SHS

Organization and Management

Quarter 2: Module 4
Organization and Management
Grade 11: Quarter 2: Module 4
First Edition, 2020

Copyright © 2020
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without
written permission from the copyright owners.

Development Team of the Module

Author: Brian O. Rilloraza, T II

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr., P II

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent

German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar, EPS in Charge of ABM

Michael Jason D. Morales, PDO II

Claire P. Toluyen, Librarian II
Organization and
Management
Quarter 2: Module 4

3
 Target

Compensation / wages and performance evaluation are related to each

because the employees’ excellent or poor performance also determines the
compensation given to them, after considering other internal and external
factors like the actual worth of the job, compensation strategy of the
organization, conditions of the labor market, cost of living, and areas wage
rates, among others.
This module will provide you with information and activities that will
help you examine the functions and importance of compensation, wages and
performance evaluation, appraisal, reward system, employee relations and
movement in business organizations.
After going through this module, you are expected to:

Learning Competency:

1. Examine the functions and importance of compensation, wages and

performance evaluation, appraisal, reward system, employee relations
and movement.
Subtask:
1. Define compensation, wages and performance evaluation, appraisal,
reward system, employee relations and movement appropriately.

2. Explain the functions and importance of compensation, wages and

performance evaluation, appraisal, reward system, employee relations
and movement correctly;

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 Jumpstart

For you to understand the lesson well, do the following activities.

Are you ready? Have fun and good luck!

Activity 1: Pretest
Direction: Read and understand the questions below and choose the letter of the
correct answer. Use a separate sheet of paper for your answer.

MULTIPLE CHOICE:

A. What type of compensation is being described to the following statements

below?

1. A type of compensation which includes recognition programs, being

assigned to do rewarding jobs, or enjoying management support, ideal work
environment, and convenient work hours.

a. Indirect compensation
b. Financial Compensation
c. Nonfinancial Compensation
d. Direct compensation

2. A type of compensation includes workers’ salaries, incentive pays, bonuses,

and commissions.

a. Indirect compensation
b. Financial Compensation
c. Nonfinancial Compensation
d. Direct compensation

3. A type of compensation includes benefits given by employee other than

financial remunerations; for example: travel, educational and health
benefits, and others.

a. Indirect compensation
b. Financial Compensation
c. Nonfinancial Compensation
d. Direct compensation

B. What type of employee is being described to the following statements below?

4. An employee who work with passion and feel a deep connection with their
company.

a. Engaged

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 b. Not Engaged
c. Actively disengaged
d. Actively engaged

5. An employee who is not only unhappy at work, but also act out unhappiness;
they undermine what their engaged coworkers accomplish.

a. Engaged
b. Not Engaged
c. Actively disengaged
d. Actively engaged

6. An employee who is essentially “checked out”; they put time, but not energy
or passion into his work.

a. Engaged
b. Not Engaged
c. Actively disengaged
d. Actively engaged

TRUE/FALSE:
________7. A labor union is a formal union of employees/ workers that deals with
employers, representing workers in their pursuit of justice and fairness and
in fight for their collective or common interest.
________8. Employees unionize due to financial needs, fair management practices and
social and leadership concerns.

________9. Grievance procedure is a formal procedure that authorizes the union to

represent its members in processing a complaint.

________10. Organizations offer competitive rewards systems to atract knowledgeable

and skilled people and to keep them motivated and satisfied once they are
employed in their firm.

Activity 2

Direction: Assume the position of being an administrator/leader or manager in a

specific organization then, react to the following situations below. Write your
answers in a separate sheet of paper.

1. Do you agree that social support and effective employee relations go together?
Explain your answer.

2. Do you agree with the statement that the evaluator’s bias may cause evaluation
programs to fail? Explain your answer.
3. Give reasons why employees organize labor union. Support your answer.
4. Give your own examples of employee benefits given by employers. Do you think
all companies give the same kinds of benefits? Explain.

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Activity 3: Sequencing

Direction: Arrange correctly the Steps in Union Organizing by using numbers

1,2,3,4,5. Write your answers in a separate sheet of paper.
______1. Formation of in-house organizing committee.

______2. Determine the employee’s desire for unionization. Before the election,
leaders’ campaign for employees’ support of the election and encourage them to cast
their votes.

______3. End of union organizing- when the sufficient number of votes is garnered,
the NLRC certifies the union as the legal bargaining representative of employees.

______4. These actions by employees and union officers are necessary to build a case
against the employer and a defense for the employees’ decision to unionize.
______5. The organizers to meet the employees’ need to explain the means to
accomplish their goals.

