2008 Consumer Industry Executive Summary[1]

7/28/2019 2008 Consumer Industry Executive Summary[1]

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Executive SummaryNovember 2008

2008 Total Rewards Survey |Consumer Products/Manufacturing Industry

watson


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2008 CONSUMER PRODUCTS/MANUFACTURING INDUSTRY SURVEY EXECUTIVE SUMMARY

2

Table of Contents

INTRODUCTION 4Scope and Methodology . 7Using The Survey Data . 10Definitions . 14

ECONOMIC OVERVIEW 17Year 2007 in Retrospect . 17

Moving Forward to 2008 . 18Industry Overview . 19

PROFILE OF PARTICIPANTS 20Survey Participants . 20Company Profile . 21Employee Headcount . 22Attrition Rate . 23

CASH POLICIES 24Hiring Rates . 25Compensation Mix . 26Base Salary Movements . 27Promotional Increases . 29CBA Increases . 30Fixed and Guaranteed Bonuses . 31Fixed Cash Allowances . 33Variable Bonuses . 36

BENEFITS POLICIES 40Retirement Benefits . 41Life Insurance . 44Personal Accident Insurance . 46Business Travel Insurance . 47Healthcare Benefits Hospitalization . 48Healthcare Benefits Outpatient . 50


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Table of Contents

BENEFITS POLICES (contd)Healthcare Benefits Maternity 51Leave Privileges Vacation Leave 52Leave Privileges Sick Leave 53Leave Privileges Maternity Leave 54Leave Privileges Other Leaves 55Loan Programs 56

Car Programs 58Club Memberships 64Stock Plans 65Miscellaneous Benefits & Subsidies 67Mobile Phone Benefits 70Working Hours 71

BENCHMARK STATISTICS 72


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Introduction


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INTRODUCTION

Now on its 28th

year of providing reliable, accurate, and relevant compensation and benefits data through its wide range of remuneration studies, Watson WyatPhilippines, Inc. is proud to present the results of the 2008Consumer Products/Manufacturing Industry Survey. As in the past six years, the results youwill find herein were generated through our own web-based tool, Watson Wyatt Compass

TM. We trust that you will find Watson Wyatt Compass

TMto be o

significance to you as it allows greater flexibility, consistent and comparable industry analysis, and paperless reports.

To ensure a deeper understanding and appreciation of this study, we encourage you to read through the About This Report section contained in the succeedingpages before going through the data. Companies seeking additional information or in need of assistance in generating reports, interpreting data or applying the

survey results are encouraged to contact us through any of the Watson Wyatt associates identified on the next page.

We remain committed to improving our reports and services, and as such, would be pleased to receive your feedback. Your comments, questions andsuggestions are always welcome and much appreciated.

Watson Wyatt Data Services TeamNovember 2008


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DATA SERVICES AND WATSON WYATT COMPASS

TM

PRODUCT SUPPORT

For assistance and inquiries regarding the survey content and other Watson Wyatt consulting services, you may email us [email protected] contact any of the following Watson Wyatt Manila Office associates:

Primary Contact Persons (Industry Account Managers)

Josie F. Villasoto

632 [email protected]

Farrah-Naz U. Susulan

632 [email protected]

Alternate Contact Persons

Patrick V. Marquina632 [email protected]

Bryan L. Sy632 [email protected]

Elaine Rossel F. Flaviano632 [email protected]

Arlene C. Paccarangan632 [email protected]

Leo Carlo H. Sarion632 [email protected]


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ABOUT THIS REPORT

The 2008 Consumer Products/Manufacturing Industry Survey contains detailed information contributed by 38 Consumer Products/Manufacturing companies inthe Philippines. Included in the database are the salaries, allowances, and bonuses of more than 18,000 individual employees, excluding expatriates. Pleaserefer to the section on Profile of Participants to gain a better understanding and appreciation of the survey results.

All information presented in this report is based on actual per incumbent data submitted by survey participants. The data collected has been carefully reviewedand validated to ensure accuracy and reliability.

The survey results are organized to present a clear and comprehensive picture of pay practices in the Philippines. The following is a brief description of themajor sections of the report.

Scope and Methodology This section summarizes the survey parameters, approach and methodology used.

Using the Survey Data This section provides suggested guidelines for utilizing market cash information to develop your owncompany pay structure.

Definitions This section contains definitions of all terms used in the report.

Economic Overview This section provides a brief description of the economic scenario and key developments in the Philippinesand the Consumer Products/Manufacturing Industry.

Profile of Participants This section summarizes data on the size and nationality of the 38 participating companies. The list ofsurvey participants is also included in this section. By reviewing this section first, you will acquire a betterappreciation of the sources of data contained in the report. This knowledge will increase your ability toaccurately interpret and apply the results to your own companys situation.

Executive Summary This section summarizes policies related to salaries, bonuses and allowances, and typical benefit practicesas well as presents market results for each of the positions surveyed.


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SCOPE AND METHODOLOGY

The 2008 Consumer products/Manufacturing Industry Survey covers:

Over 500 benchmark jobs spanning different levels (from top management to general/clerical positions) and functional areas (e.g., general managementfinance, human resources, information technology, marketing and sales, manufacturing/production), including both general jobs typically found in mostorganizations as well as industry-specific jobs. Only benchmark positions with sufficient number of matches have been included in the final report. Pleaserefer to the Appendix for a complete list of benchmark jobs and their descriptions.

All forms of cash compensation (monthly basic pay, fixed and guaranteed cash allowances, fixed and guaranteed bonuses, as well as variable income) ofall incumbents occupying positions matched with the benchmark jobs surveyed.

Policies on cash allowances, bonuses and movements in pay (including CBA-negotiate increases).

Policies on the following benefit items were also collected for this report with typical practices presented in the executive summary

- Retirement Plan Benefits

- Life and Accident Insurance

- Health Care Benefits (hospitalization and outpatient)

-Leave Privileges

- Company Loan Programs (housing, car, emergency, personal, etc.)

- Car Programs

- Club Memberships

- Allowances, Subsidies and Miscellaneous Benefits

- Mobile Phone Allowance/Subsidy

- Stock Programs

-Working Hours and Overtime Pay Policies


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SCOPE AND METHODOLOGY (contd)

Job MatchingOur job matching methodology uses the benchmark job approach whichfocuses primarily on job content to match positions in the market.

Data CollectionActual remuneration data on all incumbents or jobholders of positionsmatched to each benchmark job was collected. Such practice:

allows for greater accuracy in terms of capturing real market salarylevels;

collectively improves the quality of survey results; and enables users to do more in-depth analyses

ConfidentialityTo maintain strict confidentiality, the names of the participating companieshave been replaced by codes in all of the detailed company exhibitspresented.

In addition, results are presented only for benchmark jobs for which there areat least three (3) companies reporting data, and the statistics presented are

limited to the following:

the 10th, 25

th, 50

th, 75

th, 90

thpercentiles

and average for at least three (3)

companies and nine (9) incumbents reporting data the

25

th, 50

th, 75

thpercentiles

and average for at least three (3) companies

and five (5) incumbents reporting data the 50th percentileand average for at least three (3) companies and four

(4) incumbents reporting data the average only for at least three (3) companies and three (3)

incumbents reporting data

Reference DateUnless otherwise indicated, all information presented in this report is currentas ofJuly 1, 2008.


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USING THE SURVEY DATA

Analysis and judgment are needed when translating the salary market data into an acceptable company pay structure. Below is a general guide for applying thesurvey data.

Step 1 Establish your companys target salary position

Your overall compensation philosophy should include determining where and how you want to compensate competent staff in relation to the market, e.g., atmarket median (P50 or 50th percentile) or market upper quartile (P75 or 75

thpercentile).

Step 2 Choose your market

When examining survey results, it is important to review the List of Participants to ensure this community is the correct group to compare your company againstPay for jobs that are non-industry specific (i.e., human resources, administration, finance, information technology, secretarial) may be assessed across alindustry lines to determine the competitive level of pay for people in these functions. Industry-specific jobs are best compared with similar type companieswithin the same business grouping.

Step 3 Ensure proper job match

A careful reading of the position description is important to ensure similar responsibilities exist for a proper match. Job content can vary significantly betweentwo organizations, even though the job may have the same title. Survey results may be factored up or discounted to the extent it is believed the position isheavier or lighter than the job surveyed.


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USING THE SURVEY DATA (contd)Step 4 Calculate using competitive compa-ratios

A commonly used measurement to determine how average salaries are different from the target salary is the competitive compa-ratio. The calculation is quitesimple. If, for example, your target is to be at the median of a salary range, the competitive compa-ratio can be at the median of the market group.

