JOB ANALYSIS AND WORK FLOW ANALYSIS

A sound human resource management program requires knowing the different jobs in the
company. The manager and supervisor must get a comprehensive picture of each job in his
organization. This involves - what each worker does, how he does it, why he does it and under
what conditions he performs his job and what special qualifications each worker must possess
to perform his job satisfactorily.

Analysis of the organizational structure is the vertical and horizontal relation to those above the
organization and those down the line of the organization and interconnections among jobs. We
must have a thorough understanding of how one job works at the same level of the functional
areas. Analysis of the organization structure can be a leverage to gain a competitive advantage
for the company, but how one does this depends on the firm's strategy and its competitive
environment.

A major quality program is the need to identify clearly the output requirement for a particular
type of job. To design work systems that are maximally efficient, a manager needs to
understand the processes required in the development of the products for their work units.
Without a clear understanding of the tasks necessary to the production of the desired output, it
would be difficult to determine whether the
work is under-staff or over-staff.

The Rationale for Job Analysis

● The conduct of job analysis has behind it several reasons that are vital to human
resource management and the supervision of the work to be done by the workers in the
shop or the office. It is considered as the building block of anything that human resource
management does, as any personnel action requires information that is gleaned from job
analysis.

The following are the uses of job analysis:

1. To specify the duties and responsibilities of the position. It examines what the employee will
perform, what skills are needed, the condition in which work shall be done and the range of
difficulty or complexity of the action.

2. To provide job-oriented recruitment and selection guides. Those in the recruitment and
election of employees must be familiar with the duties and responsibilities of the vacant position.
To identify which applicant is most qualified, it is necessary to determine the tasks that will be
performed by the individual hired as to skills, knowledge and abilities.

3. To provide guides in the operation-based compensation determination process of job

evaluation involves the relative peso value of each job to the organization to set up equitable
pay structures. To get the peso value on jobs, it is necessary to get information about different
jobs, which job deserves higher pay than others.
4. To provide information and tools for career planning and counseling. Career planning entails
matching individual skills and aspirations that are or may become available in the organization.
This matching process requires that those in charge of career planning know the skill
requirements of the various jobs. This allows them to guide individuals into jobs that will fit into
their qualifications and where they will be happy and satisfied. Counseling refers to the giving of
advice and problems that the employees meet in the performance of their tasks and duties in
the positions where they are assigned.

5. To have a guide in the construction of performance evaluation criteria. Performance criteria

deals with getting information about how well each employee is performing his job in order to
reward those who are effective. The information generated by job analysis unveils the aspect of
the jobs that are measurable and should logically be evaluated in the performance appraisal of
the employee.

6. To serve as a guide in methods improvement. Job designs consist of different steps or

processes. Job analysis provides the information to design the work process most effective in
carrying out the tasks. This involves improving methods and developing more efficient systems
at work.

7. To obtain background information about working conditions. The environment of work

positively affects the productivity and morale of the workers. This information is available in job
analysis and could be used by management in positively identifying the hazards and other
conditions that affect job performance.

8. To serve as a guide in the development of training programs. Almost all employees hired by
an organization will require training in their jobs. Some training programs may be more
extensive than others. Job analysis provides the required information to ensure that the training
program will prepare the individual to perform the job effectively.

9. To assist the supervisor in the supervision of the employees. Supervisors are provided with
precise and detailed description of the jobs under their respective areas or departments and
they can make this serve as bases for judging their performance.

10 To provide the conceptual basis for position classifications to the employee who will occupy
the position. The bases of any position title are the tasks, duties and responsibilities of the job.
Managers without proper job analysis might assign position titles that are not related to the
functions of the position.
The Job Analysis Program and Organizational Structure

Job analysis starts with a careful study of organizational structure. This would reveal the
relationships of jobs within the organization. Organizational structure is often seen in
organizational charts that convey the vertical and horizontal relationship of the two. The type of
organizational structure has implications on the design of the jobs. A functional structure needs
specialization and the responsibility is focused on specialized skills hence supervision and
decision-making become minimal. In a divisional structure, jobs are holistic and people are
working in teams that tend to have greater decision-making and authority.

