THE MANAGEMENT

OF EMPLOYEE BENEFITS
AND SERVICES
Presented by: GROUP 4
The Management of Employee Benefits and
Services

The Development Wage Methods of Wage Wage and Salary Morale Renewal in Other Information
of Wage and Structure Payment Policies the Workplace Related to Wages
Salary Structure Design
The Management of Employee Benefits and
Services

The Beginning of The Governing

Managing Benefits:
The Concept of Philosophy in The Classification of Profit-Sharing
the Fringe Benefit Planning and
Benefits Granting Fringe Benefits Plans Administration
Concept Benefits
The Management of Employee Benefits and
Services

Strategic Benefit Corporate Policy Benefits Program

Implementation Guidelines On Evaluation
Benefits
The Development of
Wage and Salary Structure

The design and operation of wage and salary

structure is the concern of management and
employees. Wage and salary structure is the
hierarchy of jobs to where the pay rate is
attached. The positions are allocated in pay
grades according to the job evaluation results
and its relations with the pay system derived
from the results of the salary survey.
The Development of
Wage and Salary Structure

The jobs are ranked in ascending to

descending order according to their
importance and based on the points or ranked
earned in the job evaluation program
conducted by the HRD and the committee
created for the development of a more
responsive pay system.
The Development of
Wage and Salary Structure
The following are the advantages of the wage and salary structure:
1. It affects the workers' earning and standard of living.
2. It eases the recruitment and maintenance of an effective labor
force.
3. It develops employee morale and increases work efficiency.
4. It represents cost and competitive advantage in the industry.
5. It helps in preparing budgetary allocations and eases
computation of salary adjustments and as an aid in short term
and long range plans.
6. It eliminates pay distortions and inequities in employee
compensation.
7. It establishes an equitable salary range for various jobs.
Wage Structure Design

The design of the wage and salary structure is

the establishment of the job classes and rate
ranges. All jobs within a class are treated in
the same way for purpose of economical
administration. Pay structure ranges should
be used in developing a schedule for both
rank-and-file employees, technical and
managerial positions.
Wage Structure Design

In some companies, they have a separate

structure for hourly and daily paid employees
and separate salary structure for regular
monthly paid jobs. The managerial pay
systems are separated, based on rank
depending on their assignments and
contributions to the companys' profitability
index.
Salary Range

It is the range of the salary that is paid to an

employee doing similar functions that has a
minimum and maximum pay and a series of
step adjustments. It is to provide adjustment
in pay for performance evaluation without
distorting the salary pay plan.
Salary Adjustment with
High Seniority

Another reverse situation is when the

employee with high seniority, is either so
competent or has received so many increases
that his salary is above the maximum of the
pay grade.

This is called red circle rate, which can be

handled in two ways:
Salary Adjustment with
High Seniority

1. Review the performance of the employee. If

the employee is doing superior work and is
capable of performing higher tasks or
responsibilities and has displayed potentials
for promotion, then he has to be promoted
and given the salary grade corresponding to
the new assignment. He should be under
probation in the new assignment for at least 3
months before he assigned to the new pay
grade.
Salary Adjustment with
High Seniority

2. If the performance review reveals that the

employee is not worthy to be promoted and
such salary increase was discreetly earned for
some obvious reasons, then the employee will
not get normal merit increase due to the
implementation of the new structure. As the
range moves up due to cost of living index
and the salary plan is revised accordingly, then
his salary probably will still fall within the
range and then he could be entitled to future
adjustments if deemed
necessary.
METHODS OF WAGE PAYMENT

The main purpose of a formal wage and salary management

plan is to have a systematic method of payment to ensure that
employees receive a fair wage and salary for the work they
perform.
By the Time Worked - earnings do not fluctuate with the
amount of work performed or with the quality of output. In
this method, wages are computed in terms of unit of time.
H×R=W
In which
H - Hours actually worked
R - Rate per hour in pesos
W- Total wages earned
METHODS OF WAGE PAYMENT