Average of all salaries for a specific job in your company x 100Market median (your companys target position)

A market ratio of 100 means the average actual pay for a specific job at your company is equal to the market target. If the ratio is above 100, the averageactual pay is higher than the market target. If the ratio is less than 100, the average actual pay is lower than the market target or median.

The reasons for being off-target need to be explored further, bearing in mind that it may be justifiable for the ratio to be above or below 100%.

Step 5 Observe general administration guidelines

The following principles will assist in planning individual salary adjustments. Each staff member should be paid equitably according to the jobs internal andexternal value and the individuals performance and potential. Management should consider the following in making decisions on salary adjustments:

The salary structure is intended to be used only as a guide. The company may opt to pay a person below the minimum of the pay range or higher than thepay range ceiling. The only legal requirement is the minimum wage. The minimum wage in Metro Manila currently stands at 382 pesos per day. Theminimum mandated pay outside Metro Manila is lower and varies by region.

Use total cash compensation as a basis then convert the figure to its monthly basic salary equivalent. If various categories of staff are paid differently in the

company, you would need to divide the total annual cash compensation by the respective divisor (e.g., 13 or 14.5, depending on the number of monthsguaranteed pay in a year minus fixed cash allowances) to arrive at the monthly basic salary equivalent.

Consider setting the hiring rate at about 10% to 15% belowthe minimum of the pay range. Move the salary up to the proposed pay range minimum uponthe employees appointment to regular employment status.


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USING THE SURVEY DATA (contd)

Consider the staff members rate of progress and future potential. Increase the time interval and/or decrease the size of the increase for those individualsapproaching what appears to be their ultimate potential.

Consider more liberal salary treatment when performance demonstrates potential for future growth and foreseeable promotional opportunities.

Withhold unearned increases from a poor performer where appropriate. For individuals with salaries below the minimum of the range, bring salaries towardthe minimum through somewhat larger and/or more frequent increases where performance warrants.

Try to eliminate above maximum of the range situations by assigning qualified staff to more responsible positions.


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The 2008 Consumer Products/Manufacturing Industry Survey will provide you with information on prevailing market practices in terms of compensation andbenefits. It will tell you how the compensation package of your employees fares with your peer companies or with the whole industry. As HR practitioners,however, you might find yourself still burdened with questions, such as:

How do I build our salary structure? Are jobs evaluated well in our organization? Are our employees equipped with the right competencies? Is it time to update our medical plan?

Do our incentive schemes drive performance? Do our rewards support our business goals? Are our benefits aligned with our total rewards strategy? Are our employees aware of the benefits our Company provides for them?

At Watson Wyatt, we start by knowing your needs. We work and partner with you to have a deep knowledge of your business before we offer practical adviceand innovative solutions tailored to fit your needs, tailored to fit your organization.

For more information on how we could help you, please visit: www.watsonwyatt.com.ph


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DEFINITIONS

Anniversary Date: The term used in the salary increase table to denote the practice of using a different effectivity date, typically the Date of Hire, to adjust thesalaries of individual employees. This is in contrast to the more common practice of adjusting the salaries of all or most employees on the same date.

Cash Compensation

Basic Salary: Annual Basic Salary (12 months pay).

Basic Guaranteed: Basic Salary plus all fixed and guaranteed bonuses. Fixed bonuses would include the mandatory 13th

month pay for rank-and-fileemployees.

Total Guaranteed Cash: Basic Guaranteed, plus all fixed and guaranteed cash allowances such as rice allowance, car allowance, transportationallowance, and meal allowance, if any.

Total Cash: Total Guaranteed Cash, plus any compensation of a variable or discretionary nature. Items included here are commissions, sales incentivesprofit shares, performance bonuses, and management incentives. Historical data was utilized as estimates. Overtime pay and night shift differential are noincluded. Pay-outs for long-term incentives are likewise excluded.

Total Remuneration: Total Cash, plus the peso value of selected benefit items motor vehicle benefits, company-sponsored loans, club membershipsmedical benefits, life insurance and retirement benefits. These monetary values of these benefits are determined by using actuarial assumptions andcalculated as a value to the employee rather than the cost to the company.


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INCUMBENT CHARACTERISTICS

Years of service with the company: This represents the length of time an employee has worked in the company from the Date of Hire. Years in current position: This represents the length of time an employee has occupied a particular position from the Date of Appointment to tha

position.

Number of Companies: The total number of companies reporting data for a particular benchmark position.

Number of Employees: The companys total full-time workforce.

Number of Incumbents: The total number of individuals reported in a particular survey benchmark position.

Percentage Receiving:A term used to indicate the percentage of incumbents who received a particular item (an allowance, fixed bonus or variable bonus).

Statistical Terms

Minimum (Min): The lowest figure recorded. Lower Decile (10): The figure below which 10% of the relevant data fall. Also known as the 10

th

percentile. Lower Quartile (25): The figure below which 25% of the relevant data fall. Also known as the 25th percentile. Median (50): The figure above and below which 50% of the relevant data fall. Also known as the 50 th percentile. Upper Quartile (75): The figure below which 75% of the relevant data fall. Also known as the 75th percentile. Upper Decile (90): The figure below which 90% of the relevant data fall. Also known as the 90th percentile. Maximum (Max): The highest figure recorded.

Average (Ave): The total sum of the data for a particular item divided by the number of individual observations.


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ECONOMIC OVERVIEW (contd)

Inflation

2007 Actual 2.80%2008 YTD 11.90%2008 Year-end (Projection) 10.50%2009 Projection 8.00%

Economic Indicators Year to Date* Same Time Last Year

GNP 5.5% (Q2 2008) 8.3 (Q2 2007)GDP 4.6 7.5

- Agriculture 4.9 3.9- Industry 4.8 8.0- Services 4.3 8.4

*Data as of October 2008*Data as of September 2008

Sources: Asian Development Bank (Asian Development Outlook 2008), Bangko Sentral ng Pilipinas, National Economic Development Authority, National Statistical Coordination Board

Consumer/Manufacturing Industry Overview

Undoubtedly, the consumer/manufacturing industry is one of the largest and most important economic sectors in the country. Indeed, the value of production othe manufacturing sector remains bullish at 12.7 year-on-year growth rate, according to the August 2008 survey of the National Statistics Office (NSO). Theindustrys growth potential is further augmented by the countrys cheap but highly skilled labor force.

To date, manufacturing and consumer product companies employ 60% of workforce engaged in the Industry sector, as reported by the NSO. In addition, moscompanies have labor organizations, with some even having multiple unions in different locations. The industry is positive that it will attain not only its targerevenue growth but also, its plans of employee development.


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PROFILE OF PARTICIPANTS

The 2008 Consumer Products/Manufacturing Industry Survey consists of detailed information contributed by 38 Companies.

A general profile of the survey participants is summarized on the succeeding pages.

Survey Participants

1. Avon Asia Pacific 20. Johnson & Johnson (Philippines), Inc.2. Avon Cosmetics, Inc.** 21. Kimberly-Clark Philippines, Inc.3. BP Philippines, Inc. 22. Kraft Foods Philippines4. BristolMyers Squibb (Philis.), Inc. - Consumer 23. LaFarge Cement Services Philippines, Inc.5. Cargill Philippines, Inc. 24. Levi Strauss Philippines, Inc.6. Century Pacific Group 25. Mary Kay, Inc.*7. Chevron Philippines, Inc. 26. Nestle Philippines, Inc.8. Coca-Cola Bottlers Philippines, Inc. 27. Newell Rubbermaid9. Colgate-Palmolive Philippines, Inc. 28. Petron Corporation

10. D&L Industries, Inc. 29. Philip Morris Philippines Manufacturing, Inc.

11. Del Monte Phils. 30. Pilipinas Shell Petroleum Corporation12. Diageo Philippines, Inc. 31. Procter & Gamble Asia Pte. Ltd.13. Dow Chemical Pacific Ltd. 32. Samsung Electronics Philippines, Inc.14. Du Pont Far east, Inc. 33. San Miguel Corporation15. Fonterra Brands Philippines, Inc. 34. SC Johnson & Son, Inc.16. Fuji Xerox Philippines, Inc. 35. Stepan Philippines, Inc.17. Gap International Sourcing Inc. Manila Regional Headquarters 36. Swedish Match18. General Electric Philippines, Inc. 37. The Coca-Cola Export Corporation19. Holcim Philippines, Inc. 38. Unilever Philippines

* Cash Compensation only** Benefits only


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COMPANY PROFILE

Parent Company Nationality

57%

19%

14%8% 3%

American/Canadian EuropeanOthers Local (Filipino)Asian

Company Status

44%

41%

12% 3%

Subsidiary

Wholly-owned Foreign Enterprise

Parent

Joint Venture

This years survey participants are a mix of unionized and non-unionizedcompanies engaged in manufacturing and sales activities. Sixty-eight percent(68%) have local manufacturing operations maintaining a single plant locally.Total headcount ranges from 30 to 9,950 while average annual sales turnoverranges from Php235M to more than Php212B.

