Nature of Staffing

Staffing or Human Resources Management involves acquiring and developing human resources that will carry out and perform
the various activities of the organization. Staffing includes recruiting, selecting, training 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.

The Human Resource Department

Human Resource Department (HRD) is tasked with implementing human resource management in the company. The activities
of HRD include the primary functions and activities, recruitment and hiring, training and development, performance appraisal and
management, compensation and employee relation. HRD is also responsible for ensuring that the company complies with the
workplace safety standard and labor and employment laws. This department is staffed by human resource professionals and headed
by a Human Resource Director. Soma companies appoint a Vice President for Human Resources to oversee HR management.

The Staffing Process

Recruitment/Selection/Placemen Performance Appraisal

Human Resource t/New employee Reward System
Planning-Job Analysis orientation/Training and Employee movements
Development Employee relations

Human Resource Planning

Human resource planning (HRP) identifies people with the right skills and assigns them corresponding task in the company.
HRP is critical component in determining the organization’s manpower complement or the number of people that are currently
employed in the organization. The process involve in HRP are the following:
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. If unemployed is high, it is very easy to get applicants for positions that do not
require several years of experience.
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.
The external supply of employees is based on the pool of job applicants. In forecasting internal supply, actuarial losses are
identified. These refer to life events like death, disability and retirement.
3. Gap analysis-Gap analysis is done to determine if there is a gap difference between demand and supply in human
resources. If there is a shortage of workers, the firm may opt to allow or encourage overtime work or hire temporary or
contractual workers.
If there is a surplus of employees, there may be a need to trim down their number to achieve the desired manpower
complement. One option is to offer early retirement program for those who are already near the retirement age of 60 years
old. One cause of employee surplus is redundancy or when certain positions are no longer needed by the company. In this
case, employees with redundant positions may be laid off. Another option to address a surplus is by implementing a hiring
freeze where recruitment and hiring of new personnel are halted.

Job Analysis
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-these refer to essential tasks required for a position.
2. Required behavior on the job-this refers to workplace behavior or ethics required in the performance of the job concerned.
3. Required job standards-refers to the performance levels or standard required on the job. These are used as bases when
evaluating the performance of employees.
4. Knowledge, tools, and equipment used-this takes into account knowledge on software application, 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 include the educational background, training, experience, personality
type, attitude, values, physical characteristics needed for the position.

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 Job analysis goes through a process outlined in several steps designed to gather relevant, timely, and complete information
to prepare the job specifications needed by the company.

Formulation Application of Actual Preparation of Job

Selection of
of Jobs
Job Analysis Conduct of Description and Job
objectives Techniques Job Analysis Specification

Techniques that can be used in conducting job analysis

1. Observation- this technique requires the analysts to actually observe the job as they are being performed. This method is useful in
determining key job behaviors, especially for highly physical jobs that employ repetitive tasks such as working in an assembly line,
service crew, or warehouse.
2. Interview- this technique requires face-to-face interaction between the job analyst and the employee. Since it creates a venue for
more pleasant interaction, it provides an opportunity for the job analyst to personally clarify certain information with the employee.
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.
4. Logbook- this is a good source of data on employee duties, the frequency of performance of duties, and the span of time provided
for each one. Recording tasks and activities in logbook is a good way to keep track of the conduct of a certain job and it’s process
over a certain period.
Data gathered from the job analysis is used to formulate 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 - Describe the exact name of the job like Human Resource Manager or Human Resource Assistant,
Production Manager, etc.
2. REPORTING RELATIONSHIPS- Includes the job title for the position’s immediate supervisor. For example, in the case of a human
resource manager, the immediate supervisor may be the vice president for human resource or a human resource director.
3. JOB CLASSIFICATIONS- In large company’s job titles have different job classes or levels. Classifications provides the rank of the job
in comparison to the overall importance of other jobs.
4. GENERAL DESCRIPTION OF THE JOB- Portion that provides a description of the job and an overview of its duties and
responsibilities.
5. SPECIFIC DUTIES AND RESPONSIBILITIES- This describes the function of the job is detail. Usually, the specific functions start with a
verb to show an element of action.
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/she effectively performs the
responsibilities required of the job.

RECRUITMENT
Recruitment is the process of attracting qualified applicants to occupy vacant positions in the company. This consists of
various activities that entice and influence qualified applicants to work with the company.

