TRAINING
Building Agility for the 21st Century Enterprise
Wage Distortion and Pay Compression
STRATEGIES, TOOLS & METHODS TO ADDRESS COMPENSATION ADJUSTMENT PROBLEMS
Hands-on Workshop Exercises to Develop Competency and Expertise
September 27, 2023 | 9am-4:30pm
La Breza Hotel Quezon City
OVERVIEW:
Wage adjustments due to price inflation may give rise to wage distortion and pay compression if not managed with the proper tools.
Wage “distortion” occurs when the usual differentials in wage rates between groups of employees in an establishment are drastically reduced or eliminated due to mandated wage increases. This means that the differences in wage structure based on skills, length of service, or other logical bases of differentiation may be eliminated if the other employees already receiving more than the minimum wage will not also have a corresponding increase in their salaries. Restoring a substantial or significant gap, as against the historical wage differentials, is allowed under existing jurisprudence.
If the “distortion” in the salary rates of workers is not corrected, it could lead to demoralization that, in turn, could disrupt the harmonious work relationships between and among workers and employers in the establishments.
Article 124 of the Philippine Labor Code (PLC, amended by Republic Act 6727 “Wage Rationalization Act of 1989) provides for adjustment tools along the criteria for minimum wage increases. It is expected that with new demands for wage increases, the Regional Tripartite Wage and Productivity Boards (RTWPBs) shall be mandating orders to adjust minimum wages.
Article 124 of the Philippine Labor Code (PLC) provides:
x x x x . . . . “ where the application of any prescribed wage increase by virtue of a law or Wage Order issued by any Regional Board results in distortions of the wage structure with-in an establishment, the employer and union shall negotiate to correct the distortions. Any dispute arising from the wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. “
Our resource person has undertaken research on tools of adjustment for wage distortion and pay compression. These tools may be used to manage:
(1) adjustments in the job and pay scale;
(2) adjustments in the wage rates of lower pay groups should be accompanied by corresponding adjustments in the higher pay groups;
(3) ensuring that there is no elimination in the distinctions established in the job and pay scale; and
(4) checking for corresponding changes in wage rates throughout the industry and community.
Fortunately, there are various tools available, and well developed to deal with wage distortion and pay compression.
Our hands-on workshops shall provide participants the necessary competencies and expertise to adjust pay scales, convert daily rates to monthly rates and vice-versa, and examine the viability of various formulae to adjust wages.
It is ideal that both HR and payroll specialists work in tandem, and joint attendance is highly encouraged.
Participants who submit and pass the required hands on exercises shall be awarded a Certificate.
KEY TOPICS
Session 1:
• Wage adjustments — implications to the job and pay structure
• Wage distortion — Article 124 Philippine Labor Code definition amended by RA6727 (1989), “Wage Rationalization Act”
• Implementing rules from regional wage orders — case studies of NCR and Calabarzon wage orders
• Considerations in pay adjustment — capacity to pay, alignment with business goals & strategies.
Workshop:
• Daily wage adjustment
• Conversion to equivalent monthly rates
• Wage adjustment due to wage distortion
• Application of the exponent to compute possible adjustments in the higher pay groups.
Session II:
• Alignment of job and pay structure along business and market strategies
• Payroll management and checking your payroll software
• Workshop 2: pay adjustments for inflation and the Consumer’s Price Index
Session III:
• Learning from Supreme Court decisions on wage distortion
• Applications of essential wage distortion adjustment formulae
Workshop:
• Applications to a prototype job and pay scale spreadsheet.
• How to adjust for the higher pay groups (technical, professional, management groups)
FEEDBACK:
Hands-on and detailed workshop -Carolina B.
The knowledge and skills I obtained from this workshop will be useful in my work. -Mae J.
I found this workshop to be exceptional, featuring practical exercises and valuable insights that I can apply. Thank you! -Charlie A.
A must attend workshop for hr professionals and payroll. -Hazel Y.
Speaker was helpful in guiding us in the activities, showing correct formulas and methods. Very knowledgeable, kind and humble person. Thank you Velocity One and Dr. Amante! -Rochelle P.
Third time attending a seminar of Velocity One. Always quality and relevant. -Brian C.
Thank you event organizer and speaker. I learned a lot and enjoyed the exercises. -Maria D.
LEARNING FACILITATOR:
Maragtas SV Amante, PhD.
Dr. Maragtas S.V. Amante is Professor at the University of the Philippines School of Labor & Industrial Relations (UP SOLAIR) in Diliman, Quezon City.
From 10 February 2011 to 09 February 2017, he was the Vice President for Administration of UP, with responsibilities over strategic HR management, performance management, compensation & benefits, labor relations, utilities management and procurement.
From 2008 to 2010, he was a professor at the College of Economics and Business, Hanyang University in Seoul/Ansan, South Korea. He was U.P. SOLAIR Dean from 1998 to 2001. He has more than 25 years experience in teaching, research and consultancy work in the areas of industrial relations, economics of human resources, and compensation.
Dr. Amante graduated with a Bachelor of Arts in Economics from the University of the Philippines’ School of Economics in 1983. After graduation from the U.P., he was recruited into the staff of the University of the Philippines’ School of Labor and Industrial Relations. He was granted an Asia Foundation fellowship to pursue a master’s degree in policy economics, which he finished in 1986, from the University of Illinois in Urbana Champaign in the United States.
His interest in Japanese human resource development led him to pursue doctoral studies in Japan, where he obtained his Ph.D. degree in 1993, from Keio University in Tokyo. In 2002-03, he was a research fellow at the Seafarers’ International Research Centre (SIRC) in Cardiff University, in Wales, UK. From 2002 to 2005, Dr Amante was a consultant and facilitator with the ASEAN Secretariat and the Japan Ministry of Health, Labor and Welfare. He was closely involved in a series of meetings and dialogues held in various ASEAN capitals, to develop a common regional framework of industrial relations in East Asia. He is a research correspond-ent with the Institute of Developing Economies (IDE), Tokyo and was a visiting scholar with Shanghai Open University in June 2018.
Current research interest: emerging patterns of work, performance and pay, and new forms of employment relations.
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