Achieving and Sustaining Competitiveness in the Global Era: The Case of Company ABC (Part 1)

ANTO COMETA

The rewards and costs of achieving and sustaining competitiveness in the global era are fundamental in the placement of interests both of the business and the workers. Advancements in technology alongside with the competitive nature of the market has led most if not all organizations to look for viable ways of augmenting its ability to perform in order to avoid extinction. Increasing the efficiency and productivity of the business which is generally reflected in the company’s capability to maintain its profitability and still sustain the needs of the business as well as its workers are the perceived elements for its survival. Altering the processes and structure of the organization are largely the utilized ways in response to the dilemma or challenges imposed by the situation. However, modifications in the existing structure and processes of the organization in order to adapt to the changing requirements of the competitive market have crucial consequences not only the workers but also to the business. Various issues and conflicts arise which most of time are unfavorable to both parties. Careful analysis of the rewards and costs may present possible ways and approaches on how to manage and deal with the conflicting interests of the business and the (different levels of) workers.

The circumstances presented in Company ABC - the current situation that’s being faced by the banking institution as well as its workers, could lead to potential problems wherein both could lose its footing in the product and labor markets. At the least, six (6) major interrelated and to some extent overlapping issues were identified. These put forward conflicting interests whereby each holds central stakes in the continued existence of the business or the organization; these are (1) general skills and competencies, (2) organizational overhaul, (3) business efficiency and profitability , (4) compensation and wage dispersion, (5) resource allocation, and (6) benefits distribution. Preventive measures or negotiated agreements should be explored and taken so not to come across these concerns or worsen the condition which could put the entire organization in the red.

The rewards and costs of achieving and sustaining competitiveness in the global era are fundamental in the placement of interests both of the business and the workers. Advancements in technology alongside with the competitive nature of the market has led most if not all organizations to look for viable ways of augmenting its ability to perform in order to avoid extinction. Increasing the efficiency and productivity of the business which is generally reflected in the company’s capability to maintain its profitability and still sustain the needs of the business as well as its workers are the perceived elements for its survival. Altering the processes and structure of the organization are largely the utilized ways in response to the dilemma or challenges imposed by the situation. However, modifications in the existing structure and processes of the organization in order to adapt to the changing requirements of the competitive market have crucial consequences not only the workers but also to the business. Various issues and conflicts arise which most of time are unfavorable to both parties. Careful analysis of the rewards and costs may present possible ways and approaches on how to manage and deal with the conflicting interests of the business and the (different levels of) workers.

The circumstances presented in Company ABC - the current situation that’s being faced by the banking institution as well as its workers, could lead to potential problems wherein both could lose its footing in the product and labor markets. At the least, six (6) major interrelated and to some extent overlapping issues were identified. These put forward conflicting interests whereby each holds central stakes in the continued existence of the business or the organization; these are (1) general skills and competencies, (2) organizational overhaul, (3) business efficiency and profitability , (4) compensation and wage dispersion, (5) resource allocation, and (6) benefits distribution. Preventive measures or negotiated agreements should be explored and taken so not to come across these concerns or worsen the condition which could put the entire organization in the red.

Issues, Interests and Positions

1. General Skills and Competencies

The organization recognizes the need to keep pace with the changing demands and needs of the business and the market. In the last three years of the bank’s operations, older employees have contributed less than the younger employees. This didn’t mean that they exerted less effort but simply due to the acquisition of the skills needed in handling the new banking technology. In the interview conducted it showed that those who are at their 30s to 40s (regardless of gender) want more skills training and competency upgrading. As for those over their forties want the company to find ways of maximizing their experience, rather than simply introducing potentially job-shedding technological changes.

It is of equal importance and concern to the workers and the business to continually upgrade the skills and competencies required in order for the organization at the very least to maintain its survival in the market. There are two probable positions that could be taken in order to address the concern relating to the matter. In so far as the set of skills and competencies needed, developing training programs is one of the options that could be taken. Another, which could be deemed as a radical move, those deemed performing below the satisfactory level could be booted out of the organization.

2. Organizational Overhaul

This includes re-forming or re-organizing the structure, processes and design of the organization. The organizational structure, processes and design characterize the roles and functions carried out by each worker and are representative of the vertical and horizontal relationships within the organization. Moreover, these outline the appropriate channels and approaches for strategic information flow and decision making. The bank worries about losing its competitive edge if more efficient ways of organizing the work process are not introduced.

Modifying the organizational structure processes and design to achieve higher organizational productivity both operational and financial which is the aim of the business is of significant concern of the management. This is the most likely position to be taken by the company in order to effectively utilize and gain higher control over these concerns.

3. Business Efficiency and Profitability

The main thrust of the business is to deliver and achieve bottom-line returns which are chiefly dealt with higher asset utilization at prominently lower costs. This is the idea behind the business’s asset management and successful profit realization. This is of utmost concern of the business. Previously, the bank was perceived as financially stable having five solid years of increasing its profitability. Moreover, it was seen in the high productivity of the workers – with every peso spent on the individual worker it yields five pesos of net income. However, with the situation that could subvert the financial stability of the business diagnosing which works effectively and what’s hampering the efficiency and profitability could be the management’s action towards the resolution of this particular dilemma.

