Compensation and Position Title Classification System CPCS for

Compensation and Position Title Classification System (CPCS) for GOCCs PRESENTATION FOR GOCCs June 2016

Discussion Agenda Slide Title • CPCS Guiding Principles and Rewards Philosophy • Position Classification System a. Business Unit Size b. Career Bands, Career Levels and Job Grades • Compensation Items a. Salary Ranges b. Fixed Bonuses and Fixed Cash Allowances c. Performance-Based Bonuses d. Other Items in and beyond the CPCS • Implementation Guidelines of the CPCS • Communications Planning and Key Messages • Job Titles and Typical Qualification Standards 2

Slide Title CPCS Guiding Principles and Rewards Philosophy 3

Background of the Compensation and Position Slide Title Classification System (CPCS) for GOCCs l GOCC Governance Act of 2011 (Republic Act 10149), the GOVERNANCE COMMISSION FOR GOVERNMENT-OWNED OR -CONTROLLED CORPORATIONS (GCG) was mandated to: (a) Classify GOCCs; (b) Develop and recommend a competitive compensation and remuneration system which shall: — attract and retain talent — allow the GOCC to be financially sound and sustainable (c) Develop a COMPENSATION AND POSITION CLASSIFICATION SYSTEM (CPCS) which shall apply to all officers and employees of GOCCs. 4

CPCS Guiding Principles Slide Title 1. Provide GOCCs with adequate operational autonomy and flexibility towards ensuring efficient and effective implementation of a total compensation framework to ensure: (a) The adoption of reasonable, justifiable and appropriate remuneration schemes to prevent or deter the granting of unconscionable and excessive remunerations packages; (b) Generally be competitive with the private sector doing comparable work, and in compliance with prevailing laws on minimum wage; (c) Operate within their affordability limits and sustainability capacities, and in accordance with their overall size as provided herein; (d) Adhere to the principle of equal pay for work of equal value; and (e) The rewards system supports and encourages performance-driven, productive, and efficient organizations. 5

Guiding Principles (cont’d) Slide Title 2. The CPCS shall be updated periodically by GCG based on the following: (a) A review of the GOCC compensation rates; (b) The performance of the GOCC and its overall contribution to the national economy; (c) Drastic changes in market or business environment; 3. The CPCS shall cover all positions, on full or part time basis 6

Excluded Positions Slide Title Individuals hired by GOCCs without employer-employee relationships and paid from non-Personal Services appropriations/budgets: (a) Members of the Governing Board; (b) Consultants and experts hired to perform specific activities or services with expected outputs; (c) Laborers hired through job contracts (pakyaw) and those paid on piecework basis; (d) Student laborers and apprentices; (e) Individuals or groups of people engaged through job orders, contracts of service, or others similarly situated. 7

Covered GOCCs Slide Title • All GOCCs and their subsidiaries • Charted or non-chartered • Including those previously exempted from the coverage of the Salary Standardization Law (SSL), Republic Act No. 6758. • All GOCCs that are losing and/or highly subsidized in their operations shall maintain their current compensation framework. Such GOCCs may apply with GCG to implement the CPCS, if it can be determined that their operations improve and the GOCC shall remain financially viable 8

Excluded GOCCs Slide Title • GOCCs expressly outside the coverage of R. A. No. 10149 • Bangko Sentral ng Pilipinas • State Universities and Colleges (SUCs) • Cooperatives • Local Water Districts (LWDs) • Economic Zone Authorities • Research Institutions 9

Slide Title Position Classification System 10

Classifications of GOCCs Slide Title (Under R. A. No. 10149 and E. O. No. 203) l l To ensure that GOCCs are aligned with rates and practices of private sector entities doing comparable work By Sector 1. Government Financial Institutions (GFIs) and Gaming 2. All Other Sectors — Energy and Materials — Utilities and Communications — Area Development, Trade and Tourism — Agriculture, Fisheries and Food — Educational and Cultural l By Overall Size - each GOCC shall be compared or benchmarked with private sector entities similar in size in terms of finances and operations 11

Position Classification Process Slide Title Determine the Size of the Organization (to be done by GCG based on data submitted by GOCCs) Grade of the organization based on: a. Company financials b. Number of full time equivalent (FTE) employees c. Geographical scope and Business Complexity/Diversity Determining the Band of the Job l l Nature of contribution Level of Contribution Determining the Career Level and Job Grade The size of the organization determines the number of Job Grades a GOCC may have. It also impacts the Job Grades of Jobs in the Executive Band of the CPCS. 12

