha his/her week beyond the 40 hours of work required from basić, D salary and retirement benefits shall be monthly paid workers. computed based on the highest salary received, Sa government, wala. pursuant to section 14 or R.A No. 8439. Salary Step Increment for Completion of a Post Graduate Degree R.A. No. 7305 a PHD who holds a position in the agency plantilla of regular positions and who completes a master's or doctoral degree related to the performance of the duties and responsibilities of his/her position after Honoraria at least two (2) years of service as PHW, may be Honoraria shall be paid to the following personnel entitled to one (1) step increase to be integrated subject to the guidelines issued by the DS into the basic salary, in recognition of his/her efforts Coverage towards professional advancement o Teaching personnel of the DepEd, TESDA, SUCs, and other educational institutions with excess TYPES OF LEAVES and outside the teaching load. o Lecturers, resource persons, coordinators, and ❖ Vacation leave – (13) vacation leave facilitators in seminars ❖ Sick leave – Twelve (12) days of sick leave o Chairs and members of Commissions/Boards/Councils ❖ Privilege Leave – 3 days, (Birthday, and other o Those involved in science and technological special events) activities who render services beyond their ❖ Maternity leave – Sixty (60) calendar days leave. regular workload o Officials and employees assigned to special ❖ Paternity leave – All married male employees are eligible for 7 working days projects The rates of honoraria shall depend on the level of ❖ Bereavement – Three (3) days responsibilities, nature of work rendered, and ❖ Solo-Parent Leave – Seven (7) working days extent of individual contribution to produce the desired outputs. The total honoraria received from ❖ Leave for Victims of Violence Against Women all special projects shall not exceed 25% of the and Their Children – ten (10) days leave annual basic salary. MAGNA CARTA BENEFITS Monetization of Leave Credits o Honoraria for assignment in special project Officials and employees in the career and non- o Honoraria for lecturers and Resource person career service whether permanent, o The Per Diem temporary/casual or coterminous, who have o Hazard Pay accumulated fifteen (15) days of vacation leave o Subsistence Allowance credits shall be allowed to monetize a minimum of o Laundry Allowance ten (10) days: Provided, that at least five (5) days is o Free Quarters retained after monetization and provided further o Longevity Pay that a maximum of thirty (30) days may be o Salary Increase for Retirement and Termina Leave monetized in a given year. (CSC MC 41. s. 1998) Benefit Purposes  STRATEGIC HUMAN RESOURCES MANAGEMENT Sec. 23. Monetization of 50% of Vacation/Sick Increase or maintain morale/satisfaction. Leave Credits. Reward and encourage peak performance. this may be allowed for valid and justifiable reasons Achieve internal and external equity subject to the discretion of the agency head and the Reduce turnover and encourage company availability of funds, (MC 41, s. 1998) loyalty. maximum of 30 days Modify (through negotiations) practices of unions Terminal Leave Agencies shall also use BP Form 205 to reflect the SOCIAL SECURITY BENEFITS terminal leave benefits of FY 2019 retirees. TLB of (RA 1161, as amended by RA 8282) compulsory retirees whether permanent or casual, Coverage shall be computed separately from those of o private employee, whether permanent, optional retirees. temporary or provisional Computation Benefits TLB-SXDx CF o Sickness TLB-Terminal Leave Benefit o Maternity S-Highest Monthly salary Received o Disability D-No. of accumulated vacation and sick leave credits o Retirement CF-Constant factor is 0.0481927 o Death & Funeral Nag-resign ka or retire ka and effective siya January Reminder to Employer 15 but gagamitin mo terminal leave mo na 30 days, o An ER who does not report his/her EEs, so, December 15 pa lang pwedeng hindi ka na regardless of status of employment is violating pumasok. (instead of using their terminal leave pay) the SSS law. Meanwhile, an HR who does the same can be sued for violation. GSIS, PHILHEALTH, AND PAG-IBIG o if found guilty, the ER/HR is liable to the EEs and GSIS: Section 11 of the Revised Implementing must: Rules and Regulations of RA 8291 approved on June o Pay the benefits of those who die, become 23, 2010, under Board Resolution No. 88 provides disabled, get sick or reach retirement age. that the rate of contribution payable by the member o Pay all unpaid contributions plus a penalty of and the government agency shall be nine (9) per three (3%) per month; and cent and 12 per cent, respectively, based on the o Be held liable for a criminal offense punishable actual monthly salary of the member. (GSIS for by fine and/or imprisonment public, SSS for private) BENEFITS UNDER THE EMPLOYEES' COMPENSATION AND BENEFITS UNDER THE COMPENSATION PROGRAM (PD 626) PRIVATE SECTOR a government program designed to provide a ❖ Compensation compensation package to public and private sector a systematic approach to providing monetary employees or their dependents in the event of work- value to employees in exchange for work related sickness, injury, disability, or death. performed. Coverage May achieve several purposes in recruitment, o The ECP covers all workers in the formal sector. job performance, and job satisfaction o Coverage in the ECP starts on the first day of a tool used by management for a variety of employment. purposes