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Compensation and Position Classification System (CPCS) For Goccs
Compensation and Position Classification System (CPCS) For Goccs
Compensation and Position Classification System (CPCS) For Goccs
Title
Classification System (CPCS)
for GOCCs
3
Background of the Compensation and Position
Slide Title
Classification System (CPCS) for GOCCs
GOCC Governance Act of 2011 (Republic Act 10149), the GOVERNANCE
COMMISSION FOR GOVERNMENT-OWNED OR -CONTROLLED
CORPORATIONS (GCG) was mandated to:
(a) Classify GOCCs;
(b) Develop and recommend a competitive compensation and remuneration
system which shall:
— attract and retain talent
— allow the GOCC to be financially sound and sustainable
(c) Develop a COMPENSATION AND POSITION CLASSIFICATION SYSTEM
(CPCS) which shall apply to all officers and employees of GOCCs.
4
CPCS
Slide Guiding
Title Principles
1. Provide GOCCs with adequate operational autonomy and flexibility towards
ensuring efficient and effective implementation of a total compensation framework
to ensure:
(a) The adoption of reasonable, justifiable and appropriate remuneration
schemes to prevent or deter the granting of unconscionable and excessive
remunerations packages;
(b) Generally be competitive with the private sector doing comparable work,
and in compliance with prevailing laws on minimum wage;
(c) Operate within their affordability limits and sustainability capacities,
and in accordance with their overall size as provided herein;
(d) Adhere to the principle of equal pay for work of equal value; and
(e) The rewards system supports and encourages performance-driven,
productive, and efficient organizations.
5
Guiding Principles (cont’d)
Slide Title
3. The CPCS shall cover all positions, on full or part time basis
6
Excluded Positions
Slide Title
Individuals hired by GOCCs without employer-employee relationships and paid from
non-Personal Services appropriations/budgets:
(b) Consultants and experts hired to perform specific activities or services with
expected outputs;
(c) Laborers hired through job contracts (pakyaw) and those paid on piecework
basis;
7
Covered GOCCs
Slide Title
• All GOCCs and their subsidiaries
• Charted or non-chartered
• All GOCCs that are losing and/or highly subsidized in their operations
shall maintain their current compensation framework. Such GOCCs may
apply with GCG to implement the CPCS, if it can be determined that their
operations improve and the GOCC shall remain financially viable
8
Excluded GOCCs
Slide Title
9
Slide Title
10
Classifications of GOCCs
Slide Title
(Under R.A. No. 10149 and E.O. No. 203)
To ensure that GOCCs are aligned with rates and practices of private sector
entities doing comparable work
By Sector
1. Government Financial Institutions (GFIs) and Gaming
2. All Other Sectors
— Energy and Materials
— Utilities and Communications
— Area Development, Trade and Tourism
— Agriculture, Fisheries and Food
— Educational and Cultural
By Overall Size - each GOCC shall be compared or benchmarked with private
sector entities similar in size in terms of finances and operations
11
Position Classification Process
Slide Title
Determine the Size of the Organization (to be done
by GCG based on data submitted by GOCCs)
Grade of the organization based on:
a. Company financials
b. Number of full time equivalent (FTE) employees
c. Geographical scope and Business Complexity/Diversity
If the resulting average grade is a decimal number, the figure shall be rounded off
to the nearest whole number for the GOCC’s overall grade / size as categorized
below:
CLASSIFICATION AVERAGE GRADE
Small 16
Medium 17 to 18
Large 19 and Up
The classification shall be based on an official certification issued by GCG, covered by supporting instruments and
documents. GCG may change a GOCC’s classification 13
Step 1: Determining
Slide Title Size of the Organization
*The computation of Company Financials will be done by GCG * Consider the approved headcount in the
in consideration of the operations and mandates of each plantilla of the approved organizational
GOCC. structure
14
Step 1: Determining
Slide Title Size of the Organization
3. Geographical Scope and Business Complexity. – The grade for the GOCC’s
Geographical Scope and Business Complexity shall be determined as
Domestic 16 18 20
Geographical Scope.
– Low Medium High
(a) Domestic if majority
of operations
are based BUSINESS COMPLEXITY a small cluster of countries
in a single country or
within one region
(b) International if the organization is characterized by multi-function operations across an entire
region or in several countries in two continents.