Job analysis is the process of getting detailed information about the tasks, duties and
responsibilities of the job as seen in the organizational structure. For the company to succeed, it
must have detailed information about the requirements between job requirements and the
individual aptitudes and qualities to fit into the position in the organization.

Management must understand that it is of great importance for an organization to match job
requirements and people to achieve high-quality performance to be more competitive in today's
global marketplace.

Job analysis is a continuing program. Organizational structure changes due to the introduction
of new technology in order to be competitive in the global economy. Any simplifications of
changes in structure carry additional duties and responsibilities or functions. These changes
need job redesigning to conform to organizational needs for greater efficiency and productivity.

The Role of Human Resources in Job Evaluation

Job analysis is not the sole responsibility of the Human Resource Department but a cooperative
effort of all operating departments. While it is more of a personnel function. the greater bulk of
information must come from the persons who are jobholders of the position. The supervisor or
manager must immediately inform the HRD of any changes in the duties and responsibilities of
the position due to the introduction of new technology or changes in the production process that
improve production efficiency. This will entail job redesigning or reclassification of the position
that may involve a total change in pay structure due to increased responsibility or exposure to
elements of hazard or working conditions.

Some companies get the services of management consultants to conduct a job analysis
program to be more objective. Management consultants are more objective as they have more
experience in conducting the job analysis program due to their exposure to different
organizational systems. Another reason is that there are managers who try to overstate the
functions and duties of the different positions, as they know that they have great implications in
the company's pay scale. The other reason is that some HR practitioners are not very
knowledgeable in conducting job analysis as this is a more specialized activity that involves
careful study.
The Gathering of Job Information

● Job Analyst
- The study of jobs is the responsibility of the personnel department through the
job, the duties, responsibilities, and the specification requirements of the job. This
involves careful understanding of the conditions around the functions and tasks
of the positions.

Getting Process in Job Information

● Job analysis starts with a careful understanding of the relationship of the jobs in the
organizational structure. This relationship is concerned with the details of the job rather
than with the worker who is assigned to do the job.

The following factors are important considerations in job analysis:

1. What the job requires the employee to do. Job requirements involve the activities that
workers have to do the importance of the duties or activities. The amount of time that is involved
in doing the job and other minor duties required of the job.

2. How effectively does the employee perform his assigned duties and responsibilities? This
involves the detail on how the workers perform the assigned tasks, the materials and essential
tools and equipment required to do the job, the skills required and the methods and procedures
involved in doing the work.
3. Why should the worker do the job? This covers the reason why the employee has to do the
tasks assigned to him and the purpose of the job in relation with those of other jobs in the
organization. The tasks should justify its contributions to the effective and efficient functions in
the organizational work systems.

4. Supervision required in the job. The details in supervision requires the amount of supervision
involved or the assistance needed in carrying out the job, the extent of employee's authority in
carrying out the functions and the extent of relationships of the job with those others in the
organizational setup.

5. Working environmental conditions. This deals with the conditions prevailing in the work place,
like exposure to hazards, heat, or other elements that affect the performance of the job. This
may involve the conditions of comfort or discomfort while the employee is performing the tasks
assigned to him.

The Importance of a Job Title

● The correct title of a particular job is very important in the organization. Similar job
placements in the organizational ladder thereby job inconsistencies can be avoided with
the other jobs in the unit or department. The job relationships will provide better The
specific titles will clarify the employees' line of movement in the organizational structure
and they should be grouped in job families in the line and staff organization identification.
Job titles must reflect the major job functions. The company must prepare a titles of all
jobs and it must use standard terms

The following are suggested guidelines in job title selection:

1. The title must be standard used in the industry.

2. It must be suggestive of the nature and function of the jobs.
3. It must be different from other jobs based on major duties of employees who hold the
position.
4. The job titles must be brief but suggestive of its functions.

