THE NATURE OF

STAFFIN
G
By:
Journie Mira
Dexter Just
 STAFFING OR HUMAN
RESOURCE MANAGEMENT
-Involves acquiring and developing human resources
that will carry out and perform the various activities of
the organization.
-includes recruiting, selecting, mining, and developing
people in the organization.
-Apart from hiring people into the organization, the
company also engages in human resource
management and utilizes various tools and techniques
to promote employee loyalty, satisfaction, and personal
growth within the company.
 Human Resource
Department

The Human Resource Department (HRD) is tasked

with implementing human resource management in
the company. The activities include planning,
recruitment, training, performance appraisal,
compensation, and employee relations. It ensures
compliance with safety standards and labor laws
and is led by a Resource Director, often supported
by a Vice President for Human Resources in larger
companies.
 THE STAFFING PROCESS
The staffing process is crucial for the achievement
of organizational goals. It begins with human
resource planning, where managers identify the
necessary number of employees and required skills
for different positions. Job analysis determines the
specific tasks and skills needed. Recruitment
follows, where qualified candidates are sought.
Selection involves interviews, psychological tests,
and background checks. Finally, new employees
receive orientation on company policies,
THE STAFFING
PROCESS
 Planning
Human resource planning (HRP) identifies people with the
right skills and assigns them corresponding tasks in the
company. HRP is a critical component in determining the
organization's manpower complement or the number
of people that are currently employed in the organization.
The key processes involved in HRP include:

1. Environmental scanning – It is crucial for a manager

to find out the factors currently affecting the labor market
because this can affect the company’s recruitment. High
unemployment makes it easy to find applicants for entry-
level positions, but specialized skills can be harder to
 2. Forecasting and estimating the firm's manpower
complement - The status of employment in the
organization, specifically the number of regular and
contractual or temporary employees should be
determined. Forecasting is done to identify the demand
for and supply of employees while considering the
manpower requirements, the internal supply of
employees, and possible external sources of employees.
Internal factors include manpower requirements, internal
supply of employees, actuarial losses (due to death,
disability, retirement), and employee turnover. External
factors include the pool of job applicants, which can be
assessed through government agencies, online job
3. Gap Analysis - is done to determine if there is a
gap or difference between demand and supply in
human resources.

* If there is a shortage, options include overtime,

hiring temporary workers, outsourcing, or hiring
contract workers.
* If there is a surplus, options include early
retirement programs, layoffs (due to redundancy or
automation), or hiring freezes.
* If demand equals supply, focus on employee
development through skills training and job
 Job Analysis
- Is the procedure for determining the duties and
skill requirements for a job or position, as well as
other qualifications sought for in an employee or
applicant.
- The following information can be collected through
job analysis:
-
- 1. Specific tasks and activities – the essential
tasks required for a position.
2. Required behavior on the job – workplace
behavior or ethics required in the performance of the
3. Required job standards - the performance levels
or standards required on the job.
4. Knowledge, tools, and equipment used - this
takes into account knowledge on software applications,
accounting procedures, laws, and other relevant
information.
5. Work conditions - these include the physical
aspects of the job such as work schedules and physical
environment.
6. Personal characteristics and requirements -
these includes the background, training, experience,
personality type, attitude, values, and physical
characteristics needed for the position.
 * Job analysis goes through a process outlined in
several steps designed to gather relevant, simple,
and complete information to prepare the job
specifications needed by the company.
 Large organizations often require that job analysis be
done in many positions. Since this is time-consuming,
management carefully selects the jobs to be analyzed.
Following are the techniques that can be used in
conducting job analysis:

1. Observation – this technique requires the analyst to

actually observe the jobs as they are being performed.
Time and motion study is one example of a job analysis
that utilizes the observation method. This method is
useful in determining key job behaviors.
Disadvantage: there are complex jobs that cannot be
analyzed through simple observation alone like research
2. Interview - this technique requires face-to-face
interaction between the job analyst and the employee. It
provides an opportunity for the job analyst to personally
clarify certain information with the employee.
disadvantage : conducting interview is tedious and the job
analyst needs to interview several employees regarding the
same position.