Sources of Applicant
Internal Applicants – are company employees who are considered for promotion to higher position. Promoting an
employee to a vacant position in the company incurs lesser cost than hiring a new employee since the internal applicants is already
familiar with the job he or she will be occupying. Through promotion, employees are also motivated to work harder.
Eternal applicants – are individuals who are recruited by the company or directly apply to join the company. A company can
choose several options when recruiting external applicants. The traditional means of recruitment include advertisement and notices
in print media such as newspapers and magazines.
Some companies recruit employees through referrals, where their own employees recommend suitable applicants. Companies may
also entertain Walk-in applicants who submit their application directly to the company. Both methods incur no expense on the part
of company.
A non-traditional yet increasingly popular method of recruitment nowadays is through the internet. Applicants browse
websites or job portals such as jobsab.com and jobstreet.com where they can search for employment opportunities and submit their
applications to companies.

Equal Employment
There are certain issues that companies should consider during recruitment stage. Foremost, among them is equal
employment opportunities which ensure that an applicant is not discriminated against because if his or her age, race, religion, civil

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status, or gender. Companies are now careful about imposing age recruitment for a certain position or having preferences for
graduates from certain colleges or universities.
SELECTION
The selection process starts when applicants who qualify after preliminary screening are scheduled for preliminary
interview and psychological testing conducted by the Human Resources Department (HDR). The usual type of a psychological tests
gives to the applicants are the following:
1. Mental Ability test or Intelligence Quotient (IQ) Test – this a test of general knowledge that consist of questions on linguistic and
numerical abilities and abstract reasoning.
2. Aptitude Test – this measure specific abilities and the applicant’s indications to succeed in a particular field like engineering,
encoding, and sales. Examples include clerical test, mechanical test, sales test and dexterity test.
3. Personality Test – this is a measure of inspect of behaviour such as cooperation, dependability, responsibility and sociability.

PLACEMENT
The last part of the hiring process is placement. When a candidate accepts the job offer, the next step is the submission of
pre-employment requirement. After the submission of the pre-employment requirement and the result of the medical exam, the
candidates are officially hired and signs the employment contract. The status of employment maybe probationary contractual or
project based. Contractual employees and project based employees are given a contract to work for the company for a limited
period. A probationary employee on the other hand is given a period of six months after which he or she is evaluated before
becoming a regular employee.

Training and Development

Training and development refer to two distinct process 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.

Training Process
Training is an important investment a company can make with their employees. The training process ensures that the
implementation of training program results in benefits for employee. 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. Pre-
training assessment allows the trainer to identify which aspects of the trainees need improvement. After the assessment,
the objectives of the training program are formulated. The objective should be SMART (Specific, Measurable, Achievable,
Realistic, and Time-bound).

Designing the Training Program

Once the objectives are formulated, it is time to design the training program. The training program identifies the
training methods to be used, the time frame for implementation, dates, and venues, evaluation methods, resource persons
or speakers, and training cost.

These are some of the most common techniques used by companies in their training programs.
1. Lecture is the oldest and most popular method of teaching where the trainer or speaker gives a speech explaining a topic or
concept.
2. Demonstration method is utilized to show how something works or how to perform a task. A demonstration is accompanied by
lecture to make it more effective.
3. Computer-based training utilizes computer programs to teach knowledge and skills, and does not require face-to-face interaction
with a trainer.

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4. Programmed instruction is 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.
5. Virtual reality method allows the participants to experience a 3-D (three-dimensional) environment. It enables the participants to
experience simulations showing possible 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 is a training program that utilizes activities that encourage employees to work in groups.

Training Implementation
At this stage, the trainer delivers the training program utilizing the selected techniques the trainer of 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 enthusiasm participation by trainees.

Training Evaluation
To measure the effectiveness and success of the training and development program, the following criteria for evaluation can
be used:
1. REACTIONS - include the actual reactions of the trainees to the different aspects of the program from content to venue, to
revenue, food accommodation, and visual aids among others.
2. RESULTS-These include the end result and benefits of the program as seen in the job performance, productivity, and efficiency.
3. RECALL –This include the participants ’recall of what has been learned and the actual application of what recalled.
4. RETRIEVAL-Refers to how easily information is recalled from the memory and immediately applied by the participants.