The Nature of Job Analysis Information

● Job analysis focuses on the two important data or information that managers must have:
the right information about the nature of the employees' job. This information is reflective
of what the employee does daily, weekly, monthly or annually. It also reflects the
conditions or the working environment in the organization. These two important factors
are:
1. The Job Description
● The result of any job analysis program is the writing of the job description. The job
description contains the tasks, duties, and responsibilities that the job entails. This
information is derived from the job analysis report.

The following are the uses of job descriptions:

a. It helps identify and distinguish one job from other jobs.

b. It is used as a tool in the proper employee recruitment, selection and training.
c. It helps establish job relationships within the salary bracket.
d. It serves as a guide in structural departmentalization.
e. It could be used as a guide in the horizontal and vertical promotion employee's thereby
developing and promoting morale.

2. Job Specification
● The job specification contains information about the employee's qualifications and traits
required in the effective performance of the work assigned. It specifies the qualifications
as to education, training, experience and the statement as to the nature of the
environment where the employee is assigned.

This information could be used in the following personnel activities:

a, It serves as a guide in interviewing applicants.

b. It is a guide in the proper selection of the employee as to his qualifications for the proposed
vacant positions.
c. It is used in the assessment of employees for training and development.

JOB DESCRIPTION

Position — Human Resource Assistant Department — Human Resources

Job Code — HR 002 Salary Grade — Pay Grade 5

Job Summary
● Under the direct supervision of the Human Resource Manager assist in the general
functions in the recruitment, selection, training, benefits administration, performance
appraisal and other related duties inherent in the function of the department.
Specific Duties and Responsibilities

1. Assists in the processing of application by conducting preliminary interviews to applicants to

determine their initial qualification for the position being applied.

2. Determines the qualification requirement for the positions and makes reports to the
immediate supervisor for the applicants that meet the initial evaluation.

3. Assist in the giving of examination to applicants to determine their suitability to the position
being applied for and makes reports of the results.

4. Assist in the orientation program to ascertain that the new employees are properly oriented
with company rules and regulations and other company policies.

5. Prepare reports to the Social Security System, Pag-Ibig Fund, Philhealth and other
government instrumentalities to comply with government requirements as directed by the
immediate superior.

6. Assist in the periodic Performance Evaluation of employees and makes records in their HIRS
or 201 file for references in terms of salary adjustments
or promotion.

7. Assist in Job Evaluation program conducted by the department through the distribution and
retrieval of questionnaires for further analysis of the Job
Analyst.

8. Coordinates with other departments on employees' requirements such as leave of absence,

sick leave notices, maternity leave and other benefits.

9. Does other related duties and assignments that may be required from time to
time.

JOB SPECIFICATIONS
1. Education - College Graduate Major in Human Resource or Psychology.

2. Training - On the Job training at the HRD for at least 500 hours.

3. Job Location - HRD is usually in an air conditioned room.

4. Assignments - May be assigned to liaison work with government offices and may be exposed
to traffic and dust.
Job Analysis Methods
● There is no best method in job analysis. The method to use depends upon the purpose
of the analysis, the time element devoted to it and the amount of money that the
company would like to spend for the activity.

1. The Job Questionnaire Method

The accuracy of job information is necessary. The job analyst prepares the questionnaire based
on the purpose of the job analysis. The form to be used is carefully prepared based on the
simple understanding of the employees who will answer them. The set of questions contains
information as to its purpose, clear-cut instructions and the procedure on how to accomplish the
questionnaire.

The questionnaire is distributed to the supervisor who will then require the employee concerned
to answer it, the supervisor then reviews the information as to its accuracy. He talks with the
employee concerned with the information which he thinks does not conform to his judgment.
The corrected questionnaire is then forwarded to the HRD for finalization of the job description.
The study of the job information should be a continuing process.
The duties and responsibilities change due to changes in technology and other needs of the
organization. Job descriptions should be reviewed annually.

2. The Interview Method

The interview method is commonly used for blue-collar jobs, as the employee may not be able
to answer the questionnaire. The job analyst gets the information by interviewing the employee
about his job or the immediate supervisor. To get the more specific data the analyst is guided by
a set of facts about the job and records or takes notes on the information given by the
employee. The analyst gathers information and acquires a personal impression about the job
and later these will contribute to the accuracy of his job description. A well- trained job analyst
gives the feeling that the job is properly evaluated and the employee is satisfied.