Step 1: Determining Size of the Organization Slide Title CLASSIFICATION OF GOCCS BY OVERALL SIZE. – For purposes of the CPCS, GOCCs are classified in accordance with their overall size determined by getting the average of the following three (3) factors: (a) Company Financials; (b) Number of Full-Time Equivalent (FTE) Employees; and (c) Geographical Scope and Business Complexity. If the resulting average grade is a decimal number, the figure shall be rounded off to the nearest whole number for the GOCC’s overall grade / size as categorized below: CLASSIFICATION AVERAGE GRADE Small 16 Medium 17 to 18 Large 19 and Up The classification shall be based on an official certification issued by GCG, covered by supporting instruments and documents. GCG may change a GOCC’s classification 13

Step 1: Determining Size of the Organization Slide Title 1. Company Financials shall be based on the average of the prior three (3) years’ audited financial statements; GOCC GRADE 16 17 18 19 20 21 22 23 24 25 FINANCIAL RANGE (P) (USD TO PHP CONVERSION C/O GCG) < 3. 0 billion > 3. 0 billion and < 6. 5 billion > 6. 5 billion and < 22. 0 billion > 22. 0 billion and < 43. 5 billion > 43. 5 billion and < 87. 5 billion > 87. 5 billion and < 218. 0 billion > 218. 0 billion and < 436. 5 billion > 436. 5 billion and < 2. 0 trillion > 2. 0 trillion and < 4. 0 trillion > 4. 0 trillion *The computation of Company Financials will be done by GCG in consideration of the operations and mandates of each GOCC. 2. Number of FTE Employees. – GOCCs shall have a grade based on the number of FTE Employees as follows: GOCC GRADE 16 17 18 19 20 21 22 23 24 25 NO. OF FTE EMPLOYEES Up to 89 90 to 240 241 to 620 621 to 1, 600 1, 601 to 4, 100 4, 101 to 10, 600 10, 601 to 27, 500 27, 501 to 75, 000 75, 001 to 200, 000 More than 200, 000 * Consider the approved headcount in the plantilla of the approved organizational structure 14

Step 1: Determining Size of the Organization Slide Title 3. Geographical Scope and Business Complexity. – The grade for the GOCC’s Geographical Scope and Business Complexity shall be determined as GEOGRAPHICAL SCOPE 3. 1 Geographical Scope Global 20 22 24 International 19 21 23 Domestic 16 18 20 Low Medium High BUSINESS COMPLEXITY Geographical Scope. – (a) Domestic if majority of operations are based in a single country or a small cluster of countries within one region (b) International if the organization is characterized by multi-function operations across an entire region or in several countries in two continents. (c) Global if the majority of functions are represented across three or more continents. All GOCCs are automatically classified as domestic unless there is clear and substantial basis to classify the GOCC’s actual operations otherwise. 15

Step 1: Determining Size of the Organization Slide Title 3. Geographical Scope and Business Complexity. – The grade for the GOCC’s Geographical Scope and Business Complexity shall be determined as: 3. 2. Business Complexity – assumes that the GOCC Governing Board has end to end control of the business CATEGORY DESCRIPTION Low GOCC’s operations involve only one of the activities specified below. Medium GOCC’s operations involve only two of the activities specified below. High GOCC’s operations involve all three of the activities specified below. The three types of activities considered: i. Regulatory; and/or ii. Revenue-Generation; and/or iii. Social Services 16

Step 2: Determine the Career Band of the Job Slide Title The CPCS Position Classification differentiates jobs on both their nature and level of contribution to the organization INDIVIDUAL CONTRIBUTOR TRACK MANAGEMENT TRACK CPCS POSITION CLASSIFICATION MAP 17