Increasing the bank’s efficiency to generate higher productivity while maintaining or lowering the overheads is the most likely position to be taken. This could be achieved by taking out those employing labor flexibilization measures. This is to maximize the current set of resources that the organization have while minimizing the cost of operations.

4. Compensation and Wage Dispersion

Wage is deemed as a central driving force (but not exclusive) in the delivery and performance of individuals within the organization. Determining the tolerable wage differentials in so far as seniority, position and rank levels in the organization is concerned as well as being compensated for the output and performance carried out is of importance to the company but exceedingly to the workforce.

The significant contributions to the business and organization such as increased profitability, output delivered and performance carried out is perceived to be directly related to the compensation to be given out. It could be seen on the survey conducted which had shown concerns on the part of those workers who are relatively new which raised the idea of pegging pay to skills and performance. Moreover, the demand made by the junior officers to increase the salary differentials between them and the rank and file as well as to the senior officers to be narrowed down.

Disparity in wage levels has an effect on the productivity or efficiency as well as motivation on the part of the workers. This also posits a relational conflict in both horizontal and vertical dimensions. The most probable position to be taken by the organization would be to provide performance and skill-based pay as well as to increase the base pay given to the junior officers.

5. Resource Allocation

The basic allocation of resources is the preference of which items to finance, what level of support it would receive and which items could be left unfunded. More often than not, businesses would invest on units or groups which generate higher productivity and profitability than those which were not. Moreover, those classified as high profit centers in contrast to those deemed as cost or low generating profit centers are mostly likely to be given high priority.

This concern is of equal interest on workers and management. The most probable position to be taken by the management would be in favor of the demands made by those individuals or group which yielded high levels of productivity and made significant contributions in terms of increasing the bank’s profitability. Failure to provide the pleas could result in the decreased morale and motivation of those workers which could eventually lead to their decreased productivity which also affects the business’ profitability. It could also be the case (which is more likely to occur) that these workers would leave the company and transfer to other organizations even to the competitors.

6. Benefits Distribution

Benefits more often than not are considered to be part of the entire wage or compensation arrangement given to the workers. Companies recognize the value of benefit packages in the organization as key factors in the individual’s consideration for an employment opportunity, employee morale and motivation as well as reduction in staff turn over. Thus, the benefits offered in the organization are quite essential to the overall employment picture.

It was identified that there were different needs in terms of benefits acquisition in the organization. These vary depending on the age group and (civil) status classification of the worker - workers who are married want child-minding facilities as oppose to those who are still single who prefers to have programs for fitness and wellness; those in their thirties to forties yearn for more skills training and competency upgrading in contrast to those over their forties and fifties who want the Bank to find ways of maximizing their experience and would consider an early retirement program plus assistance in setting up their own businesses should they retire, respectively. Moreover, the position of the union in general is simply to improve what is currently being enjoyed since the workers deserve to be rewarded for their hard work which brought the organization to where it is today.

This matter is of high concern to the workers. The needs may differ but they are not necessarily conflicting. It could be perceived that the needs cited if taken all together have varying levels of significance and appeal to the worker. If the organization decides to grant the need(s) one group over the other, it could likely cause tension and discord within the horizontal dimension. The most feasible action to be taken by the management considering the cost (as well as if it’s lucrative in the long term) is through the collective bargaining agreement scheme.

Achieving and Sustaining Competitiveness in the Global Era: The Case of Company ABC (Part 2)

ANTO COMETA

Analyzing and Resolving the Issues

The major dilemma as outlined by the issues and probable concerns perceived to be encountered by the company is principally attached in the organization’s view of losing its competitive edge in the market. With the introduction of new technology, international standards in the management of risks using mathematical models, sophisticated regulatory and compliance requirements resulting from laws seeking to accommodate e-transactions among others pose a tight spot in the efficiency of the organization to adeptly address the concerns of the business and the workers.

Among the six identified issues and concerns, there are three that could be deemed crucial. These need extreme focus in order to facilitate the resolution of the problem and avoid adverse consequences that may arise from those. It doesn’t mean however, that the rest are of low significance. The remaining three from the identified critical issues and concerns are developmental consequences which are also central to the dilemma.

The first critical issue relates to the financial or banking institution’s business efficiency and productivity. If the organization considered increasing the bank’s efficiency to generate higher productivity while maintaining or lowering the overheads by applying labor flexibility it could be the case that instead of achieving what is desired the converse could occur this could be considered as the worst alternative instead of being the best option. We do not shelve that there are several benefits that could be attained by applying labor flexibilization measures. The advantages by implementing such measures in the company are exceedingly significant to the operations of the business. On the firm’s end it would provide savings or profit - operational or overhead costs for not hiring additional manpower, and better resource allocation. On the part of its workers, it facilitates in the acquisition of several skills primarily related or needed for business operations. Together with the benefits that could be acquired by applying such measures, there are also negative implications that affect not only the business and but also its workers. In line with applying labor flexibility, modifying the organizational structure, processes and design follows. This is to justify or legitimize the utilization of such measures applied in the organization specifically to its workers.

However, applying labor flexibilization measures as well as changes in the organizational structure processes and design without careful analysis, strategic implementation and compatibility with the laws governing the rights of the workers could lead to further costs than rewards. If this happens, increased worker woes on employment matter leads to job discontentment. In the case of most workers in relation with the commonly used labor flexibilization measures applied in companies correlates more distressing views which are human capital exploitation and unfair labor practices. As stated in Article 247 of the Philippine Labor Code, unfair labor practices are not only violations of the civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment as herein provided.

