Learning Area Organization and Management Grade Level 11

W4-5 Quarter Fourth Date

I. LESSON TITLE Compensation, Wages and Performance Evaluation

II. MOST ESSENTIAL LEARNING Examine the functions and importance of compensation, wages and
COMPETENCIES (MELCs) performance evaluation, appraisal, reward system, employee relations and
movement.
III. CONTENT/CORE CONTENT The learners have an understanding of the process of recruiting, selecting, and
training employees.
IV. LEARNING PHASES AND ACTIVITIES
I. Introduction (Time Frame: 25 minutes)

Good day! As a recapped, you have learned the process of recruiting, selecting and training employees. In this Leap,
you will be able to:
1. examine the functions and importance of compensation and wages, performance evaluation, appraisal and
reward system, and employee relations;
2. discuss the employee movements and grievance procedure;
3. evaluate compensation and reward system;
4. fill-up a sample performance appraisal form and give feedback.
D. Development (Time Frame: 130 minutes)

Learning Task #1: Directions: Identify what is being asked in the following statements. Choose your answer in the box and
write it in your notebook.

Compensation Rewards Labor Unions

Employee Movements Social Support Grievance Procedure

1. It is the sum total of perceived assistance or benefits that may result from effective social employee relationships.
2. It is a formal procedure that authorizes the union to represent its members in processing a grievance or complaint.
3. It is a series of actions initiated by employee groups toward an end or specific goal.
4. All forms of pay given to employees by their employers for the performance of their job.
5. Reward is a gift, prize or recompense for merit, service or achievement, which may have a motivating effect on the
employee.

In the 21st century, instead of paying employees based mainly on their job titles or positions, they are now given pay
according to their individual competencies and/or contributions to the company’s success. Wage experts now create
compensation packages with value for both employees and businesses.

Compensation/Wages: All forms of pay given to employees by their employers for the performance of their job.

Compensation may come in different forms:

1. Direct Compensation: includes workers’ salaries,
incentive pays, bonuses, and commissions
2. Indirect Compensation: includes benefits given
by employers other than financial remunerations
like educational and health benefits, travel, etc.
3. Nonfinancial Compensation: includes recognition
programs, assignment to a rewarding jobs,
enjoying management support, convenient work
hours, and work environment.

Bases for Compensation:

Employees may be compensated based on the following:
Piecework Basis-according to number of units produced
Hourly Basis-according to number of work hours rendered
Daily Basis-according to number of work days rendered
Weekly Basis-according to number of work weeks rendered
Monthly Basis-according to number of work months rendered
Two Motivational Theory of Compensation
1. Pay Equity: related to fairness; it is a motivation theory based on the idea that an employees’ pay must be
commensurate with his/her effort.
2. Expectancy Theory: it is a motivation theory which predicts that employees are motivated to work well because of
the attractiveness of the rewards or benefits that they may possibly receive from a job assignment.

Performance Evaluation: it is a process undertaken by the organization to measure the employees’ work performance.
Usually, it is done once a year.

Purposes of Performance Evaluation: Administrative and Developmental

The two main purpose behind employee assessment that are beneficial to the company and employees are:
1. Administrative Purposes: are fulfilled through appraisal/evaluation programs that provide information that may be a
basis for compensation decisions, promotions, transfers, and terminations. Likewise, it is for recruitment and selection of
potential employees.
2. Developmental Purposes: are fulfilled through appraisal/evaluation that provide information about employees
performance, strengths and weaknesses that may be a basis for identifying their training and development needs to
improve their competencies.

Performance Appraisal Methods

Different performance appraisal methods are used depending on the objective of the evaluation. To adopt new legal
employment requirements and technical changes, some appraisal methods used today are the following:
1. Trait Methods: method used to find out if the employee possesses important work characteristics such as
conscientiousness, creativity, emotional stability and others.
2. Graphic Rating Scales: method where each characteristic to be evaluated is represented by a scale to indicate the
degree to which an employee possesses that characteristic.
3. Forced-choice Method: it requires the rater to choose from two statements purposely designed to distinguish positive
or negative performance.
4. Behaviorally Anchored Rating Scale (BARS): it is a behavioral approach that includes five to ten vertical scales, one
for each important strategy for doing the job and numbered according to its importance.
5. Behavioral Observation Scale (BOS): a behavioral approach that measures the frequency of observed behavior.

Rewards System
Reward is a gift, prize or recompense for merit, service or achievement, which may have a motivating effect on the
employee. Its main objective is to attract knowledgeable and skilled people to the organization and keep them stay. It
promotes professional growth and development and presents fast employee turnover. Research from The Center for
Effective Organizations revealed that rewards systems can influence six factors that impact organization effectiveness.
These are:
1. Attention and retention; 4. Culture;
2. Motivation of performance; 5. Reinforce and define structure, and;
3. Skills and knowledge 6. Cost

Two Main Types of Rewards

1. Monetary Rewards: refers to money, finance or currency reward
a. Pay/Salary-financial remuneration given in exchange for work performance that will help the organization to attain its
goals.
b. Benefits-indirect forms of compensation given to employees for the purpose of improving the quality of their work and
personal lives. Examples: health care benefits, retirement benefits, educational benefits
c. Incentives-based upon a pay-for-performance philosophy. It establishes a baseline performance level that
employees must reach in order to receive such reward. Examples: bonuses, merit pay, sales incentives
d. Executive Pay-a compensation package for executives of the organization which consists of five components: basic
salary, bonuses, stock plans, benefits and perquisites.
e. Stock Options-plans that grant employees the right to buy a specific number of shares of the organization’s stock at a
guaranteed price during a selected period of time.

