GROUP 6

SEPARATION PAY, RETIREMENT PAY, 13 MONTH PAY, MATERNITY LEAVE, PATERNITY

LEAVE

Separation Pay

is a form of compensation given to employees who are terminated from their jobs through no
fault of their own. It is intended to help individuals manage their finances during the transition
period after losing their job.

Types of Separation Pay

Voluntary Separation Pay

Involuntary Separation Pay
Eligibility for Separation Pay
Employment Contract
Company Policies
Collecting Bargaining Agreement
Local Laws

SEPARATION PAY IN THE PHILIPPINES

In the Philippines, separation pay is provided to employees who are separated from their
employment due to authorized causes, such as retrenchment, redundancy, or closure of the
establishment. The amount of separation pay is typically one-half month or one month's pay for
every year of service.

CALCULATION OF SEPARATION PAY

The amount of separation pay can vary widely depending on factors such as:

- Length of Service: The longer an employee has worked for a company, the more separation
pay they may receive.

- Salary: The employee's salary is often a factor in calculating separation pay.

- Type of Termination: The reason for termination can influence the amount of separation pay.
EXAMPLES OF SEPARATION PAY IN LEGAL DOCUMENTS

- Employment Contract: "Upon termination of employment without cause, the employee shall
receive separation pay equivalent to two weeks of salary for each year of service.

- Severance Agreement: "The severance agreement stipulates that the employee will receive
separation pay in a lump sum within 30 days of their last working day."

- Collective Bargaining Agreement: "As per the collective bargaining agreement, all laid-off
employees are entitled to separation pay based on their length of service.

SEPARATION PAY IN THE MILITARY

In the United States military, separation pay is a lump-sum payment provided to eligible active
and reserve service members who are involuntarily discharged or denied continuation of
service. It is calculated based on the service member's years of active duty and their monthly
basic pay

RETIREMENT PAY

Retirement pay is a financial compensation given to employees upon their retirement, typically
equivalent to at least half a month's salary for every year of service, as mandated by
REPUBLIC ACT NO. 7641.

13 MONTH PAY

Is a form of compensation given to workers in addition to their annual salaries.

KEY ASPECTS OF 13TH MONTH PAY IN THE PHILIPPINES:

1. Mandatory Benefit: Labor Law PH Library mandates it under Presidential Decree No. 851.
2. Calculation: 1/12th of the employee's total basic salary earned within the calendar year.
3. Taxation: The 13th month pay is typically taxable, but the specific tax treatment can vary
depending on the employer's policies and the nature of the employment.
MATERNITY LEAVE

Maternity leave is a period of time that allows expectant mothers to take time off work before
and after the birth of their child, to recover from childbirth and bond with their newborn.

● REPUBLIC ACT NO. 11210, 105-Day Expanded Maternity Leave Law

● Regardless of the child legitimacy, civil status and employment status

● Optional ( extended 30 day without pay)

● If the working mother qualities as solo parents she has 15 day maternity leave with fully
paid

● In case of miscarriage/emergency termination of pregnancy 60 day with full paid is

granted by the law

HOW TO AVAIL

Female workers in the private sector and voluntary SSS contributions have at least 3 monthly
SSS remittances in the 12-month period before the semester of childbirth, miscarriage, or
emergency termination of pregnancy

PATERNITY LEAVE

- In the Philippines, The Paternity Leave Act of 1996 (REPUBLIC ACT 8187) grants this benefit
- Married male employees in both the private and public sectors are eligible

REPUBLIC ACT 11210,

a mother can transfer up to 7 days of her 105-day maternity leave to the father, regardless of
marital status, potentially extending the paternity leave to 14 days with pay

- The leave is intended to allow fathers to support their wives during childbirth and the
postpartum period, and to care for the newborn

- Benefit applies to the first four deliveries of the employee's legitimate spouse
GROUP 7

SOCIAL SECURITY SYSTEM

Is a state-run program in the Philippines that provides financial assistance to private sector
worker

The SSS was established by

REPUBLIC ACT NO. 1161, also
known as the Social Security
Act of 1954.