There were several case studies conducted for financial institutions showed that cost reduction is just one way of profit maximization. Banks that tried to maximize profits by raising revenues while reducing costs is quite effective, but there are also those who provide higher quality services that raised costs yet also raised revenue more than the cost increases. It could be perceived that the results suggested that methods that exclude revenues when assessing performance may be misleading (Berger and Mester, 2001). Organizations should run the business in the interest of meeting not just their own needs but also other important stakeholders such as the workers since they are also contributors which have impact on the performance of the business. The best alternative is to look for other methods or have a consultation as to what would be the measures that could increase efficiency and productivity without encountering such concerns.

The second is compensation appended with the worker’s benefits. Benefits more often than not are considered to be part of the entire wage or compensation arrangement given to the workers. Companies recognize the value of benefit packages in the organization as key factors in the individual’s consideration for an employment opportunity, employee morale and motivation as well as reduction in staff turn over. Thus, the benefits offered in the organization are quite essential to the overall employment picture.

The best way to understand the needs and at the same time agree or eliminate those which could not be granted is through the collective bargaining agreement. The needs identified have varying levels of significance and appeal to the worker, however, it doesn’t mean that these various needs are conflicting since these needs is dependent on the category (age and marital status) of the worker. If the organization decides to grant the need(s) one group over the other, it could likely cause tension and discord within the horizontal dimension. The best option for the management is really to negotiate with the union in order to arrive at a mutual agreement.

As for those demands made by individuals or group which yielded high levels of productivity and made significant contributions in terms of increasing the bank’s profitability one of the usual and conventional way of adjusting or modifying the base pay in order to reflect or make it appear higher than what is given is achieved by combining benefits and other incentives either monetary or non-monetary. The objectives of determining pay may have one or more that may be in discord with each other (De Siva, 1992). These objectives can be classified into four distinctive categories. First is equity which includes the narrowing of inequalities, wage increase of the lowest paid employees, the concept of equal pay for equal work value among others. The second is efficiency which is reflected in efforts to connect or associate part of the employee’s wage to the productivity or profit, performance whether group or individual as well as acquisition of both skills and knowledge related to the execution of job functions. The third perceived objective is related to the stability in the macro-economic aspect. This has something to do with the levels of employment as well as other related factors that of could either contribute or impede the balance and sustainability of development of the economy of a country. Last identified objective is the effective allocation of labor in the labor market. This particular objective relates to the mobility of workers whether geographical or industry related since the motive of doing such is to the idea of acquiring a net gain and not only to meet the individual’s basic requirements.

A lot of organizations are now in search of sustaining their competitiveness in the market by means of increasing the pay given to the employee. The type (s) of pay are mostly related to performance measures, this is primarily done in order to sop up the costs of labor of the organization at the same time motivate and recompense the employee for the performance. The conventional way of companies in order to secure increased wages and reward their employees is through job appraisal and promotion. However, due to the limitations on resources as well as achieving higher positions in the organization not to mention that current developments in the organizational structure becoming less hierarchical due to market demands and types of flexibility employed in the company, incorporating pay increases based on performance is perceived to be more attractive and effective rather than rewarding the worker through promotions this could be deemed as the best alternative option. One of the methods or strategies that is gaining acceptance throughout different industries particularly in the services sector in order to increase the productivity and profitability of the company at the same time rewarding the worker is through performance-based pay. Moreover, the trend in paying the employees is not for the output produced or even for the labor input rendered but simply for the time spent on the job (Blinder, 1990).

There are several theories in human motivation which incorporates pay or pay system as a driving force in motivating their workers to achieve, increase levels or maintain satisfactory performance. The systems of pay given to the workers are now being integrated as part of the human resource management of organizations. This is primarily done in order to achieve the business strategies and objectives whether financial or employee-related since both directly affect the operations of the business. Pay is viewed as a matching element or a dependent variable to the employee’s performance and productivity, by increasing or providing additional pay based on increased productivity and performance is an indication that the company could its financial profitability and could achieve its business objectives.

Its is noteworthy to take into consideration that in designing or structuring a performance pay system, the type of system should highly promote the kind of performance that the organization requires and not just to increase its revenue. Fundamental principles should be laid out and that the objectives and targets should be quite measurable or realizable. Furthermore, the achievement of the performance pay system should be supported by operative approaches and strategies so not to establish that the targets and objectives are impossible to attain. As necessary, employ consultation or increase the involvement in the decision making process or designing of the system. By employing such actions, it could generate efficient or effective ideas, approaches and strategies that could contribute or lead to the achievement of the goals. The organization should also have a feedback mechanism to review the processes, procedures, outcome among others of both pay system and the targets and objectives. It is a excellent avenue in determining and assessing the key factors of either success or failure.