to further the existence of the o Employees in the private sector who are company. Compensation may be adjusted compulsory members of the Social Security according to the business needs, goals and System (SSS), with employer-employee available resources relationship ❖ Compensation may be used to: Benefits Recruit and retain qualified employees. o Loss of income benefit  STRATEGIC HUMAN RESOURCES MANAGEMENT o 2 Medical benefits MATERNITY LEAVE (RA 11210) o Rehabilitation services o Carer's allowance o Death and Funeral PAG-IBIG BENEFITS (Republic Act No. 9679) Contribution o The maximum monthly compensation used in computing the employee contributions is currently set at P5,000. This means that the maximum member contribution and employer counterpart per month are both currently P100. Benefits Paternity Leave (RA 8187) o Savings Granted to all married male employees in the o Short Term Loans private sector, regardless of their employment o Housing Programs status (e.g., probationary, regular, contractual, project basis) PAG-IBIG: Pagtutulungan sa Kinabukasan: shall apply to the first four (4) deliveries of the Ikaw, Bangko, Industriya at Gobyerno employee's lawful wife with whom he is cohabiting 7 days Service Incentive Leave Not convertible and non-cumulative Coverage Conditions: o Every employee who has rendered at least one o He is an employee at the time of the delivery of (1) year of service whether continuous or his child broken o He is cohabiting with his spouse at the time that o 5days with pay she gives birth or suffers a miscarriage. o May be used for sick and vacation leave o He has applied for paternity leave with his purposes. employer within a reasonable period from the o Commutable to its money equivalent at the end expected date of delivery by his pregnant of the year. spouse, or within such period as may be o 5 days after a year of service provided by company rules and regulations, or Applies to all employees except by collective bar gaining agreement; and o Government employees o His wife has given birth or suffered a o Persons in the personal service of another miscarriage. o Managerial employees o Officers or members of a managerial staff Parental Leave for Solo Parents (Solo Parent o Field personnel and those whose time and Leave) RA 8972 performance is unsupervised by the employer Granted to any solo parent or individual who is left o Those already enjoying these benefits alone with the responsibility of parenthood due to: o Those enjoying vacation leave with pay of at o Giving birth as a result of rape or, as used by the least five (5) days law, other crimes against chastity; o Those employed in establishments regularly o Death of spouse; employing less than ten (10) employees o Spouse is detained or is serving sentence for a criminal conviction for at least one (1) year; o Physical and/or mental incapacity of spouse as certified by a public medical practitioner; o Legal separation or de facto separation from spouse for at least one (1) year: Provided that  STRATEGIC HUMAN RESOURCES MANAGEMENT he/she is entrusted with the custody of the Not convertible and non-cumulative children; Police report and medico-legal o Declaration of nullity or annulment of marriage as decreed by a court or by a church: Provided, SPECIAL LEAVE FOR WOMEN (RA 9710) that he/she is entrusted with the custody of the All female employee regardless of age and civil children; status o Abandonment of spouse for at least one (1) The special leave shall be granted to the qualified year; employee after she has undergone surgery without o Unmarried father/mother who has preferred to prejudice to an employer allowing an employee to keep and rear his/her child/children, instead of receive her pay before or during the surgery. having others care for them or give them up to a 2 months welfare institution; Not convertible and non-cumulative o Any other person who solely provides parental Conditions care and support to a child or children: o She has rendered at least six (6) months Provided, that he/she is duly licensed as a foster continuous aggregate employment service for parent by the Department of Social Welfare and the last twelve (12) months prior to surgery. Development (DSWD) or duly appointed legal o She has filed an application for special leave guardian by the court; and with her employer within a reasonable period o Any family member who assumes the from the expected date of surgery or within such responsibility of head of family because of the period as may be provided by company rules death, abandonment, disappearance, or and regulations or collective bar gaining prolonged absence of the parents or solo agreement; and parent: Provided, that such abandonment, o She has undergone surgery due to disappearance, or prolonged absence lasts for gynecological disorders as certified by a at least one (1) year competent physician. o Additional 7 days on top of your regular leave o Dapat 1 year service SERVICE CHARGES ❖ SHARING LEAVE FOR VICTIMS OF VIOLENCE AGAINST All rank-and-file employees of employers and WOMEN AND THEIR CHILDREN (RA 9262) contractors working therein a collecting service "Violence against women and their children," as charges are entitled to an equal share in the used in Republic Act 9262 (the "Anti-Violence eighty-five percent (85%) of the total of such Against Women and Their Children Act of 2004"), charges. The remaining fifteen percent (15%) of refers to any act or a series of acts committed by the charges may be