Percentile 2007 Annual SalesTurnover(In Million Pesos) 2008 ActualHeadcount

P10 458 38P25 1,284 76P50 7,160 215P75 23,250 737P90 111,231 1270

Average 28,425 933

Eighty-six percent (86%) of participating companies were able to provideheadcount projections for year 2009, majority of which project a higher headcountfor the coming year.

2009 Projected Headcount

P10 P25 P50 P75 P90 Average34 75 190 729 1317 994


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EMPLOYEE HEADCOUNT

Detailed headcount distribution is presented below.

Headcount Distribution (Local Employees)EmployeeCategory

P10 P25 P50 P75 P90 Average

Top Management 1 2 5 9 17 24Sr. Management 5 8 13 25 42 25Middle Management 3 11 41 83 175 87Officer/Supervisor 6 18 48 281 595 210Clerical/General 12 25 98 393 651 652All Employee Levels 38 75 213 731 1,260 930Average Age 32.20 34.75 37.00 39.00 40.90 36.56Average Years of Svc. 4.30 5.25 9.00 11.00 13.40 8.88

Total Headcount Distribution (With Expatriates)Employee

Category


Top Management 1 2 5 12 20 24Sr. Management 5 9 13 25 45 27Middle Management 3 11 41 83 175 87Officer/Supervisor 6 18 48 281 596 210Clerical/General 12 25 98 393 651 652All Employee Levels 38 76 215 737 1,270 933Average Age 33.00 35.00 37.00 39.02 41.50 37.07Average Years of Svc. 4.50 5.69 9.52 12.00 14.30 9.14


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ATTRITION RATE

Average turn-over rate for the industry is nine percent (9%), which is the same as the figure posted in lasyears survey results. Better opportunities and work overseas are now considered as the most commonreasons for employee resignation.

Overall Attrition Rate

EmployeeCategory


Top Management 0.00% 0.00% 0.00% 0.00% 28.41% 9.17%

Sr. Management 0.00% 0.00% 0.00% 8.12% 17.50% 4.80%Middle Management 0.00% 2.04% 5.71% 15.38% 25.06% 10.70%Officer/Supervisor 0.00% 2.47% 10.13% 14.63% 23.43% 11.34%Clerical/General 0.51% 3.92% 6.25% 9.76% 15.31% 8.35%All Employee Levels 2.11% 4.55% 9.59% 13.66% 15.36% 9.15%

Reasons for Attrition

68%

51%

46%

16% 16%

11%

16%

0%

10%

20%

30%

40%

50%

60%

70%

BetterOpportunities/Offer

WorkOverseas

F

amilyMigration

Stunted

CareerGrowth

Pursue

FurtherStudies

HealthReasons

Other


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Cash Policies


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HIRING RATES

Seventy percent (70%) of survey participants provided information on hiring rates for freshcollege graduates; Nineteen percent (19%) of participants maintain a general hiring rate policyregardless of function, while the rest differentiate hiring rates depending on specific operating ofunctional requirements. Below is the summary of hiring rates for fresh college graduates.

Median Hiring Rates Per Function

19,500

18,000

17,311

17,311

17,156

17,000

17,000

17,000

16,156

15,000

15,000

13,688

0 5,000 10,000 15,000 20,000 25,000

Mktg

IT

Fin

Sales

HR

Cus Svc

Eng

Gen Mgmt

Legal

Admin Svc

Log

Mfg

Monthly SalaryFunction

PercentageProviding P25 P50 P75 Average

Administrative Services 59% 12,625 15,000 18,886 17,428Customer Service 51% 13,050 17,000 23,948 18,807Engineering 51% 13,050 17,000 25,040 19,443Finance 62% 13,020 17,311 24,272 19,244General Management 46% 13,000 17,000 23,463 18,856Human Resources 54% 12,875 17,156 25,238 19,214Information Technology 51% 13,050 18,000 25,000 20,700Legal 32% 12,875 16,156 33,625 25,782Logistics 49% 12,125 15,000 22,597 17,944

Manufacturing 49% 11,971 13,688 21,925 21,451Marketing 59% 13,025 19,500 27,428 21,351Sales 57% 13,000 17,311 28,000 20,354General Policy 19% 12,750 13,100 16,156 17,130


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COMPENSATION MIX

It can be observed from the compensation mix below that the variable bonus paid out to employees is generally higher compared to last year. This is attributedto companies increased focus on performance as further supported by the data that is presented in the variable pay section of this report.

2007 Compensation Mix

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Variable Bonus 14% 15% 9% 6% 2%

Fixed Allowance 1% 3% 4% 3% 2%

Fixed Bonus 9% 10% 11% 11% 10%

Basic Salary 77% 73% 76% 80% 86%

Top

Management

Senior

ManagementManagement

Officer/

Supervisor

Clerical/

General Staff

2008 Compensation Mix

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Variable Bonus 14% 14% 12% 7% 3%

Fixed Allowance 0% 1% 2% 3% 5%

Fixed Bonus 8% 8% 9% 10% 10%

Basic Salary 77% 77% 78% 79% 82%

Top

Management

Senior

ManagementManagement

Officer/

Supervisor

Clerical/

General Staff


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BASE SALARY MOVEMENTS

Industry average salary increase has slowed down since 1997. What used to be a double digit base salary increase is now reduced to an average of 8% 9%for the last 10 years. Below is a summary of salary increase history of this years survey participants.

Salary Review Details

Frequency of Salary Review Typically, once a yearEffectivity Date of Salary Adjustments Typically, January and April

Industry Historical Salary Increases*

2005 20062007

2008

8.30%

8.70%

8.29%

8.21%

7.90%

8.00%

8.10%

8.20%

8.30%

8.40%

8.50%

8.60%

8.70%

*2008 figure is based on 2008 survey results

2007 Salary Increase Percentage (Actual)

Employee Category P10 P25 P50 P75 P90 Average

Top Management 6.25% 7.53% 8.00% 9.00% 10.00% 8.25%

Sr. Management 6.00% 7.00% 8.00% 9.00% 10.20% 8.37%Management 6.00% 7.00% 8.00% 9.00% 10.10% 8.23%

Officer/Supv. 6.50% 7.10% 8.00% 9.00% 10.00% 8.18%Clerical/General 6.35% 7.73% 8.00% 9.00% 10.00% 8.47%

All Employees 6.10% 7.12% 8.00% 9.00% 10.60% 8.29%Eighty-four percent (84%) of the companies surveyed reported actual salary increase for year 2007


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BASE SALARY MOVEMENTS (contd)

Bases for Granting Salary Increases

86%

62%

54%

38%

32%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Individualperformance

Co.

performance

Econom

iccondition

Peercompany

comparison

Manageme

ntdiscretion

Governm

entMandate

2008 Salary Increase Percentage (Actual)

EmployeeCategory


Top Management 5.96% 7.00% 8.00% 9.00% 10.40% 8.13%

Sr. Management 5.99% 7.00% 8.00% 9.00% 10.10% 8.21%Management 6.00% 7.00% 8.00% 9.00% 10.00% 8.08%

Officer/Supv. 5.99% 7.00% 8.00% 9.00% 10.10% 8.07%

Clerical/General 5.63% 6.15% 8.00% 9.00% 10.30% 8.03%All Employees 6.00% 7.14% 8.00% 9.10% 10.00% 8.21%Eighty-four percent (84%) of the companies surveyed reported actual salary increase for year 2008

Eighty-six percent (86%) of the companies surveyed provided salary increase budget for year 2009

2009 Salary Increase Percentage Budget

EmployeeCategory


Top Management 7.24% 8.00% 9.00% 10.00% 10.20% 8.87%

Sr. Management 7.30% 8.00% 9.00% 10.00% 10.00% 8.75%Management 7.32% 8.00% 9.00% 10.00% 10.00% 8.85%Officer/Supv. 7.32% 8.00% 9.00% 10.00% 10.00% 8.85%

Clerical/General 7.00% 8.00% 9.00% 10.00% 11.00% 8.72%All Employees 7.55% 8.00% 9.00% 10.00% 11.00% 9.10%


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PROMOTIONAL INCREASES

On top of base salary increases, eighty-nine percent (89%) of participating companies provided information on promotional increases. Below is a summary ocompany policies related to promotions as well as typical range of promotional increases per employee category.

