Republic of the Philippines

EULOGIO “AMANG” RODRIGUEZ INSTITUTE OF

SCIENCE AND TECHNOLOGY
Poblacion 5 Congressional Road,
BACHELOR OF SCIENCE IN INDUSTRIAL PSYCHOLOGY General Mariano Alvarez
Cavite 4117 Philippines

NAME: NIÑO ORLANDO JULIAN OCAMPO BSIP-IV

SUBJECT: ORGANIZATIONAL DEVELOPMENT
GROUP 9

II.OBJECTIVES
 To learn about the Wage/Salary Survey and Salary Structure

II.CONTENT SUMMARY
Structural Design
 Salary and Wage Survey Introduction
 Salary and Wage Survey/Pay Survey
 Factors to Consider When Conducting Pay Survey
 Salary Structure/Pay Scale
 Factors of Salary Structures in the Philippines
 DOLE and NWPC

III.CONTENT DETAILS

SALARY AND WAGE SURVEY INTRODUCTION

The terms salary and wages are commonly interchangeable, and in many contexts their
meaning are the same - but not always. A salary does not change on a weekly or
monthly basis. Salaries are calculated annually, divided by the twelve and paid out each
month. Wages are calculated on the number of hours worked that week, fortnightly or
monthly, and are linked to how many hours the employee worked.

Since we are using the two terms interchangeably and normally have the panoramic
view of what we are going to received monthly, we are now talking about compensation
which encloses the totality of our revenue within a month, this now includes the things
 Republic of the Philippines
EULOGIO “AMANG” RODRIGUEZ INSTITUTE OF
SCIENCE AND TECHNOLOGY
Poblacion 5 Congressional Road,
BACHELOR OF SCIENCE IN INDUSTRIAL PSYCHOLOGY General Mariano Alvarez
Cavite 4117 Philippines

on top of this things such as allowances, possible perks like meal, commuting cost,
housing, company car, discounts etc.

PAY SURVEY
A wage and salary survey is used to compile market pay data for large amount of jobs
on either a local or nationwide basis. This survey is usually performed in order to assess
the effectiveness of a company’s current pay structure and practices. Surveys are used
to plan future methods of compensation, and they can be instrumental in exposing gaps
and waste stemming from current policies and procedures. A comprehensive survey
may also provide companies with wage data from other companies - this will allow them
to assess their own compensatory policies and adjust them accordingly. Survey data is
compiled using various data and record from human resource departments.

To make it simple, the Pay Survey is a tool specifically for remuneration specialist and
managers to define a fair and competitive salary for the employees of a company. The
survey output is data on the average or median salary for a specific position, taking into
consideration the region, industry, company size, etc.

FACTORS TO CONSIDER WHEN CONDUCTING A PAY SURVEY

We all know and learned that wages and salaries directly influence employee behavior
and performance. John Stacey Adams, a behavioral psychologist expanded the Equity
Theory of Compensation by stating that the employees decided whether compensation
is fair by comparing work efforts and pay against those of fellow employees. The
challenges this poses to small-business owner who must balance budget realities
against the need to pay employees fairly makes wage and salary surveys that consider
external and internal factors vital to accomplishing both objectives.

LABOR MARKET DIFFERENCES

 Republic of the Philippines
EULOGIO “AMANG” RODRIGUEZ INSTITUTE OF
SCIENCE AND TECHNOLOGY
Poblacion 5 Congressional Road,
BACHELOR OF SCIENCE IN INDUSTRIAL PSYCHOLOGY General Mariano Alvarez
Cavite 4117 Philippines

External factors are those used to define the labor market. Labor markets differ
according to the factors such as geographic location, degree of competition and
the education and experience levels of the work force. This makes using the right
labor market just as important as deciding on which factors to include in a wage and
salary survey. For example, if your business has locations in both metropolitan and rural
areas and you define the labor market using just the rural definition, you will most likely
set wages too low to attract and retain employees in the metropolitan location.