Payment on the basis of time worked is more satisfactory under

the following conditions:

1. Employees have litle or no control over how much work

they produce,
2. There is no clear-cut relationship between the effort made
to produce the work and he amount of work produced.
3. Work delays occur often and are beyond the employees'
control.
4. Quality of work is very important.
5. Units of work produced cannot be distinguished and
cannot be measured.
METHODS OF WAGE PAYMENT

By the Amount of Work Produced - earnings depends on

how much work the employee completes or on a related
factor, such as the quality of work. This method of paying
wages is called an incentive wage plan.

NxU=W
In which
N - Number of Units Produced
U - Rate per unit in pesos
W- Wages earned per day or per week
METHODS OF WAGE PAYMENT

Payment by piecework is satisfactory under the following

conditions:
When a unit of completed work can be measured
easily;
When there is a clear relationship between a workers'
effort and the results of his efforts;
When the quality of work is less important than
quantity or when quality standards are uniform and
measurable;
When the flow of work is regular, breakdowns are few
and jobs follow a standard procedure, with few
interruptions.
WAGE & SALARY POLICIES

The company or any organization must have a clear-cut

wage and salary policy. These policy guidelines will help
the organization have better relationships with employees
and develop a more comprehensive employee financial
planning program.

The wage and salary must appeal to all employees and

simulate them to greater efforts.
Characteristics include the following:
1. The wage and salary plan must be easily understood.
Every worker wants to know how his company wage plan
works. To keep employees in the dark as to how their
earnings are determined could lead to distrust on the
management and fear that they are not getting paid for
what they have earned.

2. Salaries in the wage plan should be easily computed.

Most employees like to compute from to time what they
are earning and to make sure that the salaries are correct.
Therefore, a wage payment plan should be simple enough
to allow quick calculations.
3. Salaries must be made relevant with efforts. Standards
should be set and can be reached by good workers.
Standards should be set so as to challenge a worker making
him reach the extra effort. Once he has achieved the
standard, he should be rewarded for his effort with increased
earnings.

4. Incentive wage plans should provide payment for

incentive earnings to employees soon after they have been
earned for efforts exerted to reach the standards. In this
way, the reward or penalty is fixed in their minds in relation
to the work they do. Obviously, it would be too costly and
unwieldy to prepare a payroll every day. A weekly payment
of wages is most reasonable.
5. The method of payment should be stable and unvarying.
Frequent changes in wage payment plan may lead worker to
think that management is trying to confuse and or even
cheat them. It is important to choose a plan that will fit the
needs of the organization so that the necessity of frequent
subsequent changes eliminated.
Moral Renewal in the Work Place

1. Know that leaders have limitations

2. Choose character
3. Walk the talk
4. Avoid Compromising
5. Use the same measure on yourself
6. Face the mirror
7. Show the mirror to your leaders
8. Don’t just admit mistake; correct them
9. Have an improvement plan
10. Rebuild and do not slide back
Other Information Related to
Wages
Labor and Wages
The type of job one does and the financial compensation he or she
receives are very important in our society. Job type is linked to status
as is wealth. While the type of job One performs is arguably more
important status wise then wealth, both are important to Americans.

Blue Collar - Manual Laborer

White Collar - Office Worker
Pink Collar - Job associated with women like nursing, secretarial, etc.
This being a rather sexist term, is no longer used.
Other Information Related to
Wages
Today we classify our work roles into three categories called labor
grades. These labor grades are described below:

• Skilled Labor-these are workers who have received specialized

training to do their jobs. They have developed and honed a special
skill and may or may not need to be licensed or certified by the state.
The examples of skilled laborers are carpenters, plumbers,
electricians, business executives and managers, artisans, accountants,
engineers, police, mechanics, etc. These may be blue or white collar
workers.
Other Information Related to
Wages