3. The Combination of Interview and Questionnaire Methods

Under this method, the job analyst gives the questionnaire and then conducts an interview later.
The analyst verifies the information from the employees' immediate supervisor through a
structural interview. To verify further information, the analyst interviews the employee
concerned. The contents of the questionnaire and the verified information are the bases for the
writing of the job description.
4. Observation and Interview Method

This method is involved in the observation of the worker at the job site and in their station. The
observation is noted while the employee is performing the tasks assigned to him. Oftentimes,
time and motion study is involved in this activity. After the observation the job analyst interviews
both the worker and the supervisor to verify the information gathered through observation and
the results of the time and motion study. The results of the interview, observation and time
motion study are the bases of the written job description, which will be sent to the supervisor
and the employee concerned for final review and final printing.
WAGE AND SALARY ADMINISTRATION

The Role of Human Resources in the Payment of Salaries

One of the most important functions of the Human Resources is the payment of the
proper salaries and wages to all company employees. The pay that the employees
receive from their employer is the very reason for their being in the job. The pay
provides them with a strong incentive to do their jobs well and the rate of pay indicates
their status in the company. The pay determines the standard of living and their
positions in the community that they live. It must be commensurate with their efforts and
contributions to the companys' profitability index. The determination of the proper level
of pay is the foundation of an effective employee and employer relationship as a
satisfied worker will stay longer in the company and develop a working team that could
be beneficial to both parties. One way to retain competent employees and keep their
morale high is to plan salary levels so as to establish uniformity of pay in relation to the
job in the company and those in other business establishments in the community.

The function of the payroll in a company is usually the wage and salary administration
and it is carried out by the Human Resource Department. The most important duty of
the Human Resource Department is to set wage scales high enough to attract better
employees and contribute to the level of profitability that will sustain continuous
profitable operations. The level of pay must not impair profits, however.

Theories of Wages

● Wage theories deal with the payment of labor employed in competitive

enterprises. Wages represent the payment of one factor of production that is
manpower. Profits and capital could not be attained without the manpower that
has to be paid according to their contribution for the acquisition of enough capital
to attain the desired profits. Wages are the contributions or are the shares paid
for the value of land, capital and profits.
1. Classical Wage Theory

This theory is based upon the fundamental concept that labor is a commodity and we
have to pay the price according to supply and demand. When the labor supply is greater
than the demand, the lower is the price and when there is greater demand the higher is
the price. The price of labor, which is called wages, is necessary to keep the laborers to
subsist and perpetuate their race. Wages should not fall below subsistence level. When
the supply of labor reaches below the industrial requirement, there will be a competitive
bidding among employers and therefore there will be a consequent rise in wages. When
the price of labor is below the natural price, the condition of laborers is most wretched.
When this happens the laborers could be deprived of those comforts which customs
render as absolute necessities.

2. The Just Wage Theory of St. Thomas Aquinas

A just wage is described as wage which permits the recipient worker to live in a manner
in keeping with his position in society. This doctrine is related to social organization
based on the individual in the social organization.

According to this theory, the workers' cost of living should be considered first in the cost
of production. Wages are responsible for allocating labor to various occupations.
This theory is the basis in the implementation of minimum wage laws. While it could not
be consistent with the minimum requirements for a decent living in the social
organization, it responds to the basic requirements for subsistence living. The creation
of the Tripartite Board composed of Labor, Management and the Department of Labor is
the answer to the study of the implementation of just wages.