retained by management to any person against a woman who is his wife, former answer for losses and breakages and for wife, or against a woman with whom the person has distribution to managerial employees, at the or had a sexual or dating relationship, or with whom discretion of the management in the latter case. he has a common child, or against her child Service charges are collected by most hotels and whether legitimate or illegitimate, within or without some restaurants, nightclubs, cocktail lounges, the family abode, which result in or is likely to result among others in physical, sexual, psychological harm or suffering, or economic abuse including threats of such acts, ❖ TIPS battery, assault, coercion, harassment or arbitrary Where a restaurant or similar establishment does deprivation of liberty. not collect service charges but has a practice or The leave benefit shall cover the days that the policy of monitoring and pooling tips given woman employee must attend to medical and legal voluntarily by its customers to its employees, the concerns. pooled tips should be monitored, accounted, and 10 days provided certification from barangay/clerk distributed in the same manner as the service of court is submitted to employer charges.  STRATEGIC HUMAN RESOURCES MANAGEMENT MINIMUM WAGE o Government employees Republic Act No. 6727 (also known as the "Wage o Managerial employees, if they meet all of the Rationalization Act") mandates the fixing of the following conditions: minimum wages applicable to different industrial o Officers or members of a managerial staff sectors, namely, non-agriculture, agriculture o Kasambahay and persons in the personal plantation, and non-plantation, service of another; cottage/handicraft, and retail/service, depending o Workers who are paid by results. on the number of workers or capitalization or o Field personnel, if they regularly perform their annual gross sales in some sectors. duties away from the principal or branch office Coverage or place of business of the employer and whose o The wage increases prescribed under Wage actual hours of work in the field cannot be Orders apply to all private sector workers and determined with reasonable certainty. employees receiving the daily minimum wage rates Special Days Basis The "no work, no pay" principle applies during special o The basis of the minimum wage rates days and on such other special days as may be prescribed by law shall be the normal working proclaimed by the President or by Congress. hours of eight (8) hours a day. o Hindi lahat ng holiday ay double pay. o Double pay kapag regular holiday. Coverage from Income Tax of Minimum Wage Earners Minimum wage earners (MWEs) are exempt from income tax The following income of MWEs shall also be exempt from income tax: o Statutory Minimum Wage (SMW) inclusive of the COLA; o Holiday pay; o Overtime pay; o Night shift differential pay; and OVERTIME PAY (Article 87) o Hazard pay. Minimum Wage: P500 Overtime pay refers to the additional compensation Metro Manila: P570 for work performed beyond eight (8) hours a day. Same as those covered under Premium Pay. HOLIDAY PAY RDOT – Rest Day OverTime ❖ Regular Holidays Every employee covered by the Holiday Pay Rule is Night Shift Deferential entitled to the minimum wage rate (daily basic wage Refers to the additional compensation of 10% of an and COLA). This means that the employee is employee's regular wage for each hour of work entitled to at least 100% of his/her minimum wage performed between 10pm to 6 am rate even if he/she did not report for work, provided This benefit applies to all employees except: he/she is present or is on leave of absence with pay o Government employees on the work day immediately preceding the holiday. o Those of retail and service establishments regularly employing not more than five (5) PREMIUM PAY workers; Premium pay refers to the additional compensation o Kasambahay and persons in the personal for work performed within eight (8) hours on non - service of another work days, such as rest days and special days. o Managerial ermployees o Officers or members of a managerial staff Applies to all except:  STRATEGIC HUMAN RESOURCES MANAGEMENT o Field personnel and those whose time and performance are unsupervised by the employer THIRTEENTH MONTH PAY (PD 851) All employers are required to pay their rank and file employees thirteenth-month pay, regardless of the nature of their employment and irrespective of the methods by which their wages are paid, provided they worked for at least one (1) month during a calendar year. The thirteenth-month pay should be given to the employees not later than December 24 of every year. SEPARATION PAY An employee's entitlement to separation pay depends on the reason or ground for the termination of his or her services. An employee may be terminated for just cause, and other similar causes, generally, may not be entitled to separation pay. On the other hand, where the termination is for authorized causes, separation pay is due. Basis o The computation of separation pay of an employee shall be based on his/her latest salary rate. o Separated due to an authorized cause. Coverage from Income Tax of Separation Pay o Exempted from taxation is the separation pay received by an employee because of his/her separation from the service of the employer due to death, sickness or other physical disability or for other cause beyond the control of said employee such as retrenchment, redundancy or cessation of business operations.