• Unskilled Labor - These are workers who have received no

specialized training and have few specific skills. As our society has
grown into an increasingly technological one, the members of this
group have developed more and more skills. A mechanic, for
example, used to be considered unskilled labor. Today that is no
longer the case. Mechanics require a great deal of skill and training to
work with today's modern engines. Examples of unskilled laborer are
construction workers, sanitation and custodial workers, painters,
factory assembly line workers, etc.
These are blue collar workers.
Other Information Related to
Wages

• Professionals- Arguably the elite of the labor grades, these are

those workers who need an advanced degree to do their jobs. The
three primary groups of professionals are doctors, lawyers and
teachers. These are white collar workers.

These labor grades are often said to be non-competing labor grades

because workers rarely move from one grade to another and do not
compete salary wise with each other. There are reasons why they do not
compete with each other. The cost of education and training may be a
significant obstacle. They might lack the opportunity to make such a
move and they might also have a lack of initiative.
Fringe Benefit Concept

The paternalistic concept of the fringed

benefit started as welfare work by employers
among their employees and their families. The
early process gained the employees loyalty to
the company, cooperation and goodwill and
inspired them to work more efficiently. These
concepts regarded the employee as a
dependent members of one big family and
the company kept them satisfied in their jobs.
The Concept of Benefits
Benefits are anything that is not covered by
regular salaries and wages. It is anything that
contributes to the improvement of the
conditions of work, and that motivates
employees to do good work.

Benefits are granted to employees to assist them

and facilities are provided so that they will enjoy
their stay in the company.
Objectives of the Company in
Granting Fringe Benefits are:
1. To provide additional protection and comfort to their employees
and their families are they consider them as members of them.
2. To maintain and develop employees as an effective work force
duly committed to their corporate mission and vision.
3. To develop productive and happy employees and develop greater
loyalty and commitment to motivate them to remain in the
employment of the company.
Objectives of the Company in
Granting Fringe Benefits are:
4. To develop greater partnership in the development of quality
products and services to their customers and clients.
5. To develop satisfied employees and more concerned workers to
avoid activism in the workplace that will interfere with company
production.
6. To develop partnership with labor unions and employees
associations.
The Governing Philosophy In
Granting Fringe Benefits
Company benefits are additional costs in the company operations. It
must consider the company's ability to pay and contributions to the
profitability of the organization. It must also be of mutual benefit to
the giver and the receiver of benefits.
The company benefits should focus on the
following principles:
1. Company benefits should be based on financial conditions and the
capability of management to pay, as benefits granted cannot be withdrawn.
Benefits are humanitarian grants, and the capability to pay must be carefully
studied. Additional costs may lead to financial losses that could result in
company bankruptcy.

2. Benefits should not interfere with company operations, and management

has the prerogative to control the same. Additional leave credits require
proper management approval to avoid interfering with the production. Shifting
schedules ensure continuous operations, and goods must be shipped on time.
Leave credits may be used during company shutdowns, maintenance breaks, or
inventory periods.
3. Benefits should be fair, uniform, and equally given to employees of the same
rank. For example, if rank-and-file employees receive a rice allowance then all
must get the same. to prevent jealousy and maintain cooperation. Equal
treatment will avoid jealousy among managers thereby greater cooperation is
maintained.

4.Benefits must have mutual value for both employers and employees. For
example, additional leaves allow employees to rest and spend time with family,
but they are expected to return refreshed and more productive. Companies invest
in employees' welfare by providing paid leaves, which should be seen as an
investment in personal well-being.

Some companies offer additional sick leave, sickness welfare funds, or health
insurance programs to cover medical expenses. These benefits relieve employees'
worries during emergencies, ensuring they feel secure and are more efficient in
their jobs.
5. The employee must understand the costs
benefit implementation and they should work
hard so that the company will maintain its ability
to pay the added fringes. During financial crises,
employees should not expect non-essential benefits,
like outings or bonuses, to be given.

