MODULE 4: RECRUITING, SELECTING, AND

TRAINING EMPLOYEES
THE RECRUITMENT PROCESS
The Recruitment Funnel
What is recruitment?
Recruitment is defined as a process that
provides the organization with the pool of
qualified candidates from which to choose.
It involves identifying and working to attract
individuals interested and capable of filling
identified organizational roles.
Why is recruitment important?
Hiring the wrong person for a job can be Applicant Quantity and Quality
costly to organizations. Therefore, highly
talented and motivated employees offers a Quantity: Generating a sufficient number of
competitive advantage which is a firm’s ability applicants during the first stage of the
to add value to the company through its assets recruitment process
(one being its human resources); and is able to Quality: It relates to applicants having the
lower its costs. requisite skills needed as well as representing
When poorly hired employees with the wrong a diverse pool of applicants.
skills and/or experience success for companies Realistic Job Previews
is at risk.
An important consideration is to attract
THE TRUE COST OF BAD HIRE individuals to the job and organization while
The cost of a bad hire extends well beyond also being realistic enough that once they
the person’s salary, including: begin the job, they will not be disappointed and
quit.
1. Recruitment advertising costs and fees
(and cost for hiring again) One way in which organizations and
2. Training and onboarding costs researchers address these concerns is the
3. Unhappy customers and lost business realistic job preview (RJP), which offers
4. Impact on team morale and potential applicants a realistic, and sometimes
performance unappealing, view of the actual job.
5. Weakened employment brand Internal and External Sources of Applicants
6. Loss of time and momentum
7. Opportunity cost and lost productivity Internal Recruitment

Stages of Recruitment It is the process of looking inside the

organization for existing qualified employees
 The stages of recruitment move through who might be promoted to higher – level
a recruitment funnel in which the positions.
number of participants gets smaller the
further down the funnel the applicant If an organization can fill higher – level
goes. openings with current employees who are
ready to move up, it will have to fill lower-level
There are three fundamental stages of positions from the outside later
recruitment:
Job Posting – it is a mechanism for internal
1. Identify and generate applicants recruiting in which vacancies in the
2. Maintain applicant interest and organization are publicized through various
participation as they continue through media such as company newsletters, bulletin
the assessment process. During boards, internal memos, and the firm’s intranet.
recruitment, the organization is trying
both to assess and to attract the best Supervisory Recommendation -using
job applicants. supervisory recommendations, a mechanism
3. Influence job choice so that desired for internal recruiting, a manager solicits
applicants are willing to accept offers nominations or recommendations for a position
made to them. that needs to be filed from supervisors in the
organization.
External Recruitment
It is the process of looking to sources outside Advantages
the organization for prospective employees
 Brings in new ideas
 Avoids the ripple effect
Somewhat different methods are likely to be
used by an organization engaged in external Disadvantages
recruiting because the organization needs to
reach potential applicants from outside the  May hurt motivation
company.  Costs more

Word-of-Mouth Recruiting -the organization Parts of a Job Advertisement

simply informs current employees that 1. Company Information (name of the
positions are available and encourages them to company, logo, and address)
refer friends, family members, or neighbors for 2. Job Title
those jobs. 3. Summary of Job Responsibilities
Advertisement -advertisements on websites 4. Qualification (education, number of
and in newspapers and related publications are years of experience, skills and abilities
also popular methods for external recruiting. needed)
5. Company Benefits
Employment Agencies -Private Employment 6. Application Instruction
Agencies – are more likely to serve the white- 7. List of Requirement Needed
collar labor market (although some serve 8. Contact Person
specialized niches such as office workers), and
they charge a fee for their services. Factors Affecting Job Attractive

In a public employment agency, all potential Many factors influence an individual’s job
employee job applicants are currently choice as they weigh a number of pros and
unemployed, but many employed individuals cons associated with a given job.
use the services of private employment Examples of features are given below:
agencies in an effort to find other work while
maintaining their current jobs. Unattractive Features

An individual working for an executive search 1. Fit with Organization

firm is also known as a headhunter (a 2. Organizational Image
headhunter is an individual working for an 3. Comparison with other Alternatives
executive search firm who seeks out qualified Attractive Features
individuals for higher-level positions.)
1. Treatment During Recruitment
College Placement Offices -most large 2. Pay and Benefits
organizations visit college campuses every 3. Location
year to interview graduates for jobs within the 4. Job Characteristics/Work
organization
THE SELECTION PROCESS
Digital Recruiting -usage of online job boards,
social media, and internet communication tool. What is selection?
Internship -research shows that organizations Selection is concerned with identifying the best
that want to hire interns tend to be more open candidate or candidates for a job from among
to their creativity, which helps to attract interns the pool of qualified applicants developed
who are interested in full-time jobs after during the recruiting process
graduation.
Steps in the Selection Process
Internal vs External Recruitment
1. The recruiting process
Internal Recruiting 2. Gather information about pool of
qualified applicants
Advantages 3. Evaluate qualifications of each applicant
 Increases motivation 4. Make decisions about employment
 Sustains knowledge offers