3. The Wage Fund Theory

The wage fund theory expounded by John Stuart Mill and his followers is based on the
Malthusian theory of population and the law of diminishing returns. This theory holds the
idea that the working capital of the nation provides a fund from which wages can be
paid. The fund is to be divided by all the workers proportionately. When a certain group
gets a greater share of the total fund, the rest in the group will have less to share. An
increase in the wages of some through collective bargaining or any other pressures will
adversely affect the wages of others.
Under this theory it would appear that it is futile to attempt to increase wages. It would
appear that when you increase the wages of other workers in the company, it would
redound to decrease the wages of the other sectors, because the portion of the
corporate wage fund goes to the selected sectors in the organization. A comment under
this theory is that the fund should be elastic for all the other factors of production such
as capital, maintenance, materials and labor. It should be elastic enough to meet the
economic conditions prevailing at the time and the conditions of the corporate economy.

4. Bargaining Theory of John Davidson

The bargaining theory proposes that labor is a commodity like anything that could be
bought at a price by the user. As a commodity, it carries with it a price that is
determined by the bargaining process between the buyer and seller. The sellers of labor
are the workers and the buyers are the users or the industries that utilize their services.
The labor sets the limit of the value of their services as conditioned by the utility of
reward. Such reward is conditioned by what their money can buy with the wages in the
light of their actual standard of living.

The bargaining theory brings about the organization of labor unions. These unions
bargain with management for their services. The management then sets the discounted
value of labor based on the value of output in question; while labor demands the living
wages that they think is enough to sustain a decent living condition. When management
sets a rigid limit on the funds available for labor as it affects operating cost and
profitability; on the other hand, labor insists on living wages for their effort. The resultant
condition is either a strike or a lockout.

5. The Marginal Productivity Theory

The marginal productivity theory offers the best explanation of the wages in modern
industry. The supply of labor in any given economy on the whole depends upon the total
number of individuals who want to work and available for work. Worker's mobility, which
is the transfer from one company to another due to opportunities in the other company,
affects the structure of wages in the industry. It is not only the difference in wages that
makes the employee transfer to another company. Better opportunities for
advancement, more benefits, better working environment, or even the corporate
atmosphere are other factors that affect mobility. In this juncture, it may be surmised
that mobility is not judged by the amount of movement but the degree to which existing
job differences call for worker movement.

The hiring of added labor force, or the transfer of one employee to another company at
a particular wage is based on the assumption of the company that the added labor will
contribute to the increase in production output or the increase in the quality of the
product. While such assumptions may have bearing to a certain extent, any increase in
manpower tends to decrease the value of the marginal product as the number of
workers increases. In our developing economy where manpower is in great supply
against demand, competition in the labor market is seldom felt by the industry, except in
some critical positions where specialization is in great demand.

6. The Purchasing Power Theory

The purchasing power theory tries to establish the relationship between wages and the
level of economic activity. The level of economic growth is dependent upon the savings
generated because the increase in wages creates a surplus that propels growth. The
more income the worker gets, the bigger the purchasing power of the workers; then this
increases consumption of goods and services. Increased consumption of goods
generates employment opportunities.

7. Labor Theory of Value

Karl Marx propounds this theory of labor. This gives credence to the value of labor. It
emphasizes that labor is the source of all products and that without this important
component, there could be no goods for human consumption. Every good that is
produced could be traced back to the participation of the worker and, therefore, labor
must get the greater share of the profit. This is the philosophy of some organized labor
groups who are more active in the greater share of the profits of the company
operations. These labor unions have the notion that profits are the surpluses of the
other factors of production, and are pocketed by the capitalist businessman making
them amass wealth.

Profits should be shared with labor as they create the goods that generate these surplus
incomes. Economic activity is created by capital, by the surplus profits that create
investments. When employer's contentions run counter to the activists' group of labor
unions, this can create labor unrest detrimental to both labor and management and
even to economic growth.

8. The Standard of Living Theory of Wages

A recent development in the labor market is the theory of living wages that means that
wages should be based on the cost of living. The cost of living is dependent upon the
economic needs of the family for the basic necessities of life for food, clothing and
shelter. While the philosophy is economically sound for the improvement of the living
conditions of the labor force, it is counterproductive due to the forces of global economic
activity. Our productivity index has to do with increased competition in the global market
and our products must be paired in quality and price.