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 Discover

Direction: Read the text below. You can highlight the important terms as you go
along by underlining them.

COMPENSATION/ WAGES AND PERFORMANCE EVALUATION

Compensation/ wages pertains to all forms of pay given by employers to their
employees for the performance of their jobs. Performance valuation is a process
undertaken by the organization, usually done once a year, designated to measure
employees’ work performance.

Types of Compensation
Direct compensation- includes workers’ salaries, incentive pays, bonuses, and
commissions.

Indirect compensation- includes benefits given by employee other than financial

remunerations; for example: travel, educational and health benefits, and others.

Nonfinancial compensation- includes recognition programs, being assigned to do

rewarding jobs, or enjoying management support, ideal work environment, and
convenient work hours.

Connecting Compensation to Organizational Objectives

Worker compensation/wages had tremendously changed in the 21 st century

due to increased market competitions (both local and global), required skills from
workers, and changes in technology, among others. Along with these, organizations’
pay philosophies have also changed. Instead of paying employees based mainly on
their job positions or titles they are now given pay according to their individual
competencies or according to how much they could contribute or have contributed
to their company’s success. Wage experts now prepare compensation packages that
create value for both the organization and its employees.

Compensation: A Motivational Factor for Employees

Compensation pay represents a reward that an employee receives for good

performance that contributes to the company’s success. In relation to this, the
following must be considered:

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 Pay Equity- related to fairness; it is a motivation theory focusing on
employee’s response to the pay that they receive and the feeling that they receive less
or more than they deserve.
Employees generally feel that their pay must be commensurate to the effort
exerted in the performance of their job. Pay equity is achieved when the pay given to
them by their employees is equal to the value of the job performed; thus, this
motivates them to perform well and to do their jobs to the best of their abilities.
Expectancy Theory- another theory of motivation which predicts that
employees are motivated to work well because of the attractiveness of the rewards or
benefits that they may possibly receive from a job assignment.
The employee’s perception of the compensation or pay attached to a job
position is an important factor in ascertaining the motivational value of
compensation.

Bases for Compensation

Employees may be compensated based from the following:

Piecework basis- theory of motivation which predicts that employees are
motivated to work well because of the attractiveness of the rewards or benefits that
they may possibly receive from a job assignment.
Hourly basis- when pay is computed according to the number of work hours
rendered.
Daily basis- when pay is computed according to the number of work days
rendered.
Weekly basis- when pay is computed according to the number of work weeks
rendered.
Monthly basis- when pay is computed according to the number of work
months rendered.

Compensation rates are influenced by internal and external factors. Among

the internal factors are the organization’s compensation policies, the importance of
the job, the employees’ qualifications in meeting the job requirements, and the
employer’s financial stability.
External factors, on the other hand, include local and global market
conditions, labor supply, area/ regional wage rates, cost of living, collective
bargaining agreements, and national and international laws, among others.

Purposes of Performance Evaluation: Administrative and Developmental

Improving individual job performance through performance evaluation is just

one of the reasons why employees are subjected to assessments on a continuous
basis. There are other purposes behind employee assessment that are beneficial to
the company and employees.

Administrative Purposes: These are fulfilled through appraisal/ evaluation

programs that provide information that may be used as basis for compensation
decisions, promotions, transfers, and terminations. Human resource planning may
also make use of it for recruitment and selection of potential employees.

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 Developmental Purposes: These are fulfilled through appraisal/ evaluation
programs that provide information about employees’ performance and their strength
and weaknesses that may be used as basis for identifying their training and
development needs. Through this approach, the workers become more receptive to
the explanations given by the organization’s management regarding the importance
of having evaluations at regular intervals- that these are conducted to improve their
competencies in order to prepare them for future job assignments.

Different performance appraisal methods are used depending on the

information an evaluator aims to find out.

Performance Appraisal Methods

Methods of evaluating workers have undergone development in order to adapt

new legal employment requirements and technical changes. Some appraisal methods
used today are the following:

Trait methods- performance evaluation method designed to find out if the

employee possesses important work characteristics such as conscientiousness,
creativity, emotional stability, and others.

Graphic rating scales- performance appraisal method where each

characteristic to be evaluated is represented by a scale on which the evaluator or
rater indicates the degree to which an employee possesses that characteristic.

Forced-choice method- performance evaluation that requires the rater to

choose from two statements purposely designed to distinguish between positive or
negative performance; for example: works seriously-works fats; shows leadership-
has initiative.