Promotion Criteria

91%88%

82%

9%6%

12%

0%

20%

40%

60%

80%

100%

Individualperformance

ChangeinJob/Assisgnments

E

nhancedJobScope/Responsibility

IncreaseinRevenue/Budget/

PerformanceTarget

Tenure/Seniority

Others

Promotion Details

Effectivity Date of Promotions Percentage of Companies

- Varying Dates 76%

- Fixed Date 18%

(typically, January or March)- Others 6%

Typical Range of Promotional Increases

Employee Category Minimum Average Maximum

Top Management 10% 15% 23%Sr. Management 10% 14% 22%

Management 10% 14% 23%Officer/Supervisor 9% 14% 24%Clerical/General 10% 13% 22%All Levels 9% 13% 22%


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CBA INCREASES

Forty-five percent (45%) of the thirty-eight (38) companies are unionized. Below is a summary of the bargained increases to monthly salary.

Percentage of Companies that are Unionized 49%Coverage Rank & FileSalary Increase Format Fixed amount

CBA INCREASES (Flat Amount)


Average Salary of CBU 15,246 18,017 20,377 23,007 29,129 21,245CBA Increase

2007 970 1,000 1,192 2,035 2,676 1,521

2008 910 1,111 1,390 2,538 2,846 1,7662009 1,040 1,122 1,367 2,675 3,079 1,900

Signing/Goodwill Bonus* 3,860 10,000 30,000 40,000 44,000 26,144*Fifty-nine percent (59%) of unionized companies


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FIXED AND GUARANTEED BONUSES

As stated under Section 1 of Presidential Decree No. 851, all employers are required to pay their rank and file employees a 13th

Month pay equivalent to anamount not less than 1/12th of the employees basic salary. While payment of 13th Month Pay is required for non-management employees only, it is a generapractice in the Philippines for companies to provide this bonus to all employee levels. This is often supplemented with additional bonuses given in the form oChristmas and Mid-year bonuses.

For companies who joined this years survey, results show that at least seventy percent (70%) grant bonuses that are higher than the one month bonusprescribed by law.

A summary of typical practices in the area of fixed bonuses is shown below.

13th

MONTH PAY

One hundred percent (100%) of survey participants provide 13th

month pay to all employee levels

Typically, one-time payment

Typical timing of payment is November

MID-YEAR BONUS

Seventy percent (70%) of survey participants provide mid-year bonuses to their employees. Bonus formula is typically the same regardless of employeecategory.

Annual Amount (as a multiple of monthly basic salary)

Employee Category P10 P25 P50 P75 P90 AverageTop Management 1.00 1.00 1.00 1.00 1.46 1.17Sr. Management 0.95 1.00 1.00 1.00 1.15 1.13

Management 1.00 1.00 1.00 1.00 1.00 1.12Officer/Supervisor 1.00 1.00 1.00 1.00 1.00 1.12Clerical/General Staff 1.00 1.00 1.00 1.00 1.00 1.12

Note: Typically paid out in April or May


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FIXED AND GUARANTEED BONUSES (contd)

YEAR-END BONUS

Twenty-four percent (24%) of the companies in the survey provide year-end bonuses to their employees. As in the provision of the mid-year bonus, the yearend bonus is usually provided to all employee categories, where typically the same proportion of basic salary is provided regardless of employee category.

Annual Amount (as a multiple of monthly basic salary)Employee Category P10 P25 P50 P75 P90 Average

Top Management 0.70 1.00 1.00 1.00 1.84 1.18

Sr. Management 0.50 0.63 1.00 1.00 1.70 1.07Management 0.50 0.63 1.00 1.00 1.70 1.07Officer/Supervisor 0.50 0.63 1.00 1.00 1.70 1.07Clerical/General Staff 0.50 0.63 1.00 1.00 1.70 1.07

Note: Typically paid-out November or December

ALL FIXED & GUARANTEED BONSUES (including 13th

Month Pay)

Annual Amount (as a multiple of monthly basic salary)Employee Category P10 P25 P50 P75 P90 Average

Top Management 1.00 1.00 2.00 2.00 3.00 1.89Sr. Management 1.00 1.00 2.00 2.00 3.00 1.87Management 1.00 1.00 2.00 2.00 3.00 1.87Officer/Supervisor 1.00 1.00 2.00 2.00 3.00 1.88Clerical/General Staff 1.00 1.00 2.00 2.00 3.00 1.88


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FIXED CASH ALLOWANCES

The following section summarizes typical industry practices related to fixed cash allowances. Variable allowances are covered under the benefits executivesummary (e.g., given in kind such as meal stubs/tickets; dependent on number of hours/days worked; requires presentation of receipts).

Seventy-three percent (73%) of the companies surveyed provide at least one type of fixed cash allowance to their employees. Typical allowances provided arerice and transportation.

A. Rice Allowance

Percentage of Companies Providing Rice Allowance 57%Coverage Percentage of Sample- All employees 86%- Selected employees 14%Distribution Policy Same amount for all covered employeesManner of Payout Typically, monthlyTaxation Typically, non-taxable

Rice Allowance Per MonthEmployeeCategory P10 P25 P50 P75 P90 Average

Top Management 647 1,000 1,200 1,500 1,830 1,214Sr. Management 647 1,000 1,200 1,500 1,830 1,214Management 653 1,000 1,200 1,500 1,820 1,190Officer/Supervisor 667 1,000 1,175 1,469 1,775 1,171Clerical/General 677 1,000 1,200 1,356 1,545 1,177

*Twenty-seven percent (27%) of surveyed companies provide rice subsidy (given in kind)


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FIXED CASH ALLOWANCES (contd)

B. Transportation Allowance

Percentage of Companies Providing Transportation Allowance 27%

Coverage Percentage of Sample- Selected Employees 75%- All Employees 25%Distribution Policy Typically, same amount for all covered employeesManner of Payout MonthlyTaxation Typically, taxable

Transportation Allowance Per MonthEmployeeCategory P10 P25 P50 P75 P90 Average

Top Management - - - - - -Sr. Management - - - - - 21,167Management - - 5,342 - - 4,849Officer/Supervisor - 2,750 4,000 4,840 - 3,985

Clerical/General - 1,250 2,500 3,000 - 2,390


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FIXED CASH ALLOWANCES (contd)

C. Meal Allowance

Percentage of Companies Providing Meal Allowance 22%

Coverage Typically, all employeesDistribution Policy Typically, same amount for all covered employeesManner of Payout MonthlyTaxation Typically, non-taxable

Meal Allowance Per MonthEmployeeCategory P10 P25 P50 P75 P90 Average

Top Management - 1,125 2,000 2,550 - 1,868Sr. Management - 1,125 2,000 2,550 - 1,868Management - 1,125 2,000 2,550 - 1,868Officer/Supervisor - 1,250 2,050 2,775 - 1,971Clerical/General - 1,200 1,900 2,075 - 1,771

*Thirty-two percent (32%) of survey participants provide meal subsidy (please see Allowances, Subsidies, and Miscellaneous Benefits section)

D. Other Allowances

Meal Allowance Per YearType of Allowance PercentageProviding Median Average

Clothing Allowance 19% 5,600 6,670Medicine Allowance 8% - 6,170


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VARIABLE BONUSES

The prevalence of variable pay programs has grown over the last four years as more and more companies seek ways of linking rewards with performance. Iprovides organizations with alternative pay methods to both control fixed costs and at the same time differentiate rewards for varying levels of performance.

This section summarizes industry practices with regard to the following variable pay programs:

Profit Sharing: A type of variable pay that provides for employee participation in the profits of an organization. Companies usually havepredetermined goals and formulas for the determining the amount that will be allocated to employees.

Incentive Plans: Variable bonus that is tied to predetermined performance and reward schedule.Commissions: Cash payments that are based on predetermined performance and reward schedule that are typically based on sales orprofit margin on those sales.

Performance Bonus: Cash payments that are given in recognition of individual employee performance or overall company profitability.

Eighty-nine percent (89%) of survey participants provided at least one type of variable bonus. Typically, variable bonus is provided to all employees withvarying target amounts depending on employee category.

Industry Variable Bonus Component Historical Data(as a percentage of Total Cash)

19% 19%

11%

23%

0%

5%

10%

15%

20%

25%

2004

Performance

2005

Performance

2006

Performance

2007

Performance

2008 Variable Bonus Provisions

41%

81%

8% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Incentive/

Commission

Performance

Bonus

Profit

Sharing

Others


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VARIABLE BONUSES (contd)

Eighty-one percent (81%) of the participants provide variable pay in the form of performance bonus. Below is a summary of performance bonus policies.