Disadvantages BASIC SELECTION CRITERIA

 May foster stagnation Education and Experience

 May cause a ripple effect Education -refers to the formal classroom
External Recruiting training an individual has received in public or
private school and in a college, university, or information found in a regular
technical school application, but it also goes into
more complex and detailed
Experience -the amount of time the individual
assessments about that
may have spent working in either a general
background
capacity or particular field
Background Checking
Skills and Abilities -the assessment of skills
and abilities, on the other hand, is rather mixed  A background check is a legal
in terms of objectivity. investigation or verification into a
potential employee’s history.
Personal Characteristics
Background screening often involves
Some personal characteristics, which are criminal background checks, identity
believed to reflect the applicant’s personality, verification, and education and
are also difficult to assess objectively credential checks.
More recently, however, a great deal of Employment Test
attention has been paid to assessing
 A device for measuring the
applicants in terms of the big five personality
characteristics of an individual such as
traits
personality, intelligence, and aptitude.
Hiring for Fit -a rather unique and interesting  Types:
criterion for selection is refereed to as “fit”. o Cognitive ability tests
When a firm decides to hire someone on the o Psychomotor ability test
basis of fit, it hires that person not because he o Personality tests
or she is the most qualified for a specific job,  Self-inventory test
but because she or he is a good fit for the  Projective technique
larger organization. o Integrity tests
The Big Five Personality Traits
Work Simulations
1. Openness to Experience -appreciation
 It require an applicant to perform tasks
for art; new ideas, variety of experiences
or job-related activities that simulate or
imagination and curiosity
represent the actual work for which the
2. Conscientiousness -tendency towards
person is being considered.
self-discipline and striving for
 It is sometimes referred as work
achievement against measures or
samples.
outside expectations.
3. Extraversion -gain energy from Personal Interviews
external situations and means, enjoy a
breadth of activities and assert their  Although tests are popular, the most
viewpoints widely used selection technique in most
4. Agreeableness -value social harmony organizations is the employment
and getting along with others, optimistic, interview
kind and generous towards others  Types:
5. Neuroticism -tendency to experience o Structured: The interviewer
negative emotions, such as anger, works from a list of standard
anxiety, or depressions. Low tolerance questions that are presented to
of stress every candidate; by every
interviewer.
POPULAR SELECTION TECHNIQUES o Unstructured: It involves
Application Form relatively little advance
preparation. The interviewer may
 A first step in most selection systems is have a general idea about what
to ask applicants to complete an she or he wants to learn about
employment application or an the job applicant but has few or
application blank. no advance questions that are
o Weighted application blank: formally constructed.
relies on statistical techniques to o Semi-structured: Major or key
determine the relative importance questions are decided in advance
of various personal factors for and provided for each
predicting a person’s ability to interviewer, but the interviewer is
perform a job effectively. also given the prerogative to ask
o Biodata application blank: follow-up questions to probe the
focuses on the same type of interviewee’s specific answers.
 o Situational: Asks the applicant Ensuring the Quality of Selection Measures:
questions about a specific Reliability and Validity
situation to see how he or she
Reliability is how consistent or dependable
would react.
selection procedures are in measuring
INTERVIEW ERRORS something, such as a skill or ability.
First-Impression Errors -occur when an Validity is the accuracy of a measure and the
interviewer makes a decision too early in the degree to which it measures what it is
interview process. supposed to measure
Contrast Errors -occur when the interviewer is Test validity means that scores on a test are
unduly influenced by other people who have related to performance on a job.
been interviewed
Similarity Errors -occur when the interviewer
Criterion-related validity refers to the extent
is unduly influenced by the fact that the
to which a particular selection technique can
interviewee is similar to the interviewer in one
accurately predict one or more elements of
or more important ways.
performance
Nonrelevancy -occurs when an interviewer is
Making the Offer
influenced by information that is not relevant to
an individual’s ability to perform the job  The last step in the selection process is
to offer a position to the chosen
Interviewer’s Knowledge of the Job – a final
candidate.
type of error that is common in interview
 The development of an offer via e-mail
situations has to do with the interviewer’s
or letter is a formal part of the process
knowledge of the job.
and requires careful articulation of all
OTHER SELECTION TECHNIQUES elements and conditions of the offer.
 Compensation and benefits will be
References and Recommendations: The job
defined in an offer, as will any unique
applicant is usually asked to provide either
legal considerations.
letters of recommendation or the names and
addresses of individuals who may be contacted  The job offer may be negotiable,
to write such letters. depending on the position.

Assessment Centers: An assessment center THE TRAINING PROCESS

is not physical location but is instead an What is training and development
approach to selecting mangers based on
measuring and evaluating their ability to Training and development refers to educational
perform work behaviors. activities within a company created to enhance
the knowledge and skills of employees while
Medical Examination providing information and instruction on how to
better perform specific tasks.
 Candidate who have cross the above
stages are sent for a physical and Training -it is a planned attempt by an
medical examination. organization to facilitate employee learning of
 Reasons: job-related knowledge, skills, and behaviors
o Physical fitness for the job
Development -refers to teaching managers
concerned;
and professionals the skills needed for both
o To protect the business and
present and future jobs.
employees from infectious
disease; and Why is training and development
o To check excessive expenditure important?
on the treatment of employee.
 Helps employees develop new skills and
Selection Errors increases their knowledge
 Improves efficiency and productivity of
Two basic types of selection errors can be
individuals and teams
made: false positives (are applicants who are
 Creates new and improved job positions
predicted to be successful and are hired but
who ultimately fail) and false negatives (are  Keeps employees motivated and
applicants who are predicted to fail and are not enhance contribution levels
hired, but if they had been hired would have The ADDIE Model Explained
been successful)
1. Analysis -analyze your situation to
understand the gaps you need to fill
 2. Design -based on your analysis, make objectives, delivery methods, and
informed decisions to design the best program evaluation.
possible learning experience.  Substeps include setting performance
3. Development -bring your learning objectives, creating a detailed training
experience to life by building you end- outline (all training program steps from
product start to finish), choosing a program
4. Implementation -distribute your delivery method (such as lectures or
learning end-product to your audience Web), and verifying the overall program
5. Evaluation -evaluate if your learning design with management.
end-product is effective. Make any
IMPLEMENT THE TRAINING PROGRAM
necessary updates and cycle back to
the Analysis phase.  Implement means actually provide the
training, using one or more of the
instructional methods.