In Japan, employees often choose to forego some

benefits during tough times to support the
company's recovery, and instead, they work harder
to enjoy suspended benefits later. This partnership
fosters healthier management relations and helps
prevent further financial struggles. Unions and
various organizations must understand that one
cannot give what one does not have enough to
spare.
6.Benefits must be measured in terms of employees'
services to the company. While benefits should be uniformly
implemented, there must be a measurement in the policy
guidelines on those who should receive the benefits in terms of
the following criteria:
A. Length of service:

Employees who have one year of service are entitled to the

mandatory leave of five days per year.
The employees enjoy an additional two-day leave for every
year of service but not to exceed 15 days thereafter.
Employees get five days of sick leave after one year, with an
additional day per year until reaching 15 days.
Additional leave may be granted depending on the
company's capability to pay.
B. Retirement Benefits

Some companies pay retirement benefits outside of those

given by the Social Security System. Usually employees are
paid 15 days for every year of service. Some offer an
additional day of benefit after five more years, giving one
month of separation pay after 15 years.
Other companies pay up to two months of retirement
benefits per year of service, or more depending on collective
bargaining agreements.
Some also offer pension plans, either participatory or non-
participatory, to reduce the company's cost at retirement.
C.Other Benefit Programs

Company insurance plans covering employees and their

dependents may be provided based on their
service.Offering measurable benefits encourages employees
to stay longer, work efficiently, and improve morale. The
expectation of greater benefits with more years of service
helps reduce turnover by preventing employees from
resigning and seeking other jobs.
7. Benefit programs should be a cooperative effort of
top management and employees. Recreational and
athletic activities are fringe benefits that should involve
maximum participation from all employees. The
Human Resources Department should handle
planning, with input from department heads and
experts for success. Uniforms should be decided with
minimal management intervention to avoid
dissatisfaction.
The Classification of Benefits

Statutory Benefits

These are benefits mandated by law such as:

A. 13th month pay given half in June and half in December
B. Five-day incentive leave
C. Birthday leave
D. Maternity leave with pay for married women
E. Paternity leave with pay when husband's wife gives birth (7 days)
F. Pag-ibig Fund
G. Medicare Fund
H. Social Security Benefits
I. Cost of living allowance
The Classification of Benefits

Company Benefits

These are benefits granted by the company outside of

those mandated by law.

A. Vacation Leave
B. Sick Leave with Pay
C. Bereavement Leave
D. Hospitalization Plan
E. Sickness and Accident Insurance plan
F. Life insurance and Pension Plans
The Classification of Benefits

Company Benefits

G. Christmas and Mid-Year Bonus

H. Housing Equity Assistance
I. Educational Plan
J. Recreational and Fitness Facilities
K. Legal Aid
L. Car Plan
M. Company Service and transportation
N. Stock Option Plan
The Classification of Benefits

Company Benefits

O. Management Bonus
P. Emergency Leave
Q. Personal Leave
R. Union Leave
S. Production Sharing Plan
T. Profit-Sharing
Profit-Sharing Plans

Profit-sharing is an incentive plan under which

an employer agrees to share with his personnel a
specified portion of the net profits of his business
at the end of each fiscal period or over a given
period.

Purpose
1. It is believed that employees would feel they have stake in the
company if they get a direct share in the profits of the enterprise
in which they work.
2. It aims to modify employees' attitudes to achieve greater
employee efficiency, productivity and loyalty to the firm and
keener interest in its welfare.
3. Employers who subscribe to the concept of profit-sharing look
upon their workers as partners or co-workers of the enterprise.
Types of Plans

The Cash Plan The Deferred The Purchase Plan

Distribution Plan
Also known as the Current This program establishes a Under this plan, participating
Distribution Plan. This provides for trust fund to provide employees are permitted to
payment of the employee's share employees with future purchase often through payroll
in the profit in cash based on his payment. deductions, shares of company
salary or Wage. stock, either or less than the
prevailing market price or at per
value.
The Scope and Nature of Benefits

1. Economical and Financial Benefits

2. Recreational, Social and Athletic
Services
3. Health and Medical Services
4. Professional Services.
Managing Benefits: Planning and Administration.

