Updates on CompensationUpdates on CompensationBy Assistant Secretary Myrna S. ChuaBy Assistant Secretary Myrna S. Chua

Department of Budget and ManagementDepartment of Budget and ManagementOctober 2015October 2015

Updates on CompensationUpdates on CompensationBy Assistant Secretary Myrna S. ChuaBy Assistant Secretary Myrna S. Chua

Department of Budget and ManagementDepartment of Budget and ManagementOctober 2015October 2015

2

1. Republic Act No. 6758, Compensation and Position Classification Act of 1989 (SSL 1)

2. Senate and House of Representatives Joint Resolution No. 1, s. 1994 (SSL 2)

3. Senate and House of Representatives Joint Resolution No. 4, s. 2009 (SSL 3)

Salary Standardization Laws Salary Standardization Laws

Congress Joint Resolution No. 4, s. 2009 (SSL 3)

3

Guiding Principles:

Payment of just and equitable compensation to government personnel in accordance with the principle of equal pay for work of equal value;

Comparability of civilian government pay with those in the private sector;

Rationalized and standardized compensation across all government agencies; and

Adoption of a performance-based incentive scheme

44

Total Compensation FrameworkUnder Joint Resolution No. 4 (SSL 3)

Basic Salary

IncludingStep Increment

Standard Allowances and Benefits----------------------given to all employees e.g., PERA, Year-End Bonus and Cash Gift, Uniform/Clothing Allowance

Specific- Purpose Allowances and Benefits ----------------------given under specific conditions of work

e.g., RATA, Subsistence Allowance, Hazard Pay

Incentives

------------------------Rewards for loyalty and productivity

e.g., Loyalty Incentive, Anniversary Bonus CNA Incentive, Productivity Enhancement Incentive (PEI)

5

Performance-Based Incentive System (PBIS)

Executive Order No. 80Executive Order No. 80“Directing the Adoption of a Performance-Based Incentive System for Government Employees”

Objectives

To rationalize the current incentive system generally characterized by across-the-board bonuses that are given uniformly.

To strengthen performance monitoring and appraisal system like the Performance-Informed Budget and OPIF used by DBM to measure agency performance .

Link organizational and individual performance thru the Strategic Performance Management System (SPMS) of the CSC.

6

Performance-Based Incentive System (PBIS)

Adoption of a Performance Based Incentive System (PBIS) consists of the following:

Productivity Enhancement Incentive = ₱5,000

Given across-the-board

Performance-Based Bonus = ₱5,000 to ₱35,000

A top-up bonus given to personnel of bureaus or delivery units in accordance with their contribution to the accomplishment of their agency’s overall targets and commitments.

Executive Order No. 80Executive Order No. 80

8

Performance-Based Bonus (PBB)

Principles Governing the PBB Scheme

PBB is a system of ranking delivery units and personnel within an organization according to performance in the following areas :

Major Final Outputs;

Commitments to the President that are supportive of the priorities under EO 43; and

Good Governance Conditions to be determined by IATF under AO 25.

Executive Order No. 80Executive Order No. 80

9

Performance-Based Bonus (PBB)

The amount of PBB is based on the performance of the delivery units and the individual employees.

Ranking of delivery units and individual employees according to their performance.

PBB amounts are as follows:

Performance Categories and Rates of IncentivesPerformance Categories and Rates of Incentives

Category of Delivery

Unit

Category of Individual Performer

BEST BETTER GOOD

BEST ₱35,000 ₱20,000 ₱10,000

BETTER ₱25,000 ₱13,500 ₱7,000

GOOD ₱15,000 ₱10,000 ₱5,000

10

FY 2014 PBB Cycle

Supplemental Guidelines on the Grant of Supplemental Guidelines on the Grant of Performance-Based Bonus for Fiscal Year 2014 Performance-Based Bonus for Fiscal Year 2014 under EO 80under EO 80(Memorandum Circular No. 2014-1 dated April 21, 2014)

Ranking Performance Category

TOP - 10% Best Bureau/Office/Delivery Unit

NEXT - 25% Better Bureau/Office/Delivery Unit

NEXT - 65% Good Bureau/Office/Delivery Unit

Distribution of Delivery Units per CategoryDistribution of Delivery Units per Category

Item 6.1 of MC No. 2014-1

Distribution when General Conditions are Met

11

FY 2014 PBB Cycle

Ranking for Individual PerformanceRanking for Individual Performance

Item 6.4 Distribution by Category

Category of Delivery

Unit

Category of Individual Performer

BEST BETTER GOOD

BEST 20% 35% 45%

BETTER 15% 30% 55%

GOOD 10% 25% 65%

Since 2012 the % distribution for Individual Performer qualifying under the Best and Better Category was increased

