QUARTER 2 _ MODULE 4 Employee Compensation, Performance Evaluation, Reward System, Employee Relations, and Movement What is It Human Resources is considered the organization's most important resource. Very few administrators would argue with the fact that human resources are very important for the efficient and effective operation of a company. Human resources are also called human capital, intellectual assets, or management or company talents to emphasize their importance. These terms implied that human resources are the drivers of the organization's performance. Hence, employees welfare staffing must be considered a crucial function of managers. Have you experienced working in a company or any works that you have received payment for? How much have you earned? Where did you use it for? Have you enjoyed your compensation? Every manager is a resource manager. Employees, undeniably, are the organization's most important asset. Through the roles, employees play and the coordination of these roles done by the manager, organizational goals are achieved. As you have learned in the past lesson, staffing as the managerial function of finding the best and qualified to perform and fill in specific positions in the organization is important. This chapter tackles finding, keeping, and bringing out the best in people through staffing practices and techniques. It discusses the recruitment and selection process and the different kinds of training programs given for employee development. It concludes with providing fair and consistent treatment to employees through proper performance appraisal, compensation, reward system, and employee relations. Compensation or wages and performance evaluation are related to each other because the employees excellent or poor performance also determines a 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 Compensation can come in different forms. It may be direct, indirect, or non-financial. It includes both the financial and the non-financial rewards that organizations give employees in exchange for their work. Compensation 4 serves as a motivational factor for employees. Pay represents a reward that an employee receives for good performance that contributes to the company's success. Types of Compensation

1. Direct compensation includes workers' salaries, incentives, bonuses, and commissions.
2. Indirect compensation includes benefits given by employers other than financial remuneration (example: travel, educational and health benefits, and others).
3. Non-financial compensation includes recognition programs, being assigned to do rewarding jobs, or enjoying management support, an ideal work environment, and convenient work hours.

Theories related to compensation:

1. Equity Theory, which is related to fairness, is a motivation theory focusing on employees response to the pay they received and the feeling that they received less or more than they deserve. Employees generally feel that their pay must be commensurate to the effort exerted in their job performance. In other words, pay equity is achieved when the pay given to them by their employers is equal to the value of the job performed. Thus, this motivates them to perform well and do their jobs to the best of their abilities.
2. Expectancy Theory is another theory of motivation that predicts that employees are motivated to work well because of the attractiveness of the rewards and benefits that they may receive from a job assignment. The employees' perception of the compensation or be attached to a job position is an important factor in a certain name the motivational value of compensation.

The four basic kinds of compensation decisions:

1. Pay-level decisions are decisions about whether to pay workers at a level below, above or current market wages. Companies use job evaluation to set their pay structures. Job evaluation determines the worth of each job by determining the market value of the knowledge, skills, and requirements needed to perform it.
2. Pay variability decisions concern the extent to which employees pay

varies with individual and organizational performance. Common pay-variability options.

1. Piecework is a compensation system in which employees are paid a set rate for each item they produce.
2. The commission is a compensation system in which employees earn a percentage of each sale they make.
3. Profit-sharing is a compensation system in which a company pays a percentage of its profits to employees in addition to their regular compensation.
4. Employee Stock Ownership Plan (ESOP) is a compensation system that awards employees shares of company stock in addition to their regular compensation.
5. Stock options are a compensation system that gives employees the right to purchase shares of stock at a set price, even if the value of the stock increases above the heat price.
6. Employee benefits are a method of rewarding employees that includes virtually any kind of compensation other than wages or salaries.
7. Pay structure decisions are concerned with internal pay distributions, meaning the extent to which the people in the company receive very different levels of pay. With a Hierarchical pay structure, there is a big difference from one pay level to another. By contrast, the Compressed pay structure, typically has fewer pay levels and smaller differences in pay between levels. Pay is less dispersed and more similar across jobs in the company.
8. Employment benefits include virtually any kind of compensation other than direct wages paid to employees.

Three employee benefits are mandated by law: 1. Social Security (SSS), 2. Workers compensation insurance (Philhealth), and 3. Unemployment insurance. Two employee benefits options:

1. Cafeteria benefit plans (flexible benefit plans) plans that allow employees to choose which benefits they receive, up to a certain peso value, and
2. Pretax payroll deductions enable employees to pay for expenses such as medical care, daycare, and community out of pretax dollars.