3. Questionnaire - this is the least expensive technique for

data gathering. The analyst prepares a questionnaire about
relevant information regarding a job such as duties and
responsibilities, working conditions, equipment used, and
other requirements.
disadvantage: the accuracy of the responses is dependent
on the ability of the employees to understand the questions
 4. Logbook - a good source of data on employee
duties, the frequency of performance of these
duties, and the span of time provided for each one.
disadvantage: may not be effective for very
detailed or complex jobs and prone to inaccuracies.
 Data gathered from the job analysis is used to formulate the
job description. The job description is a written summary of
the duties, responsibilities, reporting relationships, and the
job specifications for each job or position in the company .
There is no standard format in writing a job description, but
the following are its essential parts:

1. Job title or position - this describes the exact name of

the job like Human Resource Manager or Human Resource
Assistant, Production Manager, etc.
2. Reporting relationships - this includes the job title for
the position's immediate supervisor. The reporting
relationship also includes the subordinates under the
employee's supervision.
3.Job classification - in large companies, job titles have
different job classes or levels.
4. General description of the job - this portion provides a
description of the job and an overview of its duties and
responsibilities.
5. Specific duties and responsibilities - this describes the
functions of the job in detail. Usually, the specific functions
start with a verb to show an element of action, for example:
"assists the vice president for human resources in the
implementation of policies and procedures.
6. Job Specification - it provides the minimum qualifications
for a particular job such as educational background,
experience, skills, and personal qualities. These qualifications
are required of the employee or applicant so that he or she
effectively performs the responsibilities required of the job.
 RECRUITMENT
-the process of attracting qualified applicants to occupy
vacant positions in the company.

To ensure the success of recruitment, management

must know the goals of the organization and the
reasons for hiring people.

Applicants are required to fill out the company’s

application form and submit to a selection process that
requires tests, interviews, and a background check.
 Sources of Applicants
There are two types of applicants to job positions in the
company:
• Internal applicants are company employees who are
considered for promotion to higher positions.
• External applicants are individuals who are recruited
by the company or directly apply to join the company.
A company can choose from several options when
recruiting external applicants.
traditional - advertisement and notices in print media
such as newspapers and magazines.
Referrals - own employees recommend suitable
applicants.
walk-in - applicants who submit their application
directly to the company.
Manpower agency - Companies that need
temporary workers.
project-based positions - The company
engages their services for a certain project. After
the project's completion, their job contract ends.
A non-traditional yet increasingly popular
method of recruitment nowadays is through the
internet, Applicants browse websites or job
 Equal Employment
There are certain issues that
companies should consider during the
recruitment stage. Foremost among
them is equal employment
opportunity, which ensures that an
applicant is not discriminated against
because of his or her age, color, rage,
religion, civil status, or gender.
 SELECTION
The selection process starts when applicants who qualify
after preliminary screening are scheduled for the
preliminary interview and psychological testing
conducted by the human resource department
(HRD).
The usual types of psychological tests given to the
applicants are the following:

1. Mental Ability Test or Intelligence Quotient (IQ)

Test - a test of general knowledge that consists of
questions on linguistic and numerical abilities and
2. Aptitude Test - measures specific abilities and the
applicant's inclination to succeed in a particular field
like engineering, encoding, and sales.
3. Personality Test - This is a measure of aspects of
behavior such as cooperation, initiative,
dependability, responsibility, and sociability.

Applicants who pass the initial testing are then

interviewed by the department with the vacancy. HR
conducts background checks to verify applicant
information. The final selection is made by the
requisitioning department, and the chosen candidate
is offered the job.
 PLACEMENT
Placement is the final stage of the hiring process. Once a
candidate accepts the job offer, they must submit pre-
employment requirements (e.g., transcripts, clearances)
and undergo a medical examination. After these steps are
completed, the candidate is officially hired and signs the
employment contract..

The status of employment may be probationary,

contractual, or project-based. Contractual employers and
project-based employees are given a contract to work
for the company for a limited period. A probationary
 TRAINING AND
DEVELOPMENT
Training and development refer to two distinct processes in employee
development. The company helps the employees improve their skills
through training. It is an organized activity that increases and enhances
employees’ knowledge and skills on their job to improve their current
performance. Development is the enhancement of the competencies of
employees by giving them opportunities for greater responsibilities as
well as challenging tasks that will help them achieve their total growth.
New Employee Orientation Program

The initial training of newly-hired employees includes an

orientation. The new employee orientation program aims to
provide new employees with relevant information about the
company such as the company’s history, vision and mission,
culture, products and services provided, work hours, dress code,
and company policies. The program also introduces new
employees to their immediate superior and co-employees within
the department. Lastly, the members of top management are
introduced. Some companies with big manufacturing plants
permit new employees to do an ocular visit to the facility.
 The Training Process Ñ