Behaviorally anchored rating scale (BARS)- a behavioral approach to

performance appraisal that includes five to ten vertical scales, one for each important
strategy for doing the job and numbered according to its importance.

Behavior observation scale (BOS)- a behavioral approach to performance

appraisal that measures the frequency of observed behavior.

Why Some Evaluation Program Fail

Performance appraisal (such as manager/ supervisor appraisal, self- appraisal,

subordinate appraisal, customer appraisal, peer appraisal, or 360-degree appraisal)
may sometimes fail due to various reasons including the following:

 Inadequate orientation of the evaluatees regarding the objectives of the program;

 Incomplete cooperation of the evaluatees
 Bias exhibited by the evaluators;
 Inadequate time for answering the evaluation forms;
 Ambiguous language used in the evaluation questionnaire;

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 Employee’s job description is not properly evaluated by the evaluation
questionnaire used;
 Inflated ratings resulting from evaluator’s avoidance of giving low scores;
 Evaluator’s appraisal is focused on the personality of the evaluatee and not his
or her performance;
 Unhealthy personality of the valuator; and
 Evaluator may be influenced by organizational politics.

EMPLOYEE RELATIONS
Employee relations applies to all phases of work activities in organization, and
managers, to be effective, must be able to encourage good employee relations among
all human resources under his or her care. Employees or workers are social beings
who need connections or relations with other beings- other employees/ workers- who
are capable of giving them social support as they carry out their tasks in the
organization where all of them belong. Talking to a coworker, perceived to be a friend,
or working on a delicate task with others can be comforting during times of stress,
fear, or loneliness. When these negative feelings are overcome, employees will be able
to work better toward the achievement of their organization’s goals.

Effective Employer Relations and Social Support

Social support is the sum total of perceived assistance or benefits that may
result from effective social employee relationships. The quantity and quality of an
employee’s relationship with others determine social support (esteem support,
informational support, or financial support). In short, social support and effective
employee relations must always go together like “a horse and carriage;” where one
would be useless without the other. Therefore, without social support, effective
employee relations are not possible; and without effective social employee
relationships, social support, likewise, is not possible.

Barriers to good employee relations:

 Anti- social personality; refusal to share more about oneself to co-employees;

being a loner
 Lack of trust in others
 Selfish attitude; too many self-serving motives
 Lack of good self esteem
 Not a team player
 Being conceited
 Cultural/ subcultural differences
 Lack of cooperation
 Communication problems; refusal to listen to what others seek to communicate
 Lack of concern for others’ welfare
Ways to overcome barriers to good employee relations:

 Develop a healthy personality to overcome negative attitudes and behavior

 Find time to socialize with coworkers

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 Overcome tendencies of being too dependent on electronic gadgets
 Develop good communication skills and be open to others’ opinion
 Minimize cultural/ subcultural tension
Types of Employees

 Engaged- employee who work with passion and feel a deep connection with their
company; they drive and move the organization forward
 Not engaged- employees who are essentially “checked out”; they put time, but not
energy or passion, into their work
 Actively disengaged- employees who are not only unhappy at work, but also act
out their unhappiness; they undermine what their engaged coworkers
accomplish.

EMPLOYEE MOVEMENTS
A labor union is a formal union of employees/ workers that deals with
employers, representing workers in their pursuit of justice and fairness and in their
fight for their collective or common interests.

Employees or workers unionize because of financial needs, unfair

management practices, or social and leadership concerns.

a. Financial needs- complaints regarding wages or salaries and benefits given to

them by the management are the usual reasons why employees join labor
unions.
b. Unfair management practices- perceptions of employees regarding unfair or
biased managerial actions are also reasons why they join mass movements;
examples of lack of fairness in management are favoritism related to promotion
and giving of training opportunities and exemption from disciplinary action.
c. Social and leadership concerns- some join unions for the satisfaction of their
need for affiliation with a group and for the prestige associated with coworkers’
recognition of one’s leadership qualities.

Steps in Union Organizing

Terry Moser, an expert union organizer, was credited by Snell and
Bohlander (2011) for the following steps:

Step 1: Employee/ union contact-to explore unionization possibilities, employees

weigh the advantages and disadvantages of seeking labor representation while
the union officers gather more data about the employees’ complaints, as well as
data about the employer’s management styles, financial stability, policies, etc.
These actions by employees and union officers are necessary to build a case
against the employer and a defense for the employees’ decision to unionize.