Bases for Compensation: Employees may be compensated on the following bases:

1. Piecework basis when pay is computed according to the number of

units produced.

1. Hourly basis when pay is computed according to the number of work hours rendered.
2. Daily basis when pay is computed according to the number of workdays rendered.
3. Weekly basis when pay is computed according to the number of workweeks rendered.
4. Monthly basis when pay is computed according to the number of birth months rendered.

Factors that influence Compensation Rates:

1. Internal factors are the organizations' compensation policies, the importance of the job, the employees qualifications in meeting the job requirements, and the employer's financial stability.
2. External factors include local and global market conditions, labor supply area original wage rates, cost of living, collective bargaining agreements, and national and international laws.

Performance Evaluation Performance Appraisal is the process of assessing the contribution of the employees, and the day achievement goes through the measurement and evaluation of these productive activities. The performance of employees under the supervision of the manager is his primary concern. The manager needs to assess whether he is performing well or there is room for improvement to conduct a fair performance appraisal, and a manager should communicate the responsibilities of the job when an employee is hired. Purposes of Performance Evaluation: Administrative and Developmental Improving individual job performance through performance evaluation is just one reason why employees are continuously subjected to assessment. There are other purposes behind employee assessment that are beneficial to both the company and the employees. Other purposes of Performance Evaluation:

1. Administrative purposes are fulfilled to appraisal or evaluation programs that provide information that may be used as a basis for compensation decisions, promotions, transfers, and terminations. Human resource planning may also make use of it for the recruitment and selection of potential employees.
2. Developmental purposes are fulfilled through appraisal or evaluation

programs that provide information about the employees performance and their strengths and weaknesses that may be used as a basis for identifying their training and development needs. Through this approach, the workers become more receptive to the explanation given by the organization's management regarding the importance of having evaluations at regular intervals, but these are conducted to improve their competencies to prepare them for future job assignments. Performance Evaluation Methods The methods of evaluating workers have undergone development to adapt to new legal employment requirements and technical changes. Some Evaluation Methods used today:

1. Trait Methods are performance evaluation methods designed to find out if the employee possesses important work characteristics such as conscientiousness, creativity, emotional stability, and others.
2. Graphic Rating Scale is a performance appraisal method where each characteristic to be evaluated is represented by a scale on which the evaluator or rater indicates the degree to which an employee processes that characteristic.
3. Forced-Choice Method is a performance evaluation that requires the rater to choose from two statements purposely designed to distinguish between positive or negative performance. It is a behavioral approach to performance appraisal that includes 5 to 10 vertical scales, one for each important strategy for doing the job and numbered according to its importance.
4. Observation Scale or BOS is a behavioral approach to performance appraisal that measures the frequency of observed behavior.

Employee relations Employee relations generally avoid and resolve issues concerning individuals that might arise out of or influence the work scenario. Good employee relation signifies that employees should feel positive about their identity, their job, and being part of such a great organization. Employee relations apply to all phases of work activities in an organization. To be effective, managers must encourage good employee relations among all human resources under his/her care. What is/are the importance of employee relations? Maintaining healthy employee relations in an organization is a prerequisite for organizational success. Strong employee relations are required for high productivity and human satisfaction. Strong employee relation depends upon healthy and safe work environment, Involvement and 8 commitment of all employees, incentives for employee motivation, and effective communication system in the organization. Healthy employee relations led to more efficient, motivated, and productive employees, which further increased sales levels. Some barriers to good employee relations

• Antisocial personality or the refusal to share more about oneself to co employees or being alone.
• Lack of trust in others
• Selfish attitude or too many self-serving motives
• Not a team player

Ways to overcome barriers to good employee relations:

• Develop a healthy personality to overcome negative attitudes and behavior.
• Find time to socialize with coworkers.
• Overcome tendencies to be too dependent on electronic gadgets.