- an important investment a company can make with their employees. The training
process ensures that the implementation of training programs results in benefits for
employees. The training process includes pre-training assessment, designing the training
program, implementation, and evaluation.
Pre-training Assessment
It is important to conduct an initial assessment of the needs of employees before training
is conducted. It allows the trainer to identify which aspects of the trainees need
improvement. After the assessment, the objectives of the training program are
formulated. The objectives should be SMART (Specific, Measurable, Achievable, Realistic,
and Time-bound). Training objectives are translated into the expected changes and
improvements that must be displayed by the trainees at the end of the training program.
Designing the Training Program
After establishing training objectives, the next step is
designing the training program. This involves determining
training methods, timeframe, dates, venues, evaluation
methods, resource personnel, and costs.
Various training techniques can be employed depending on
the objectives and learner needs.
These are the common techniques used by companies in
training programs:

1. Lecture - the oldest and most popular method of teaching

where the trainer or speaker gives a speech explaining a topic
or concept.
2. Demonstration method – utilized to show how something
3. Computer-based training - utilizes computer
programs to teach knowledge and skills, and does not
require face-to-face interaction with a trainer. The
internet has provided a wide array of training programs
for employees and many companies now opt to use
computer-based training instead of lecture-based
training.
4. Programmed instruction - a form of computer-
based training that uses an instructional program that
employs a variety of content such as text, graphics and
multimedia. The program is stored in the company
system, and participants can access the program
through a network. The participants go through the
content of the material and answer tests. Once they
 5. Virtual reality method - allows the participants to
experience a 3-D environment. It enables the participants to
experience simulations showing possible job situations.
6. Case study method - presents a particular situation and
trainees discuss and decide on a solution to an organizational
problem highlighted in the case.
7. Role-playing method - presents actual work situations for
analysis and participants are asked to act out specific roles.
8. Teambuilding – a training program that utilizes activities
that encourages to work in groups. These activities provide
opportunities for the employees to build rapport with their
colleagues, enhance their social skills, be sensitive to the
feelings of others, and improve over-all teamwork in the
company. It helps the organization achieve greater efficiency
in the workplace.
Training Implementation
At this stage, the trainer delivers the training program utilizing
the selected techniques. The trainer or training officer is an
important component to the success of the training
implementation. An effective trainer is one who possesses the
following characteristics: has enthusiasm and passion
regarding the topic, has a good working knowledge of the
topic, is able to motivate and encourage participation from
trainees, has a good sense of humor, and possesses good
posture and a dynamic appearance.
Other factors that ensure the success of the program are
adequate preparation of materials, employment of good
instruction and presentation methods, appropriate use of
audio-visual materials and technology, an appropriate venue
and controlled environment, and enthusiastic participation by
trainees.
Training Evaluation
To measure the effectiveness and success of training and
development programs, the following criteria for evaluation can
be used:

1. Reactions - actual reactions of the trainees to different

aspects of the program from content, to venue, food,
accommodation, and visual aids, among others.
2. Results - the end result and benefits of the program as seen
in job performance, productivity, and efficiency.
3. Recall- this includes the participants ' recall of what has
been learned and the actual application of what is recalled. A
program that is well-received, well-delivered, and effectively
implemented will be easily recalled by participants.
4. Retrieval - refers to how easily information is recalled from memory
and immediately applied by the participants.

The four R’s are essential for any change or modification of behavior
on the part of the employees. Thus, a training or development program
is considered a success after it passes these criteria. Evaluation is a
continuous process as the company seeks to continually implement
better training and development programs for their employees
 COMPENSATION AND
WAGES
Compensation is any tangible equivalent or reward for services
rendered or for the performance of a task performed in the
organization. Direct compensation is monetary in nature and
given in the form of salaries, wages, commissions, bonuses, and
allowances. Indirect compensation is given in the form of
services and non-monetary benefits such as hospitalization,
summer outings, vacation leaves, and sports fests.
Compensation varies from one position to another. A highly
specialized position is given a higher salary compared to those
that require lesser skills. If there is a demand for highly skilled
there are many companies that would like to get their services. On
the other hand, companies looking to hire employees with average
skill often offer compensation that is a little over the minimum
 Compensation
Guidelines
Compensation decisions are influenced by the nature and environment of a particular industry. Industries like pharmaceuticals,
banking, and telecommunications offer competitive packages. The minimum wage law is set to protect manual laborers from being
taken advantage of by companies.

Compensation is usually time-based. The term salary refers to compensation given to professionals on a monthly or semi-monthly
basis. The term wage refers to compensation given on a weekly or daily basis and usually applies to manual workers such as
carpenters, plumbers, electricians, and the like. Base pay or basic pay is the fixed part of pay. It is the minimum payment for the
tasks rendered by the employee based on his or her position or job title.