Compensation and Wages

Compensation is any tangible equivalent or reward for the 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 sportsfests

Compensation Guidelines
Compensation decisions are influenced by the nature and environment of performance industry for example the
pharmaceutical, banking, telecommunication and hotel industries offer attractive compensation packages. The government also
imposes regulations and restrictions on salaries of employees like the MINIMUM WAGE LAW as of March 20, 2015 the minimum
wage for the NATIONAL CAPITAL REGION (NCR) is P481 per day.

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 a month including unworked rest day. Daily paid employees are paid on the
basis of the days they actually worked and unworked regular holidays. Payments for time work have adjustments based on
any 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.
d. Seniority pay - this is given to employees based on the number of years of service in the company.
2. 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.

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 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 number of pieces of clothing they make.
c. Commission- this is compensation based on an achieved quota. Companies usually pay their sales associates
commission based on their sales performance.
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. Group effort is essential in attaining this incentive as all members of
the team are rewarded.
3. 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.
4. Payment based on knowledge or credentials- Continuous learning is one of the motivation for an employee to attend
seminars and conferences related to his or her field of expertise. Highly-skilled and specialized jobs such as lawyers and
doctors need to pass licensure examination and earn additional credentials to qualify for higher pay.
5. 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 success of the organization depends on the overall skills of the executive
officers.
6. Special Payment- This 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 work. The minimum overtime pay rates also vary
according to the day the overtime work is performed. They determined as follows:
a. For work excess of eight hours performed on ordinary working days, overtime pay is 25% of the hourly
rate.
b. For work in excess of eight hours performed on a scheduled rest day, a special day, and a regular holiday,
overtime pay is 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 even if he or she does not report for work. If an Employee works on a regular holiday,
he or she is paid 200% of his or her daily rate.

Holiday Date
New Year’s Day January 1
Maunday Thursday Movable date
Good Friday Movable date
Araw ng Kagitingan April 9
Labor Day May 1
Independence Day June 12
National Heroes’ Day Last Monday of August
Eid al-Fitr Movable date
Eid al-Adha Movable date
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
c. Premium pay- This is payment given to employees who work during rest day and special holidays. The three special
holidays are the following:

Holiday Date
Ninoy Aquino Day August 21
All Saints Day November 1
Last Day of the year December 31
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 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 6:00am. COLA is not included in the computation of night differential.
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 service collected. The remaining 15% is retained by

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 management for distribution to managerial employees and for losses or breakage. Some establishments do not
impose service charge but instead rely on tips given by customers.
f. Severance pay or separation pay- It is the duty of the firm to provide separation pay to employees who are
terminated with authorized cause. An authorized cause may be one of the following:
1) Retrenchment to prevent further losses
2) Closure of a firm
3) Illness that may affect his or her performance or is highly contagious.
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 caused:
1) Imposition of labor-saving devices
2) Redundancy or duplication of functions or abolition of a certain department where the employee belongs
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.
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.

Employee Benefits
Employee benefits ate divided into two main groups: government-mandated and voluntary benefits. Government-mandated
benefits are those required by law, while voluntary benefits are those that are voluntarily given by the company. The following are
government-mandated benefits:
1. Social Security System (SSS)/Government Service Insurance System(GSIS) benefits- All income earners and workers,
particularly employers working in private firms, are required to give monthly contributions to the Social Security System or
SSS. SSS membership and contributions entitle the worker to several benefits such as sickness benefits, maternity benefits,
deaths and funeral benefits, disability benefits, and housing and salary loan.
2. Employees’ compensation (EC) program- This is given to private and government employees in case of work-related injury,
disability, sickness
3. Pag-ibig (Home Development Mutual Fund) benefits- Employees also contribute to Pag-ibig, which is the government-
established housing finance program. A Pag-ibig member can avail of the following benefits: housing loan, salary loan, and
calamity loan.
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.
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
employee's lawful wife. It can last up to 7 days after the wife's delivery.
8. Special leave for women- This is granted to female employee with gynecological disorders that involve surgical procedures
regardless of age or civil status. Those who will avail this benefit are entitled to two months leave with pay.