Three Types of Employees

1. Engaged employees are those who work with passion and feel a deep connection with their company. They drive innovation and move the organization forward.
2. Not Engaged Employees are employees who are essentially checking out, and they put time, but not energy or passion, into their work actively
3. 3. Disengaged Employees are employees who are unhappy at work and act out their unhappiness and undermine their engaged co-workers accomplishment. Disengaged employees are often characterized by being conceited, cultural or subcultural differences, lack of cooperation, communication problems or refusal to listen to what others seek to communicate, and lack of concern for other's welfare.

Labor Union is a formal union of employees or workers that deals with employers, representing workers and their pursuit of justice and fairness and in their fight for their collective or common interest. Reasons why employees unionize: Employees or workers unionize because of financial needs, and their management practices, or social and leadership concerns. ? Financial needs complaints regarding wages or salaries and benefits given to them by the management are the usual reasons employees join labor unions.

• Unfair management practices employees' perceptions regarding unfair or biased managerial actions are why they join mass movements. Examples are lack of fairness in management or favoritism related to promotion and training opportunities and exemption from disciplinary action.
• Social and leadership concerns some join unions to satisfy their need for affiliation with a group and the prestige associated with the co-workers recognition of one's leadership qualities.

Reward system A reward is something given or done in return for good received. Organizations offer a competitive reward system to attract knowledgeable and skilled people and to keep them motivated and satisfied once they are employed in their firm. Further, rewards promote personal growth and development and present fast employee turnover. Types of Rewards

1. Monetary rewards awards that pertain to money, finance, or currency. a. Pay or salary is a financial remuneration given in exchange for work performance that will help the organization at then its goals. Examples are weekly, monthly, or hourly pay piecework compensation, etc. b. Benefits are indirect forms of compensation given to employees or workers to improve the quality of their work and personal lives. Health care benefits, retirement benefits, educational benefits, and others are an example of these.

1. Incentives rewards that are based upon pay for performance philosophy. It is established as a baseline performance level that employees or groups of employees must reach to begin then such a reward or payment. Examples are bonuses, intake, sales incentives, etc.
2. Executive Pay a compensation package for executives of organizations that consists of five components basic salary, bonuses, stock plans, benefits, and perquisites.
3. Stock options plans that grant employees the right to buy a specific number of shares.

1. Non-monetary rewards are rewards that do not pertain to money, finance, or currency. It refers to intrinsic rewards that are self-granted and which have a positive psychological effect on the employee who receives them.
   1. Award a non-monetary reward that might be given to the individual employee or group for their exemplary performance. Recognition may be given and instead of cash or an expensive reward.
   2. Praise a form of non-monetary intrinsic reward given by a superior.

Employee Movement

1. Transfer a movement to a different job with similar pay & responsibility
2. Promotion advancement in position with higher pay & responsibility 3. Demotion a movement to a lower-status-position.

Whats More Activity. Essay Directions: Answer the following questions briefly.

1. Do you agree that social support and effective employee relations always go together? Explain your answer.

1. How important is effective employee relations to the achievement of company goals?

1. Choose three barriers to good employee relations mentioned in this lesson and explain their adverse effects on attaining its objectives.

1. What is the effect of too much dependence on electronic gadgets on good employee relations? Explain your answer.

Output 4. Get me involved. Directions: Interview someone who has been an Employee. Ask them the following questions and their experiences related to; Ask them the following questions:

1. what inspired you to pursue this career path?
2. can you describe a typical day at work?
3. what skills do you think are essential for success in your job?
4. what is the most challenging aspect of your job?
5. how do you handle difficult situations or conflicts at work?
6. what kind of training or education is required for your job?
7. how do you stay updated with the latest developments in your field?
8. what do you think are the most important qualities an employee should possess?

Ask them about their experiences related to:

1. Employee compensation (salary, Benefits)
2. Performance evaluation (based on your Attendance, Time in Time out)
3. Reward system (13-month pay)
4. Employee relations (describes the relationship between employers and employees)
5. Employee movement (the transfer of employees from an organization to another)

Write a two (2) three (3) paragraphs about the interview and your realization.

Score	Standards
3	The students answer is correct, clear, and grammar error-free
2	The students answer is somewhat correct, clear, and with few grammar errors
1	The students answer is incorrect, unclear, and full of grammar errors

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