Companies keep individual salary information confidential to prevent issues like demotivation, jealousy, and conflict among
employees.
 Common Modes of Payment
The following are the common modes of payment given to employees:
1. Payment for time worked
Majority of employees are paid on the basis of time worked. Monthly-paid
employees are those who are paid each day of a particular month including
unworked rest days, special days, and regular holidays. Daily-paid
employees are paid on the basis of the days they actually worked and
unworked regular holidays. Payments for time worked have adjustments
based on any of the following:
a. Across-the-board increase-pay adjustments provided to all
employees with the same rate regardless of rank.
b. Merit increase - salary or wage increase given to employees on the
basis of performance.
c. Cost-of-living allowance (COLA) - a monetary allowance given to
employees to help them cope with the prevailing conditions of the economy
related to the standard of living and increasing prices of commodities due to
inflation.
2. Flat rates
Firms with flat rates do not consider skills and seniority as
factors for giving compensation. Companies pay their
employees the same amount regardless of rank.
3. Compensation through incentives
These are payments based on output. The most popular forms
of incentive pay are the following:
a. Merit pay - this is given in recognition of outstanding
performance and based on the results of a performance
evaluation. The merit pay is a one-time payment given as an
incentive for outstanding performance in a certain task or
project, or for an outstanding evaluation of job performance
within a certain period of time.
b. Piece rate pay - this is given to employees who are paid a
fixed rate per product produced. For example, seamstresses
working in a garments factory are given wages based on the
c. . Commission- this is compensation based on an achieved
sales quota. Companies usually pay their sales associates
commissions based on their sales performance. For example,
car companies usually pay their sales representatives a
commission for every unit they sell.
d. Group incentives - this is given to a team that has
achieved a particular sales or production target. The group is
given a commission upon reaching a prescribed target.

4. Payment based on skills

This is based on the number of skills the employees
gain while working for the company. In order to avail of
this particular compensation, an employee must acquire
a certain skill prescribed by the company. His or her pay
increase is then based on the new skill acquired.
5. Payment based on knowledge or credentials
Continuous learning is one of the motivations for an employee
to attend seminars and conferences related to his or her field
of expertise. Employees are often compensated for attending
seminars and conferences to gain new knowledge and skills
that improve their performance. This is especially true for
professions requiring licensure exams and additional
credentials, like lawyers and doctors. Academic institutions
also reward faculty for continuing education, publications, and
participation in conferences.

6. Executive payment
This is payment given to chief executive officers, the
chairman of the board, and other members of top
management. Executive payment is high since the
 7. Special Payment
This is additional compensation given in special cases.
It includes the following:
a. Overtime pay – This covers work done beyond the normal
schedule of eight hours a day, and is given on top of the basic
salary. The rates depend on the day and number of hours
worked. The minimum overtime pay rates also vary according
to the day the overtime work is performed. They are
determined as follows:
• For work in excess of eight hours performed on ordinary
working days, overtime pay is 25% of the hourly rate.
• For work in excess of eight hours performed on a scheduled
rest day, a special day, and a regular holiday, overtime pay is
at 30% of the hourly rate.
b. Holiday pay - This is payment for an unworked regular
holiday based on the employee's daily rate. An employee is
paid 100% of his or her daily rate (minimum wage and COLA)
even if he or she does not report for work, provided that he or
she was present or on leave with pay on the work day
preceding the holiday. If an employee works on a regular
holiday, he or she is paid 200% of his daily rate.

The following are the 12 regular

holidays under
Executive Order No. 292,
as amended by Republic
Act 9849:
c. Premium pay - This is payment given to employees who work
during rest days and special holidays. The three special holidays
under Executive Order 292 are the following:

Premium pay is also given on special holidays declared by the

President of the Philippines. Additional pay of at least 30% of the
basic daily pay is given for work performed during these days. If
a special day is also an employee's rest day and he or she
performs work on that day, he is entitled to an additional pay of
50% of his basic daily pay.
d. Night differential payment - This is an additional 10% of
basic rate for each hour of work performed between 10:00pm to
e. Service charge - This refers to fees charged to cover
services related to the production of a product or provision of
service. Establishments such as restaurants, hotels, and bars
often charge a service charge above their regular fees.
Employees who collect service charges are entitled to 85% of
the total service charges collected. The remaining 15% is
retained by management for distribution to managerial
employees and for losses or breakages. Some establishments
do not impose a service charge but instead rely on tips given by
customers. If this is the case, the total amount of collected tips
shall be distributed in the same manner as the service charge.
f. Severance or separation pay - It is the duty of the firm to
provide separation pay to employees who are terminated with
an authorized cause. An authorized cause may be one of the
following:
1) Retrenchment to prevent further losses
 The severance pay is equivalent to half a
month’s pay for every year of service. However,
the employee is entitled to a full month’s salary
for every year of service if the employee is
separated because of any of the following
authorized causes:
(1) Imposition of labor-saving devices
(2) Redundancy or duplication where the
employee belongs of functions or abolition of a
certain department
(3) Transfer to another department is not
possible
 g. Retirement pay – An employee who is 60 or 65 years old shall
receive one-half month salary for every year of service provided
that he or she has rendered five years of continuous service to the
company. The pay will include the following:
(1) Basic salary worth fifteen days based on the retiring employee’s
latest rate
(2) Five days service incentive leave
(3) One-twelfth of his 13th month pay or two and a half days