Lastly, skills and competencies which encompass the general productivity of the organization in delivering the required output needed for the business. In order to address the issues concerning the skills and competencies of its workers, organizations should also provide trainings since these are quite beneficial to the company and its workers in achieving their goals both monetary and non-monetary, this could be perceived as the best alternative over a negotiated agreement. To reinforce the training programs, the company should employ Total Quality Management (TQM). TQM which consists of continuous improvement activities involving everyone in the organization, managers and workers alike in a totally integrated effort toward improving performance at every level ( Goetsch and Davis, 1997). It could be integrated as part of the organizational and professional development program. In a quality organization everyone is constantly learning. Management encourages employees to constantly elevate their level of technical skills and professional expertise. People gain an even greater mastery of their jobs and learn to broaden their capability (Scholtes as cited by Goetsch and Davis, 1997). The required set of skills and competencies are basic not only because these are elements essential to the execution of the assigned functions and tasks of the worker in order to achieve the desired output needed for the operations but also important for innovation and alignment of current and future goals and strategies of the organization.

References

Blinder, A. 1990, Paying for Productivity, The Brookings Institution, Washington

Berger, A. and Mester, L. 2001, Explaining the Dramatic Changes in Performance of U.S. Banks: Technological Change, Deregulation and Dynamic Changes in Competition (Working Paper), The Wharton School, University of Pennsylvania

De Silva, S. 1998, An Introduction to Performance and Skill-based Pay Systems, International Labor Office, Geneva

Goetsch, D. and Davis, S. 1997, Introduction to Total Quality – Quality Management for Production, Processing and Services, Second Edition, Prentice Hall, Ohio

The Philippine Labor Code, Department of Labor and Employment, http://www.dole.gov.ph

Not Another Ordinary Day...

ANTO COMETA

A statement we drafted (together with the Chair and Vice-chair) disseminated to all constituents of the college and forwarded to a major newspaper in the observance of Labor Day. Mabuhay ang uring manggagawa!


NOT ANOTHER ORDINARY DAY…

The SOLAIR Student Council joins the rest of the nation in the observance of Labor Day.

The salient labor concerns such as sluggish implementation of wage increases, debilitating work standards and conditions, among others have remained unresolved up to this time. And this year may not be significant, as workers are still at the brink of rising unemployment rates, poorer working conditions, higher prices of commodities and increasing contractualization of work.

The recent shortcomings of our agricultural prices strained many of our laborers to clamor for the expedient implementation of a rational wage increase to sustain their decent livelihood. We believe that the increase on the daily wages is not only timely as it has been long overdue. The Student Council sees this issue as an institutional dysfunction of the appropriate government agencies supposed to deliver the mandate for the conduct of wage reviews, whether in a state of unprecedented national crisis or not.

We call for the immediate resolution of this issue and we urge these agencies to immediately act and present a feasible wage increase structure. We clamor for a more transparent and consultative wage review process to include participation of the different sectors of the society, especially the working population. By exercising this mandate, we provide assurance for both workers and employers.

The UP SOLAIR Student Council believes that the appropriated non-wage benefits for this year’s observance of Labor Day is an insult to the ordinary workers. These token “gifts” are clear manifestations of the State’s lopsided policy towards Labor. These represent the State’s total disregard of the interests and overall well-being of the working class.

We demand for the relevant government agencies to deliver their mandate! We demand for transparent and accountable wage review process to include different sectors of the society, especially the working class! We demand for the expedient implementation of wage increase!

We call on the Arroyo Administration to act on these NOW!!!

UP School of Labor and Industrial Relations
Student Council AY 2008-2009
May 01, 2008

A Call to Action to the UP SOLAIR Centennial Graduates

ANTO COMETA

Below is the statement of the UP SOLAIR Student Council which I drafted together with the council's Vice-Chairperson, Jef Baraquio for the centennial graduating class of the college. It was quite ecstatic when both the academic excellence awardee of the graduate school and the Guest Speaker - Dean Froilan Bacungan quoted the statement we distributed during the commencement exercise last Sunday, April 28, 2008.

For the graduates of both DipIR and MIR, I hope that what we have learned in UP SOLAIR would be applied in our respective professions and organizations and not just another item in our list of credentials.

A CALL TO ACTION TO THE UP SOLAIR CENTENNIAL GRADUATES

Today marks a momentous event in your academic and professional careers as you will be conferred with your respective Diploma or Master’s Degree in Industrial Relations, from no less than the School of Labor and Industrial Relations of the premier state university in the country, The University of the Philippines. As Iskolar ng Bayan, this not only brings prestige, but likewise responsibility and obligation to give something back to the country, to the university, and to the society.

A UP-SOLAIR education is not just a hard-earned diploma or another item in our list of credentials. Above anything else, it is something that we should apply in the workplace to effectuate decent work, non-discrimination, equal opportunities, and distributive justice.

As workers, it will be our weapon to resist unfair labor practices. As managers, it will be our moral and ethical standard in implementing just and equitable labor policies.

As graduates of UP-SOLAIR, we should lead by example in our respective organizations by taking into our minds and hearts, and be advocates of what is fair, what is just, and what is right --- the very core principles UP SOLAIR is much known for.

Let’s uphold and act on what we believe to be just and humane, not only for the workers and the organization we belong to but for the society and the country! Let us be UP SOLAIR graduates!

MABUHAY KA ISKOLAR NG BAYAN! MABUHAY KA SOLAIRIAN!

UP School of Labor and Industrial Relations
Student Council 2008-2009
APRIL 27, 2008

Conflict (Mis)Management and (Un)Settlement Through Negotiated Agreements: The Case of Mr. J and Company Z

ANTO COMETA

The Situation, Conflicts and Negotiated Agreements

Mr. J was a former employee of Company Z[1]. He worked as the Search Engine Marketing Manager for almost two years before he decided to leave the company. Aside from his regular work in the company he also had several consultancy work sidelines having the same line of business.