(c) Global if the majority of functions are represented across three or more continents.
All GOCCs are automatically classified as domestic unless there is clear and substantial basis to
classify the GOCC’s actual operations otherwise. 15
Step 1: Determining
Slide Title Size of the Organization
3. Geographical Scope and Business Complexity. – The grade for the GOCC’s
Geographical Scope and Business Complexity shall be determined as:
3.2. Business Complexity – assumes that the GOCC Governing Board has end to
end control of the business
CATEGORY DESCRIPTION
Low GOCC’s operations involve only one of the activities specified below.
Medium GOCC’s operations involve only two of the activities specified below.
High GOCC’s operations involve all three of the activities specified below.
i. Regulatory; and/or
ii. Revenue-Generation; and/or
iii. Social Services
16
Step 2: Determine
Slide Title the Career Band of the Job
17
Step 2: Determine
Slide Title the Career Band of the Job
18
Step 2: Determine
Slide Title the Career Band of the Job
19
Step 2: Determine
Slide Title the Career Band of the Job
20
Step 3: Determining the Career Levels and Job
Slide
Grade Title
CPCS POSITION CLASSIFICATION MAP
MANAGEMENT
TRACK
CONTRIBUTOR TRACK
INDIVIDUAL
21
Sample Output of Job Leveling
Slide Title
The Position Classification Matrix allows for easier review of the alignment of jobs
vertically in the same function/unit, and across units/functions.
CAREER JOB
ACCOUNTING AUDIT LEGAL
LEVEL GRADE
M4: Grp Mgr 16 • LEGAL
COUNSEL (M4)
M3: Sr Mgr 15 • ACCOUNTING • AUDIT MANAGER
MANAGER (M3) (M3)
•
CONTROLLER (M3)
M2: Mgr 13 • ACCOUNTING • AUDIT
ASSISTANT SUPERVISOR
MANAGER (M2) (M2)
•
CONTROLLERSHIP
SUPERVISOR (M2)
• ACCOUNTING
SUPERVISOR (M2)
M1: P3: 11 • FINANCIAL ANALYST • SENIOR AUDITOR
Supv Career (M1) (P3)
22
Slide Title
Compensation Items
23
Compensation
Slide Title System in the CPCS
The total compensation granted shall include:
Basic Salaries
Standard Allowances and Benefits
Specific-Purpose Allowances and Benefits
Variable Pay
Excluded are indirect compensation regulated under existing laws
Life and retirement insurance benefits
Employee compensation insurance
Health insurance
Pag-IBIG fund benefits
Provident Fund benefits
There will be non-diminution of the authorized amount of monthly basic salary as of
December 31, 2015 for incumbent employees
24
Basic Monthly Salaries:
Slide Title
Developing the Salary Ranges
25
Basic Monthly Salaries:
Slide Title
Difference between SSL and CPCS
FROM TO
26
Salary Ranges
Slide Title
Job Grades 1-11
Current SSL Fourth Tranche CPCS Salary Ranges
Monthly Salary Schedule
1 11,068 11,756
2 11,761 12,461
3 12,466 13,209
4 13,214 14,787
5 14,788 16,547
6 16,548 18,518
7 18,519 20,722
8 20,754 25,946
9 25,947 32,439
10 32,440 40,557
11 40,558 50,702
All Sectors
Type Annual Amount
Fixed Bonus Mid-Year Bonus (13th 1.00 x Monthly Pay
month)
Year-end Bonus (14th 1.00 x Monthly Pay
month)
Fixed Cash Rice Php 16,000
Allowances Clothing Php 6,000
Meal Php 18,000
29
Design Principles of Variable Pay:
Slide Title
Performance-Based Bonus Systems
Parameters and considerations in designing the PBB
A. Individual Performance-Based Bonus (IPBB)
30
Elements of the Individual Performance-
Slide Title
Based Bonus (IPBB)*
Element Provisions
Eligibility • Officers and Employees who occupy regular positions
• Should have rendered at least six (6) months of service in the GOCC
for the performance year
Plan Funding • Targeted PBB payout should be included in the payroll expense
budget for the coming year plus a buffer of 10%
• If unspent, the amounts shall revert as savings for the GOCC
• The budgeted amount shall also take into consideration the
affordability constraints of the GOCC
Payout Criteria • Pursuant to the “Performance Evaluation System for the GOCC
Sector” (GCG MC No. 2013-02):
- Achieve a weighted-average score of at least 90% on its
Performance Scorecard
- Comply with the Good Governance Conditions prescribed by
GCG
35
Other
SlideCompensation
Title Items in the CPCS
Specific-Purpose Allowances and Benefits
Hazard Pay for personnel exposed to hazardous situations
Overtime pay for Technical Support, General Staff and Labor Bands
Night-Shift Differential Pay
Honorarium for individuals concurrently occupying a Board/Corporate Officer
position
Allowance for lawyer-personnel appearing in court hearings
Other allowances and Benefits peculiar to certain GOCCs (subject to GCG’s
approval)
Variable Pay
Anniversary Bonus
Productivity Enhancement Incentive (PEI)
36
Other
SlideCompensation
Title Items in the CPCS
38
Role
SlideofTitle
the GOCC
1. Each covered GOCC shall adopt a Total Compensation Framework (TCF), subject to
the approval of the President of the Philippines in accordance with the favorable
recommendation of the GCG.