Step 2: Determine the Career Band of the Job Slide Title Executive (EX) • Typically, one downs of CEO/President/Business Unit Heads • Primarily involved in the development, evolution and approval of longterm vision across a market function, division, region or country • Impacts broader organization performance directly • Main focus is on strategy setting (with Org-wide impact) Supervisory/ Management (M) • Implements organization strategies through the effective direction and management of resources • Sets discipline or area strategy consistent with established organization strategies • Focused on policy making and/or implementation • Accountable for managing people, setting direction and deploying resources Customer/Client Management & Sales (S) • Primarily involved in direct contact with clients to acquire new business or develop existing accounts • Participates in sales presentations, developing bids, and responding to proposals • At senior levels, likely to set/negotiate product/service terms • A portion of their compensation is likely to be based on sales results 18

Step 2: Determine the Career Band of the Job Slide Title Professional (P) • Work is primarily achieved by an individual or through project teams • Qualified professionals who are expected to use their judgment to apply expertise gained through education and/or experience • Progression within the career band is defined by increasing depth of professional knowledge, project management, and ability to influence others • Typically requires mastery of a specialized field of expertise related to professional qualification which may be in the form of a professional certification (e. g. , Engineers, CPA, etc. ) Technical Support (T) • Performs technical tasks required to support on-going business operations (e. g. , Technicians, IT Administrators) • Requires vocational training or the equivalent experience, but does not require a university degree • Skilled technician in a hands-on environment, often highly specialized 19

Step 2: Determine the Career Band of the Job Slide Title General Staff (G) Labor (L) • Supports the business through performing clerical/administrative support tasks • Work is typically rule-based, covered by standard operating procedures, and jobholder has very limited opportunity to deviate from agreed processes and standards • May require vocational training or the equivalent experience, but does not require a university degree • Performs operational, craft or manual tasks • Performs tasks according to established procedures, with limited opportunities for independent decision-making • Typically performs unskilled or semi-skilled work 20

Step 3: Determining the Career Levels and Job Slide Title Grade INDIVIDUAL CONTRIBUTOR TRACK MANAGEMENT TRACK CPCS POSITION CLASSIFICATION MAP 21

Sample Output of Job Leveling Slide Title The Position Classification Matrix allows for easier review of the alignment of jobs vertically in the same function/unit, and across units/functions. CAREER LEVEL M 4: Grp Mgr JOB GRADE 16 M 3: Sr Mgr 15 M 2: Mgr 13 M 1: Supv P 3: Career 11 ACCOUNTING AUDIT • ACCOUNTING MANAGER (M 3) • CONTROLLER (M 3) • ACCOUNTING ASSISTANT MANAGER (M 2) • CONTROLLERSHIP SUPERVISOR (M 2) • ACCOUNTING SUPERVISOR (M 2) • FINANCIAL ANALYST (M 1) • AUDIT MANAGER (M 3) LEGAL • LEGAL COUNSEL (M 4) • AUDIT SUPERVISOR (M 2) • SENIOR AUDITOR (P 3) 22

Slide Title Compensation Items 23

Compensation System in the CPCS Slide Title l l l The total compensation granted shall include: l Basic Salaries l Standard Allowances and Benefits l Specific-Purpose Allowances and Benefits l Variable Pay Excluded are indirect compensation regulated under existing laws l Life and retirement insurance benefits l Employee compensation insurance l Health insurance l Pag-IBIG fund benefits l Provident Fund benefits There will be non-diminution of the authorized amount of monthly basic salary as of December 31, 2015 for incumbent employees 24

Basic Monthly Salaries: Slide Title Developing the Salary Ranges Defined the guiding principles of the CPCS Classified the GOCC jobs Using CPCS Conducted cash competitive Analysis Developed salary ranges 25

Basic Monthly Salaries: Slide Title Difference between SSL and CPCS FROM TO • SSL-covered GOCCs • SSL-exempt GOCCs CPCS Salary Ranges • Job Grades 1 to 11: Single Salary Ranges • Job Grades 12 and above: Salary Ranges differentiated according to Sector a. Government Financial Institutions (GFIs) and Gaming b. All Other Sectors • SSL: 33 salary grades, 8 steps per grade • CPCS pay structure identifies a Minimum and Maximum pay for each job grade 26

Salary Ranges Slide Title Job Grades 1 -11 Current SSL Fourth Tranche Monthly Salary Schedule CPCS Salary Ranges Job Grade Minimum 1 2 3 4 5 6 7 8 9 10 11 11, 068 11, 761 12, 466 13, 214 14, 788 16, 548 18, 519 20, 754 25, 947 32, 440 40, 558 Maximum 11, 756 12, 461 13, 209 14, 787 16, 547 18, 518 20, 722 25, 946 32, 439 40, 557 50, 702 l Reference date of Salary Ranges is as of January 1, 2016. l Salary Ranges are typically reviewed every 2 -3 years. GCG shall periodically update the CPCS based on parameters outlined in the EO. 27