Mr. J could be somewhat tagged as an archetype of an employee who is difficult to handle. Aside from behavioral and attitude-related problems encountered by co-workers, he has constantly violated company procedures and policies such as habitual tardiness and frequent absenteeism. There has been an existence of a hostile working relationship both in the horizontal and vertical domains (relationship conflict) as well as conscious disregard of company rules and regulations which affected not only his own work function and performance but also to those people whose tasks are connected to his (interest conflict). Despite of the outlined predicaments, his expertise in the field of Search Engine Marketing was of considerable significance which made him fairly indispensable or to an extent an asset to the company. This particular situation presented conflicting interests on the company’s end. Initially, the company ignored the matter since it might cause an issue on Mr. J’s end which could lead to his resignation, consequently, have an effect on the operations of the business.

There were attempts of addressing the concerns associated with the employee. There had been discussions conducted in order to identify the factors and reasons of Mr. J’s actions. However, Mr. J’s motivation was plainly monetary in nature. This has presented an opportunity for the company to negotiate in order to finally resolve the problem. Mr. J asked for an increase of 10,000php. The company was willing to give in to the request provided that he would never be late nor be absent for one month. Both parties agreed to the deal since it was deemed as the best possible solution in resolving the matter.

After the period of agreement lapsed, Mr. J didn’t meet the provisions which both parties have agreed. The company decided to take the matter seriously. There has been another negotiation in which Mr. J proposed to change his type of employment from regular full time to regular part-time. The company agreed to the proposal presented by the employee but the job title was to be changed from Manager to Specialist in which Mr. J agreed. In addition, the work shift and schedule is no longer of utmost concern so long as he would inform his immediate superior regarding the days and time he would come to work.

The agreed settlement was neglected by the employee. This has dragged for almost two months. Finally, the company decided to end the employment of Mr. J due to the burden and problems encountered in the workplace and business operations. However, the intent of terminating the employment of Mr. J was not enacted promptly. Two weeks after, the People Services (Human Resource) unit received a resignation letter from Mr. J. Instead of revoking the resignation letter and serving a notice of termination, the company decided to accept the resignation of the employee

BATNA or WATNA?:
Assessment and Reinforcement to the Negotiated Agreements

There were a couple of flaws that were not at the outset foreseen when the negotiated agreements were made by the parties. The established settlements although viewed as effective ways to resolve the issues turned out to be ineffective. The alternatives offered could be seen as short-term in nature since there were no concomitant reinforcements provided in the implementation. Moreover, the measures that were taken have presented precedents wherein the probable outcome or consequences could be undesirable to the company.

The concerns and issues with Mr. J could have been dealt with accordingly if the company had administered counseling and applied progressive disciplinary actions since these are typical behavioral and attitude-related problems in any organization. These progressive disciplinary actions are quite fitting and helpful in doing mid-course corrections. Such corrective actions however, should be constructive in nature as well as reasonable in order for the employee to understand why such actions were carried out. Deliberate ignorance of Mr. J’s violations considering that he was employed as a manager and that there is a behavior expected in line with his position was wide off the mark since there were standards, rules and procedures set by the company to regulate appropriate conduct for all of its employees. Furthermore, it could be deemed as an illustration of workplace inequality as being partial in favor of Mr. J. The employee is a human resource just like the others and giving special considerations to select few puts across discrimination to the rest.

The first negotiated agreement could have been very substantive even successful if the company (or both parties) employed progress evaluation. The settlement could have been the best alternative to a negotiated agreement (BATNA) for both since the conditions laid out by the parties prior to coming to the said agreement were generally practical, advantageous and viable. On Mr. J’s end, it could be considered as an economically sound motivation – money as motivator [2] in order to execute the necessary (at the very least) work tasks both expected and needed since the reward is significantly attractive to accommodate his personal endeavors. As for the company, it could be seen as a responsive action to the needs of their workers. Moreover, on the business side, it could be the solution to the problem of performance and functional effectiveness of the operations since work attitude and behavior at some level could influence the outcome. Progress evaluation is the reinforcement to the agreement in view of the fact that work schedule and attendance is oftentimes challenging particularly in cases wherein it is habitually done. By monitoring and assessing the development of the agreement, concerns could be uncovered and raised in a timely manner rather than waiting for the situation to get worse. As appropriate or necessary, based on the evaluation conducted, renegotiate. The renegotiation should still be based on the provisions set forth in the agreement prior to implementation. This is deemed to be the most flexible and apt way of dealing with matters that are not moving in the right direction. This is to facilitate the realization and eventual maintenance of the employee’s work tardiness and absenteeism.

The subsequent negotiation was clearly the worst alternative to a negotiated agreement (WATNA). It was a drastic measure which put the company in a detrimental and unfavorable state. The company did not examine the full implications of the new agreement made which turned to the unsettlement of the main problem. Changing the employment from regular full-time to regular part-time could trim down the productivity and could hamper the operations of the business. Full attention to the operations is a minimum requirement in order to execute the work function properly. This could also affect the tasks and delivery of output of other workers whose responsibilities and accountabilities are connected to his. Furthermore, the modification of the job title to suit the status or type of employment does not add any value nor provide noteworthy additions in the resolution of the issue.