Overall, a retiring employee should at least get 22.5 days

equivalent pay for every year of service. COLA is not included in the
computation of retirement pay.

h. Thirteenth month pay – All employees are entitled to thirteenth

month pay provided that they have worked for at least one month in
a calendar year. This is given not later than December 24 of that
particular year,
 Employee Benefits
Employee Benefits are divided into two main groups: government-
mandated and voluntary benefits.
Government-mandated – are those controlled by law
1. Social Security System (SSS)/Government Service Insurance
System (GSIS) benefits – All income earners and workers, particularly
employees working in private firms, are required to give monthly
contributions to the Social Security System of SSS. SSS membership and
contributions entitle the worker to several benefits such as sickness
benefits, maternity benefits, death and funeral benefits, disability benefits,
and housing and salary loans. Government employees avail of benefits
from the Government Service Insurance System or GSIS.
Both the employee and the employer share the contribution cost to the
SSS. Employees pay their personal contributions through salary deductions
while firms pay their share for each of their employees. The employer’s
share is higher than that of their employees. The employer is also
 2. Employees’ compensation (EC) program – This is given to private
and government employees in case of work-related injury, disability,
sickness, or death.
3. Pag-ibig (Home Development Mutual Fund) benefits- this is a
government-established housing finance program. A Pag-ibig member can
avail of the following benefits: housing loan, salary loan, and calamity loan.
The member can also avail of a provident fund upon retirement.
4. Philhealth (Philippine Health Insurance Corporation) benefits –
this is a government-established health insurance program that gives
members and their dependents financial assistance for hospitalization.
Philhealth benefits cover both inpatient and outpatient care.
5. Service incentive leave - All employees, except government
employees, managerial employees, and house helpers, are entitled to five
days service incentive leave with pay provided they have rendered at least
one year of service. This five-day leave can be used for health and vacation
purposes. Any unused leave will be converted to cash at the end of the
year at the present salary rate of the employee.
 6. Maternity leave – This is given to all female SSS
members whether married or unmarried. The maternity
leave benefit for normal delivery or miscarriage is 60
days and 78 days for caesarean delivery.
7. Paternity leave – This is granted to all married male
employees working in private firms, for the first four
deliveries of the male employee’s lawful wife. Paternity
leave can last up to seven days after the wife’s delivery.
8. Special leave for women – This is granted to
female employees with gynecological disorders that
involve surgical procedures regardless of age or civil
status. Those who will avail of this benefit are entitled to
two months leave with pay.
Voluntary benefits refer to benefits that are freely given by
the company to its employees. These benefits, however, are
dependent on the company's ability to provide them and are
subject to certain conditions and policies. The following are
examples of voluntary benefits:

