RCMB-XI in convergence with the Regional Tripartite Wages and Productivity Board XI (RTWPB XI) held an online productivity seminar entitled “Two-Tiered Wage System” last August 26, 2021 via Zoom.
The activity was attended by 33 participants coming from 23 organized companies with expiring Collective Bargaining Agreements (CBAs) for 2021.
The seminar included two topics. Atty. Sharon Grace Sanoy, Attorney IV of RTWPB XI, presented the first topic which covered the salient points of the Two-Tiered Wage System.
“The two-tiered wage system is a reform that maintains the mandatory minimum wage setting under Republic Act 6727 or the Wage Rationalization Act, as the first tier, and complemented by a voluntary productivity-based pay scheme as the second tier (Tier 2).” Sanoy explained.
When explaining further on Tier 2, Sanoy emphasized that productivity incentives are different from mandated benefits such as 13th month pay and fringe benefits which are the perks provided by the employers. “Productivity-based incentives are directly tied to the performance of the employees and are given as rewards when employees produce more outputs or deliver better services using minimal resources.”
The second topic of the seminar was delivered by Ms. Mariz V. Tabusares, Labor Employment III of RTWPB XI. This covered example of productivity incentives schemes that companies may adopt.
“To create productivity incentive schemes, companies must first identify their unique Key Performance Indicators (KPIs), which are the measurable value that shows how a company is achieving its business objectives.” Tabusares stated. “After identifying the KPIs, companies must then identify what incentives and conditions can be given relative to the KPIs and who are covered by the said incentives.”
Tabusares further highlighted her point by giving an example of a productivity incentive scheme. “One general example of a productivity incentive scheme is providing cash reward to employees who reached their production target and had no absences for the whole year. The KPI is the reduction of personnel absence. The condition is that the production target is met. The incentive coverage limits only to a certain department. The incentive is the amount of cash for passing the condition and qualifying for the coverage.”
Attorney Sanoy then provided a concluding remark on the Two-Tiered Wage System. “The implementation of the second tier or the grant of the productivity performance-based bonus will benefit both workers and employees since it will help raise worker’s standard of living while encouraging workers and enterprises to become more competitive and productive.”
During the closing of the program, Regional Branch Director Aerrine Marie R. Reyes encouraged the participants to include productivity incentives in their next CBA proposals. Gary B. Bonghanoy