Proposed Joint Resolution Modification of the Compensation and Position Classification System in the Government Department of Budget and Management

+ RA No Compensation and Position Classification Act of 1989 Senate and House of Representatives Joint Resolution No. 01, s Benefits: Standardized Compensation and Position Classification System for Civilian Employees in the Government Introduction

Weaknesses of the Current Compensation and Position Classification System: Non-competitiveness of pay Private sector pays more to professionals and executives Examples: Teacher, Nurse, Accountant, Medical Officer, Attorney, Pilot, Chief Executive Officer, Manager

Comparison of Existing Compensation in Public Sector Versus Private Sector Sub-ProfessionalProfessional Executive Comparison of Existing Compensation in Public Sector Versus Private Sector 3.1%25.2% 26.2%29.3% -0.9% 40.3% 83.2% 95.8% 144% 272.3% 300.6% 765.2% 631.9%

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Substantial overlaps in salaries between positions: leads to problems in relationships between superiors and subordinates complexity in duties and responsibilities not well compensated Weaknesses of the Current Compensation and Position Classification System :

Salary Schedule Effective July 1, 2008 Pursuant to EO No. 719

11 Salaries of Selected Positions Effective July 1, 2008

12 Weaknesses of the Current Compensation and Position Classification System : Magna Carta advantage of certain positions Public School Teachers, Public Health Workers, Public Social Workers and Science and Technology Personnel enjoy more benefits. Proliferation of allowances and benefits Particularly in GOCCs, e.g.: Rice Allowance, Grocery Allowance, Staple Food Allowance, Meal Subsidy

Governing Principles Standardization and rationalization of compensation to promote social justice, integrity, efficiency, productivity, accountability and excellence in the civil service Adoption of a performance-based incentive scheme that will reward exemplary performance Comparability of compensation for government personnel with those in the private sector doing comparable work Payment of just and equitable wages in accordance with the principle of equal pay for work of equal value Periodic review of the Compensation and Position Classification System to consider changes in skills and competency requirements, demand for certain expertise, and inflation Compensation for government personnel to be kept modest and to be maintained at reasonable level in proportion to the national budget

Professional Category – positions involved in the exercise of profession or application of knowledge acquired through formal training. Sub-Professional Category – positions involved in manual or clerical work in support of office operations or those engaged in arts, crafts, and trades. Executive Category – managerial positions involved in the executive, legislative and judicial functions. Categories of Positions

Sub-ProfessionalProfessionalExecutive Comparison of Proposed Compensation in Public Sector Versus Existing Compensation in Private Sector 300.7% -16% 2.1%1.5% 0.3% -25.5% 0.7% 14% 8.5% 25.4% 71.1% 77.3% 288.5%

Compensation System Proposed Salary Schedule Salary Grades 1-9

Compensation System Proposed Salary Schedule Salary Grades 10-24

Compensation System Proposed Salary Schedule Salary Grades 25-33

Compensation System Total Compensation Framework Basic Salaries, including Step Increments Standard Allowances and Benefits – given to all employees across agencies, e.g., PERA, Additional Compensation, Year-End Bonus Specific-Purpose Allowances and Benefits – given under specific conditions, based on actual performance of work e.g., RATA, Honoraria, Subsistence Allowance, Hazard Pay Incentives – rewards to recognize employee loyalty, for exceeding performance targets and to motivate productivity e.g., Loyalty Incentive, Productivity Enhancement Incentive

Compensation System Magna Carta Benefits To be categorized by DBM per Total Compensation Framework Henceforth, DBM will issue guidelines on conditions, qualifications for grant, and rates of benefits

Compensation System Local Government Units Position titles, salary grades, salary rates, allowances, benefits and incentives of LGU employees shall be in accordance with the provisions of the Joint Resolution. Salaries of LGU employees shall be based on income class and financial capability of LGU, not to exceed the following percentages : For Provinces/CitiesFor Municipalities Special Cities100% 1 st Class100%90% 2 nd Class95%85% 3 rd Class90%80% 4 th Class85%75% 5 th Class80%70% 6 th Class75%65%

Compensation System Non-Diminution in Basic Salaries of Incumbent Employees There shall be no diminution in basic salaries of incumbent employees upon implementation of this Joint Resolution. For this purpose, they shall receive the new salary rates prescribed herein, to be implemented in tranches, which shall in no case be less than their existing salary rates.

23 Implementation Period SSL III to be implemented in 4 tranches From July 2009 to 2012

24 Support the Joint Resolution on SSL III

25 Thank You Department of Budget and Management 2008