1. Vacation leaves - The number of vacation days given to

employees varies from one company to another. Companies
may grant a vacation leave consisting of five (5), ten (10), or
fifteen (15) days. Vacation leaves are usually not convertible to
cash and should be used up before the end of the calendar
year. The usual policy is that unused vacation leaves are
forfeited and not carried over the following year.
2. Sick leaves - Companies provide more than the alloted
number of days for the service incentive leave as sick leaves.
Sick leaves are convertible to cash at the end of the year.
 3. Emergency leaves – Some companies provide emergency
leaves of three days or more for reasons not applicable to sick
and vacation leaves. Some examples include bringing an
immediate family member to a hospital, floods due to typhoons,
and other emergencies
4. Summer outings – Companies may organize exclusive
summer outings for their employees and bring them to resorts or
beaches. The company may also spend for food,
accommodation, and transportation expenses.
5. Sports fest - Companies organize sports fests where their
employees engage in sports like bowling, basketball, and
volleyball. These events are usually scheduled after office hours.
6. Rice subsidy – Regular employees are provided one sack of
rice per month.
7. Meal subsidy – Employees are given meal stubs with
8. Shuttle service - Employees who live in locations that
are far from the office or plant are provided transportation
services where shuttle buses pick them up at designated
points and bring them to the company premises.
9. Hospitalization - Apart from health benefits provided by
the SSS, Philhealth, and the employee compensation
program, there are companies that extend hospitalization
benefits to employees and their dependents. Employees are
given health cards and a list of accredited hospitals whose
services they can avail. The company then pays for the
hospitalization and other related costs.
10. Group life insurance program - Employees are
enrolled in a group life insurance program with benefits
provided to beneficiaries in case of death.
11. Bonuses - Aside from the 13th month pay, some
companies also give 14th month up to 17th month pay to
 12. Profit sharing – A company can “share its bounty” by dividing
net income among all employees regardless of rank.
13. Stock options – Companies can give shares of stocks to
employees who have rendered more than ten (10) years of service.
14. Christmas parties and packages – Christmas benefits are
extended to employees give form of Christmas parties that include
exchange gifts, raffles, and gift basket giveaways.
15. Cash bonuses – Companies provide cash bonuses to
employees at the end of the year.
16. Emergency loan - Some companies grant interest-free
emergency loans to employees for emergency purposes. These
loans are payable through salary deduction.
17. Free uniform and laundry allowance – Employees are
provided laundry allowances upon regularization or after one year
of service. Uniforms and
18. Executive perquisites – These are additional benefits given
to top management in the form of free limousine service, free hotel
 REWARDS SYSTEMS
Companies also provide additional payments and benefits on top of the
employees’ basic salaries. These form part of the company’s rewards systems
and are given to motivate employees as they perform their tasks.
Contingent Pay
This is a pay scheme which is given on
top of the basic pay rate and is based on
the employee’s performance,
competency, contribution, and skills.
Contingent pay can be applied to
individuals or groups.
Individual contingent pay can be implemented along five schemes:
 2. Pay for competency – This is based on the
knowledge, skills, and abilities that employees have that
they apply on the job. This encourages enhancement of
competencies among employees but may be difficult to
assess since it ignores output levels. An excellent
competency framework is required in order to implement
this scheme.
3. Pay for contribution – It focuses on the combination
of employee competencies and output levels. This
scheme provides employees the opportunity to
simultaneously develop their competencies and increase
their output levels. However, this may be difficult to
manage because managers will have to assess both the
competencies and performance of employees at the same
4. Pay for skills – This payment depends on the skills acquired by the
employee. This requires a worker to undergo training and gain
certification for certain skills or competencies. The advantage of this
scheme is that it encourages employees to learn more skills and avail
of training and development programs. However, this scheme may be
expensive because a company needs to allocate resources for training.
Also, there is a possibility that that an employee may decide to
undergo training to acquire skills are unrelated to his or her position.

5. Pay for service – This is usually paid yearly on the basis of an

employee’s continued service. This scheme treats all employees
equally regardless of performance, skills sequined, or competence
level. However, implementing rewards based on length of service fails
to reward those who contribute more to the achievement of company
objectives despite being with the company for only a short period.
 Group contingency pay may be implemented
through two schemes:

1. Team-based pay – This is given to groups of

employees who have related jobs and are assigned to
work on a certain project. The reward is based on the
achievement of a certain quota or service delivery
standard. Team-based pay is usually given at a rate
proportionate to an employee’s basic pay: Other
companies, however, distribute the pay equally among
team members. This scheme is effective for highly
cohesive groups. However, this may also spark conflict
within the team as employees who consider themselves
to be contributing more to the achievement of the team
 2. Organization-wide pay – This is given to employees on the
basis of the achievement of organizational goals. There are two
types of organization-wide payments:
a. Gainsharing – This is based on a bonus plan where
employees are encouraged to fully contribute to the company’s
performance. Gainsharing primarily emphasizes increased
productivity and improved performance of employees. The
achievements of the company are compared to a set baseline
and based on this, the gains of the company are calculated and
become the bases for bonuses given to employees. An example
of gainsharing is when a company gives a bonus to its employees
when its sales revenues surpass the sales targets.
b. Profit sharing – This refers to a scheme where employees
share in the profits of the company either through cash
payments or shares of stocks. The value of the incentive as
 PERFORMANCE
APPRAISAL
Performance appraisal refers to the process where employee
performance is documented and evaluated. This is also known as
performance review or performance evaluation. An appraisal
determines whether employee performance is effective and
conforms to company standards and expectations. This is done
periodically by the company and management decides on how
frequently it is conducted and the means by which employees are
appraised.