Step 2: Initial Organizational meeting- this is conducted to attract more supporters

and select potential leaders among the employees who can help the union
organizers. Information or data obtained in Step 1 will be used by the organizers
to meet the employees’ need to explain the means to accomplish their goals.

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Step 3: Formation of in-house organizing committee- this starts with identification
of employees who are ready to act as leaders in campaigning for their goals, in
trying to get the interest of the other employees to join their movement, and in
convincing employees to sign an authorization card to show their willingness to
be represented by a labor union in collective bargaining with their employer.
Strength of the union is shown by the number of employees.

Step 4: If a sufficient number of employees support the union movement, the

organizer requests for a representation election or certification election- a
representation petition is filed with the NLRC asking for the holding of a secret
ballot election to determine the employee’s desire for unionization. Before the
election, leaders’ campaign for employees’ support of the election and encourage
them to cast their votes.

Step 5: End of union organizing- when the sufficient number of votes is garnered,
the NLRC certifies the union as the legal bargaining representative of employees.
Contract negotiations or collective bargaining agreement (CBA) negotiations
follow the certification. The CBA process involves the following procedures:
a. Prepare for negotiations
b. Develop strategies
c. Conduct negotiations
d. Formalize agreement

Grievance procedure- a formal procedure that authorizes the union to

represent its members in processing a grievance or complaint. Such grievance must
be expressed orally or in writing to the employee’s immediate supervisor and the
union steward. If the immediate supervisor shows willing ness to discuss the
complaint with the employee and the union steward, the grievance may be resolved
immediately.

REWARD SYSTEM
Organizations offer competitive rewards systems to attract knowledgeable and
skilled people and to keep them motivated and satisfied once they are employed in
their firm. Further, rewards promote personal growth and development and present
fast employee turnover.
Managements offer different types of rewards:
Monetary Rewards- rewards which pertain to money, finance, or currency.

a. Pay/salary- financial remuneration given in exchange for work performance that

will help the organization attain its goals; examples: weekly, monthly, or hourly
pay, piecework compensation, etc.
b. Benefits- indirect forms of compensation given to employees/ workers for the
purpose of improving the quality of their work and personal lives; health care
benefits, retirement benefits, educational benefits, and others are example of
these.
c. Incentives- rewards are based upon a pay-for- performance philosophy; it
establishes a baseline performance level that employees or groups of employees

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 must reach in order to be given such reward or payment; examples: bonuses,
merit pay, sales incentives, etc.
d. Executive pay- a compensation package for executives of organizations which
consists of five components: basic salary, bonuses, stock plans, benefits and
perquisites.
e. Stock options- are plans that grant employees the right to buy a specific number
of shares of the organization’s stock at a guaranteed price during a selected period
of time.
Nonmonetary Rewards- rewards which do not pertain to money, finance, or
currency; refer to intrinsic rewards that are self-granted and which have a positive
psychological effect on the employee who receives them.
a. Award- nonmonetary reward that may be given to individual employees or
groups/ teams for meritorious service or outstanding performance; trophies,
medals, or certificates of recognition may be given instead of cash or extrinsic
rewards.
b. Praise- a form of nonmonetary, intrinsic reward given by superiors to their
subordinates when they express oral or verbal appreciation for excellent job
performance.

Explore

Here are some enrichment activities for you to master and strengthen the basic
concepts you have learned from this lesson. Are you ready?

Enrichment Activity 1: REVIEW

Direction: Answer on a separate sheet of paper answer the following questions
below.

1. What are the two purposes of performance evaluation?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
____________________________________________________________

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2. Using the T-Chart below, compare and contrast Administrative and
Developmental purposes of performance evaluation.

Administrative Purposes Developmental Purposes

3. Among the four performance appraisal methods, which do you think is more
effective and efficient? Why do you say so?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________

Enrichment Activity No. 2: MATCHING TYPE

Direction: Match Column A to Column B. Select the letter of your answer
from Column B that best describes the key terms from Column A. Write the
letter of your choice in a separate sheet of paper.
COLUMN A COLUMN B

_______1. This pertains to all forms of pay given by A. Compensation

employers to their employees for the
performance of their jobs.
_______2. This is related to fairness; it is a motivation B. Piecework basis
theory focusing on employee’s response to
the pay that they receive and the feeling
that they receive less or more than they
deserve.
_______3. This theory of motivation predicts that C. Pay equity
employees are motivated to work well
because of the attractiveness of the rewards
or benefits that they may possibly receive
from a job assignment.

_______4. This pay is computed according to the D. Monthly basis

number of work months rendered.