With reference to the employee’s competency and expertise in the abovementioned field that created an impression of having a considerable significance which made him an asset or fairly indispensable to the company could have been purged or remedied if the company at the inception of the situation provided training programs which could equip and increase the skills and aptitude of the other employees. In this particular case it could be applied as part of the contingent plan or succession strategy in the organization. This is to assist employees who are deserving - based on credentials, skills as well as behavior such as commitment to be eligible for planned changes in both function and role in the organization. Trainings are quite beneficial to the company and its workers. To reinforce the training programs, the company should employ (proper) Total Quality Management (TQM) which consists of continuous improvement activities involving everyone in the organization, managers and workers alike in a totally integrated effort toward improving performance at every level.[3] It could be integrated as part of the organizational and professional development program. In a quality organization everyone is constantly learning. Management encourages employees to constantly elevate their level of technical skills and professional expertise. People gain an even greater mastery of their jobs and learn to broaden their capability.[4]

---

[1] Company Z is a European owned and managed Web Services Company that develops PHP-based commercial grade software and performance-based internet marketing services.

[2] A hypothesis (or theory itself) which states that workers are motivated by the need for money. There were a lot of theories which incorporated money as a driving force in the employees work performance such as Maslow’s Hierarchy of Needs among others.

[3] Goetsch, D. and Davis, S. 1997, Introduction to Total Quality – Quality Management for Production, Processing and Services, Second Edition, Prentice Hall, Columbus, Ohio

[4] Scholtes, P. as cited by Goetsch and Davis - Introduction to Total Quality – Quality Management for Production, Processing and Services, Second Edition, Prentice Hall, Columbus, Ohio

The Objectives and Dynamics of Pay: Rationalizing the Value of Performance-based Pay System

ANTO COMETA

There are a lot reasons why people work, but in the basic scheme of employment or labor the most evident reason is that people work to earn money to cover their expenses or personal needs. Money is a means to an end – various necessities ranging from the most basic which are essential for the subsistence of the individual such as food, shelter and clothing to the material wants and desires of the person. The relative access to these needs and facilities is a major determinant of how much pay the individual acquires or earns. This is fundamental to the individual since this directly relates to the person’s standard of living and is deemed as a determinant to the value of the performance or services provided or to be rendered.

The significance of pay not only relates to the individual who is working but also to other components that compromise the employment relationship. It is of equal importance and interest to the employer as well as to the government. Pay provides motivation or characterizes the quality of performance needed by the employer to cover the cost of the labor performed. As for the government, not only does it provide proceeds for national undertakings but it affects the stability of the both economic and societal facets of the country such as employment, inflation – purchasing power and other state developments in general.

The main component of employee compensation is the basic pay given to the worker. However, due to the demand and competitiveness characterized by both labor and product markets as well as other objectives and factors that directly affect the performance, productivity and profitability not only of the organization but also the worker new strategies are emerging toward increasing the pay levels given to the employee.

One of the usual and conventional ways of adjusting or modifying the base pay in order to reflect or make it appear higher than what is given is achieved by combining benefits and other incentives either monetary or non-monetary. The objectives of determining pay may have one or more that may be in discord with each other (De Siva, 1992). These objectives can be classified into four distinctive categories. First is equity which includes the narrowing of inequalities, wage increase of the lowest paid employees, the concept of equal pay for equal work value among others. The second is efficiency which is reflected in efforts to connect or associate part of the employee’s wage to the productivity or profit, performance whether group or individual as well as acquisition of both skills and knowledge related to the execution of job functions. The third perceived objective is related to the stability in the macro-economic aspect. This has something to do with the levels of employment as well as other related factors that of could either contribute or impede the balance and sustainability of development of the economy of a country. Last identified objective is the effective allocation of labor in the labor market. This particular objective relates to the mobility of workers whether geographical or industry related since the motive of doing such is to the idea of acquiring a net gain and not only to meet the individual’s basic requirements.

A lot of organizations are now in search of sustaining their competitiveness in the market by means of increasing the pay given to the employee. The type of pay is mostly related to performance measures, this is primarily done in order to sop up the costs of labor of the organization at the same time motivate and recompense the employee for the performance. The conventional way of companies in order to secure increased wages and reward their employees is through job appraisal and promotion. However, due to the limitations on resources as well as achieving higher positions in the organization not to mention that current developments in the organizational structure becoming less hierarchical due to market demands and types of flexibility employed in the company, incorporating pay increases based on performance is perceived to be more attractive and effective rather than rewarding the worker through promotions. One of the methods or strategies that is gaining acceptance throughout different industries particularly in the services sector in order to increase the productivity and profitability of the company at the same time rewarding the worker is through performance-based pay. Moreover, the trend in paying the employees is not for the output produced or even for the labor input rendered but simply for the time spent on the job (Blinder, 1990).

There are several theories in human motivation which incorporates pay or pay system as a driving force in motivating their workers to achieve, increase levels or maintain satisfactory performance. The systems of pay given to the workers are now being integrated as part of the human resource management of organizations. This is primarily done in order to achieve the business strategies and objectives whether financial or employee-related since both directly affect the operations of the business. Pay is viewed as a matching element or a dependent variable to the employee’s performance and productivity, by increasing or providing additional pay based on increased productivity and performance is an indication that the company could its financial profitability and could achieve its business objectives.