FIGURE:  Before the actual training, send

announcements far in advance, provide
directions, provide a contact, and make
sure participants have pretraining
materials.
 During training, make sure all
participants have a point of contact in
case they have questions or need
guidance.
 After training, remember training does
not end when the program ends.
Instead, periodically ascertain that
trainees are transferring their learning to
the job.
TRAINING IMPLEMENTATION TECHNIQUES
ANALYZING TRANING NEEDS
On-the-Job -it means having a person learn a
In determining the needs for training, HR job by actually doing it.
professional should consider the following
factors. These factors affect what type of  Coaching/Understudy method -an
training, topics, and approach to use. experienced worker or the trainee’s
supervisor trains the employee.
The Three Phases of a Training Needs  Job rotation -an employee (usually a
Assessment management trainee) moves from job to
1. Organizational Analysis job at planned intervals.
 Goals, strategies, objectives,  Special assignments -similarly give
culture lower-level executives firsthand
experience in working on actual
 Resources
problems.
 External environment
2. Job Analysis Apprenticeship Training -a process by which
 KSAOs and tasks of the focal job people become skilled workers, usually
 Competencies through a combination of formal learning and
 Critical incidents employee face long-term on-the-job training.
on the job Informal Learning -training experts use the
3. Person Analysis notation “70/20/10” to show that as a rule, 70%
 Assess current KSAOs and of job learning occurs informally on or off the
competencies of employees job, 20% reflects social interactions (for
 Develop training goals instance, among employees on the job), and
 Consider employee only 10% is actual formal training.
characteristics (e.g.,
demographics, motivation, Job Instruction Training -many jobs consist
education of a sequence of steps best learned step-by-
step. Such step-by-step training is called job
DESIGNING THE TRAINING PROGRAM instruction training (JIT)
 Design means planning the overall Lecture -lecturing is a quick and simple way to
training program including training present knowledge to large groups of trainees.
Programmed Learning -a systematic method organization’s overall performance through
for teaching job skills, involving presenting planned interventions
questions or facts, allowing the person to
OD Techniques:
respond, and giving the learner immediate
feedback on the accuracy of his or her  Survey feedback -employees will
answers. respond to questionnaires
Behavior Modelling -behavior modeling  Third-party peacemaking -here a
involves (1) showing trainees the right (or neutral third party, often an OD
“model”) way of doing something, (2) letting consultant from outside the
trainees practice that way, an then (3) giving organization.
feedback on the trainees’ performance.  Process consultation -the consultant
then provides feedback and
Audiovisual based Learning -although recommendations to the mangers about
increasingly replaced by Web-based methods, how to improve these procedures.
audiovisual-based training techniques like
DVDs, films, PowerPoint, and audiotapes are Organizational learning -the process by
still used. which an organization “learns” from past
mistakes and adapts to its environment.
Vestibule Training -with vestibule training,
trainees learn on the actual or simulated EVALUATING TRAINING PROGRAMS
equipment but are trained off the job (perhaps KirkPatrick’s Training Evaluation Model
in a separate room or vestibule)
Electronic performance support systems -
EPSS are computerized tools and displays that
automate training, documentation, and phone
support.
Videoconferencing -involves delivering
programs over broadband lines, the Internet, or
satellite. EMPLOYEE COMPENSATION AND
BENEFITS
Computer-based training -uses interactive
computer-based systems to increase COMPENSATION
knowledge or skills Compensation is the total of all rewards
 Simulated learning and gaming/Virtual provided employees in return for their work.
reality The overall purpose of compensation is to
Online/Internet based learning attract, retain, and motivate employees.

 Learning portals Purposes of compensation:

 Virtual classrooms  Provide appropriate and equitable
 Mobile and microlearning rewards to employees;
Off-the-Job Training -refers to training that  Help employees focus on activities that
takes place outside of the employee’s regular the organization considers important;
work environment. and
 Increase employee efforts along desired
 Case study method lines
 Management games
INTERNAL VS EXTERNAL EQUITY
 Outside seminars
 University-related programs Internal Equity: It refers to comparison made
 Role playing by employees to other employees within the
 Corporate universities same organization
 Executive coaches
External Equity: It refers to comparison made
MANAGEMENT DEVELOPMENT by employees by different organizations
performing similar jobs.
Management development is any attempt to
improve managerial performance by PAY SURVEYS
imparting knowledge, changing attitudes, or
How does an employer learn about the
increasing skills.
compensation rates of other firms?
ORGANIZATIONAL DEVELOPMENT (OD)
Pay Surveys: these are surveys of
It is a system-wide effort, managed from the compensation paid to employees by other
top of the organization, to increase the
employers in a particular geographic area, Job Environment
industry, or occupational group.
 Sound Policies
WAGES VS. SALARY  Capable Managers
Wages -refer to money paid on a hourly, daily  Competent Employees
or a weekly basis  Congenial Coworkers
 Appropriate Status Symbol
 Calculated using the number of hours  Working Conditions
worked
 If a wage-earner does not work, he Workplace Flexibility
won’t receive payment for that day  Flextime
 Usually earned by unskilled or semi-  Compressed Workweek
skilled workers  Job Sharing
 Usually have lower positions & fewer  Telecommuting
responsibilities.
 Part-time Work
Salary -refers to a fixed, regular payment
typically paid on a monthly basis
 Not calculated using the number of
hours worked. Direct Financial Compensation (core
 Workers have a number of paid leaves compensation) consists of the pay that a
 Earned by office workers or person receives in the form of wages, salaries,
management commissions, and bonuses.
 Usually have higher positions, & more Indirect Financial Compensation (employee
responsibilities benefits) consists of all financial rewards that
COMPENSATION are not included in direct financial
compensation. This form of compensation
Financial includes a wide variety of rewards normally
Direct received indirectly by the employee such as
paid vacation
 Wages
Nonfinancial Compensation consists of the
 Salary
satisfaction that a person receives from the job
 Commissions
itself or from the psychological or physical
 Bonuses
environment in which the person works.
Indirect (Benefits) Although our focus will not be on nonfinancial
compensation, it is worth giving brief
Legally Required Benefits consideration through an illustration to better
 Social Security describe the total compensation
 Unemployment Compensation COMPONENTS OF DIRECT FINANCIAL
 Worker’s Compensation COMPENSATION
 Family & Medical Leave
Employee Base Pay: The monetary
Discretionary Benefits compensation employees earn on a regular
basis for performing their jobs. Hourly pay and
 Paid Time Off
salary are the main forms of base pay.
 Health Care
 Life Insurance  Hourly Pay: Employees earn hourly pay
 Retirement Plans for each hour worked.
 Employee Stock Option Plans  Salary: Employees earn salaries for
 Employee Services performing their, jobs regardless of the
 Premium Pay actual number of hours worked.
Companies generally measure salary on
Non-financial an annual basis.
The Job Cost-of-Living Adjustment: It represents
 Meaningful periodic base pay increases that are founded
on changes in prices as recorded by the
 Appreciated
consumer price index (CPI)
 Satisfying
 Learning Seniority Pay: Pay program in which pay
 Enjoyable increases are based on length of service.
 Challenging
Performance-Based Pay: Performance-based soon as profits have been
pay is governed by how well one performs the determined.
job. The objective of performance-based pay is o Deferred Plans: involve placing
to improve productivity by rewarding those who company contributions in an
best assist in achieving this goal. irrevocable trust, credited to
individual employees’ accounts.
 Merit Pay: Pay increase added to
o Combination Plans: permit
employees’ based on their level of
employees to receive payment of
performance.
part of their share of profits on a
 Merit Bonus: One-time annual financial
current basis, while deferring
award, based on productivity
payment of part of their share.
 Spot Bonuses: Relatively small
 Employee Stock Plans: Equity
monetary gifts provided to employees
segments of equal value, which
for outstanding work or effort during a
increase with the number of stock
reasonably short period of time.
shares held.
 Incentive Pay: Compensation, other
o Employee Stock Option Plan:
than base wages or salaries, that
Plan in which a firm contributes
fluctuates according to employees’
stock shares to a trust, which
attainment of some standard)
then allocates the stock to
e.g., a pre-established formula, individual or participating employee accounts
group goals, or company earnings). according to employee earnings.
Kinds of Incentive Pay Plan Options
(Individual Incentive Plans)
o Stock Compensation Plan:
 Piecework: Incentive pay plan in which Companywide incentive plans
employees are paid for each unit they that grant employees the right to
produce. purchase shares of company
 Management Incentive Plan: Bonuses stock.
to managers who meet or exceed o Deferred Compensation: An
objectives based on sales, profit, agreement between an employee
production, or other measure for their and a company to render
division, department or unit. payments to an employee at a
 Behavioral Encouragement Plan: future date.
Individual incentive pay plans that  Person-Focused Pay: Compensation
reward employees for specific such for developing the flexibility, knowledge,
behavioral accomplishments as good and skills to perform a number of jobs
attendance. effectively.
 Referral Plan: Individual incentive pay o Skill-based Pay: System that
plans for rewarding the referral of new compensates employees for their
customers or recruiting successful job job-related skills and knowledge,
applicants. not for their titles.
o Competency-based Pay:
Kinds of Incentive Pay Plan Options (Group
Compensation plan that rewards
Incentive Plans)
employees for the capabilities
 Gain Sharing: Plans designed to bind they attain.
employees to the firm’s productivity and
Determinants of Compensation Strategy
provide an incentive payment based on
improved company performance. 1. Overall organization strategy
 Scanlon Plan: Gain sharing plan that 2. Ability to pay
provides a financial reward to 3. Ability to attract and retain employees
employees for savings in labor costs 4. Ability to bargain with the unions
resulting from their suggestions.
Pay Secrecy
Companywide Incentive Plans
Pay secrecy is a workplace policy that prohibits
 Profit Sharing: Compensation plans employees from talking about how much
that result in the distribution of a money they make with co-workers and other
predetermined percentage of the firm’s people outside the company.
profits to employees
 Many organizations have a policy of not
o Current Plans: provide payment
disclosing pay-related information.
to employees in cash or stock as o Information about pay system as
well as individual pay received
  Justification for pay secrecy  Physical requirements, which involve
o To avoid any discontent that sitting, standing, walking, lifting, and so
might result from employees’ on.
o Many employees, especially high  Responsibilities, which cover areas
achievers, feel very strongly that such as raw materials, money, records,
their pay is nobody else’s and supervision.
business  Working conditions, which reflect the
 Drawbacks of pay secrecy environmental influences of noise,
o Difficult for employees to illumination, ventilation, hazards, and
determine whether pay is related hours.
to performance and does not Point Method
eliminate pay comparisons
o May cause employees to over In the point method, raters assign numerical
estimate pay of their peers and values to specific job factors, such as
under estimate pay of their knowledge required, and the sum of these
supervisors values provides a quantitative assessment of
o Can create feelings of job’s relative worth. Historically, some variation
dissatisfaction of the point plan has been the most popular
o Employees may become option.
suspicious