If no action is taken by the Office of the President within 45 days of receipt, the
same shall be deemed approved unless the Office of the President informs the GCG
otherwise.
2. Implementation of compensation adjustments shall depend on the financial capability
of the GOCC and their Corporate Operating Budget as approved by GCG, and those
approved by the DBM for entities receiving allocations for the National Government
3. Basic Salaries – if there are affordability concerns, the GOCC may propose a salary
range for each Job Grade that falls below the salary ranges prescribed in the EO, taking into
account the financial standing of the GOCC as well as the sustainability of the compensation
framework.
39
Implementing
Slide Title the Salary Ranges
The implementation of the CPCS is progressive, not retroactive
Hiring Rate guidelines
For JG 1-11
— May be set up to minimum during the probationary period, but in no case lower
than the applicable minimum wage rate mandated by law.
— Upon appointment to regular status, pay may be increased to the minimum
— For individuals who exceed the minimum CSC Qualification Standards, the
hiring rate may be set until 5% above the minimum of the salary range
For JG 12 and above
— The hiring rate may be set up to 10% above minimum if the individual exceeds
the minimum CSC Qualification Standards (e.g. graduation from a reputable
school, relevant experience, having more than the required educational
attainment)
40
Implementing
Slide Title the Salary Ranges
Promotion – the Governing Board through Management may promote
individuals through:
1. Raise the salary to the minimum of the Job Grade of the vacant plantilla
item which the employee will be promoted to
4 13,214 14,787
5 14,788 16,547
Example:
• Current Job: Grade 4, with Salary of Php 14,000
• Promotion to Job Grade 5, with a minimum of Php 14,788
• Raise raise pay to Php 14,788
41
Implementing
Slide Title the Salary Ranges
Promotion (continued)
2. If the employee’s salary already exceeds the minimum of the Job Grade of said plantilla
item, raise the salary by the percentage difference in the salary range minimum of the
current Job Grade to the new Job Grade
4 13,214 14,787
Example: 5 14,788 16,547
• Current Job Grade 4, with Salary of Php 14,800
• Promoted to Job Grade 5, with a minimum of Php 14,788
• Compute for the percentage difference of the minimums
• (Job Grade 5 – Job Grade 4)/Job Grade 4 = (14,788 – 13,214)/13,214
• 11.91%
• Raise salary by 11.91% = 14,800 * (1 + 11.91%) = 16,563.