Evaluation is an important aspect of a company’s performance

management system as it provides concrete information based
on which the overall performance of the company can be
assessed. Formal evaluation is highly preferred and
 The following are the purposes of performance
appraisal:

1. Needs assessment – Performance evaluation

provides relevant information about the specific training
needs of employees.
2. Employee movements - It helps management
decide who will be promoted by providing proof of
meritorious performance.
3. Basis for merit increase - Performance appraisal
gives strong proof for merit increases.
4. Legal concerns- If there are questions regarding
certain decisions like termination, the appraisal
5. Development – A series of performance appraisals
tracks the growth of employees. The appraisals serve
as evidence for identifying career paths and
determining personnel development.
6. Channel of communication – Appraisal provides
a good venue for discussion regarding performance
and other issues between an employee and his or her
immediate supervisor. It becomes an avenue for
ironing out differences and articulating certain career
concerns or questions on performance ratings.
7. Source of motivation- Performance evaluation is
one of the best ways to keep employees motivated. It
is one way to boost employee morale and encourage
 Performance Appraisal
Methods
Performance appraisal is done through objective or
judgmental methods. Objective methods include
measures of actual output and performance tests.
Measures of actual output include volume of
sales or number of orders processed. Another
objective appraisal method is the performance
test. This test evaluates an employee using a set
of standardized conditions. One example of
performance a test is when call center workers are
made to answer a set of prerecorded calls. They are
Judgmental methods include ranking and rating techniques.
The ranking technique is a method where employees are
compared to other employees. Drawbacks to this technique
include a tendency to be inaccurate when applied to large
groups. It is also sought by people who come from different
groups as the “weaker” member of one group may be a
“strong” member in another. Ranking also does not provide
sufficient information for feedback as the evaluator focuses on
the general performance of employees and does not identify
and weaknesses. The rating technique is an appraisal
method that compares employees to a fixed standard. A rating
scale is used to measure the characteristics of an employer,
as well as his or her job performance. An example of a rating
scale is the Behaviorally Anchored Rating Sole (BARS). This
rating scale identifies aspects of employee behavior that will
 To eliminate bias in employee evaluations,
companies provide managers with extensive
training on performance appraisals. This training
emphasizes the importance of consistent
evaluation methods and the impact of appraisals
on employee morale, promotions, and career
development. Managers learn to set clear goals,
select effective evaluation methods, document
findings, conduct feedback sessions, and address
employee concerns. Workshops led by HR
consultants can facilitate this training.
 EMPLOYEE
MOVEMENTS
Employee movements are inevitable and are often the result of
evaluation or structural changes within an organization. An organization
can move its employees either vertically or horizontally. Vertical
movement entails the movement of an employee from a lower position
to a higher one. Horizontal movement involves the transfer of an
employee to another department or position with similar responsibilities
or status.

Promotion is a movement to a higher level or position. Companies have

different criteria on promotion. The usual criterion is a combination of
tenure and meritorious performance. The usual criterion is a combination
of tenure and meritorious performance. Tenure refers to the number of
years in service of an employee while meritorious performance refers
to an excellent or outstanding performance of an employee. Some
Demotion is a movement to a lower level or position. A common
reason for an employee’s demotion is inefficiency or poor
performance.
Transfer is a movement to another position but with the same
level or scope of responsibility. It can also mean a transfer to
another branch or location but the employee still occupies the
same tasks. In some cases, an employee may have another
position but the level is still the same.
The last type of movement is separation or an employee’s
departure from the organization.
It may take the following forms:
1. Resignation - This is an employee’s voluntary decision to
leave the organization. The usual reasons for employee
resignation is to look for better opportunities in other companies
2. Separation with authorized cause – commonly known as layoff, this is the
company’s decision to terminate employees due to business reasons. One of the
more common reasons is redundancy, wherein the introduction of a new
technology will duplicate some of the existing functions of certain jobs. The
current job holders of be given an appropriate severance package technology will
when they leave the organization. The severance package consists of a
considerable monetary package to such functions will enable employees to
maintain their standard of living during the period that they are unemployed
3. Separation with just cause – This occurs when an employee is terminated
due to theft, fraud, and other serious offenses. In this case the employee does
not receive any severance pay from the company. Apart from being terminated
from the company, an employee who was found to have committed grave
offenses may also be subjected to legal sanctions. An employee who receives an
unfavorable evaluation at the end of his or her probationary period can also be
terminated.
4. Retirement – This refers to the end of a worker’s employment with the
company due to old age, illness, or infirmity. There is no prescribed age for
retirement, although many companies set the normal retirement age for
employees at 60 years old. Some companies, however, set their retirement age
at 65. The retiring employee is given a retirement package as mandated by law
along with other voluntary benefits from the company.
 EMPLOYEE
RELATIONS
Effective employee relations management is an essential
component that contributes to the success of a company. The
following elements are considered in establishing and
maintaining good employee relations.