BUILDING JOB STRUCTURES USING JOB

EVALUATION
A job structure is an ordered set of jobs that
represents the job structure or hierarchy.
HR professionals use job evaluation
systematically to recognize differences in the
relative worth among a set of jobs and to
establish pay differentials accordingly.
Ranking Method
JOB EVALUATION METHODS
The ranking method is the simplest of the four
job evaluation methods. In the job evaluation
ranking method, the raters examine the
description of each job being evaluated and
arrange the jobs in order according to their
value to the company.
The procedure is essentially the same as the
ranking method for evaluating employee
performance. The only difference is that you
evaluate jobs, not people.
Classification Method
Factor Comparison Method
The classification method involves defining a
The factor comparison method of job number of classes or grades to describe a
evaluation assumes that there are five group of jobs. In evaluating jobs by this
universal factors consisting of mental method, the raters compare the job description
requirements, skills, physical requirements, with the class description.
responsibilities, and working conditions; the
evaluator makes decisions on these factors Class descriptions reflect the differences
independently. between groups of jobs at various difficulty
levels. The class description that most closely
 Mental requirements, which reflect agrees with the job description determines the
mental traits such as intelligence, classification for that job.
reasoning, and imagination.
 Skills, which pertain to facility in Compensable Factors: Any factor used to
muscular coordination and training in provide a basis for judging job value in a job
the interpretation of sensory evaluation scheme.
impressions. 1. Experience
2. Education
 3. Working Conditions 4. Long Tenure of Employees – long-
4. Confidential Data term employees might end up with
5. Consequences of Errors similar pay as new hires due to smaller
6. Complexity of Duties incremental raises over time
7. Responsibility
Executive Compensation
8. Mental and Physical Demands
A company’s executive compensation program
Competitive Compensation Policy
is a critical factor in attracting and retaining the
A compensation policy refers to choices that best available talent.
compensation professionals make to promote
The five main components of executive
competitive advantage.
compensation packages include:
Pay Level Compensation Policy
1. Base Salary
Market Lead Policies: Pay policy that 2. Bonuses and Performance-Based Pay
distinguishes companies from the competition 3. Stock Option Plans
by compensating employees more highly than 4. Perquisites (perks), and
most competitors. Leading the market denotes 5. Severance Packages.
market levels above the market pay line.
Market Match: Average pay that most
POSSIBLE COMPONENTS OF GLOBAL
employers provide for a similar job in a
EMPLOYEE COMPENSATION
particular area or industry.
Global Employee Compensation
Market Lag: Pay policy distinguishes
companies from the competition by  Foreign Service and Hardship
compensating employees less than most Premiums
competitors. Lagging the market indicates that  Relocation and Moving Allowances
market levels fall below the market pay line.  Housing and Utilities Allowances
Pay Level Policy  Cost-of-Living Adjustments
 Tax Equalization Payments
 Educational Allowance for Children
 Home Leave and Travel Allowances
TYPES OF EMPLOYEE BENEFITS
1. Legally Required Benefits
2. Discretionary Benefits
3. Voluntary Benefits
Legally Required Benefits
 Service Incentive Leave
 Maternity Leave
 Paternity Leave
 Paternal Leave for Solo Parent
Pay Compression  Leave for Victims of Violence Against
Women and Their Children
Pay compression (wage compression or salary
 Special Leave for Women
compression) occurs when employees with the
 Thirteen-Month Pay
same skills and experience are paid differently
 Separation Pay
Pay Compression Causes  Retirement Pay
1. Market Rate Changes -new hires earn  Employees’ Compensation Program
as much as existing employees due to  PhilHealth Benefits
rapid salary increases in high-demand  Social Security Benefits
jobs.  Pag-Ibig Benefits
2. Internal Equity Adjustments – raises Premium Pay
in lower or mid-level jobs to ensure
fairness can lead to similar pay across 1. Overtime Pay
these roles and higher-level positions 2. Holiday Pay
3. Regulatory or Policy Changes -new 3. Premium Pay
minimum wage laws can decrease the 4. Night Shift Differential
pay gap between new and experienced
workers
Discretionary Benefits
 1. Protection Programs  Premiums can be quite expensive
o Health Maintenance especially for people of advanced age or
Organization: The health with pre-existing conditions.
maintenance organization or  Premiums are expected to go higher
HMO is a company that allows each time you renew
people to be insured to avail  People in poor health may have to pay
medical services in exchange for more expensive premium, are not
a fixed monthly or annual fee. It allowed to renew their plan or are not
acts as the middleman between approved to get a plan.
the client and healthcare  You need to have Philhealth cover or
