CHAPTER 5:

Lesson 5
Compensation/Wages and
Performance
Evaluation/Appraisal
organization & management
OBJECTIVE:

Identify the policy guidelines on

compensation/wages and performance
evaluation/appraisal.
 REVIEW (1 pt in recitation)
This is a fixed regular payment, typically paid
on a daily or weekly basis, made by an
employer to an employee, especially to a
manual or unskilled worker.
-WAGES
 REVIEW (1 pt in recitation)
A process undertaken by the organization,
usually done once a year designed to measure
employees’ work performance.
-PERFORMANCE EVALUATION
 REVIEW (1 pt in recitation)
The connections created among
employees/workers as they do their
assigned tasks for the organization.
-EMPLOYEE RELATIONS
 REVIEW (1 pt in recitation)
A process where employees
performance is documented and
evaluated
-APPRAISAL
COMPENSATION
• All forms of pay given by employers to their employees
for the performance of their jobs.
 TYPES OF COMPENSATION
DIRECT INDIRECT NONFINANCIAL
COMPENSATION COMPENSATION COMPENSATION

• Worker’s • Recognition
•Travel programs
salaries
• Incentive
•Health • Enjoying
management
pays •Education support
• Ideal work
• Bonuses •etc environment
• Commissions • Convenient work
hours
• Assigned to
rewarding jobs
WHAT ARE YOUR THOUGHTS ABOUT THIS
ILLUSTRATION?
COMPENSATION: A MOTIVATIONAL FACTOR
FOR EMPLOYEES

Pay Equity – related to fairness

Employees generally feel that their pay must

be commensurate to the effort exerted in the
performance of their job.
Expectancy Theory – employees are
motivated to work well because of the
attractiveness of the rewards of benefits
that they may receive from a job assignment
 Piecework
BASES FOR Basis
COMPENSATION
Monthly Hourly
Basis Basis

Weekly Daily
Basis Basis
PURPOSES OF PERFORMANCE EVALUATION

ADMINISTRATIVE PURPOSES
• may be used as a basis for compensation decisions,
promotions, transfers, and terminations

DEVELOPMENTAL PURPOSES
• provide information about employees’ performance and their
strengths and weaknesses
• used as the basis for their training and developmental needs
PERFORMANCE APPRAISAL METHODS
4. Behaviorally
1. Trait Methods anchored rating scale
(BARS)

5. Behavior
2. Graphic Rating
Observation Scale
Scales
(BOS)

3. Forced-choice
methods
1. Trait Methods

• Performance evaluation method

designed to find out if the employee
possesses important work
characteristics such as consciousness,
creativity, emotional stability, and
others
2. Graphic Rating Scales

• characteristics to be evaluated are

represented by a scale on which the
rater indicates the degree to which an
employee possesses that characteristic.
Example of Graphic
Rating Scales
3. Forced-choice method

• requires the rater to choose

from two statements purposely
designed to distinguish between
positive or negative
performance
Example of Forced-choice method

• work seriously – work fast

• shows leadership – has
initiative
4. Behaviorally anchored rating scale (BARS)

• Includes five to ten vertical

scales
5. Behavior Observation Scale (BOS)

• Measures the frequency of

observed behavior
Example of Behavior Observation Scale (BOS)
Lesson 6: Employee Relations
A person employed for wages
or salary, especially at the non-
executive level.

E______E
Movement to a higher
position

_R____I__
Reverse of promotion.

_E_____N
Employee’s voluntary
decision to leave the
organization.
__S____T___
This is the company’s
decision to terminate
employees due to
business reasons.
“_ a _ o _ _”
WHAT IS EMPLOYEE RELATIONS?
•The connections or relations with other
employees or workers who can give 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, fear, or
loneliness.
Barriers to good employee relations:

• Not a team player

• Anti-social personality • Being conceited
• Refusal to share more • Cultural differences
about oneself • Lack of cooperation
• Being a loner • Communication
• Lack of trust in others problems
• Lack of good self-esteem • Lack of concern for
others’ welfare
Recitation (2 pts)

What do you think are the ways to overcome

barriers to good employee relations?
Do you agree that social support and effective
employee relations always go together?
Elaborate your answer.