Any increase in economic growth would redound to increased wages. Nevertheless an

increase in income would mean more consumption. More consumption increases the
prices of goods and thus living wages also need to be increased proportionately. There
could be no end to this argument. It is the government, labor and management that
must sit together to determine the level of living wages if possible by industry and by
region.

Wage and Salary Surveys

● Once the worth of a job has been established using one of the job rating
systems, the actual salary to be paid for each job must be determined. A major
factor in making the determination is the wage survey. Since salaries paid by
other companies have an effect on employment, morale and turnover rate, close
attention is paid to the salary that is prevailing in the community and industry for
specific jobs.

● Most companies participate in wage and salary surveys or they conduct their own
surveys. Informal surveys may be conducted through telephones and informal
interviews. Formal salary and wage surveys are questionnaires based on
benchmark jobs that are also present in other companies and industries. In the
formal survey method, the Human Resource Department prepares a set of
questionnaires incorporating common jobs present in the company and is
comparable with other jobs in other industries.

Procedure in Conducting Wage and Salary Surveys

 ● Before embarking on a wage and salary survey, the Human Resources
Department should study the wage and salary data that are already available. In
any request for survey data, it could be recognized that job title alone is not good
enough for matching jobs. Each job title should be accompanied with one
paragraph job description so that it is possible to accurately compare jobs. In
addition to the base salary, the information should include data on shift
premiums, overtime payment practices and methods of wage payment. Some
surveys also include questions on paid holidays, vacation, policies, pension
benefits, group health cards and life insurances and additional leave pays. These
data are needed for more analysis of the total pay structure and its relation to
other company benefits.

Defining the Labor Market

List of Key Job Positions

List of Key Job Positions

Detailed description of Jobs

Collection of Salary Data

Compilation of Salary Data

Results of Survey

The following are the steps in conducting the survey:

1. Defining the labor market. Establishing the boundaries of the pertinent labor market is
the most critical step in the survey procedure. It involves the selection of the industry,
the region or area or the firm to be included in the survey.

2. List of key jobs and positions common to most firms in the survey. This will ensure a
representative sampling of the jobs that will be selected as universal for a particular
wage or salary survey.

3. A detailed description of the key jobs and positions that are to be included in the
survey and that is common to most firm or industries. Key jobs are labor grades that are
comparatively stable in duties and responsibilities. These are occupations that are
common in most industries and scattered through the ladder of labor classification and
commonly familiar to most people in the industry.

4. Collection of accurate wage and salary data. This may be done through a set of
questionnaires and supplemented by interviews to get the accurate information. The
information must be able to pinpoint the problem area that has to be addressed by the
compensation level, compensation structure and the terms of the payment plan.

5. A compilation of the wage and salary data for each job. The data gathered will
provide management with the opportunity of arriving at the arithmetical average, the
median and the range or rate paid and the supplementary wage
data.

6. Presentation of the results of the survey. The results are properly evaluated and HRD
prepares the corresponding recommendations to the management of the most
appropriate action to take relative to the revision of the current wage structure.
Participating companies are also provided with the summary of the findings to foster
continuous cooperation.

After the organization completes the salary survey and finds out what he prevailing
salaries are in the community for comparable jobs, it must then make
several decisions:
1. Whether the company should pay salaries above, below or at the same level, as the
others in the same industry in the community are paying for the same jobs.

2. Whether the company should pay a single rate for each job, or slot the jobs into
ranges or grades which would provide room for merit increases.

3. How many pay grades or salary ranges to use, and how wide each pay grade should
be (from the minimum of the grade to the maximum).

4. What is the range of the amount in terms of money value that should be allotted for
each salary grade level?

Although there are no set rules for making these decisions, one tool that is often used to
simplify the process is the use of two-dimensional graphs, also known as data trend
graphs. When the graph is used with the point system, the values of the points for key
jobs in the industry are plotted with the lowest pay at the bottom. The data survey for
any job is then plotted according to the evaluation points and grades. Eventually all the
pay survey data should be plotted.