Voluntary benefits refer to benefits that are freely given by the company to its employee. The following are examples of voluntary
benefits:
1. Vacation leaves 7. Meal subsidy 13. Stock options
2. Sick leaves 8. Shuttle service 14. Christmas and packages
3. Emergency leaves 9. Hospitalization 15. Cash bonuses
4. Summer outings 10. Group life insurance program 16. Emergency loan
5. Sportsfest 11. Bonuses 17. Free uniform and laundry allowance
6. Rice subsidy 12. Profit sharing 18. Executive perquisites
Rewards System

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 Companies also provide additional payments and benefits on top of the employee’s basic salaries.

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. It can be applied to individuals or groups. Individual contingent pay can be implemented along five schemes.
These are follows:
1. Pay for performance scheme- On top of the basic pay, an employee is given a bonus based on performance. This pay
scheme serves to motivate employees to perform well in their jobs.
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.
3. Pay for contribution-It focuses on the combination of competencies and output levels. This scheme provides employees the
opportunity to simultaneously develop their competencies and increase their output levels.
4. Pay for skills- This payment depends on the skills acquired by the employees.
5. Pay for service- This is usually paid yearly on the basis of the employee’s continued service.
Group contingent pay:
1. Team-based pay- This is given to a group of employees who have related jobs and are assigned to work in a certain project.
2. Organization-wide pay – This is given to employees on the basis of the achievement of organizational goals. Two types of
organization-wide pay:
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
gains of the company are calculated and become the bases for bonuses given to employees.
b. Profits Sharing- This refers to a scheme where employees share in the profits of the company either through cash
payment or shares of stocks. Usually, the management decides which portion of the profits will be shared with
employees.

Performance Appraisal
Performance appraisal refers to the process where employee is documented and evaluated. This is also known as
performance review or performance evaluation.
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 recommended
as opposed to the informal evaluation which is done by simple observation.
The following are the purposes of performance appraisal:
1. Needs assessment- Performance evaluation provides relevant information about 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 decision like termination.
5. Development- A series of performance appraisal tracks the growth of employees.
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.
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 them to make a good impression and give an outstanding performance in their job.

Performance Appraisal Methods

Performance appraisal is done through objective and judgemental methods. Objective methods include measures of actual
output and performance test. Measures of actual output include volume of sales or number of orders processed. Performance test
evaluates an employee using a set of standardized conditions. One example is when a call center workers are made to answer a pre-
recorded calls. They then graded based on speed, accuracy, and level of courtesy when taking the call.
Judgemental methods include ranking and rating techniques. Ranking techniques is a method where employees are
compared to other employees. Rating techniques is an appraisal method that compares an employee to a fixed standard. A rating
scale is used to measure the characteristics of an employee, as well as his or her job performance. An example of a rating scale is the
Behaviorally Anchored Rating Scale (BARS). This rating scale identifies aspects of employee behavior that will measure and assigns
rating scales to them.
360-degree Feedback

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 This is the performance appraisal technique which has become popular in recent years. In this technique, supervisors are
not the only evaluators and other people may also evaluate employees. This technique also requires the employee to conduct a
self-evaluation. The 360-degree feedback gives a comprehensive evaluation of all personal aspects of the employee.
To eliminate bias in conducting employee evaluation, companies provide its managers and supervisors extensive training on
performance appraisal. Evaluators are also required to practice consistent and effective ways of appraising employee performance.
Managers should always keep in mind that their appraisal will affect the morale of employees and their chances for merit increase,
promotion, career development, and training.

Employee Movements
Employee movements are inevitable and are often the result of evaluation or structural changes within the organization. An
organization can move its employees either vertically or horizontally. Vertical movement entails movement of an employee for a
lower position to a higher one. Horizontal movements involve 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. 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.
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.
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.
2. Separation with authorized cause- More commonly known as layoff, this is the company’s decision to terminate
employees due to business reason. 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 such functions
will be given appropriate severance package when they leave the organization. The severance package consists of a
considerate monetary package to 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 offences.
4. Retirement- This refers to the end of worker’s employment with the company due to old age, illness or infirmity.

Employee Relations
Effective employee relations management is 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.
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.
3. Emphasis on mutuality- Management must be inclusive and employees must feel that managers are also 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.

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 agreement contains agreement on compensation, benefits, duties of employees and
management, work hours, job security, promotion, layoffs, vacation and rest periods, and the grievance procedure should be
violations to the labor contract.

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 Forming a union or workers association should be a voluntary act on the part of the employees. Employees with managerial
positions are not allowed to become members of a labor union since they are assumed to represent the interest of management.
Once a labor 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.

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