Why is it important to have a good employee

relations?
Lesson 7: Employee Movements
WHAT IS EMPLOYEE MOVEMENTS?
• often the result of evaluation or structural changes
within an organization

• VERTICAL MOVEMENT – entails the movement of an

employee from a lower position

• HORIZONTAL MOVEMENT – involves the transfer of

an employee to another position with similar
responsibilities
WHAT IS EMPLOYEE MOVEMENTS?
•PROMOTION – movement to a higher level or
position
•TENURE – refer to the number of years in the
service
•MERITOROUS PERFORMANCE – refers to an
excellent or outstanding performance
•DEMOTION – reverse of promotion; lowering
of rank
Demotion may take place due to the following:

1. Breach of Discipline
2. Inadequacy of Knowledge
3. Unable to cope with change
4. Organizational re-organization
Transfer

• a movement to another position but

with the same level or scope of
responsibility
• can also mean a transfer to another
branch or location
Separation – employee’s departure from the
organization

• Forms of Separation:

1. Resignation

– employee’s voluntary decision to

leave the organization
 2. Separation with authorized cause

- “layoff”
-this is the company’s decision to
terminate employees due to business
reasons
-severance package – consists of
monetary package
 3. Separation with just cause

-occurs when an employee is

terminated due to theft, fraud, and
other serious offenses
 3. Retirement

-refers to the end of a worker’s

employment with the company due to
old age, illness, or infirmity
Assessment #4
I. TRUE OR FALSE

1. Employees feel that their salary must

commensurate to the efforts exerted
in the performance of their job.
2. Performance evaluation done by
companies never fail.
3. The purpose of performance
evaluation is for decision-making
related to promotions, transfers, and
terminations.
4. Employee appraisal is essential to
ensure that employee performance
contributes effectively to the attainment
of company goals
5. Monetary rewards are also called
intrinsic rewards.
6. The normal retirement age of Filipinos
are set to 60 years old.
7. The basic salary in the Philippines is
applied in all regions.
8. Employee movements are inevitable
and are often the result of evaluation or
structural changes in an organization.
9. The nature of compensation is
determined by the competency level
and skills of the employees alone.
10. Rewards may have a motivating
effect to the employees.
Assessment #4
II. MULTIPLE CHOICE
1. Which form of separation is an
employees voluntary decision to
leave the organization?
A. Resignation
B. Retirement
C. Separation with authorized cause
D. Separation with just cause
Assessment #4
II. MULTIPLE CHOICE
2. It is the movement to another position
but with the same level or scope of
responsibility.
A. Demotion
B. Promotion
C. Separation
D. Transfer
Assessment #4
II. MULTIPLE CHOICE
3. Which of the following is NOT
included?
A. Demotion
B. Promotion
C. Resignation
D. Separation
Assessment #4
II. MULTIPLE CHOICE
4. Which of the following is the common
reason for demotion?
A. Accuracy
B. Congeniality
C. Inefficiency
D. Punctuality
Assessment #4
II. MULTIPLE CHOICE
5. Which refers to the end of a worker’s
employment with the company due to
old age/illness?
A. Resignation
B. Retirement
C. Separation with authorized cause
D. Separation with just cause
Assessment #4
1. T
2. F
3. T
4. T
5. F
6. T
7. F
8. T
9. F
10. T
Assessment #4
1. A
2. D
3. B
4. C
5. B
CHAPTER 5:
Lesson 5
Rewards System

organization & management

OBJECTIVE:

Adopt effective rewards system

WHAT IS A REWARD SYSTEM?

REWARD SYSTEM

• helps to motivate employees achieve high-quality

performance
• promote fairness and equity by rewarding
employees according to their contribution and effort
to the organization
 2 Types of Rewards:
1. Extrinsic Rewards
– rewards that pertain to money, finance, or currency.
– monetary rewards

2. Intrinsic Rewards
– nonmonetary rewards
 Extrinsic Rewards

a. pay/salary – financial remuneration

b. Benefits – an indirect form of compensation (ex: healthcare,
educational)
c. Incentives – based upon a pay-for-performance philosophy
(bonuses, merit pay, sales incentives)
d. Executive pay – compensation package for executives of
organizations (basic salary, bonuses, stock plans, benefits)
e. Stock options – plans that grant employees the right to buy a
specific number of shares of the organization’s stock
 Intrinsic Rewards

a. Award – nonmonetary reward given to employees for

meritorious service or outstanding performance
Examples: Trophies, medals, certificates

b. Praise – given by superiors to their subordinates when

they express oral or verbal appreciation for excellent job
performance.
ACTIVITY 1: Identify the word given if it
is Extrinsic or Intrinsic Reward.

1. CASH INCENTIVE
2. LEISURE TRIP
3. SCHOLARSHIP GRANT
4. FEELING OF CONTENTMENT
5. RECOGNITION
ACTIVITY 1: Identify the word given if it
is Extrinsic or Intrinsic Reward.

6. Sense of Achievement
7. New car
8. Promotion
9. Work Freedom
10. Fringe Benefits
QUIZ #5
CHOICES:

A. NONMONETARY
B. MONETARY REWARD
C. REWARD
D. PRAISE
E. EXECUTIVE PAY