providers such as hospitals, else you’d have to pay the portion for
clinics, laboratories, doctors, Philhealth membership.
therapist, etc.  The plan may be tied to employment, so
o HMO companies have a network you may lose it when you resign or you
of hospitals, laboratories, and retire from the job.
medical facilities with which they
have existing partnership. They List of Accredited HMOs
also have a list of doctors,  PhilHealth
specialists, and experts that are  Intellicare
signed up with them.
 Maxicare
o When a member gets sick, they
 MediCard
are recommended to get medical
 Lacson & Lacson
help within the network. Services
 ValuCare
can be performed faster because
the HMO companies and  Medicareplus
healthcare providers may already  Cocolife
have existing process in  Avega
admitting members, determining  Insular Health Care
the benefits and coverage,  PhilCare
identifying medical experts who  MedAsia
can best give treatment, etc.  HPPI
 AsianLife
Advantages of HMO
 CareHealth Plus
 HMO companies offer a variety of  Health Maintenance, In. (HMI)
healthcare solutions, including prepaid  Good Health
cards, coverage for senior citizens, etc.  Caritas
 An HMO plan can cushion the impact of  Generali
not earning an income during sickness  Carewell Health Systems
 It can give peace of mind because it can  Life & Health HMP, Inc.
help relieve financial worry brought  Pacific Cross Philippines
about by being ill.
Disadvantages of HMO
2. Paid Time Off
 Most plans have limited annual benefit  In providing payment for time not
limit (ABL), and so people might still worked, employers
spend money to pay what remains of o Vacation
the bill. This can happen when one gets o Sick Pay and Paid Time
hospitalized for a long time, requires
Off Banks
regular lab tests and treatment, or
o Sabbaticals
needs to go through a very expensive
procedure. Employee Services
 Some plans may not cover certain
 Child Care
diseases or medical procedures
 Some plans may also be a co-pay  Educational Assistance
arrangement, where you’re asked to pay  Food Services and Subsidized
portion of the bill Cafeterias
 You’re limited to a network of healthcare  Scholarships for Dependents
providers. Some plans may not offer  Relocation Benefits
reimbursement when you avail of  Domestic Partner Benefits
healthcare services outside of the Workplace Flexibility and Worklife Balance
network.
Effective work – life balance programs focus on For Employers:
solving any personal issues that can detract
 Some employees may not work
from an employee’s work.
efficiently without supervision
For employers, creating a balanced work-life  Compressed work weeks may mean
environment can be a key strategic factor in client availability suffers
attracting and retaining the most talented  Feelings of unfairness when only certain
employees employees have work that can be done
Flexible Working Arrangements remotely
MANDATORY EMPLOYEE BENEFITS IN THE
 Flextime: Practice of permitting
PHILIPPINES
employees to choose their own working
hours, within certain limitations Minimum Wage -it is the lowest wage rate
 Compressed Workweek: Any fixed by law that an employer can pay his/her
arrangement of work hours that permits worker.
employees to fulfill their work obligation
How is minimum wage is determined?
in fewer days than the typical five-day
workweek. Tier 1: Poverty Threshold, Prevailing Wage
 Job Sharing: Two part-time people split Rates, and Socio-Economic Indicators
the duties of one job in some agreed-on (Inflation, Employment Figures, GDP, etc.)
manner and are paid according to their
contributions Tier 2: Voluntary Productivity-Based Pay
 Telecommuting: Work arrangement Holiday Pay -refers to the payment of regular
whereby employees, called daily wage for any unworked regular holiday.
“teleworkers” or “telecommuters”, are
able to remain at home (or otherwise Premium Pay -refers to the additional
away from the office) and perform their compensation for work performed with eight
work using computers and other hours on non-work days, such as rest days and
electronic devices that connect them special days
with their offices. Overtime Pay -refers to the additional
 Part-time Work: A type of employment compensation for work performed beyond eight
which regular hours of work are hours a day.
substantially less than the normal hours
prescribed. Night Shift Differential (NSD) – refers to the
additional compensation of (10%) of an
TOP ADVANTAGES employee’s regular wage for each hour of wok
performed 10 pm to 6 am
For Employees:
Service Charges – is the amount that is added
 Flexibility to better meet family and
to a bill for any work or service performed.
personal needs
 Reduced commuting time and gas The Service Charge Law dictates how service
expenses charge payments should be made and when
 Have more control over your time they should be made to employees
schedule and working environment
All service charges collected by an employer
 Can work during the hours that fit your must be distributed fully and equally, based
energy cycles bets on actual hours or days of work or service
For Employers: rendered, among all covered employees.