1. Drive for commitment - When a company fosters good

relationship between management and employees, the latter
is more likely to become loyal and committed to the
organization. It is very important to always win employees
over and gain their loyalty to the organization.
2. Harmonization of terms and conditions of
employment - Management should ensure that employees
are provided good work conditions and benefits as stated in
their employment contracts. In doing so, the general
 3. Emphasis on mutuality – Management must
be inclusive and employees must feel that
managers are also a part of the work team.
4. Policies and practices for communication –
Clear and honest communication between
employees and management is a vital component
of labor relations that will ensure continuous and
harmonious relationship among members of the
company.
The diagram below shows the ideal relationship between the two
parties which centers on communication

The diagram shows the

elements of maintaining
good relationships between
management and
employees. Harmony, unity,
joint effort, fairness, and
rapport contribute to
maintaining relations
characterized by mutual
respect, cooperation, and
shared responsibilities and
benefits. Good
communication is key in
resolving conflict between
employees and
management. The company
must ensure that there is
constant dialogue between
employees and
 Labor Unions and Collective
Bargaining
Employees have the option to form labor unions, also known as labor
organizations, for the purpose of collective bargaining or mutual aid, interest,
cooperation and protection. Labor unions in the Philippines are classified as either
public sector unions or private sector unions. Public sector unions or
government employees unions are organized by employees of government
agencies. Private sector unions are those whose members are employed in
commercial, industrial and agricultural enterprises, including non-profit or
charitable organizations, and medical, religious, and educational institutions.
Workers associations, on the other hand, are employee organizations
established for mutual aid, protection, and other legitimate purposes but not for
the purpose of collective bargaining.

Collective bargaining refers to the process by which the labor union negotiates a
labor contract with management. This labor contract or collective bargaining
 Forming a union or workers association should be a voluntary
act on the part of the employees. The employees themselves
may take the initiative and organize themselves into a union, or
they may be assisted by outside organizations. Employees with
managerial positions are not allowed to become members of a
labor union since they are assumed to represent the interests of
management. Once a union is established, it must be registered
with the Department of Labor and Employment. Once
negotiations between the union and management produce a
collective bargaining agreement, this must be registered with
the DOLE.

Labor unions often present a problem for management since

these limit the freedom of management in several areas, and
the conflicting interests between unions and management often
 Employee Code or
Conduct
The code of conduct defines the acceptable behavior of employees within
the workplace. The code of conduct is considered a legal agreement
between the company and the employee that he or she will observe
ethical workplace conduct at all times. Some of the essential contents of
Codes of Conduct are as follows:

1. Prohibition of illegal activities such as gambling, smoking, or drinking

2. Prohibition of discrimination against gender, race, religion, and civil
status
3. Sexual harassment
4. Confidentiality and disclosure of confidential information
5. Dress code and appearance
6. Punctuality (tardiness and absences)
7. Procedures for sick leaves and emergency leaves
8. Sanctions for violations of the code of conduct
 General Steps in the
Disciplinary Process through
HRD
Disciplinary actions are taken to address misconduct in the workplace or any
type of violations against company rules. The disciplinary process is often
included in the employees’ contracts or is given as part of the job orientation.
In order to properly assess the nature of the alleged violation or misconduct,
the disciplinary process follows these steps:

1. Identify the employee who committed the violation.

2. Identify the violation/s committed.
3. Consult the department head or the immediate supervisor and make an
initial assessment of the violation.
4. Set a meeting with the department head or immediate supervisor and the
employee.
5. Ensure that the employee is provided with due process.
 Due Process
Any disciplinary issue involving employee violations of the code of
conduct must go through due process. This ensures that the disciplinary
process is conducted in a fair and impartial manner with due regard for
the rights of the employee. Employees are entitled to safeguards and
protections since being subjected to discipline hearings will endanger
their standing in the company and in the worse case may result in the
termination of their employment. Due process also upholds the right of
management to address any disciplinary issue involving its employees
and employ whatever corrective measure they see fit.

Due process ensures a fair and impartial hearing on employee’s

violations or a management decision which threatens an employee’s
tenure or status of employment. It also ensures a fair and impartial
investigation of the case. It allows the management to impose
Tenkyoo berii
much