• Promotion increases cannot exceed the maximum of the new Job Grade; hence the new
salary is capped at 16,547 42
Implementing
Slide Title the Salary Ranges
Promotion (continued)
3. Raise the salary by the percentage difference in the salary range midpoints of the current
Job Grade to the new Job Grade
4 13,214 14,787
Example: 5 14,788 16,547
• Current Job Grade 4, with Salary of Php 14,800
• Compute for Midpoint = (Minimum + Maximum)/2
• Job Grade 4 = (13,214 + 14,787)/2 = 14,001
• Job Grade 5 = (14,788 + 16,547)/2 = 15,668
• Compute for percentage difference = (15,658-14,001)/14,001 = 11.91%
• Compute for the new salary = (14,800 * (1+11.91%) = 16,562
• Promotion increases cannot exceed the maximum of the new Job Grade; hence the new
salary is capped at 16,547
4. If the employee moves from an overtime-earning job to a non-overtime earning job,
consider the earning potential lost 43
Implementing
Slide Title the Salary Ranges
Merit Increases – in order to support a performance-driven organization,
GOCCs may recommend merit increases subject to GCG’s approval:
Step 1: Determine the salary increase budget for the year. Consider projected
market salary increase and the GOCC’s affordability to pay
Step 2: Determine the performance rating distribution under the GOCC’s
Strategic Performance Management System (SPMS) or equivalent.
Implementing guidelines may vary year-on-year depending on considerations
such as budget. The table below shows the recommended distribution of the
GOCC’s population:
Performance Rating Recommended
Distribution
Outstanding 10% of employees
Very Satisfactory 20%
Satisfactory 50%
Unsatisfactory 15%
Poor 5% 44
Implementing
Slide Title the Salary Ranges
Merit Increases (continued)
Step 3: Allocate percentage increases depending on individual performance.
The following additional factors may be considered
— Current position in the salary range
— Rate of progress and future potential (increase the time interval and/or
decrease size of increase for individuals approaching what appears to be
the ultimate potential)
— Foreseeable promotion opportunities
— Salary increase budget
The Governing Board through Management may withhold unearned
increases from a poor performer where appropriate
In no case shall implementation of a merit increase result in raising the
current salary of an individual above 25% of the maximum for his/her job
45
ILLUSTRATION:
Slide Title
Implementing the Salary Ranges
Sample Merit Increase matrix considering both position in range and individual
performance
Performance Position in Salary Range
Using the two-dimensional matrix is aligned to the pay philosophy of considering both
individual performance and competitiveness against the market.
46
Slide Title
47
Communication
Slide Title Management Objectives
General Objective:
• To identify the appropriate messages for respective audiences to be delivered
through effective communication channels
• To equip the communication core team on change and communication
management for the CPCS
Specific Objectives:
To identify and understand the key stakeholders and their current perceptions
about the change
To identify key messages and communication channels to implement the
CPCS
To create communication toolkits to provide select communication and
change champions to deliver the messages
48
Role
SlideofTitle
Communication Core Team
Advocate of change. Assist in explaining and providing context on CPCS
Link. Bridge the gap between the employees and management and/or
GOCCs and GCG
Listen to what employees say about CPCS
Observe how employees react, feel about the changes
Act
— Document feedback received
— Provide feedback to Core Team and/or GCG on the concerns received
and observations noted
— Address questions or misperceptions
— Direct questions or misperceptions to the right party
— Participate in communication management meetings and brainstorm on
interventions
— Support GCG in addressing or articulating the responses to issues /
49
questions raised
An effective Communication Strategy
Slide Title
supports the Change Initiative
Objectives Targeted, measurable objectives and the specific strategies needed to achieve
success
Audience Who needs to know when and, for key communicators, what their role is in the
Analysis process
Key Critical messages that become the touchstone for the entire communication
Messages process
Channels Plan Using the right channel for specific communication interventions
Success
Measures Guidelines for success and methods of data-gathering
50
Communication
Slide Title Toolkit
Overall CPCS Communication Plan
Executive Order
Presentation Decks, tailor-fit according to the following audiences:
GOCC Executives (high-level content)
GOCC HR and Line Managers (technical content; same material to be used
in train-the-trainer sessions)
All Employees (for general town hall assemblies)
Frequently Asked Questions (FAQs)
51
Key Communication Message:
Slide
New Title Methodology
Leveling
• An objective basis for establishing job levels was used
- The CPCS adopted a proven job evaluation methodology used
globally
- Jobs were evaluated based on job content and not on jobholders’
qualifications, tenure or performance
The previous SSL salary grades and steps will no longer apply.
The new CPCS job grades will now be adapted.