Salary Ranges Slide Title Job Grades 12 and above CPCS Salary Ranges Current SSL Fourth Tranche Monthly Salary Schedule GFIs and Gaming Job Grade 12 13 14 15 16 17 18 19 20 21 Minimum 53, 814 73, 186 99, 534 138, 897 180, 567 238, 579 322, 081 434, 809 591, 339 804, 221 All Other Sectors Maximum 73, 186 99, 534 135, 366 180, 566 234, 736 322, 080 434, 808 586, 991 798, 307 1, 085, 699 Job Grade Minimum Maximum 12 13 14 15 16 17 18 19 20 21 55, 652 72, 348 94, 052 124, 985 156, 231 195, 289 244, 111 310, 446 403, 579 524, 653 72, 348 94, 052 122, 268 156, 231 195, 289 244, 111 305, 139 403, 579 524, 653 682, 049 28

Standard Allowances and Benefits Slide Title (Fixed Bonuses and Allowances) • These items are given across-the-board based on the prescribed rates in line with the private sector practice • Shall include the following: All Sectors Fixed Bonus Fixed Cash Allowances Type Annual Amount Mid-Year Bonus (13 th month) 1. 00 x Monthly Pay Year-end Bonus (14 th month) 1. 00 x Monthly Pay Rice Php 16, 000 Clothing Php 6, 000 Meal Php 18, 000 29

Design Principles of Variable Pay: Slide Title Performance-Based Bonus Systems Parameters and considerations in designing the PBB A. Individual Performance-Based Bonus (IPBB) l l Linked to individual performance Target amount differs depending on Job Grade B. Organizational Performance-Based Bonus (OPBB) l l Linked to organizational performance Target amount is 1. 0 monthly basic salary for all 30

Elements of the Individual Performance. Slide Title Based Bonus (IPBB)* Element Provisions Eligibility • • Officers and Employees who occupy regular positions Should have rendered at least six (6) months of service in the GOCC for the performance year Plan Funding • Targeted PBB payout should be included in the payroll expense budget for the coming year plus a buffer of 10% If unspent, the amounts shall revert as savings for the GOCC The budgeted amount shall also take into consideration the affordability constraints of the GOCC • • Performance Measures • • Overall Organization Performance Individual performance Payout Criteria • Pursuant to the “Performance Evaluation System for the GOCC Sector” (GCG MC No. 2013 -02): - Achieve a weighted-average score of at least 90% on its Performance Scorecard - Comply with the Good Governance Conditions prescribed by GCG *The IPBB is separate from the Organizational Performance-Based Bonus (OPBB) **GCG shall issue Memorandum Circulars on the implementation of the various PBB systems. 31

Elements of the Individual Performance. Slide Title Based Bonus (IPBB)* (cont’d) Element Calibration between Measures & Awards Provisions • • • Individual performance measured by the GOCC’s Strategic Performance Management System (SPMS) or equivalent Ratings shall be quantified to allow for ranking based on the following performance brackets. • Labor, General Staff, Technical Support bands (JG 1 -7) • Client Management/Sales, Professional, Management/Supervisory bands (divided into JG 8 -11, and JG 12 -15) • Executives (JG 16 -21) Target payout for each performance bracket, expressed as a multiple of monthly base salary: Performance Category JG 1 -7 JG 8 -11 JG 12 -15 JG 16 -21 Top 10% 1. 50 2. 00 2. 50 3. 50 Next 25% 1. 25 1. 75 2. 25 3. 25 Remaining 65% 1. 00 1. 50 2. 00 3. 00 Below “Satisfactory” None Performance Period and Payout Frequency • • Performance period to follow the calendar year Annual payout, generally during the first half of succeeding year Amount • Based on monthly basic salary 32