A. Performance Bonus

Percentage of Companies With Performance Bonus 81%

Benefit Format Typically, expressed as a multiple of monthly salaryCoverage Percentage of Sample- Both Sales and Non-sales employees 70%

- Non-sales employees only 30%Distribution Policy Typically, same amount for all covered employeesManner of Payout Typically, one-time payoutTiming Bonuses are typically paid on March or April

A.1. Sales

Expressed as a Multiple of Monthly Basic SalaryEmployeeCategory P10 P25 P50 P75 P90 Average

Top Management 1.83 2.03 2.75 3.23 3.78 3.28Sr. Management 1.45 2.00 2.50 3.00 3.84 2.98Management 1.78 2.00 2.24 3.00 3.12 3.55Officer/Supervisor 1.78 2.00 2.37 3.00 3.00 2.40Clerical/General 1.26 1.88 2.10 2.45 3.00 2.15

A.2. Non Sales

Expressed as a Multiple of Monthly Basic SalaryEmployee

Category P10 P25 P50 P75 P90 AverageTop Management 1.45 1.76 2.34 3.00 3.36 1.45Sr. Management 1.28 1.72 2.40 3.00 3.38 1.28Management 1.32 1.70 2.05 2.84 3.00 1.32Officer/Supervisor 1.05 1.32 1.90 2.65 3.00 1.05Clerical/General 1.03 1.24 1.78 2.40 2.73 1.03


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B. Incentives/Commissions

Percentage of Companies With Incentives/Commission 41%

Benefit Format Typically, expressed as a multiple of monthly salaryCoverage Percentage of Sample- Selected Levels 86%- All Levels 14%Distribution Policy Typically, same amount for all covered employees

Manner of Payout Typically, one-time payoutTiming Bonuses are typically paid either March or April




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C. Total Variable Bonus

C.1 Sales Employees


Top Management 1.96 2.08 2.75 3.53 5.62 3.18Sr. Management 1.96 2.10 2.50 3.02 4.76 3.04

Management 1.96 2.10 3.00 3.09 4.99 3.10Officer/Supervisor 1.90 2.10 2.70 3.04 6.29 3.26Clerical/General 1.51 2.08 2.75 3.26 5.40 3.03

C.2 Non Sales Employees




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Benefits Policies


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RETIREMENT BENEFITS

It is mandated by the Philippine Labor Code for companies toprovide minimum retirement benefits for their employees.Under Article 287 of the Labor Code, as amended by RA 7641,an employee may be retired upon reaching the age establishedin the collective bargaining agreement (CBA) or otherapplicable employment contract, and shall be entitled to receivesuch retirement benefits as he or she may have earned underexisting laws and any CBA and other agreement, provided that

the benefits are not less than that provided by law.

Statutory Provisions

In the absence of a retirement plan or agreement providing forretirement benefits of employees in the establishment, anemployee upon reaching the age of sixty (60) years or more,but not beyond sixty-five (65) years which is hereby declaredthe compulsory retirement age, who has served at least five

(5) years in the said establishment, may retire and shall beentitled to retirement pay equivalent to at least one-half (1/2)month salary for every year of service, a fraction of at least six(6) months being considered as one whole year.

The term one-half (1/2) month salary shall mean fifteen (15)days plus one-twelfth (1/12) of the 13th month pay and thecash equivalent of not more than five (5) days of serviceincentive leaves.

Summarized below are the characteristic features of formal retirement plans as reportedby the survey participants.

Percentage of Companies With Formal Retirement Plan 95%

Funding Medium TrusteedSalary Definition Typically, final basic payMode of Payment Lump sum

Type of Plan

70%

6%

24%

Defined Benefit Defined Contribution Hybrid

Defined Benefit (DB) Retirement plan which provides for a benefit payable to theemployee upon separation (retirement or leaving service) which is a product of the

employees number of years of service with the employer and his monthly salary, andthe defined benefit multiple.

Defined Contribution (DC) A plan in which the employer and/or the employeecontribute a fixed percentage of salary every month. Upon separation, the employeereceives the accumulated vested contributions plus the interest earned.

Hybrid (HB) A plan that combines the properties/features of both definedbenefit and defined contribution plans.



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RETIREMENT BENEFITS (contd)

A. Defined Benefit Plan (Including DB component of Hybrid Plans)

Normal Retirement Benefit (NRB)

Eligibility Percentage of Sample- Age only 63%

(Typically, age 60)- Age plus years of service 31%

(Typically, age 60 with 10 years of service)

- Age or years of service 6%Retirement Benefit (expressed as a multiple of monthly basic pay per year of service)

Minimum Median Maximum AverageMultiplier 1.00 1.35 2.00 1.37

Early Retirement Benefit (ERB)

Percentage of plans with provisions for Early Retirement Benefit 97%Eligibility Typically, age 50 with 10 years of serviceEarly Retirement Benefit (expressed as a multiple of monthly basic pay per year of service)

Minimum Median Maximum AverageMultiplier 0.30 1.00 2.00 1.16

Resignation/Leaving Service Benefit

Percentage of plans with provisions for Resignation Benefit 91%Initial Vesting

- Years of Service Typically, 5 years- Multiple of monthly basic pay per year of service Typically, 50% of accrued NRB

Full Vesting Typically, 20 years

Death BenefitPercentage of plans with provisions for Death Benefit 81%Benefit Typically, accrued NRB

Disability Benefit

Percentage of plans with provisions for Disability benefit 84%Benefit Typically, accrued NRB



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RETIREMENT BENEFITS (contd)

B. Defined Contribution Plan (Including DC component of Hybrid Plans)

Normal Retirement Benefit (NRB)

Eligibility Age 60Benefit Amount 100% of employer contribution plus earnings

Early Retirement Benefit (ERB)

Eligibility Typically, age 50 with 10 years of service

Benefit Amount 100% of employer contribution plus earnings

Resignation/Leaving Service Benefit

Initial Vesting Typically, 25% of employer contribution plus earnings at 5years of service

Full Vesting Typically, 15 or 20 years

Other Benefits

Death Benefit 100% of employer contribution plus earningsDisability Benefit 100% of employer contribution plus earnings



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LIFE INSURANCE

Employers liability in case an employee suffers from work-related injury or death is covered by the countrys EmployeeCompensation & State Insurance Fund.

A statutory, compulsory, contributory and exclusive system ofpaying benefits to employees is established in the event ofwork-connected disability or death. The fund is administeredby the Employees Compensation Commission which is part

of the Social Security System.

Statutory Benefits

An earnings-related pension for temporary orpermanent total disability and for permanent partialdisability

An earnings-related survivors pension plus Php20,000as funeral benefit in the event of death; and

Medical, hospital, and (theoretically) rehabilitationservices

The monthly income benefit is guaranteed for five years andis no less than Php15,000.

In the Philippines, it is a common practice for companies tosubsidize the cost of providing insurance coverage to itsemployees through a group life insurance benefit program.

These are usually stand-alone programs, given on top of thesocial security benefit. It is also a common practice toprovide additional accidental death coverage, usually with adouble indemnity than the one that applies in case of non-accidental death.

Ninety-five percent (95%) of participating companies in this years survey provide lifeinsurance coverage in addition to death benefits payable under the retirement plan.

Below is a summary of typical industry practices with regard to life and accidentinsurance coverage.

Life Insurance Coverage

Plan Financing Company Only

Benefit Level Percentage of Sample- Uniform level of benefits for all covered employees 63%- Varying levels of benefits based on job rank 37%Riders to Master Policy Percentage of Sample- Both TPD and AD&D 57%- Total Permanent Disability (TPD) 14%- Accidental Death & Dismemberment (AD&D) 8%- None 16%

40%

34%

20%6%

Multiple with Limit Multiple of Annual Salary Fixed/Flat Amount Hybrid



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LIFE INSURANCE (contd)

A. Multiple of Annual Salary

Benefit AmountEmployeeCategory P10 P25 P50 P75 P90 Average

Top Management 2.00 2.00 2.50 3.00 3.00 2.54Sr. Management 2.00 2.00 2.50 3.00 3.00 2.54Management 2.00 2.00 2.42 3.00 3.00 2.52Officer/Supervisor 2.00 2.00 2.33 3.00 3.00 2.48

Clerical/General 2.00 2.00 2.33 3.00 3.00 2.47

For those specifying limits


Top Management 3,400,000 4,000,000 7,000,000 10,000,000 25,000,000 10,167,000Sr. Management 3,000,000 3,250,000 7,000,000 10,000,000 25,000,000 10,250,000

Management 3,000,000 3,250,000 7,000,000 10,000,000 25,000,000 10,250,000Officer/Supervisor 2,150,000 2,625,000 5,500,000 10,000,000 20,500,000 8,458,000Clerical/General 2,150,000 2,625,000 5,500,000 10,000,000 20,500,000 8,425,000

B. Fixed/Flat Amount


Top Management 270,000 700,000 1,000,000 2,750,000 4,100,000 1,854,000Sr. Management 303,000 475,000 938,000 2,000,000 2,068,000 1,134,000Management 315,000 400,000 1,000,000 1,000,000 1,600,000 914,000Officer/Supervisor 132,000 230,000 500,000 800,000 1,925,000 907,000Clerical/General 50,000 80,000 230,000 400,000 550,000 275,000