Its is noteworthy to take into consideration that in designing or structuring a performance pay system, the type of system should highly promote the kind of performance that the organization requires and not just to increase its revenue. Fundamental principles should be laid out and that the objectives and targets should be quite measurable or realizable. Furthermore, the achievement of the performance pay system should be supported by operative approaches and strategies so not to establish that the targets and objectives are impossible to attain. As necessary, employ consultation or increase the involvement in the decision making process or designing of the system. By employing such actions, it could generate efficient or effective ideas, approaches and strategies that could contribute or lead to the achievement of the goals. The organization should also have a feedback mechanism to review the processes, procedures, outcome among others of both pay system and the targets and objectives. It is a excellent avenue in determining and assessing the key factors of either success or failure. Lastly, organizations should also provide trainings since these are quite beneficial to the company and its workers in achieving their goals both monetary and non-monetary. To reinforce the training programs, the company should employ Total Quality Management which consists of continuous improvement activities involving everyone in the organization, managers and workers alike in a totally integrated effort toward improving performance at every level (Goetsch and Davis, 1997). It could be integrated as part of the organizational and professional development program. In a quality organization everyone is constantly learning. Management encourages employees to constantly elevate their level of technical skills and professional expertise. People gain an even greater mastery of their jobs and learn to broaden their capability (Scholtes as cited by Goetsch and Davis, 1997).

References:

Blinder, A. 1990, Paying for Productivity, The Brookings Institution, Washington

Goetsch, D. and Davis, S. 1997, Introduction to Total Quality – Quality Management for Production, Processing and Services, Second Edition, Prentice Hall, Ohio

De Silva, S. 1998, An Introduction to Performance and Skill-based Pay Systems, International Labor Office, Geneva

TINDIG SOLAIR – Maraming Salamat!

ANTO COMETA

I would like to thank all those who supported TINDIG SOLAIR, the slate won all the council seats in the first UP SOLAIR Graduate Student Council Elections. In behalf of the UP SOLAIR Graduate Student Council for 2008 - 2009, maraming maraming salamat!

UP SOLAIR Graduate Student Council 2008 -2009

Chairperson - McRhon Banderlipe I, Vice-Chairperson - Jef Baraquio (Students' Rights and Welfare), Councilors - Jab Bandayrel (Extension Program), Anto Cometa (Education, Research and Popular Struggle), Anne Milla (Publicity), Mischa Millar (Finance) and Bammer Pilar (Secretariat and Logistics).

“Isang konsehong naglilingkod, nagbubuo, nakikilahok at tumutugon sa ika-100 taon”

Sustainable Progress in the Organization through Shared Responsibility and Social Partnership

ANTO COMETA

It has been a major dilemma in all organizations on how to deal with internal issues and conflicts arising from different values, views and interests of individuals. These disagreements more often than not become impediments or deterrents in achieving organizational objectives both internal and external. The challenge for parties concerned as well as for the organization is how to resolve internal discord in order to address the needs and interests not only of the individual(s) but also of the organization. Effective management and leadership often depend on the capacity to envision, bring about, sustain and modify valuable agreements among parties (Sebenius 1995). If we were to achieve efficiency and the sustainability of the business, we should highly take into account shared responsibility and social partnership within the organization.

Most people look for solutions by simply analyzing the matter based on what they deem is feasible, usually in the confines of their ivory towers. This may hold true to a lot of circumstances particularly those strategies that need to be imposed in order to get things done the way they wanted it to be without resistance and opposition. However, if we really wanted to recognize and address the matter effectively, we should put into operation proper consultation and negotiation between parties since these issues are of significance whether of common interests or not since it relates to organizational efficiency. Consultation is an avenue whereby parties could discuss and understand matters concerning disputes, positions and interests. Integrating consultation with negotiation puts these matters into concrete plans of action(s) in order to arrive at an agreement or partnership that would settle dissension between parties as well as possible risks for the organization. Negotiation is best understood as the process of potentially opportunistic dealings intended to move ahead the full set of individual interests by jointly decided action (Sebenius, 1995).

Responsibility entails accountability of all those involved throughout a certain process or course of action. It requires parties to be liable in all the phases of the process since these individuals comprise part of the assembly or constituent that collectively concerns the organization and that its impact affects individual interests and welfare. In order to create a just and unfeigned organization-focused undertaking, proper representation and consultation which should eventually lead to negotiation should be taken into account.

Just and Humane Actions

ANTO COMETA

I’ll just be brief about this personal entry.

"The preservation of Roman Catholic views is not pegged by discrimination in any form but through just and humane actions."

This is the last line of the memo I drafted prior to this entry. It just hit me when I realized that were people who deem themselves as righteous by invoking Roman Catholic views and principles in their actions and judgments whereas they themselves are the ones sullying the views and principles they deem revered by the same actions and judgments they carried out.

Although the abovementioned line was used in a different context in the memo, the meaning remains universal.

It is of highest gratitude to those people I got acquainted before who made me understand that people like them deserved what they got.

Memorandum: Worker’s Rights to Religious Affiliation

ANTO COMETA

This is a memorandum I drafted under Atty. Benedicto Bitonio Jr.'s (Former NLRC Chair and DOLE Undersecretary) labor law class as a labor consultant concerning a case of a Physics teacher in a Roman Catholic High School. Aside from the qualification standards based on education and experience, the school requires every teacher to be a Roman Catholic as a condition for hiring and continuing employment. During the instructor's employment in the school he converted to Protestantism. The issues are (1) the validity of the school policy, (2) whether Jessie may be dismissed because of it, and (3) the options to consider in dealing with the situation.