 Boosts employee morale Service Incentive Leave -employee who has

 Reduces tardiness and absenteeism rendered at least one year of service is entitled
 Reduces employee turnover Service Incentive Leave (SIL) of five days with
 Enhances company image as a family- pay.
friendly place to work Maternity Leave -this benefit applies to all
TOP DISADVANTAGES covered female employees, regardless of civil
status, employment status, and the legitimacy
For Employees: of her child
 Difficult for office-based staff to work as
effectively with telecommuting staff
 Working from home may mislead loved
ones about your availability
 No clear dividing line between home
and work
 other similar causes as enumerated under
Article 297 (formerly Article 282) of the Labor
Code and, generally may not be entitled to
separation pay. On the other hand, where the
termination is for authorized causes,
separation pay is due.
Two types of Separation Pay
1. One-Half (1/2) Month Pay per Year of
Service -if employee’s separation from
the service is due to any of the following
authorized causes:
a. Retrenchment to prevent losses
(i.e., reduction of personnel
effected by management to
PATERNITY LEAVE
prevent losses);
What is the Paternity Leave Law? b. Closure or cessation of operation
of an establishment not due to
Under the law, male private and government serious losses of financial
employees in the Philippines are entitled to reverses; and
seven days of paternity leave with full pay. c. When the employee is suffering
They should receive their basic salary, from a disease not curable within
allowance, and other monetary benefits for a period of six (6) months
those days. 2. One-Month Pay per Year of Service -if
Parental Leave for Solo Parent employee’s separation form service is
due to any of the following:
Solo parents are entitled to parental leave of 7 a. Installation by employer of labor-
work days every year with full pay saving devices;
Leave for Victims of Violence Against b. Redundancy, as when the
Women and their Children position of the employee has
been found to be excessive or
Duration: 10 days unnecessary in the operation of
Who’s entitled: Female victims of physical, the enterprise; and
sexual, psychological, or economic abuse. c. Impossible reinstatement of the
employee to his or her former
Special Leave for Women (after working for position to a substantially
6 months within the last 12 months) equivalent position of reasons not
Duration: 2 months attributable to the fault of the
employer
Who’s entitled: Women who have had surgery
caused by gynecological disorders Retirement Pay -employees shall be retired
upon reaching the age of sixty (60) years or
Thirteenth-Month Pay more but not beyond old (and have served the
establishment for at least five (5) years)
-it is an obligation of every employer to give the
13th month pay not later than December 24 Formula for Computing Retirement Pay
-An employee who resigned within the year Minimum Retirement Pay = Daily Rate x 22.5
shall be entitled to 13th month pay, provided days x No. of years in service
he or she has worked at least one month.
Employees’ Compensation Program -is a
Formula: Total Basic Salary x Employment / government program designed to provide a
12 months compensation package to public and private
sector employees or their dependents in the
Ex. 10,000 x 8 months / 12 months = 6,666
event of work-related sickness, injury, or death.
Separation Pay -is given to employees in
EC Program Compensable Injuries
instances covered by Article 298 and 299
(formerly Articles 283 and 284) of the Labor 1. Happened at the workplace
Code of the Philippines. An employee’s 2. Happened while performing official
entitlement to separation pay depends on the function
reason or ground for the termination of his or 3. Outside of workplace but performing an
her services. An employee may be terminated order of his employer
for just cause (i.e., gross and habitual neglect 4. Going to or coming from work
of duty, fraud, or commission of a crime), and 5. While ministering to personal comfort
 6. While in a company shuttle bus Performance Management refers to the more
7. During a company sponsored activity general set of activities carried out by the
8. Death of an employee due to assault organization to change (improve) employee
performance.
PhilHealth Benefits -the National Health
Insurance (NHIP) is a compulsory health Importance of Performance Appraisal
insurance program of the government
 Appraisal results provide a benchmark
established to provide universal health
for assessing the extent to which
insurance coverage and ensure affordable,
recruiting and selection processes
acceptable, available and accessible health
are adequate;
care services for all citizens of the Philippines
 It is important for legal reasons (all
Social Security System -covered employees employee movements are based on
are entitled to a package of benefits under the merit and valid causes);
Social Security and Employees’ Compensation  It provides employees additional
(EC) Programs in the event of death, disability, information how well they are currently
sickness, maternity and old age. Self-employed doing so they can correct their
and voluntary members also get the same deficiencies, capitalize on their
benefits as covered employees, except those strengths, and improve their overall
benefits under the EC program contributions to their job; and
Pag-ibig Benefits -The Home Development  It is a basis of incentive pay systems
Mutual fund otherwise known as Pag-IBIG and other performance-management
(Pagtutulungan sa kinabukasan: Ikaw, Bangko, interventions
Industriya at Gobyerno) Fund is a mutual Goals of Performance Appraisal Process
provident savings system for private and
government employees and other earning  Provide valid and reliable measure of
groups, supported by matching mandatory employee performance in relevant
contributions of their respective employers with dimensions
housing as the primary investment.  Documentation