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PERSONAL ACCIDENT INSURANCE

Personal Accident Insurance

Percentage of Companies with Personal Accident Insurance 43%Coverage Typically, all employeesBenefit Level Percentage of Sample- Uniform level of benefits for all covered employees 75%- Varying levels of benefits based on job rank 25%Benefit Format- Multiple of Annual Salary 50%

- Multiple with Limit 31%- Flat/Fixed Amount 13%- Hybrid 6%

Benefit Amount (expressed as a multiple of annual salary)EmployeeCategory P10 P25 P50 P75 P90 Average





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BUSINESS TRAVEL INSURANCE

Business Travel Insurance

Percentage of Companies with Business Travel Insurance 38%Coverage Typically, all employees on business travelBenefit Level Typically, uniform level of benefits for all covered

employeesBenefit Format Percentage of Sample- Flat/Fixed Amount 50%- Multiple of Annual Salary 36%

- Multiple with Limit 14%- Hybrid 0%

*Amounts expressed in US dollars were converted to Peso using the exchange rate: USD1 = Php45

Benefit Amount (expressed as a multiple of annual salary)EmployeeCategory P10 P25 P50 P75 P90 Average



Benefit Amount (expressed as a flat amount)*EmployeeCategory P10 P25 P50 P75 P90 Average

Top Management 525,000 1,000,000 2,000,000 6,656,000 18,938,000 7,154,000Sr. Management 525,000 1,000,000 2,000,000 6,656,000 9,438,000 3,988,000

Management 620,000 1,000,000 1,300,000 3,000,000 4,950,000 2,461,000Officer/Supervisor 508,000 906,000 1,000,000 2,000,000 4,950,000 2,105,000Clerical/General 195,000 413,000 1,000,000 1,000,000 5,125,000 2,068,000

*Amounts expressed in US dollars were converted to Peso using the exchange rate: USD1 = Php45



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HEALTHCARE BENEFITS HOSPITALIZATION

Healthcare benefits are provided by the National Health InsuranceProgram (NHIP). The coverage is granted to total permanentdisability, unemployed, partial permanent disability, retirementpensioners, and survivors of deceased members of the SSS andtheir dependents without need for additional contributions.

Eligibility

A member or his/her eligible dependents suffering from an illnessor injury that requires hospitalization. Member must have paid atleast three monthly NHIP contribution within the 12-month periodimmediately prior to the month of hospitalization.

Benefit

Room and board limit of Php200 to Php1,035 per day

Allowance for medicines ranging from Php1,500 to Php35,655

Laboratory & X-rays of Php350 to Php29,430 (depending on typeof sickness)

Surgical benefits of up to a maximum of Php47,790

Maximum anesthesiologists fee of Php14,355

Maximum operating room fee of Php10,470

Other Provisions

As mandated in the Labor Code, a minimum standard of on-site

medical care should be maintained by commercial, retail, andmanufacturing establishments with varying requirementsdepending on the number of employees

This section summarizes the policies covering healthcare benefits of the surveyparticipants.

Employee Plan Details:

Percentage of Companies Providing Hospitalization Benefit 100%

Plan Financing Company OnlyType of Plan Percentage of Sample- Health Maintenance Plan 41%

- Medical Insurance 35%- Hybrid 13%- Third Party Administrator & Self Administered 11%Benefit Level Percentage of Sample- Varying levels of benefits based on job rank 70%- Uniform level of benefits for all covered employees 30%

Plan Details for Dependents:

Percentage of Companies with Dependents Coverage 97%

Plan Financing Percentage of Sample- Company only 68%- Co-sharing 32%Covered Dependents Percentage of Sample- Dependents of Married Employees 89%- Dependents of Single Employees 81%Eligibility Details- Dependents of Married Employees Spouse up to age 65 and

children up to age 21

- Dependents of Single Employees Parents up to age 65 andsiblings up to age 21

Benefit Coverage Typically, same level ofbenefits provided to

employees



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HEALTHCARE BENEFITS HOSPITALIZATION (contd)

BenefitDetails

TopManagement

Sr.Management

MiddleManagement

Officer/Supervisor

Clerical/GeneralStaff

Daily Room & Board (DRB)a. Peso Limit

Median 2,050 2,050 1,600 1,525 1,400Average 3,060 2,670 1,780 1,550 1,415

b. Room Type Private to

Suite Room

Private to

Large Private

Private to

Large Private

Semi-Private to

Private Ward to PrivateMaximum Benefit per Year

Median 238,000 238,000 229,000 201,000 161,000Average 304,000 302,000 270,000 252,000 232,000



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HEALTHCARE BENEFITS OUTPATIENT

Ninety-seven percent (97%) of the companies surveyed provide outpatient benefits. Typically, services are provided either as part of the hospitalization plan inwhich companies are enrolled or through an in-house or retained clinic. These include medical benefits (consultations, emergency care, treatment of minolesions, x-ray, and laboratory exams), dental services (consultation, annual prophylaxis, simple tooth extractions, and temporary fillings), and optical benefits(EENT care only and a few companies that provide subsidies for prescription lenses).

Item Medical Dental OpticalPercentage Providing 100% 86% 59%With In-house Clinic 29% 19% 14%

With Expense Reimbursement 58% 34% 77%Annual Reimbursement Limit

Median 10,000 5,000 2,000Average 10,590 5,620 5,010



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HEALTHCARE BENEFITS MATERNITY

Seventy-six percent (76%) of survey companies provide maternity benefit/assistance to their employees. The level of benefits provided is typically uniformregardless of job rank.

Maternity Benefits

Type of Plan Typically, self-administeredBenefit Amount Median Average- Normal Delivery 10,000 12,730- Caesarean Delivery 15,000 23,410

- Miscarriage/Abortion 6,560 8,650- Home Delivery 5,000 7,790



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LEAVE PRIVILEGES VACATION LEAVE

As stated in the Labor Code, employees are entitled to five days paid vacation leave for every 12 months of service. This is commonly known as ServiceIncentive Leave. In practice, companies provide annual leave days that exceed the minimum days required by law. Below is the typical industry practice withregards to vacation leave.

Vacation Leave

Benefit Level Percentage of Companies- Uniform level of benefits for all employees 86%- Varying levels of benefits based on job rank 14%

Benefit Format Percentage of Companies- Varying number of days based on years of service 81%- Fixed number of days 19%Leave Entitlement (typical number of days) Median Average- Fixed number of days 18 19- Varying number of days based on service Median Average 1 to 5 years 16 16 6 to 9 years 17 17 1 to 12 years 19 19

13 or more 20 21Policy on Unused Leave Credits* Percentage ofCompanies

All Unused LeaveCredits

Fixed Number of Days

With Carry- Over 47% 24% 76% of sample(Ave. of 24 days)

With Commutation 56% 45% of sample 55% of sample(Ave. of 14 days)

* Percentage do not total 100% due to multiple responses.Note: One Company with PTO



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LEAVE PRIVILEGES SICK LEAVE

Sick leave provision is non-mandatory. Nonetheless, employees can claim sick leave benefits from the Social Security System if they have already used uptheir paid sick leave entitlements with their employer. It is a typical practice for companies to provide extra paid leave credits to ensure the health and wellbeing of its employees, allowing them to recuperate from injuries or illnesses. Below is a summary of sick leave provisions provided by survey participants.

Sick Leave

Benefit Level Percentage of Companies- Uniform level of benefits for all employees 94%- Varying levels of benefits based on job rank 6%

Benefit Format Percentage of Companies- Fixed number of days 60%- Varying number of days based on years of service 40%Leave entitlement (typical number of days) Median Average- Fixed number of days 15 17- Varying number of days based on service Median Average 1 to 5 years 15 16 6 to 9 years 16 17 10 to 13 years 20 19

14 or more 20 20Policy on Unused Leave Credits Percentage ofCompanies

All UnusedLeave Credits

Fixed Number ofDays

In Excess of Setof Limits

With Carry- Over 51% - 100% of sample(Ave. of 73 days)

-

With Commutation 77% 44% of sample 26% of sample(Ave. of 21 days)

30% of sample(In excess of 43

days)



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LEAVE PRIVILEGES MATERNITY LEAVE

Under the Republic Act 7322, female employees who have paid at least 3 monthly Social Security contributions in the 12-month period preceding the semesteof her childbirth, abortion, or miscarriage, and who is currently employed, shall be paid a daily maternity benefit equivalent to the employees average salarycredit as defined under the Social Security Law 60 to 78 days depending on the type of delivery. This is applicable for the first four (4) deliveries.

While maternity leave is considered paid time-off from work, the amount of pay vis--vis the SSS as described above varies among employers. The practice onmaternity leave benefits as reported by the survey participants is summarized below.

