Effectiveness of Employee Benefits

and Rewards on Work Motivation

and Productivity to Minimum Wage
Earners Within Pandacan, Manila
Submitted by: Jessica Chariz A. Sy

Introduction
As an organization continues to grow , Their clients demand is
also affected. They are bound to have more pressure to exceed
their competitors As they are bound to surpass their competitors,
Their sales and demands will surely increase as well. An effective
Human Resource management plays a very critical role in
accomplishing more demands with a fewer work forces through the
means of a good compensation for them. Typically, the employees
benefit and rewards which is my main focus for this research plays
a critical role in managing an organizations human resource
effectively.
Compensation plays one of the main roles in maintaining a
harmonious employer-employee relationship. An employee depend
on the compensation to have income and financial security. While
the employers , Their decision about the employees compensation
can influence their cost of doing business thus, Their ability to sell
a product at a competitive price in the market. In addition,
providing a good compensation can influence the employers ability
to attract new employees into their workforce , keeping the
employees engaged and committed to their work and also if they
will have a positive of negative attitude and behavior while with the
employer
Under the Philippine Labor code, There are six basic employee
benefit for an individual who is working legally here in our country.
These basic employee benefits cover most occupations, may it be
agricultural or non-agricultural, and also provided that associated
compensation for Daily Minimum Wages still apply.
A legally employed worker who work eight (8) hours a day on a 48
hours a week schedule is covered under the Philippine Labor
Code. Commencing from the time the employee starts to work and
until twenty-four (24) hours later is considered one work day.
This is according to the - (http://www.dole.gov.ph/ BOOK
THREE :CONDITIONS OF EMPLOYMENT Title I: WORKING
CONDITIONS AND REST PERIOD Chapter I: HOURS OF WORK
- October 7th, 2009)

Art. 83. Normal hours of work. The normal hours of work of any
employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at
least one million (1,000,000) or in hospitals and clinics with a bed
capacity of at least one hundred (100) shall hold regular office
hours for eight (8) hours a day, for five (5) days a week, exclusive
of time for meals, except where the exigencies of the service
require that such personnel work for six (6) days or forty-eight (48)
hours, in which case, they shall be entitled to an additional
compensation of at least thirty percent (30%) of their regular wage
for work on the sixth day. For purposes of this Article, "health
personnel" shall include resident physicians, nurses, nutritionists,
dietitians, pharmacists, social workers, laboratory technicians,
paramedical technicians, psychologists, midwives, attendants and
all other hospital or clinic personnel
What is an employee? And how can you classify yourself as an
employee here in the Philippines?
An employee is any individual who is legally employed in the
Philippines. Any person who is covered by the GSIS under the
Commonwealth Act 186, or any person compulsorily covered by
the SSS under Republic Act 1161. Such employee is automatically
covered for these government mandated employee benefits. Here
are the basic benefits for employees covered by the Philippine
Labor Code:
Social Security System (SSS) Contributions
Republic Act No. 8282, otherwise known as the Social Security Act
of 1997 is the social security system that was developed,
promoted and implemented by the government here in the
Philippines. The Social Security is focused on providing protecting
its member in unfortunate events, in retirement and other reasons
that may result in loss of income for the SSS member.
Contribution to National Health Insurance Program (NHIP)
The employee and his/her employer(s) are to contribute for the
medical insurance of the said employee in accordance to the
Republic Act 7875 on Medicare Program which is administered by
the Philippine Health Insurance Corporation (Philhealth).

Contribution to Home Development and Mutual Fund (HDMF)

The employer(s) is required to contribute per month not less than
P100.00 to the employee's Home Development and Mutual Fund.
In accordance to the periodic remittance schedule provided by
HDMF, the employer(s) will remit this contribution, in addition to
that of the employee's, which is to be deducted from his/her payroll
The 13th Month Pay
As mandated by the Presidential Decree No. 851, the employee
shall receive a bonus salary equivalent to one (1) month,
regardless of the nature of his/her employment, not later than
December 24 of every year.
Service Incentive Leave
Book III, Chapter III of the Labor Code of the Philippines covers
the employee's benefit for Service Incentive Leaves. According to
Article 95, an employee who has rendered at least one year of
service is entitled to a yearly five days service incentive leave with
pay.
Meal and Rest Periods
Under Article 83, the employee is provided a one-hour employee
benefit for regular meals, when working on an eight (8 hour)
stretch. Employees are also provided adequate rest periods in the
morning and afternoon which shall be counted as hours worked.
(See: Article 83, Conditions of Employment).
These benefits plays a major role in creating decisive
compensation and rewards package for an employer to its
employees and also to attract new talents to welcome into the
organization. It is up to the employees if they would accept the
deal or not. And if they would accept , Are the benefits and rewards
enough to keep them motivated in their field of work?
I am aiming to focus my study on its effectiveness towards
minimum wage workers within the vicinity of Manila. Since we
know that the salaries of a minimum wage workers is not really at
hype, I would like to understand what makes them engaged to stay
in their company whether it be through extrinsic or intrinsic rewards
as an individual. And even though their salaries may not be at the