An examination of the graph will indicate the trend of the data plotted. A line is drawn to
indicate this trend, using one of the following techniques:

1. Eye Inspection

The line is drawn freehand so that about the same number of data points fall above the
line. It follows the general trend of the data. This technique is the least scientific and
reliable as this does not require scientific computations. It is more of a judgmental
analysis that is used only by experts in the field of job evaluation.

2. The Least Squares

This uses the statistical formula; the trend line will normally follow a straight path. It
presents more accurately the relationships between the peso or money value and the
points for the key jobs.

3. The Second Degree Curve

Using another statistical formula; the trend line will normally take the form of a curve
and may more accurately indicate the trend of the data.
The trend line should correctly reflect the trend of the data collected so that competitive
pay rates and ranges will hold throughout the structure. If the ranking method is used,
the rank number or grade can be substituted for points on the horizontal of the graph.

A similar graph should then be drawn to reflect the relationship between internal existing
rates and job rating points. A trend line should be established and drawn. This trend line
should be compared with the outside-survey trend line. In this way, management can
see how salaries compare with those outside the company. Then the decision will have
to be made whether to pay below the survey trend line, meet it or pay above it
.
In deciding whether to match a survey trend line, management faces a conflict between
personnel and economic forces. If the company pays above the survey trend line, its
ability to compete may be endangered as the labor cost will be higher than the same
industry, thereby adding cost of production will be added to the cost of the product. If
the company pays below the trend line, its ability to hire capable employees may be
affected or this will cause personnel turnover. To reconcile these two conflicting forces,
management may decide its own slope line that should be about the same as the result
of the survey.

Another important decision is whether hourly paid occupations should be assigned a

single rate or a range of rates. For production or maintenance workers, most
organizations pay one standard rate for all jobs in the same grade. That is especially
true when an operation is so standardized that it is difficult to determine accurately the
contribution of workers. A single rate for each job has the advantage of eliminating
favoritism.

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 jobs are ranked in ascending to descending order according to their
importance and based on the points or ranks earned in the job evaluation program
conducted by the HRD and the committee created for the development of a more
responsive pay system.

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
economical administration. Pay structure ranges should be used in developing a and
rate ranges. All jobs within a class are treated in the same way for the purpose of
schedule for both rank-and-file employees, technical and managerial positions. 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
company's profitability index.

The number of pay ranges in pay structure depends on the company and on the
number of such structures in the company. If a company has a single salary structure
then, there should be many pay grades. If the organization has one wage structure for
hourly workers, another for office regular workers and still another for supervisors and
managerial employees, then there should be a moderate number of pay grades in each
structure. There is no standard number of pay grades per structure for any industry or
company. This depends on the number of job classes and the number of employees in
the company. The greater the differences in job classes the greater the number of pay
grades in the salary structure to give credence to differences in duties, responsibilities
and other factors of variances as determined by the job evaluation program.

The same could be said for the width of the salary grade. There is no standard guide as
to the spread of pay grades. For hourly jobs, the spread from the minimum to maximum
may vary from ten percent (10%) to twenty (20%), while for salaried jobs, the spread
may vary from 15% to 75%. The typical spread of salaried jobs is 3% from the minimum
to the next to step. (See Sample computation) Once the pay structure has been
determined, the next step is to assign employees to their proper job classifications. If
the jobs are properly evaluated and were developed before the implementation of any
structure, most existing salaries should fall within the salary range established for their
jobs. When employees' salaries fall below the minimum of the pay grade for the job,
then it is called green circle rate. When that Occurs, the decision to bring salaries to the
minimum of the grade should be based on the employees' performance. If the
employees are on training stage, their salaries should perhaps be below the minimum of
the grade until they can fully meet the requirements then they are brought up to at least
the minimum of the pay grade.

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.

It provides adjustments within the pay grade of 3% between each step. It is determined
by the industry rate and the prevailing wages adjustments by the Tripartite Board and
the Department of Labor and Employment.

SUBMITTED BY:

Delos Reyes, MIcah

Edora, Rizalyn
Edrosolo, Oliver James
Eduvala, Marco

SUBMITTED TO:
Ma’am Rachelle Edillor