Maternity Leave

Typical Number of Days Per Labor Code provisions, i.e., 60 to 78calendar daysBenefit Payment Percentage of Sample- Company pays difference between employees full salary and SSS benefit 70%- Company pays full salary in addition to SSS benefit 14%- SSS benefit only 16%



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LEAVE PRIVILEGES OTHER LEAVES

Other than the mandatory 7-day paternity leave, below is the list of other paid leave entitlements common in the industry.

Type of Leave Percentage of Companies Providing Average Number of Days Allowed

Bereavement 70% 5Emergency 70% 5Extended SL 41% 77Calamity 19% 4Birthday 16% 1

Solo Parent 16% 7Marriage 14% 3Union 11% 87



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LOAN PROGRAMS

Eighty-one percent (81%) of the companies surveyed have at least one type of company-sponsored loan program.

Type of Loan Percentage of Companies Providing

Car Loan 38%Emergency Loan 32%Personal, Multi-purpose, and Salary Loans 30%Housing Loan 19%Other Loans 49%

Car Loan Program

Coverage Selected employeesBenefit Level Uniform level of benefits for all employeesBenefit Format Typically flat amountTypical Loan Limit Median Average

477,500 686,538Interest Rate Average of 9%Repayment Period/Term 5 years

Emergency Loan Program

Coverage All regular employeesBenefit Level Uniform level of benefits for all covered employeesBenefit Format Percentage of Sample- Multiple of monthly salary 50%- Peso limit/flat amount 42%- Multiple with limit 8%

Typical Loan Limit Median Average- For those expressed as a multiple of monthly salary 1.00 1.37- For those expressed as a peso limit 10,000 16,020Interest Rate 0%Repayment Period/Term Average of 1.35 years



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LOAN PROGRAMS (contd)

Personal, Multi-purpose and Salary Loans

Coverage All regular employeesBenefit Level Uniform level of benefits for all covered employeesBenefit Format Percentage of Sample*- Multiple of monthly salary 75%- Peso limit/flat amount 25%Typical Loan Limit Median

1.00Average

1.75

Interest Rate Average of 3.64% per annumRepayment Period/Term Average of 1.80 years*Percentages do not total 100% due to multiple responses

Other Loans (e.g. Hospitalization, Education, Computer, Calamity, etc.)

Coverage Typically, all regular employeesBenefit Level Typically, uniform level of benefits for all covered employeesBenefit Format Percentage of Sample- Peso limit/flat amount 63%

- Multiple of monthly salary 37%Typical Loan Limit Median Average- For those expressed as a multiple of monthly salary 1.00 1.51- Peso limit/Flat Amount 10,000 18,586Interest Rate Average of 8% per annumRepayment Period/Term Average of 1.8 years



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CAR PROGRAMS

Eighty-nine percent (89%) of the survey participants sponsor at least one of the following types of car programs.

Company Car where vehicle is assigned to the employee for daily use, and the entire cost of the car, including running cost (such as insurance andregistration, repairs and maintenance, gasoline) is typically shouldered by the company. This is typically given to managers and up as a perquisite, and tosales employees as tool of trade.

Car Plan type of car program that involves sharing in the cost of the car between the company and the eligible employee. Typically, the employees equity isloanable from the company at subsidized interest rates, and the ownership of the car is transferred to the employee at the end of the repayment or replacemenperiod.

Car Allowance an emerging market trend, this cash allowance is provided in lieu of an actual vehicle unit or car

Percentage of Companies with Company Car Program 89%

Type of Car Program* Percentage of Sample**- Company Car 97%- Car Plan 33%- Car Allowance 28%

*Car loan details are discussed under loan programs

**Percentages do not total 100% due to multiple responses



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CAR PROGRAMS (contd)

Company Car Program 97%

Employee Category Percentage of Sample- Top Management* 84%- Senior Management 94%- Middle Management 91%- Officer/Supervisor 72%

*Three companies did not provide car program details for their Top Management level

Section 1a: Car Entitlement (For Those With Same Policy For Sales & Non-Sales)

Car Price Limit Top Management Sr. Management Middle Management10

thPercentile 1,470,000 1,520,000 900,000

25th

Percentile 1,700,000 1,750,000 985,00050

thPercentile 2,400,000 2,000,000 1,023,330

75th

Percentile 3,975,000 2,600,000 1,243,33090

thPercentile 4,300,000 2,940,000 1,390,000Average 2,700,000 2,153,850 1,110,000

Engine Size/Cylinder Capacity 2000cc 2200cc & up 2000ccTypical Car Make/Models BMW Honda Accord Honda CRV

Volvo Honda CRVToyota Camry

Peso Value of Car Benefit** Top Management Sr. Management Middle Management10

thPercentile 1,631,500 1,580,000 870,000

25th

Percentile 2,000,000 1,705,000 970,00050

thPercentile 2,800,000 2,000,000 1,070,000

75th

Percentile 3,062,500 2,800,000 1,390,00090

thPercentile 4,300,000 2,969,600 1,705,000Average 2,781,830 2,203,390 1,203,110

Replacement Period Typically, 5 years Typically, 5 years Typically, 5 years**Calculated based on market price of car make/models/engine size



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Section 1b: Other Details (For Those With Same Policy For Sales & Non-Sales)

Purchase Option Percentage of SampleAppraised Value 9% 7% 5%

Book Value 5% 4% 5%Percentage of

Acquisition Cost41%

(Average of 16% ofAcquisition Cost)

41%(Average of 14% ofAcquisition Cost)

40%(Average of 14% ofAcquisition Cost)

Fair Market Value 5% 4% -Discounted Market Value 9%

(Average of 73% ofFair Market Value)

19%(Average of 55% ofFair Market Value)

20%(Average of 49% ofFair Market Value)

Transfer of Ownership 5% 7% 10%No Purchase Option 27% 19% 20%

Running Costs Percentage of Samplea. Insurance 92%

Typically, Actual Amounts93%


Typically, Actual Amountsb. Registration 92%



Typically, Actual Amountsc. Repairs & Maintenance 96%



Typically, Actual Amountsd. Drivers Allowance 32% 24% 14%e. Parking 40%

Typically, Reserved Slots45%


Typically, Reserved Slotsf. Gasoline

Actual Gasoline Expenses 87% 77% 65%Fixed Peso Limit/Allowance 4% 4% 5%

Gas Card 4% 4% 5%Number of Liters Per Month - 8%

Ave. of 428 Liters/Month15%

Ave. of 246 Liters/Month



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Section 2a: Car Entitlement (For Sales)

Car Price Limit Middle Management Officers/Supervisor10

thPercentile 600,000 540,000

25th

Percentile 600,000 609,25050


75th

Percentile 875,000 725,00090

thPercentile 1,004,000 780,000Average 783,000 652,640

Engine Size/Cylinder Capacity 1600cc to 1800cc 1600ccTypical Car Make/Models Toyota Altis Honda City

Honda CivicPeso Value of Car Benefit* Middle Management Officers/Supervisor**

10th

Percentile 685,200 612,00025


50th

Percentile 900,000 700,00075

thPercentile 1,500,000 862,500

90th

Percentile 1,748,000 1,132,800Average 1,170,680 865,630

Replacement Period Typically, 5 years Typically, 5 years*Calculated based on market price of car make/models/engine size**Typically, Medical Representatives



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Section 2b: Other Details (For Sales)

Purchase Option Percentage of SampleBook Value - 6%

Percentage ofAcquisition Cost

67%(Average of 17% of Acquisition Cost)

53%(Average of 19% of Acquisition Cost)

Discounted Market Value 13%(32% of Fair Market Value)

6%(32% of Fair Market Value)

Transfer of Ownership 7% 12%No Purchase Option 13% 24%

Running Costs Percentage of Samplea. Insurance 89%


Typically, Actual Amountsb. Registration 88%


Typically, Actual Amountsc. Repairs & Maintenance 94%


Typically, Actual Amountsd. Drivers Allowance Not Covered Not Coverede. Parking 53%


Typically, Reserved Slotsf. Gasoline 94%


Typically, Actual Amounts



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Car Plan Program 33%

Employee Category Percentage of Sample- Senior Management and up 27%- Middle Management 82%- Officer/Supervisor 55%

Car Entitlement (With Same Policy For Sales & Non-Sales)

Car Price Limit Middle Management Officers/Supervisor

10

th

Percentile 500,000 -25th

Percentile 500,000 -50

thPercentile 560,000 -

75th


thPercentile 984,170 -Average 681,390 530,000

Engine Size/Cylinder Capacity Not typically provided Not typically providedTypical Car Make/Models Not typically provided Not typically providedPeso Value of Car Benefit** Middle Management Officers/Supervisor

10

th

Percentile 500,000 -25th


thPercentile 620,000 -

75th


thPercentile 981,000 -Average 705,690 530,000

Replacement Period Typically, 5 years Typically, 5 yearsPercentage of Sample

a. Company Share Average of 53% Average of 50%

b. Employee Share Typically, loanable Typically, loanable- Interest Rate 0% 0%- Repayment Period 5 years 5 years

**Calculated based on market price of car make/models/engine size



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CLUB MEMBERSHIPS

Typical provisions for social and sports club membership are summarized below.

