Philippines offers productivity-related pay

Article Type: News From: International Journal of Productivity and Performance Management, Volume 60, Issue 3

The Labour Department of the Phillipines says the two-tiered wage system is gaining support from workers and employers, but their representatives say obstacles remain before it can replace the mechanism for setting the minimum wage.

The government sets a fixed wage for workers, with added compensation depending on the worker’s productivity, once it decides to shift to that system.

“While there are pros and cons to the planned shift to a two-tiered wage system, all concerned sectors are supporting the new system,” said Ciriaco Lagunzad III, executive director of the National Wage and Productivity Council.

“A tripartite consultation among employers, workers and government sectors is carefully studying the new system,” he said, adding the Labour Department had already consulted the International Labour Organization and other countries on the planned shift.