52
Key Communication Message:
Slide
New Title Methodology
Leveling
CPCS adapted the Towers Watson proprietary job leveling methodology
Global Grades
Career Band • Provide the underpinning
Groups jobs with similar (foundation) for both Executive
level of contribution or Benchmarks and the Career
broad employee Levels
category • Determines the start and end
points of a career progression
Career Level
• Discernible broad step in a career progression
• Consistent across organizations
• Reflects normal market progression of jobs
requiring higher levels of competence and
knowledge as people advance in their careers 53
Key Communication Message:
Slide
New Title Methodology
Leveling
•Perceived move to a lower level
- This is not a demotion.
- There will be no pay cut nor discontinuance of benefits currently enjoyed.
- There may be an opportunity for the incumbent to aspire for a job
commensurate to his qualifications and experience.
- If a new person is hired for the job, the new person’s pay and benefits will be
in accordance with the job level of the job and not the level of the predecessor
incumbent of the role.
55
Key Communication Message:
Slide Titleof the New Compensation System
Implications
Employee Group Key Communication Message
All employees “Your compensation is a private and confidential matter and should
NOT be discussed openly with others.”
Red Circle - “Your pay is above the market. You will continue to receive salary
Employees whose increases but expect these increases to be smaller than the
pay is beyond the average. You will be eligible to receive the variable pay
maximum of the commensurate to your level.”
proposed salary
range.
Green Circle - “A review of your pay will be made to bring it to the level accorded
Employees whose to the range of pay for your job, considering your own
pay is below the performance in the job. The improvements may be spread out
minimum of the across several years based on affordability limits due to regulatory
proposed salary provisions in our concession agreement.”
range.
56
Key Communication Message:
Slide Titleof the New Compensation System
Implications
Employee Group Key Communication Message
New hires “Your salary is set at the minimum of the salary range.
Premium may be extended depending on very special
circumstances and are subject to appropriate approvals.”
Promotions “Promotions are subject to promotion guidelines. Candidates
for promotion must successfully assume the requirements of
the next level role. All promotions are based on the availability
of roles at the higher level.“
CBA-covered jobs “While recognizing the constitutional right of workers to self-
organization, collective bargaining and negotiations, the
Governing Boards of all covered GOCCs may not negotiate
with their officers and employees the economic terms of their
CBAs.”
“CNA Incentives which primarily cover savings from the COBs
of Chartered GOCCs, shall now be extended to non-
chartered GOCCs to promote the uniformity of allowable
incentives within the GOCC Sector.”
57
Slide Title
58
Job Titling
Slide Title
These are recommended titles that will allow for alignment across GOCCs. These
titles may be applied after the Job Leveling has been approved by GCG.
A. Management
1. Executive Career Band (EX) – Job titling in the Executive Career Band will follow
respective organizational job titles currently used.
Sample Job Titles
Career Band Career Level Job Grade
(For Illustration Purposes Only)
20 Chief Executive Officer
19 Chief Operating Officer
18 Executive Vice President
Executives EX
17 Senior Vice President
16 Vice President
15 Assistant Vice President
59
Job Titling
Slide Title
2. Supervisory Management Career Band.
GOCC Unit / Department + Prescribed Level Title
Example: Accounting Asst. Manager (M2-JG13)
Logistics Supervisor (M1- JG11)
Career Career Prescribed Grade Sample Job Titles
Job Grade
Band Level Title (For Illustration Purposes Only
Not Applicable (Only for Global and International Organizations)
M5 17
M4 16 Head HR Head
15 Senior Manager HR Senior Manager
M3
14 Manager HR Manager
Supervisory/
Management
13 Assistant Manager HR Assistant Manager
M2
12 Senior Supervisor Compensation Senior Supervisor
11 Supervisor Compensation Supervisor
M1
10 Junior Supervisor Compensation Junior Supervisor 60
Illustration
Typical
SlideQualification
Title Standards
Qualification Standards
Career
Career Band Job Grade
Level Educational Attainment No. of Years Work Experience
20
19
Bachelor or Post-Graduate 12-15 years prior relevant formal
18 Degree or Professional training or work experience in an
Executives EX
Qualification executive or function strategist
17 role
16
15
61
Illustration
Typical
SlideQualification
Title Standards
Qualification Standards
Career
Career Band Job Grade
Level Educational Attainment No. of Years Work Experience
M5
17
M4 11-15 years prior relevant formal
16
training or work experience in a
managerial role
15
M3
14