Individual Performance-Based Bonus (IPBB): Slide Title Illustration § Step 1: Evaluate GOCC performance Yes No No Pay-Out GOCC hits target? X Rank employees • Step 2: Rank eligible employees according to performance Performance Category JG 1 -7 JG 8 -11 JG 12 -15 JG 16 -21 Top 10% 1. 50 2. 00 2. 50 3. 50 Next 25% 1. 25 1. 75 2. 25 3. 25 Remaining 65% 1. 00 1. 50 2. 00 3. 00 Below “Satisfactory” None 33

Elements of the Organizational Performance. Slide Title Based Bonus (OPBB)* Element Provisions Eligibility • All officers and employees of the GOCC Performance Measures • Overall Organizational Performance Payout Criteria • Certification by GCG that a GOCC has achieved a weighted-average score of at least 90% on its Performance Scorecard for the previous year Performance Period and Payout Frequency • • Performance period to follow the calendar year Annual payout in the first quarter of each year Amount • One month’s (1. 00) basic salary Others • The administration of the OPBB shall follow the same relevant criteria and processes pertaining to the IPBB, as covered in the EO *The OPBB is separate from the Individual Performance-Based Bonus (IPBB) **GCG shall issue Memorandum Circulars on the implementation of the various PBB systems. 34

Other Compensation Items in the CPCS Slide Title l Standard Benefit – Healthcare Plan l l The Governing Board of a GOCC may, subject to guidelines to be issued by GCG, procure a Healthcare Plan supplementing benefits received under Phil. Health The plan may include the following Benefits: — Hospitalization Benefit — Clinical/Outpatient Benefit — Dental Care — Optical Benefit — And others. l GOCC must be financially capable of sustaining services of the Healthcare Plan l Procurement is subject to RA 9184 (Government Procurement Reform Act) 35

Other Compensation Items in the CPCS Slide Title l Specific-Purpose Allowances and Benefits l Hazard Pay for personnel exposed to hazardous situations l Overtime pay for Technical Support, General Staff and Labor Bands l Night-Shift Differential Pay l l Honorarium for individuals concurrently occupying a Board/Corporate Officer position Allowance for lawyer-personnel appearing in court hearings Other allowances and Benefits peculiar to certain GOCCs (subject to GCG’s approval) Variable Pay l Anniversary Bonus l Productivity Enhancement Incentive (PEI) 36

Other Compensation Items in the CPCS Slide Title l l CNA Incentives, to be extended to cover non-Chartered GOCCs in addition to Chartered GOCCs (governed by policies of DBM) Incentives allowed by CSC (e. g. Program on Awards and Incentives for Service Excellence) The GCG may recommend, for the President’s approval, incentives outside of the CPCS for certain position titles in consideration of the good performance of the GOCC. Early Retirement Incentive Plan (ERIP) for officers and employees covered by CPCS who voluntarily elect to be retired or separated. GOCCs must undergo reorganization under GCG in order to offer this, but do not need to have implemented CPCS. Government Service Rates* (based on current salary, not on CPCS rates) First 20 years 1. 00 * Basic Monthly Pay * No. of years 20 years and 1 day to 30 years 1. 25 * Basic Monthly Pay * No. of years 30 years and 1 day and above 1. 50 * Basic Monthly Pay * No. of years 37

Slide Title Implementation of the CPCS 38

Role of the GOCC Slide Title 1. Each covered GOCC shall adopt a Total Compensation Framework (TCF), subject to the approval of the President of the Philippines in accordance with the favorable recommendation of the GCG. If no action is taken by the Office of the President within 45 days of receipt, the same shall be deemed approved unless the Office of the President informs the GCG otherwise. 2. Implementation of compensation adjustments shall depend on the financial capability of the GOCC and their Corporate Operating Budget as approved by GCG, and those approved by the DBM for entities receiving allocations for the National Government 3. Basic Salaries – if there affordability concerns, the GOCC may propose a salary range for each Job Grade that falls below the salary ranges prescribed in the EO, taking into account the financial standing of the GOCC as well as the sustainability of the compensation framework. 39

Implementing the Salary Ranges Slide Title l The implementation of the CPCS is progressive, not retroactive l Hiring Rate guidelines l For JG 1 -11 — May be set up to minimum during the probationary period, but in no case lower than the applicable minimum wage rate mandated by law. — Upon appointment to regular status, pay may be increased to the minimum — For individuals who exceed the minimum CSC Qualification Standards, the hiring rate may be set until 5% above the minimum of the salary range l For JG 12 and above — The hiring rate may be set up to 10% above minimum if the individual exceeds the minimum CSC Qualification Standards (e. g. graduation from a reputable school, relevant experience, having more than the required educational attainment) 40