What are the benefits of SSS members in the Philippines?

Sickness
Maternity
Disability
Retirement
Death and funeral
Salary
Loan

HDMF OR PAGIBIG
The Home Development Mutual Fund (HDMF), commonly known as the Pag-IBIG Fund is a
government-owned
and controlled corporations under the Department of Human Settlements and Urban
Development of the Philippines.

HOW IT WORKS IN PRACTICE:

● Monthly Deduction
● Earning Dividends
● Applying for a loan

“Membership in the Home Development Mutual Fund (HDMF) also known as PAG- IBIG is
mandatory for most Filipino employees. It's also available on a voluntary basis to many
others.”
PHILHEALTH

PhilHealth is an attached agency of the Department of Health. The Philippine Health Insurance
Corporation, a
government-run health insurance program that provides health care coverage to Filipinos.

HOW DOES PHILHEALTH WORKS

PHILHEALTH WORKS BY COLLECTING

PAYMENTS FROM MEMBERS AND GETTING FUNDS FROM THE GOVERNMENT
THROUGH TAXES. IT CREATES PACKAGES THAT LISTS WHAT MEDICAL SERVICES IT
WILL HELP PAY FOR

TARDINESS
Is the habit of being late or delaying
arrival.

Filipino Time
refers to the perceived habitual tardiness
of Filipinos.

Mañana attitude
The lax attitude to time

TARDINESS IN THE WORKPLACE

To reduce tardiness, employers can:

● Encourage punctuality .
● Reward employees who are punctual and have perfect attendance .
● Address lateness on an individual basis

Why being knowledgeable in

tardiness is Crucial for Future HR:

● Attendance Management
● Employee Relations and Communication
● Disciplinary Actions and Compliance
ABSENCES
Absences refer to instances where an
employee is not present at work for a
variety of reasons
including:

● Illness or injury
● Family emergencies
● Personal appointments
● Vacation or leisure
● Weather related
● Issues

Types of Absences

1. Authorized Absences: Approved

time off, such as vacation, sick leave, or family leave.

2.Unauthorized Absences:
Unapproved time off, including truancy or absenteeism without a valid reason.

3.Planned Absences: Scheduled time off, such as appointments or medical procedures.

4. Unplanned Absences:
Unscheduled time off, such as sudden illness or family emergencies.

IMPACT OF ABSENCES

1.Increased workload for colleagues.

2. Decreased morale.
3.Financial losses.

GOVERNMENT MANDATED SALARY INCREASES

Refer to the legally required adjustments to employee compensation, as dictated by the
government, to ensure fair and equitable pay.
These increases are typically implemented to:

1. Promote Economic Growth

2. Address Income Inequality
3. Reduce the gap between the highest and lowest earners.

EMPLOYEE TURNOVER

Is the number of employees who leave a company over a specific period of time.

FACTORS THAT CONTRIBUTE TO HIGH TURNOVER EMPLOYEES

● Feeling overworked
● Companies not offering adequate professional advancement opportunities.
● Businesses offering insufficient pay or benefits to employee

HOW TO REDUCE TURNOVER?

● Hire the right people

● Reward and recognize employees
● Prioritize work-life balance
GROUP 8
DESIGNING PAY LEVEL, PAY STRUCTURE & MIX PAY

DESIGNING PAY LEVELS

Designing pay levels sets fair,competitive salaries based on job roles and experience. Higher
levels reflect more senior or skilled positions.

PAY STRUCTURE

is a system that guides how employees are paid based on their job, experience, and market
rates. it includes salary grades, ranges, and rules for adjustments to ensure fairness,
consistency, and transparency

PAY STRUCTURE VS. SALARY BANDS

Pay structure is the overall plan a company uses to decide how much to pay employees. It
organizes jobs into levels (like junior, mid, and senior) and helps keep pay fair and consistent.