Memorandum: Worker’s Rights to Religious Affiliation

This memorandum seeks to address the underlying issue set forth by the provisions of employment by the school concerning the religious affiliation of Mr. Jessie employed as a member of the faculty of the Science Department, Division of Physics.
_________________________

Statement of Facts

The school is considered as a private sectarian academic institution operating under the jurisdiction of the Roman Catholic Church which employs individuals outside the secular domain to run its operations.

Existence of policy or qualifying standards of the school for both hiring and continuance of employment necessitates members of the faculty, staff and administrative personnel to be affiliated with the Roman Catholic religion.

Mr. Jessie an instructor of Physics in the school once part of the Roman Catholic congregation converted to Protestantism on the course of his tenure.

Questions Presented

Whether the school policy concerning hiring and continuance of the employee’s tenure is valid, this entails violation on the part of Mr. Jessie who is an instructor of Physics in the school.

Whether Mr. Jessie be dismissed from the school as a result of his conversion to Protestantism, given the policy that employees and members of the school to be affiliated with the Roman Catholic religion as part of the hiring and continuance of employment.

Response to the Questions Presented

Being considered as a private sectarian academic institution employing individuals outside the secular domain operating in the Philippines, the school notwithstanding its jurisdiction under the Roman Catholic Church is bound by the rules and regulations governing labor and employment relations of the country. This entails that the school as a labor entity with reference to its employment procedures should be in accordance to the rules and regulations set by the State.

The Philippine Constitution recognizes the right to labor and the promotion of full employment and equality of employment opportunities for all.[1] This academic institution should follow the proper guidelines set by the country with reference to labor and employment. The Philippine Labor Code upholds the civil and labor rights of every employee to which religious institutions are not exempted from.[2]

As members of the Roman Catholic Church, the 1983 Code of Canon Law with reference to the Directory for the Application of Principles and Norms on Ecumenism, Section IV B Item 102[3] states that Christians regardless of its denomination may be encouraged to share in spiritual activities as well as its resources. Protestantism is one of the denominations of the Christian religion. Also taking into account, the school under the jurisdiction of the church is considered as a resource which is of value not only for the church but also for its employees and students for their holistic development as Christians and citizens of the State.

The policy of the school administration negates both views and doctrines of the State and the Roman Catholic Church in promoting and upholding the principles of human rights. In this regard, this memorandum recognizes the right to employment notwithstanding the religious affiliation of the individual. Thus, this invalidates the employment policy set by the school.

In the case Mr. Jessie who is an instructor of Physics of this school concerning the continuance of his employment, in accordance to the Philippine Labor Code, he could only be dismissed only if any of the following grounds are committed; (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work, (b) gross and habitual neglect by the employee of his duties, (c) fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative, (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives, and (e) other causes analogous to the foregoing.[4] It could be argued that the first identified provision of employer termination of the worker has been sufficed. However, it has been established that the policy set by the school is unfounded as both principles of the State as well as the Roman Catholic Church concerning human rights and religious affiliation of the individual in relation to Mr. Jessie’s employment in this academic institution is in contradiction.

This is to inform that the school policy for both hiring and continuance of employment which requires members of the faculty, staff and administrative personnel to be affiliated with the Roman Catholic religion is null and void. As for the case of Mr. Jessie an instructor of Physics, he would be retained as a member of the faculty unless he willfully resigns or there would be violation(s) that fall(s) under the abovementioned provisions of termination under the Philippine Labor Code that would arise in the course of his tenure in which the school will be compelled to end his employment. Nonetheless, proper conduct of dismissal of the employee would be observed.

This is to urge both the congregation and members of the school to practice ecumenism[5] and religious pluralism[6]. This is to promote understanding, cooperation and unity among different religions or denominations within the religion. Tolerance is a condition of harmonious co-existence between members of other denominations and different religions as members of our society. Let us treat all individuals as our equal as we wanted to be treated as equal as well. The preservation of Roman Catholic views is not pegged by discrimination in any form but through just and humane actions.

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[1] Article 13 Section 3 of the 1987 Philippine Constitution

[2] Article 3 Preliminary Title of the Philippine Labor Code – Declaration of Basic Policy

[3] Pontificum Consilium Ad Christianorum Unitatem Fovendam (Directory for the Application of Principles and Norms on Ecumenism) IV B 102 – Sharing Spiritual Activities and Resources, Vatican Church

[4] Article 282 Book VI, Philippine Labor Code – Termination of Employer

[5] Defined as the movement toward unity or cooperation among the Christian churches - Britannica Concise Encyclopedia, http://concise.britannica.com/

[6] Also known as religious diversity which states that there exist significant differences of opinion among individuals who seem to be equally knowledgeable and sincere. individuals who apparently have access to the same information and are equally interested in the truth affirm incompatible perspectives on, for instance, significant social, political, and economic issues. Such diversity of opinion, though, is nowhere more evident than in the area of religious thought. On almost every religious issue, honest, knowledgeable people hold significantly diverse, often incompatible beliefs – Stanford Encyclopedia of Philosophy, http://plato.stanford.edu/entries/religious-pluralism/