same pace as the other, Why stay? Could it be because of the

harmonious relationship with the organization itself? Fear of being
Unemployed? Or the benefits and acknowledgment other than the
monetary incentives?
STATEMENT OF THE PROBLEM
Since an organization is expected to grow in a span of time. It
should be prepared to meet their clients demands and
expectations. Having a large and various amount of demand
coming from customers is a serious task and must have high
quality of service returned as a fair exchange to their payment . To
meet the goals and surpass the hurdles of an organization , They
would need a higher number of workforce or even better, A number
of highly skilled employees. A lesser employee count can be quite
benefiting for the organization itself. Few individuals would be
given salaries for their work . Thus, the organization itself would be
able to save up income. But how can an organization make sure
that their employees would stay especially when they are
compensated as a minimum wage earners? Since employees has
different needs as an individual, How can we be so sure that
organizations can make an individual that packs a lot of skills to
stay with them which would lessen the arrival of new employees
since one person can handle two tasks? Building the loyalty of
your employees individually can be quite a task to handle
especially since its hard to balance their salaries between the
other rewards and compensation (extrinsic or intrinsic) that would
be given to them. A lot of key points should be remembered, For
example - Employees are given minimum wages but they stay
because of (1) Health Incentives or other Employer-Employee
contributions that can make an individual secure like HMO, SSS,
Pag-Ibig or even Philhealth Contributions. (2) Employee can loan
from you given the right criteria to be eligible to loan , (3) They
receive free commodities from you given the right scenario. (e.g :
Free sack of rice for the month if there was no tardiness on their
attendance.)
Given these circumstances it should be an obvious fact that
creating strategies in order to create or remain employee-employer
relationship is a task especially given the fact that I am focusing on
minimum wage earners from that, We would really need the help of
a proper human resource management. What can make an

employee leave? How can we make room for improvement given

the scenario that we are talking about minimum wage earners.
How can we properly scale their rewards and compensation to
their salary worth? Are the employees really after the monetary
and tangible rewards? What about an individuals self actualization
as a reward? Is it enough to keep their loyalty? I want to focus my
study as to what makes a minimum wage earner stays in their
company . I want to know if whether the rewards and benefits that
are given to them is an enough reason for them not other greener
pastures. Which is more valuable to them? The extrinsic or intrinsic
rewards? I would want to study whether the given compensation
package to them is effective strategy in retaining and maintaining
employee and reducing their turnover rate.
RELATED LITERATURES
(1) BOOK THREE - CONDITIONS OF EMPLOYMENT / Title I - WORKING
CONDITIONS AND REST PERIODS / Chapter I HOURS OF WORK
From :
Republic of the Philippines - Department of Labor and Employment Website
http://www.dole.gov.ph/labor_codes/view/4
Art. 83. Normal hours of work. The normal hours of work of any employee
shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one
million (1,000,000) or in hospitals and clinics with a bed capacity of at least
one hundred (100) shall hold regular office hours for eight (8) hours a day, for
five (5) days a week, exclusive of time for meals, except where the exigencies
of the service require that such personnel work for six (6) days or forty-eight
(48) hours, in which case, they shall be entitled to an additional compensation
of at least thirty percent (30%) of their regular wage for work on the sixth day.
For purposes of this Article, "health personnel" shall include resident
physicians, nurses, nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel.
Art. 84. Hours worked. Hours worked shall include (a) all time during which an
employee is required to be on duty or to be at a prescribed workplace; and (b)
all time during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours
worked.
Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor
may prescribe, it shall be the duty of every employer to give his employees
not less than sixty (60) minutes time-off for their regular meals.

(2) BOOK FOUR

HEALTH, SAFETY AND SOCIAL WELFARE BENEFITS / Title I - MEDICAL,
DENTAL AND OCCUPATIONAL SAFETY / Chapter I - MEDICAL AND
DENTAL SERVICES
Republic of the Philippines - Department of Labor and Employment Website
http://www.dole.gov.ph/labor_codes/view/5
Chapter IV
CONTRIBUTIONS
Art. 183. Employers contributions.
Under such regulations as the System may prescribe, beginning as of the last
day of the month when an employees compulsory coverage takes effect and
every month thereafter during his employment, his employer shall prepare to
remit to the System a contribution equivalent to one percent of his monthly
salary credit.
The rate of contribution shall be reviewed periodically and subject to the
limitations herein provided, may be revised as the experience in risk, cost of
administration and actual or anticipated as well as unexpected losses, may
require.
Contributions under this Title shall be paid in their entirety by the employer
and any contract or device for the deductions of any portion thereof from the
wages or salaries of the employees shall be null and void.
When a covered employee dies, becomes disabled or is separated from
employment, his employers obligation to pay the monthly contribution arising
from that employment shall cease at the end of the month of contingency and
during such months that he is not receiving wages or salary.
Art. 184. Government guarantee. The Republic of the Philippines guarantees
the benefits prescribed under this Title, and accepts general responsibility for
the solvency of the State Insurance Fund. In case of any deficiency, the same
shall be covered by supplemental appropriations from the national
government.