Salary bands are the specific pay ranges within each level.

For example, a mid-level job might have a salary band of 60,000 to 80,000. That means
someone in that role can be paid anywhere within that range, depending on experience and
performance.

Example: The company has three (3) job levels:

1. Junior
Salary Band: 20,000 to 30,000
2. Mid-level
Salary Band: 30,000 to 40,000
3. Senior
Salary Band: 40,000 to 50,000
4 KEY COMPONENTS OF PAY STRUCTURE

Base Pay: This is the fundamental salary or hourly wage an employee receives for their job
responsibilities. It's the fixed amount paid regularly, regardless of performance.

Incentive Pay: This encourages employees to achieve specific goals or

exceed expectations. Examples include bonuses, commissions, or profit-sharing plans.

Benefits: These are non-monetary forms of compensation, such as health insurance, retirement
plans, paid time off, and other perks.

Wage and Salary Add-ons: These provide additional financial security and can include
overtime pay, shift differentials, or other allowances.

DEVELOPING PAY STRUCTURE

HOW TO DEVELOP A PAY STRUCTURE

1. Purpose of a compensation plan

2. Job analysis
3. Job evaluation
4. Market pricing
5. Salary structure
6. Compensation and Performance

MIXED PAY STRUCTURE

also known as pay mix, refers to a compensation system that combines fixed pay (like a base
salary) with variable pay (like bonuses, commissions, or profit sharing). The ratio of fixed to
variable pay can vary significantly, and it's important to consider the impact of the mix on
employee motivation and risk.

WHAT IS PAY FOR PERFORMANCE

AND HOW DOES IT WORK?

Pay For Performance

is a compensation strategy that rewards employees based on performance.

-it typically works by linking pay increases or bonuses to an individual's performance goals or
measures.
MERIT AND VARIABLE PAY FOR PERFORMANCE MODELS

MERIT PAY
permanent increase base salary for strong performance

VARIABLE PAY
bonuses or incentives based on achieving specific goals

MERIT PAY

PROS

-Encourages long-term performance

-Improves Retention

CONS

-May hurt Teamwork

-Hard to align with collaboration

VARIABLE PAY

PROS

-Motivates short-term results

-Tie pat to performance

CONS

Can cause unhealthy compensation

-Focus on narrow goals
PERFORMANCE APPRAISAL

it is also known as Performance Reviews, a process of assessing and evaluating

employee’s job performance systematically and formally.

SIGNIFICANCE OF PERFORMANCE APPRAISALS

● Feedback And Development

performance appraisals provide employees with feedback about

their job performance, identifying areas where they are excelling and
areas that they need to improve.

● Performance-based Decisions

performance appraisals are often used as a basis for making decisions about promotions, salary
increases, and other job-related matters.

● Communication And Collaboration

performance appraisals provide an opportunity for managers and employees to have a

conversation about the employee’s job
performance

● Goal Setting

performance appraisals often involve setting goals for the upcoming year or performance period

● Alignment With Organizational Goals

performance appraisals help to align employee goals and performance to overall goals of the
organization
OBJECTIVES OF PERFORMANCE APPRAISALS

the primary objectives of performance appraisals are to evaluate and assess employee
performance, provide feedback on areas of strengths and areas for improvement, set
performance goals, and make decisions regarding employee development and career growth.

HERE ARE SOME SPECIFIC OBJECTIVES OF PERFORMANCE

APPRAISALS

● Evaluate Employee Performance

● Provide Feedback
● Set Performance Goals
● Identify Training And Development needs
● Determine Compensation And Rewards
● Support Performance management
● Identify Potential For Career Growth

TYPES OF PERFORMANCE APPRAISAL

1. Trait based appraisal

2. Self appraisal
3. Result based appraisal
4. Behavior based appraisal
5. Management by objectives