Managing a fringe benefits program is an administrative and

a financial problem to the employer. This needs to be
handled very carefully as this may mean sour relations
between management and the employees. Careful planning
of the benefit programs could develop healthy
administrative relations between the workers and
management. It should be both beneficial to the employer
and the employee as well. It should be wisely managed by a
competent staff that knows the feeling of the employees
and understand management benefits program philosophy.
Strategic Benefit Implementation

Management has ot analyze the benefit payoff of any be

program. Employees expect managementto provide them
benefits management hand, job performance remains the
same.
Benevolent management on the other hand expects
employees to contribute to the company’s productivity and
profitability and the end game should be mutual benefits to
both the employer and tue employee. Since benefits are
expenses and the results are not usually immediately
appreciate, a strategic management in it’s implementation
must be considered.
Benefit Survey and Benchmarking

Benefits should be within the level of the industry in the

community and those of the competitors in business as any
added cost should affect product-pricing strategy. Cost
Information is necessary as product competition affects
company sales strategy and programs
Cost Control Strategy

In thinking about cost control strategy, several factors can

be successful. It assumed that the larger the cost of benefits
category, the greater the opportunity for savings.
Staffing Cost Strategy

Employers may change staffing practices to control benefit

costs. Benefit costs are fixed and spent per employee. The
company may require the employees to work more hours
and pay overtime premiums.

Demographic Composition Cost Strategy

The employer mus also consider the demographic factors

such as age, sex and status of their work force. The benefits
must be designed along the demographic need of the
human resources to be more relevant and appreciated.
Organization of Employees Cooperatives

Organizations of employee associations cooperatives will

greatly help unburden management of employees loans
and cash advances. This will also help employees save part
of their income and generate dividens as added incentives.

Communicating Benefits to Employees

Any strategic implementation of any program cannot take

root on employees morale without their understanding fully
the concept lsnand program of the management in the
granting of such benevolent gestures for their welfare.
Benefits are investments in the greater job statisfaction and
increased commitment for better performance on the job.
Corporate Policy and Guidelines
on Benefits

The company must develop corporate policy

guidelines for implementing any benefit program.
These policies and procedures should be created in
collaboration with all operating and staff
departments and submitted to the Board of
Directors for approval. They must outline the
procedures for implementing the program and
ensure clear communication to all employees.
Corporate policy must follow to
the following guidelines:
1. Specify who is covered by the policy.
2. Relate to family and individual assistance based on levels of
need.
3. Include the cost of work-related benefits as part of production
costs.
4. Provide security through compensation for work-related
illness and retirement benefits.
5. Promote a healthy and safe work environment.
6. Offer morale-building programs to develop employees' esprit
de corps.
7. Ensure mutual benefits for both employees and the employer.
Importance of Employee Benefits

- An important means by which organizations

successfully compete.
- Rising costs, especially in healthcare benefits
- Essential for sustaining growth and stability

Need for Effective Evaluation

• Assessing total benefit costs

• Competing in global markets
• Attracting and retaining a committed workforce
• Focus its attention not only on product cost but also
on the growing competition
Need for Effective Evaluation

• Aligning benefits programs with company growth

goals
• Have some research for better decision-making
• Make a Strategic implementation for long-term
business success
Employer and Employee Responsibilities
Employer’s Role
Social responsibility in benefits decision-making

Employee’s Role
Carry the responsibility of safeguarding their own
economic and social well-being
Protecting their employers through productive
efforts to sustain financial stability
Methods for Benefits Evaluation

Cost-Benefit Analysis
Measuring financial impact
Employee Performance & Morale Assessment
Evaluating effects
Human Resource Department Research Programs
Continuous monitoring and improvements
THANK YOU
FOR YOUR ATTENTION