Increase of Pag Ibig Mandated Contribution

 Improve job performance, which
for 2024
requires that employees receive:
-updated news for pag ibig 2024 o Accurate feedback
o Guidance
-mandated deduction of 200 pesos
DIFFERENT ROLES IN THE PERFORMANCE
-target date is on Jan 2024
APPRAISAL PROCESS
MODULE 6: PERFORMANCE APPRAISAL
Role of the organization
AND CAREER MANAGEMENT
 Develop the appraisal process
If you are manager, how would handle an
employee who is experiencing difficulty in  Determine timing of appraisals
terms of his/her performance?  Ensure availability of clear and specific
standards
Employees need to know how well they are
performing and how they can improve their Role of the rater
performance. Companies often base pay and  Observe performance and process
promotion decisions on employee information gained from observation
performance. They need ways of measuring,  Communicate results and
capturing, and comparing performance levels consequences
of different employees. For all these purposes,  Prepare ratee to perform at desired
companies need accurate performance
levels
Performance Appraisal and Performance
Role of the ratee
Management
 Maintain a clear and unbiased view of
Performance Appraisal is the specific and
performance
formal evaluation of an employee to determine
 Collect adequate information to avoid
the degree to which the employee is
disagreements during the process
performing his or her job effectively
Sources of Information for Performance
It is also known as: performance evaluation,
Appraisal
performance review, annual review, employee
appraisal, or employee evaluation
 Contrast Error -when people are compared
against one another instead of against an
objective standard.
Distributional Error - when the rater tends to
use only one part of the rating scale
 Severity -all employees have below
average ratings
360 Degree Feedback -is a process that  Leniency -everyone has an above
allows an employee to understand their average rating
strengths and weaknesses. In this feedback  Central Tendency -no one is actually
system, the employer and other staff members, good or bad, employees receive
like co-workers, peers, subordinates, and generally average ratings.
people that share the same work environment,
provide feedback to an employee. Halo Error -one positive performance
characteristic may cause the manager to rate
Pros & Cons of 360-Degree Feedback all other aspects of performance positively.
Pros: Horns Error -when the manager downgrades
 Provides feedback to employees from a other aspects of an employee’s performance
variety of sources because of a single performance dimension.
 Develops & strengthens teamwork & Contextual Performance -it refers to tasks an
accountability employee does on the job that are not required
 Reveals specific career development as part of the job but that nevertheless benefit
areas the organization in some way. This is known
as OCB
Cons:
 Organizational citizenship behaviors
 Focuses on employee weaknesses &
include:
shortcomings instead of strengths
o Willingness to stay late at work to
 Provides feedback from inexperienced
finish deadlines
raters, & groups can “game” the process
o Helping co-workers
 Requires large degree of data collection
o Performing tasks that help the
& processing in some cases.
organization
METHODS OF PERFORMANCE APPRAISAL
Evaluating the Performance-Appraisal
Simple Ranking Method -manager gives a Process
rank-order to each member of a particular work
group from top to bottom or from best to worst  Most firms claim to have dropped
performance appraisal since the usage
Paired Comparison Method -each individual of stack ratings have led to:
employee is compared with every other o Backstabbing
individual employee, two at a time. o Low levels of teamwork
Forced-Distribution Method -grouping o Feelings of frustration
employees into predefined frequencies of  Performance-management technologies
performance ratings. enable collection of real-time
performance data
Graphic Rating Scale -statement or question
about some aspect of an individual’s job Legal Issues in Performance Appraisal
performance
 Appraisals showing evidence of
Critical Incident Method -relies on instances disparate impact must be validated in
of especially good or poor performance on the the same manner as any selection
part of the employee technique
o Show that rating is job related
Behaviorally Anchored Rating Scale (BARS)
o Demonstrate that raters:
-combination of the graphic rating scale and
 Can observe rated
the critical incident method.
behaviors
Management by Objectives -system is based  Have training to help them
largely on the extent to which individuals meet appraise performance
their personal performance objectives better
RATING ERRORS IN PERFORMANCE Most people have a general idea of the
APPRAISAL meaning of career. For instance, they
generally agree that careers have o Performance is highest when
something to do with the work a person workers are youngest and older
does in an organization, but they also  Retired individuals are most likely to
recognize that a career is a broader and retire when:
more general concept than a single job or o Adequate financial resources are
task in an organization. available
Career o Health makes it difficult to
continue work
 Set of experiences and activities that
people engage in related to their job and Human Resource Management and Career
livelihood over the course of their Management
working life
o Specific jobs performed by a
person
o Responsibilities and activities that
constitute the job
o Movements and transitions
between jobs
o Individual’s overall assessment
o Feelings of job satisfaction What’s Career Planning -career planning is a
strategic systematic process that involves
Traditional Career Stages individuals and organizations working
collaboratively to identify and develop career
goals, explore growth opportunities, and create
actionable plans to achieve desired career
outcomes.
Steps in Career Planning

Exploration
 During this period in people’s lives, they
try to identify the kind of work they are
interested in doing.
 This period of a typical person’s career
starts in the mind- to late teens and lasts
through and mid-to late twenties.
Establishment
 During this period, an individual begins
to create a meaningful and relevant role CAREER DEVELOPMENT ISSUES AND
for herself and the organization. CHALLENGES
 This is considerable range in terms of Career Counselling Programs
age and time in this stage, but it
generally encompasses an individual’s  Formal career-counseling programs
late twenties through mid – to late usually take the form of workshops,
thirties. conferences, and career-
development centers. In some cases,
Maintenance -during this period, the individual the organization establishes general-
begins to reach a level in the organization that purpose career-counseling programs
optimizes his talents or capabilities. that are available to all employees.
Disengagement -during this period, the  Organizations also have informal
individual gradually begins to pull away from counselling programs. Much of this
her work in the organization, her priorities counseling takes the form of one-on-
change, and work may become less important one interactions between an employee
to her. and his or her supervisor and typically
occurs during the performance-appraisal
Older Workers and Decision to Retire period.
 Curvilinear relationship exists between Dual-Career and Work-Family Issues
age and performance
  Balancing family needs with work
demands
o Family-friendly work practices
such as child care, elder care,
and flexible work schedules
 Work stress and family stress are
connected
Evaluating Career-Management Activities
 If an employee is satisfied with his or
her career at this point, then career
management must be judged successful
up to that point
 Employees who go into careers for
which they are not well suited (either in
terms of abilities or temperament) will
obviously be more likely to suffer
dissatisfaction with their careers.