Percentage of Companies Sponsoring Club Membership 70%

Coverage Sr. Management & upType of Membership Typically, corporateNumber of Clubs Allowed per Covered Employee Typically, 1Most Common Clubs Maintained Alabang Country Club

Baguio Country Club

Makati Sports ClubManila Golf ClubManila Polo Club

Manila Southwoods Golf & Country ClubOrchard Golf & Country Club

Palms Country ClubTagaytay Highlands

Valley Golf ClubWack Wack Golf and Country Club

Expenses Paid by the Company Full subsidy of membership fees and business-related expenses



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STOCK PLANS

Provisions for long-term incentives are slowly gaining popularity among companies in the Philippines, although these are typically granted by multi-nationacorporations. The following are the types of long term incentives offered to local employees:

Stock Option where an employee is given the right to purchase a certain number of shares at a fixed price within a specific period. Stock Grant where a company grants an outright assignment of stocks to an employee. Stock Purchase where a company offers an employee the right to purchase a certain number of shares at a given point in time.

Percentage of Companies with Formal Policy 46%Type of Stock Plans Percentage of Sample*- Stock Grant 47%- Stock Purchase 47%- Stock Option 41%

* Percentages do not total 100% due to multiple responses.

Stock GrantCoverage Typically, Sr. Management & upNumber of Shares Granted Typically, varying amount per companyFrequency of Grant Typically, once a yearPurchase Price Insufficient data

Stock Purchase

Coverage All employeesNumber of Shares Granted Typically, varying amount per companyFrequency of Grant Typically, once a yearPurchase Price Typically, full market value



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STOCK PLANS (contd)

Stock Option

Coverage Typically, Sr. Management & upNumber of Shares Granted Typically, varying amount per companyFrequency of Grant Typically, once a year or based on

management discretionPurchase Price Full market value


MISCELLANEOUS BENEFITS ALLOWANCES & SUBSIDIES


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MISCELLANEOUS BENEFITS, ALLOWANCES & SUBSIDIES

Market practice shows that companies typically provide allowances and subsidies to employees as a form of an alternative reward system. Several companiesview allowances and subsidies as a means for them to extend additional economic assistance to employees.

Typical allowance/subsidies provided include meal and overtime, and other assistance programs such as educational subsidies and funeral assistance. Thefollowing section covers typical company practices with regard to allowances, subsidies, and miscellaneous benefits. Fixed cash allowances are not included inthis section.

Type of Allowance/Subsidy

PercentageProviding

Typical Practice/Amount

Service Awards 92% Typically provided as gift items after an initial 5 years of service, this benefit isgiven with increasing value every 5 years thereafter and will go as high as 40years.

Overtime Allowance 86% Typically, meal and/or transportation allowance is provided to employees whohave rendered at least 3 hours of overtime work. For meal allowance, thetypical amounts provided per availment are as follows:

Weekdays/Same for Weekdays Weekendsand Weekends

Median: Php90-100 Php120-150

Average: Php95-130 Php150-260

The typical allowance per availment for transportation is as follows:Weekdays/Same for Weekdays Weekends

and WeekendsMedian: Php155 Php170Average: Php170 ` Php185

Funeral Assistance- Employees death

- Dependents death

78%

76%

Funeral assistance provided to employees qualified dependents:

Median: Php28,750Average: Php33,607

Funeral assistance provided to employees for death of an immediate familymember:



MISCELLANEOUS BENEFITS ALLOWANCES & SUBSIDIES ( td)


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MISCELLANEOUS BENEFITS, ALLOWANCES & SUBSIDIES (contd)


PercentageProviding


Uniform Subsidy 78% This is typically provided to plant and field sales employees and is administeredin kind. Typically provided are 5 sets per year equivalent to:


Kilometrage Allowance 59% Typically provided to employees using their personal vehicle for business-related purposes, typical subsidy is equivalent to:

Median: Php8.25/KmAverage: Php9.36/Km

Educational Subsidy 57% Company typically provides educational assistance that covers all related feesfor employees taking job-related courses. Benefit is usually either 85%reimbursement of actual expenses or a fixed annual limit equivalent to thefollowing:


Thirty-eight percent (38%) of participating companies provides educationalassistance to their employees dependents.

Attendance Award 35% Annual perfect attendance award of:Median: Php1,500Average: Php2,051

Most provide cash award for annual perfect attendance with varying amounts.


MISCELLANEOUS BENEFITS ALLOWANCES & SUBSIDIES (contd)


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MISCELLANEOUS BENEFITS, ALLOWANCES & SUBSIDIES (cont d)


PercentageProviding


Meal Subsidy 32% This benefit is typically provided either to all employee levels or a selectedgroup of employees only. Mode of distribution is typically on a daily basis.Typical meal allowance per year is equivalent to:


Rice Subsidy 27% Average of 11 sacks per year, typical provided to all employee levels on amonthly basis.

(57% of survey participants provide this type of benefit in a form of fixed cashallowance.)

Transportation Allowance 24% Typically this benefit is enjoyed by selected employees without cars. This istypically provided with a fixed reimbursable limit, with limits as follows:


Relocation Assistance 80% One-time grant equivalent to an average of one months salary or fixed amountof:

Median: Php15,000

Average: Php18,000

Actual moving expenses are typically covered.


MOBILE PHONE BENEFITS


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MOBILE PHONE BENEFITS

Percentage of Companies Providing Mobile Phone Subsidy 81%

Coverage Percentage of Sample- Selected Employees 63%- All Employees 37%Policy on Use Percentage of Sample- Business Only 57%- Business and Personal Only 43%Type of Allowance Provided Typically, Plan TypePlan Type (Amount per Month) Median Average- Top Management 3,500 3,864- Sr. Management 2,500 3,085- Management 2,075 2,063- Officer/Supervisor 1,800 1,619- Clerical/General Staff 1,200 1,367


WORKING HOURS, OVERTIME PAY AND NIGHT SHIFT PREMIUM PAY POLICIES


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WORKING HOURS, OVERTIME PAY AND NIGHT SHIFT PREMIUM PAY POLICIES

Normal working hours are prescribed by Article 83 of the Philippine Labor Code as eight (8) hours per day for a maximum of six (6) days a week. Work inexcess of 8 hours in a given day is regarded as overtime and is entitled to additional pay. Where an employee is assigned to perform work on night shift oobliged to work on his scheduled rest day, he is likewise entitled to an additional compensation.

The Labor Code provisions relating to working hours as well as those covering rest periods, public holidays, do not apply to government employees, manageriaemployees, field personnel and certain workers who are paid by based on results/output.

The following are the summary of provisions on working hours, overtime and night shift differential pay policies.

Working Hours

Number of Hours Per WeekMedian

40Average

42Regular Work Schedule Typically, Monday to FridayDaily Rate Computation Typically, 262 days

Regular Rest Day Special Holiday Regular HolidayOvertimeRates Day 1

st 8 Hrs In Excess 1st 8 Hrs In Excess 1st 8 Hrs In Excess

Labor Code 125 130 169 130 169 200 260Industry- Median 150 150 182 150 225 210 275- Average 141 150 201 167 230 223 295

Note: Night shift schedule and premium follows minimum government requirement

Night Shift Premium

Typical Night Shift Schedule (10:00 pm to 6:00 am)

Median

20

Average

23



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Benchmark Statistics

2008 Total Rewards SurveyAnalysis of Remuneration Components Summary


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Position Remuneration Market Statistics No. of

Title Component 10 25 50 75 90 Ave Cos. Inc.

004-TRTEHD0018, CEO - MEDIUM-SIZED COMPANY

BASIC SALARY - 5,218,427 8,446,100 11,131,320 - 8,753,146 5 8

BASIC GUARANTEED - 6,088,164 9,157,442 11,798,255 - 9,306,143

TOTAL GUARANTEED CASH - 6,088,164 9,157,442 11,807,105 - 9,310,568

TOTAL CASH - 6,119,385 10,435,090 12,995,222 - 10,458,279

TOTAL REMUNERATION - 7,860,151 13,325,690 15,445,860 - 12,663,974

005-TRTEHD0016, CEO - SMALL COMPANY

BASIC SALARY 4,235,513 4,554,000 6,015,312 7,543,632 8,279,051 6,283,880 8 9

BASIC GUARANTEED 4,701,672 5,233,200 6,516,588 8

2008 Consumer Industry Executive Summary[1]

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Transcript of 2008 Consumer Industry Executive Summary[1]