Republic of the Philippines

Department of Education
Region IVA- CALABARZON
SCHOOLS DIVISION OFFICE OF LAGUNA
District of Los Bańos
BN Calara Integrated National High School
Brgy. Anos Los Bańos, Laguna

Grade Level: GRADE 11 Subject: Organization and Quarter 2, Week.:

Management 11&12
Name: Teacher: Garry D. Punzalan Date:

Introduction
This activity sheet (AS) was designed to provide you with a meaningful opportunities for guided
and independent learning at your own pace and time. You will be enabled to process the
contents of the learning resource while being an active learner.

Most Essential Learning Competency

1 . Examining the Functions and Importance of Compensation, Wages and Performance Evaluation,
Appraisal, Employee Relations and Movement

Examine the Functions and Importance of

Compensation, Wages and Performance Evaluation,
Appraisal, Employee Relations and Movement

WHAT IS COMPENSATION/WAGES AND PERFORMANCE EVALATION &

APPRAISAL?
Compensation/wages and performance evaluation are related to each other 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 area wage rates, among others. Compensation may come in different forms. It
may be direct, indirect or nonfinancial.

Types of Compensation:

Direct Compensation Indirect Compensation Nonfinancial

Compensation
➢ Worker’s salaries Benefits other than ➢ recognition programs
financial remunerations: ➢ enjoying management
➢ Incentive pays
➢ travel support
➢ Bonuses ➢ ideal work environment
➢ health
➢ Commissions ➢ education ➢ convenient work hours
➢ assigned to rewarding
➢ etc. jobs

Compensation Guidelines
Compensation guidelines are influenced by the nature and environment of a particular
industry. For example, the pharmaceutical, banking,
telecommunications, 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 December, 2019 the minimum wage law for the National
Capital Region (NCR) is P537 per day. Meanwhile, the minimum wage for other regions is
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slightly lower. The wage law is set to protect manual workers 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.
Purposes of Performance Evaluation: Administrative and Developmental
Improving individual job performance through performance evaluation is just one of the
reasons why employees are subject to assessment 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 a basis for compensation decisions, promotions,
transfers and promotions. Human resource planning may also make use of it for
recruitment and selection of potential employees.
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 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 methods are used and 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 characteristics 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 fast; shows leadership – has initiative.
Behaviorally anchored rating scale (BARS) – a behavioural 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.
Behaviour observation scale (BOS) – a behavioural approach to performance appraisal that
measures the frequency of observed behaviour.
WHAT IS EMPLOYEE RELATIONS?
Employee relations apply to all phases of work activities in organizations, and managers,
to be effective, must be able to encourage good employee relations among all human
resources under his or her care. Employees/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 working
on a delicate task with others can be comforting during times of stress, fears, or
loneliness.
Social support is the sum total of perceived assistance or benefits that may result from
effective social employee relationships.
Barriers to good employee relations Ways to overcome barriers to good
employee relations
➢ anti-social personality; refusal to ➢ develop a healthy personality to
share more about oneself to co- overcome negative attitudes and
employees; being a loner behavior
➢ lack of trust in others ➢ find time to socialize with co-workers
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➢ selfish attitude; too many self-serving ➢ overcome tendencies of being too
motives dependent on electronic gadgets.
➢ lack of good self-esteem ➢ develop good communication skills
and be open to others’ opinion
➢ not a team player ➢ minimize cultural/subcultural
tension
➢ 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
Can you still add ways on how barriers to overcome good employee relations?
Do you agree that social support and effective employee relations always go together?
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 most 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 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.

WHAT IS 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 employee from a lower
position. 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.
Promotion or career advancement is a process through which an employee of a company
is given a higher share of duties, a higher pay-scale or both. A promotion is not just
beneficial for employees but is also highly crucial for the employer or business owners. It
boosts the morale of promoted employees, increases their productivity and hence
improves upon the overall profits earned by the organization.
Tenure refers to the number of years in the service of an employee while meritorious
performance refers to an excellent or outstanding performance of an employee.
Some companies may have a clear preference based on loyalty of the employee or
performance may have more weight on the basis on how much the employee
contributes to the achievement of corporate goals.
Demotion is ―reverse‖ of promotion. Demotion is the lowering of a rank, reduction in salary,
status and responsibilities. It may be defined as the assignment of an individual to a job
of lower rank and pay usually involving lower level of authority and responsibility .
Demotion may take place due to the following reasons:
a. Breach of discipline
A breach of discipline may attract demotion as a punishment. An organization can
work only if proper discipline is maintained. A punitive action for such breach may
be necessary so that people do not flout rules, regulation etc. of the company.

b. Inadequacy of knowledge
A person may not be competent to perform his job properly. He may not be able
to meet job requirements. In such situation, demotion is necessary.

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 c. Unable to cope with change
Now-a-days, there is a rapid change in technology and methods of work. The
existing employees may not be able to adjust themselves as per the new
requirements. It may be due to lack of education, technical skill, ill health, old age
or other personal reasons. Under these circumstances new persons may be
needed to take up such jobs.
d. Organizational re-organization
Sometimes there may be organizational changes. It may be by either combing the
department or closing some departments. In such situations, the number of
position may no longer be necessary and other employee may be posted to a
lower position.
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 reason for employee’s resignation is to look for better
opportunities in other companies and avail of higher salaries and benefits.

2. Separation with authorized cause. More 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 new technology
will duplicate some of the existing functions of certain jobs. The current job holders of
such functions will be given an appropriate severance package when they leave the
organization. The severance package consists of a considerable 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 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.

References
Organization and Management. Cynthia A. Zarate Organization and Management. Helena Ma F.
Cabrera, PhD, et.al. https://gethppy.com/employee-engagement/15-employee-engagement-
activities can-start-now https://nwpc.dole.gov.ph/regionandwages/national-capital-region/
https://www.cleverism.com/when-and-how-to-promote-your-employees/
https://www.employeepedia.com/info/general/782-employee-movement definition-formula-and-
examples https://www.managementstudyguide.com/staffing-function.htm
https://ourarticlelibrary.com/employee-management/demotion-of-employees meaning-and-
causes-of-demotion/25976
google.com/search?q=employee+relations&sxsrf=ALeKk03IaN4udpgrKG63QAH5Ds
MhMPatOA:1592189943076&source=lnms&tbm=isch&sa=X&ved=2ahUKEwj59uLf 6YLqAhVc6