STRUCTURE, INDUSTRY AND SIZE

Organizational structures, the type of business and size are important considerations.
To make accurate wage and salary comparisons, each of these factors must relate
closely to your business. For example, a sole proprietor, a non-profit organization and a
corporation all use different pay structures. Similarly, a convenience store and a
software development company also use different pay structure. If you run a modest-
size business and compare your wage and salary ranges to a large corporation in the
same industry as your own, you’ll most likely find that you are paying your employees
much less than their counterparts.

INTERNAL FACTORS
Internal factors determine the relative worth of different jobs to the company. While a
small business owner with only a few employees might evaluate every job, large
businesses most often select representative key jobs. Regardless, internal factors are
compensable characteristics of a job for which a business is willing to pay. These most
often included the job title, duties and requirements. Each factor receives a monetary
scale ranking according to its importance in the job, with total points used to determine
the optimal wage or salary.

SALARY STRUCTURE/PAY SCALE

 Republic of the Philippines
EULOGIO “AMANG” RODRIGUEZ INSTITUTE OF
SCIENCE AND TECHNOLOGY
Poblacion 5 Congressional Road,
BACHELOR OF SCIENCE IN INDUSTRIAL PSYCHOLOGY General Mariano Alvarez
Cavite 4117 Philippines

A pay scale or also known as the salary structure, is a system that determines how
much an employee is to be paid as a wage or salary, based on one or more factors
such as the employee’s level, rank or status within the employer’s organization, the
length of time that the employee has been employed, and the difficulty of the specific
work performed. Before the company hires its first employee, it constructs a pay scale.
Pay scales are subject to change based on production demands and workforce
planning; however, initial pay scales may be modified since the business completes the
employment process by hiring its first employees. The manner in which employees are
going to be compensated is the first consideration in a salary system.

A salary structure consists of starting wages, cost-of-living-allowances, annual raises

and cash incentives and bonuses. The actual salary paid to employees depends on
market conditions, business revenue and profitability, workforce size and how much
employers contribute to employee benefits. Employers have three basic choices when it
comes to establishing pay rates. They can pay premium wages and offer premiums
benefits, compensate employees according to base amounts and provide outstanding
benefit packages, or they can be among the highest paying companies in their industry
and offer minimal benefits.

Factors of Salary Structures in the Philippines

Aside from professional experience and academic credentials, salary structures and
wages in the Philippines are determined by factors such as nature of work, workplace,
location, working hours, type of industry/sector, and others. The salaries of those
working in major cities and business districts are relatively higher compared to those
employed in second-tier cities and provincial areas around the country.

Philippine laws, however, grant fair compensations and benefits to all types of
employees regardless of differentiating factors such as those previously mentioned.
 Republic of the Philippines
EULOGIO “AMANG” RODRIGUEZ INSTITUTE OF
SCIENCE AND TECHNOLOGY
Poblacion 5 Congressional Road,
BACHELOR OF SCIENCE IN INDUSTRIAL PSYCHOLOGY General Mariano Alvarez
Cavite 4117 Philippines

Among these compensations and benefits are minimum wages, the 13 th month pay,
health and insurances benefits and holidays.

DOLE and NWPC

The Department of Labor and Employment (DOLE) and its affiliate agency, the
National Wages and Productivity Commission (NWPC), are mandated to enforce the
provisions of the Labor Code of the Philippines - which prescribes employment
regulations and labor laws for companies operating in the Philippines.

Minimum wages rates in the Philippines vary in every region, with the Regional
Tripartite Wages and Productivity Board (RTWPB) in each of them to monitor
economic activities and adjust minimum wages based on the region’s growth rate,
unemployment rate, and other factors. In early 2018, NWPC released an updated
summary of regional daily minimum wage rates to serve as a guide for employers on
the minimum daily amount legally required for them to pay their employees.

References:
https://www.bizfluent.com
Pay Equity: Internal and External Considerations