Chapter 7: Salary Structure Flashcards
Refers to the framework or specifics of the
offered salary, detailing the different components that make up the overall compensation package.
SALARY STRUCTURE
Mandated to enforce the provisions of the Labor Code of the Philippines – prescribes
employment regulations and labor laws for companies operating in the Philippines.
Department of Labor and Employment (DOLE)
National Wages and Productivity Commission (NWPC),
Legally mandated lowest amount of
remuneration that employers are required to pay their employees for their work during a specified period.
Minimum wage rates
Monitors economic activities and adjusts minimum wages based on the region’s growth rate, unemployment rate, and other
factors.
Regional Tripartite Wages and
Productivity Board (RTWPB)
Salary must be consistent across all roles and levels in the organization.
Consistency
Organization must
have a standard ________ in
calculating pay based on
experience, qualifications, and
performance.
Formula
Employees
have the right to be informed
about salary structure and how it
compares to the others in the
organization and the industry.
Communication
Employees
with same
responsibilities/work/roles must be
paid equally
Equity and Fairness
This must be established and well-defined, with consideration to
market pricing
Position Value
Organization must
have written philosophy about pay
and value sharing
Philosophy
Expectations for the employees,
and how to prioritize them
Outcomes
An
organization must base its pay
and compensation to perform
Linking Pay to Performance
Assessing jobs
based on skills, responsibilities, and
market demand to determine their
value.
Job Evaluation
Establishing
minimum, midpoint, and
maximum salaries for different job
levels.
Salary Range
Benchmarking
against industry standards to keep
compensation competitive.
Market Data
Ensuring fair compensation for employees with
similar qualifications and
responsibilities.
Pay Equity
Including base salary, bonuses,
stock options, and benefits to
motivate employees based on
performance.
Compensation Components
These structures are
characterized by a clear
hierarchy of job grades or levels,
each associated with a specific
salary range.
Pay Structure
With this strategy, there are fewer pay
grades or levels, and the salary
ranges are broader, allowing for
more compensation flexibility.
Broadband
These structures are
compensation approaches that
rely on external market data to
determine salary levels for
various job positions within an
organization.
Market-based
These structures define
compensation based on
predetermined pay grades with
incremental steps within each
grade.
Step Structure
Compare salaries
with similar organizations.
Market Analysis
Check for
fairness within the organization.
Internal Equity Analysis
Review job
complexity to adjust
compensation levels.
Job Evaluation
