DOLE-NWPC starts studies on the implementation of two-tiered wage system

The DOLE's National Wages and Productivity Commission (NWPC) is now assessing the implementation of the advisories on productivity-based incentive schemes issued by the Regional Wage Boards.

In a report of NWPC Director Alex V. Avila to Labor and Employment Secretary Silvestre H. Bello III, the Wage Policy and Research Division (WPRD) of the NWPC will lead the conduct of a series of focus group discussions (FGDs) with enterprises implementing the said wage system.

"For 2016, the study will cover Regions IV-A, CAR and XII, taking into consideration the number of enterprises with productivity based incentive schemes and representation of respondent enterprises across agriculture, industry and service sectors, and geographic areas," Avila said.

The criteria for assessing the schemes will include employee involvement in the design and implementation of productivity/performance incentive schemes; level of employee awareness; use of quantifiable work/performance standards acceptable to both workers and management as basis for evaluating performance and the grant of incentive bonuses; coverage; and frequency or schedule of distribution of incentive/bonuses.

The two-tiered wage, as a policy reform measure, was adopted by the Regional Tripartite Wage and Productivity Boards, or RTPWBs in 2012, aimed at minimizing the unintended outcomes of mandated minimum wage, improving the coverage of the vulnerable sectors, and promoting productivity improvement and gain-sharing.

The two-tier wage system consists of a fixed "floor wage," or entry level for new entrants and low-skilled workers, and a flexible wage above the floor based on worker productivity and performance of the industry and enterprises, which may be negotiated between the employer and the workers.

Source: Philippine Information Agency

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