2. Non Monetary Rewards: refers to intrinsic rewards which do not pertain to money, finance or currency. It refers to
intrinsic rewards that are self-granted and have a positive psychological effect on the employee who receives it.
a. Award-given for meritorious service or outstanding performance. Examples: trophies, medals, certificate of
recognition.
b. Praise-given to express oral or verbal appreciation for excellent job performance.

Employee Relations
Employee relations is the connection created among employees or workers as they do their assigned tasks for the
organization to which they belong.
 Three Types of Employees
Engaged Employees who work with passion and feel a deep connection with their company.
They drive innovation and move the organization forward.
Not Engaged Employees who are essentially “checked out”.
They put time but not energy or passion into their work.
Actively Disengaged Employees who are not only unhappy at work but also act out their unhappiness.
They undermine what their engaged coworkers accomplish.

Effective Employer Relations and Social Support

Social support is the sum total of perceived assistance or benefits that may result from effective social employee
relationships. It must always go with effective employee relations. Here are some ways to overcome barriers to good
employee relations:
● Develop a healthy personality and avoid negative attitudes and behavior.
● Find time to socialize with coworkers.
● Overcome tendencies of being too dependent on electronic gadgets.
● Develop good communication skills and be open to the opinions of others.
● Minimize sub/cultural tension.

Employee Movements
Employee movements is a series of actions initiated by employee groups toward an end or specific goal. A labor unit is
a formal union of employees that deals with employers, representing workers in their pursuit of justice and fairness and in
their fight for their collective or common interests. Common concerns of unionism:
⮚ Financial needs
⮚ Unfair management practice
⮚ Social and leadership concerns

Grievance Procedure
It is a formal procedure that authorizes the union to represent its members in processing a grievance or complaint. Such
grievance must be expressed orally or in writing to the employees’ immediate supervisor and the union steward. With
the willingness of all parties to discuss the complaint, grievance may be resolved immediately. If not, the grievance can
be elevated to higher authority. However, if it remains unresolved within the prescribed period, the employee with the
aid of the local union president, may now forward the complaint to the National Labor Relations Commissions (NLRC) for
arbitration. The NLRC is an attached agency of DOLE that is tasked to resolve disputes between the labor force and
management in order to preserve industrial peace. The arbitrator is a neutral third party who resolves the grievance by
issuing a final decision which both the employee/s, the union president, and the employer have to follow.

E. Engagement (Time Frame: 35 minutes)

Learning Task #2: Directions: Fill-up the sample performance appraisal form and exchange it with your classmate. Both
of you shall give an appreciation of his/her performance.
A. Assimilation (Time Frame: 25 minutes)

Learning Task #3: Directions: Compare and contrast the three different remuneration and reward packages of each
company. Select your preferred most and explain why.

Preferred Most: Company _______

Why? __________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________

V. ASSESSMENT (Time Frame: 15 minutes )

(Learning Activity Sheets for Enrichment, Remediation, or Assessment to be given on Weeks 3 and 6)

Learning Task #4: Directions: Match Column A with Column B by connecting a line to the right answers.

Column A Column B
1 Incentives A meritorious service rendered
2 Award B remuneration
3 Pay/Salary C health care benefits
4 Praise D sales incentives
5 Benefits E Oral appreciation for excellent job performance

VI. REFLECTION (Time Frame: 10 minutes)

• Write your personal insights about the lesson using the prompts below.
I understand that __________________________________________________________________________________________.
I realize that _______________________________________________________________________________________________.
I need to learn more about _________________________________________________________________________________.

● Communicate your personal assessment as indicated in the Learner’s Assessment Card.

Personal Assessment on Learner’s Level of Performance
Using the symbols below, choose one which best describes your experience in working on each given task. Draw it in the
column for Level of Performance (LP). Be guided by the descriptions below:
✰ - I was able to do/perform the task without any difficulty. The task helped me in understanding the target content/ lesson.
✔ - I was able to do/perform the task. It was quite challenging, but it still helped me in understanding the target content/lesson.
? – I was not able to do/perform the task. It was extremely difficult. I need additional enrichment activities to be able to do/perform
this task.
Learning Task LP Learning Task LP Learning Task LP Learning Task LP
Number 1 Number 3 Number 5 Number 7
Number 2 Number 4 Number 6 Number 8

VII. REFERENCES Cabrera, Helena Ma. F., PhD., Altarejos, Anthony DC., PhD., Benjamin, Riaz. Textbook in
Organization and Management. Edited by Clarence Darro B. Del Castillo. Philippines:
Vibal Group, Inc., 2016.

Prepared by: Checked by: Annabelle G. Bughao, DBA.

Ma. Cristina F. Pabalate Ciela Aunica D. Lelis
Feliz A. Tayao