Effective FY 2014 PBB

Effective FY 2013 PBB

Effective FY 2012 PBB

12

Participation Rate

COs5 Depts

23

OEOs36

GOCCs (DBM)

15

SUCs111

2014

COs2

Depts23

OE6s36

GOCCs (DBM)

13

SUCs110

2012

COs4 Depts

23

OEOs36

GOCCs (DBM)

15

SUCs111

2013

96% 98%

184 out of 191 Agencies 189 out of 192 Agencies 190 out of 192 Agencies

99%

+ 165 Local Water Districts

Source: AO25 Secretariat

Updates on PBB Implementation

13

Good Governance Conditions Average Compliance Rate

PhilGEPS(RA 9184)

Transparency Seal(Sec 91 GAA 2013)

Report on Ageing of Cash Advance

SALN(RA 6713)

ARTA (RA 9485)

*As of May 30, 2015

14

Productivity Enhancement Incentive (PEI) for FY 2015

Executive Order (EO) No. 181 dated May 15, 2015

Implementation of the Provisions of the FY 2015 GAA on the Productivity Enhancement Incentive (PEI) for 2015

Entitles an employee to the one-time grant of PEI at one month basic salary as of May 31, 2015, provided that certain conditions are met.

15

Productivity Enhancement Incentive (PEI) for FY 2015

Conditions for the grant of PEI at one month basic salary:

For NGAsFor NGAs

a. Achievement of at least 90% of two performance indicators for at least one Major Final

Output under “Operations” for FY 2014

b. Posting of the Transparency Seal

c. Posting or publication of the Citizen’s Charter or its equivalent

16

For GOCCs covered under RA No. 10149For GOCCs covered under RA No. 10149

a. Achievement of at least 90% of two performance indicators for at least one Major Final Output under

Operations for FY 2014

or

The targets under the Performance Scorecard as agreed upon between the Governance Commission

for

GOCCs (GCG) and the GOCC (GCG Memorandum Circular No. 2013-02)

b. Posting of the Transparency Seal

c. Posting or publication of the Citizen’s Charter or its equivalent

Productivity Enhancement Incentive (PEI) for FY 2015

17

Productivity Enhancement Incentive (PEI) for FY 2015

For Local Water Districts (LWDs)For Local Water Districts (LWDs)

Positive net balance in the average net income for the 12 months of operations prior to May 31, 2015.

For Local Government Units (LGUs)For Local Government Units (LGUs)

Compliance with the requirements under the Good Financial Housekeeping (formerly the Seal of Good Housekeeping) component of the FY 2014 Seal of Good Governance (DILG Memorandum Circular No. 2014-39).

18

Agencies unable to comply with the afore-

mentioned requirements may still grant the PEI

only at the fixed amount of ₱5,000 to qualified

employees.

Productivity Enhancement Incentive (PEI) for FY 2015

Study on Compensation and Benefits

in the Public Sector, FY 2015

19

To determine:

The competitiveness of government pay in relation to the private sector; and,The compensation strategy to bring government pay closer to market rates.

20

Per Congress Joint Resolution No. 4, s. 2009

SSL 3 Salary Increase

-

100,000

200,000

300,000

400,000

500,000

600,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Php

per m

onth

SSL Grade

Regressed Market Total Guaranteed(Median)

Actual Market Total Guaranteed (Median)

SSL Midpoints

Highlights of Competitive Review: SSL is Below Market

Regressed Market Total Guaranteed Pay(Median)

Actual Market Total Guaranteed Pay(Median)

SSL Midpoint

SSL Salary Grade (SG)

Annex A

• At lower SGs, SSL is already close to market. • At higher SGs, SSL falls far below market. • The salary progression in market follows an exponential rate of increase, unlike in SSL which follows a linear progression.

The SSL Midpoint is the exact middle point between Step 1 and Step 8 of each salary grade.

22

Job Category Sample PositionsMarket Position of Government Pay

• Utility Worker• Driver• Messenger• Clerk• Administrative Assistant

126% to 79% of market

• Economist• Agriculturist• Accountant• Engineer• Lawyer

76% to 41% of market

• Director I• Director IV• Executive Director

• Assistant Secretary• Undersecretary• Secretary• Senator• Vice - President• President

32% to 23% of market

Sub-Professional (SGs 1 to 10)

Professional (SGs11 to 24)Middle Manager (SGs 25 to 28)Executive (SGs 29 to 33)

39% to 34% of market

Highlights of Competitive Review: SSL 3 is 45% Below Market

23

Thank You and Good Day!

To view recent DBM issuances please visit our website at www.dbm.gov.phwww.dbm.gov.ph