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Assessment of the Performance Evaluation and Rewards System

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****** **** CORPORATION

Andrea Leah E.Y. Velasco - Romero

9 July 2011

Professor Miguel D. Soledad, MBM, MPA


Money and other financial rewards are a fundamental part of employment and non-employee work relationships. Organizations distribute monetary and non-monetary benefits in order to align individual goals with company objectives. Across cultures, financial rewards also represent the generally accepted or primary form of exchange for services rendered. Money compensates employees for their competencies, behavior, performance and time.

Money however is not just an economic medium of exchange in an employment relationship. Though the Bible clearly warns of the dangers of the love of money, money symbolizes a meaning much deeper and more complex, affecting our needs, our emotions and our perception of self worth. At ****** **** Corporation, I fully grasped the significance of money in cultivating and generating good performance but found the organization wanting in fully benefiting from the use of money as a motivation medium.


Abiding with the government mandated minimum wage, all employees of ****** **** Corporation were to be paid at least the minimum salary per day stipulated for Mindanao. Pay scale was elevated for employees occupying supervisory positions and rank and file positions with special functions given to people who enjoy deep trust from the company owner. All rank and file (RF), and even supervisory level personnel were paid on a "No Work, No Pay" basis, hence employees who were in need of money dread holidays because that meant zero income for the day. Only managers were paid on a monthly basis, with absences only deducted from the salary when not covered by available leave credits.

When compared with Davao based companies, managers at ****** **** Corporation seem to be compensated competitively against their counterparts, but due to the company's lean but mean organizational structure, the workload of managers are way beyond what they are paid for, because they take on work performed by two or three people in other organizations. In addition to the work overload, the salary package of the top level managers at ****** **** Corporation is broken down into allowances, with the basic salary reduced to the compensation level of a supervisor or middle manager and the rest of the package split to housing allowances, cost of living allowances and other "benefits". The original intention for such breakdown was to reduce income tax on compensation, which is regularly deducted from the manager's salary, thereby making it appear that the manager benefits from a higher net take home pay in the process. A naïve manager who readily concedes to such arrangement, fails to realize the negative implications of the practice such as reduced salary base for the computation of 13th month pay, bonuses (should there be any), retirement benefits (particularly true to more senior employees) and salary aligned loans with the Social Security System, Home Development Bank, cooperatives and banks.

As a result of the above scenario, the company has constantly been experiencing a "come and go" of competent employees. Personnel who stick with the company are supervisors and "rank and file" staff who had fallen on the dangerous "false security" trap of employment, afraid to venture out of the company for better opportunities due to age, lack of confidence or lack of competencies. The pathetic cycle does not end there, inasmuch as unappreciated employees are apt to churn out mediocre work, hence instead of becoming the best assets of the company, remnants become liabilities, in fact, the worst liabilities of the organization, sticking on to their jobs for money's sake and not for self actualization and maximum productivity.


If ****** **** Corporation is wanting of much improvement in its basic compensation



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