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_______5. This influenced by internal and external E. Administrative
factors. Among the internal factors are the Purposes
organization’s compensation policies, the
importance of the job, the employees’
qualifications in meeting the job
requirements, and the employer’s financial
stability.

_______6. These are fulfilled through appraisal/ F. Compensation

evaluation programs that provide rates
information that may be used as basis for
compensation decisions, promotions,
transfers, and terminations.
_______7. These are fulfilled through appraisal/ G. Behavior
evaluation programs that provide observation scale
information about employees’ performance
and their strength and weaknesses that
may be used as basis for identifying their
training and development needs.
_______8. This performance evaluation method H. Developmental
designed to find out if the employee Purposes
possesses important work characteristics
such as conscientiousness, creativity,
emotional stability, and others.

_______9. These performance appraisal methods I. Graphic rating

where each characteristics to be evaluated scales
is represented by a scale on which the
evaluator or rater indicates the degree to
which an employee possesses that
characteristic.

_______10. This behavioral approach to performance J. Trait methods

appraisal measures the frequency of
observed behavior.

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 Deepen

Activity 1: SITUATIONAL ANALYSIS

Direction: Read the situation below and give your reactions by writing a short
essay. Below is your rubric to assess your output.

 Blames other people when one makes mistakes instead of taking responsibility
for own actions.

Rubric: Poor Fair Good Excellent

2 3 4 5
The essay is clear and logically arranged with
introduction, body and conclusion.

The essay observes grammar mechanics.

The essay demonstrates an accurate and

understanding of the question and uses
arguments with examples.
The essay has meaningful and informative
content underscoring the importance and
benefits of control methods and techniques.

17
 Gauge

Direction: Read and understand the questions below and choose the letter
of the correct answer. Use a separate sheet of paper for your answer.

TI: MULTIPLE CHOICE:

A. What type of compensation is being described to the following statements
below?
1. A type of compensation which includes recognition programs, being assigned to
do rewarding jobs, or enjoying management support, ideal work environment,
and convenient work hours.
a. Indirect compensation
b. Financial Compensation
c. Nonfinancial Compensation
d. Direct compensation

2. A type of compensation includes workers’ salaries, incentive pays, bonuses, and

commissions.
a. Indirect compensation
b. Financial Compensation
c. Nonfinancial Compensation
d. Direct compensation

3. A type of compensation includes benefits given by employee other than financial

remunerations; for example: travel, educational and health benefits, and others.
a. Indirect compensation
b. Financial Compensation
c. Nonfinancial Compensation
d. Direct compensation

B. What type of employee is being described to the following statements below?

4. An employee who work with passion and feel a deep connection with their
company.
a. Engaged
b. Not Engaged
c. Actively disengaged
d. Actively engaged

5. An employee who is not only unhappy at work, but also act out unhappiness;
they undermine what their engaged coworkers accomplish.
a. Engaged
b. Not Engaged
c. Actively disengaged
d. Actively engaged

18
6. An employee who is essentially “checked out”; they put time, but not energy or
passion into his work.
a. Engaged
b. Not Engaged
c. Actively disengaged
d. Actively engaged

TII: TRUE/FALSE:
________7. A labour union is a formal union of employees/ workers that deals with
employers, representing workers in their pursuit of justice and fairness
and in fight for their collective or common interest.
________8. Employees unionize due to financial needs, fair management practices
and social and leadership concerns.

________9. Grievance procedure is a formal procedure that authorizes the union to

represent its members in processing a complaint.

________10. Organizations offer competitive rewards systems to attract

knowledgeable and skilled people and to keep them motivated and satisfied
once they are employed in their firm.

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20
Pretest/ GAUGE
1. C
2. D
3. A
4. A
5. C
6. B
7. TRUE
8. FALSE
9. TRUE
10.TRUE
Activity 2: Sequencing
1. 3
2. 4
3. 5
4. 1
5. 2
Enrichment Activity 2
1. A
2. C
3. K
4. D
5. F
6. E
7. H
8. J
9. I
10.G
Key Answer
References

Grap F. Taylor 1856-1915p.5, Wikipedia Photo,

http://en.wikipedia.org/wiki/File.F_Taylor_1856-1915.jpg.Accessed October 2020

https://study.com/academy/lesson/what-is-employee-relations-definition-lesson-
quiz.html

https://en.wikipedia.org/wiki/Compensation_and_benefits#:~:text=Compensation

https://www.inc.com/encyclopedia/employee-reward-and-recognition-
systems.html

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