Implementing the Salary Ranges Slide Title l Promotion – the Governing Board through Management may promote individuals through: 1. Raise the salary to the minimum of the Job Grade of the vacant plantilla item which the employee will be promoted to Job Grade Minimum 4 5 13, 214 14, 788 Maximum 14, 787 16, 547 Example: • Current Job: Grade 4, with Salary of Php 14, 000 • Promotion to Job Grade 5, with a minimum of Php 14, 788 • Raise raise pay to Php 14, 788 41

Implementing the Salary Ranges Slide Title l Promotion (continued) 2. If the employee’s salary already exceeds the minimum of the Job Grade of said plantilla item, raise the salary by the percentage difference in the salary range minimum of the current Job Grade to the new Job Grade Minimum Maximum 4 13, 214 14, 787 Example: 5 14, 788 16, 547 • Current Job Grade 4, with Salary of Php 14, 800 • Promoted to Job Grade 5, with a minimum of Php 14, 788 • Compute for the percentage difference of the minimums • (Job Grade 5 – Job Grade 4)/Job Grade 4 = (14, 788 – 13, 214)/13, 214 • 11. 91% • Raise salary by 11. 91% = 14, 800 * (1 + 11. 91%) = 16, 563. • Promotion increases cannot exceed the maximum of the new Job Grade; hence the new salary is capped at 16, 547 42

Implementing the Salary Ranges Slide Title l Promotion (continued) 3. Raise the salary by the percentage difference in the salary range midpoints of the current Job Grade to the new Job Grade Minimum Example: 4 5 Maximum 13, 214 14, 788 14, 787 16, 547 • Current Job Grade 4, with Salary of Php 14, 800 • Compute for Midpoint = (Minimum + Maximum)/2 • Job Grade 4 = (13, 214 + 14, 787)/2 = 14, 001 • Job Grade 5 = (14, 788 + 16, 547)/2 = 15, 668 • Compute for percentage difference = (15, 658 -14, 001)/14, 001 = 11. 91% • Compute for the new salary = (14, 800 * (1+11. 91%) = 16, 562 • Promotion increases cannot exceed the maximum of the new Job Grade; hence the new salary is capped at 16, 547 4. If the employee moves from an overtime-earning job to a non-overtime earning job, consider the earning potential lost 43

Implementing the Salary Ranges Slide Title l Merit Increases – in order to support a performance-driven organization, GOCCs may recommend merit increases subject to GCG’s approval: l l Step 1: Determine the salary increase budget for the year. Consider projected market salary increase and the GOCC’s affordability to pay Step 2: Determine the performance rating distribution under the GOCC’s Strategic Performance Management System (SPMS) or equivalent. Implementing guidelines may vary year-on-year depending on considerations such as budget. The table below shows the recommended distribution of the GOCC’s population: Performance Rating Outstanding Recommended Distribution 10% of employees Very Satisfactory 20% Satisfactory 50% Unsatisfactory 15% Poor 5% 44

Implementing the Salary Ranges Slide Title l Merit Increases (continued) l Step 3: Allocate percentage increases depending on individual performance. The following additional factors may be considered — Current position in the salary range — Rate of progress and future potential (increase the time interval and/or decrease size of increase for individuals approaching what appears to be the ultimate potential) — Foreseeable promotion opportunities — Salary increase budget l l The Governing Board through Management may withhold unearned increases from a poor performer where appropriate In no case shall implementation of a merit increase result in raising the current salary of an individual above 25% of the maximum for his/her job 45

ILLUSTRATION: Slide Title Implementing the Salary Ranges l Sample Merit Increase matrix considering both position in range and individual performance Position in Salary Range Bell Curve Distribution Rating Below Minimum to 1/3 of Maximum 1/3 to 2/3 of Maximum Above Maximum 9. 00% 2/3 of Maximum to Maximum 8. 25% 10% 4 10. 50% 9. 75% 40% 3 6. 50% 6. 00% 5. 50% 5. 00% 4. 50% 40% 2 4. 00% 3. 75% 3. 50% 3. 25% 3. 00% 1 3. 25% 2. 75% 2. 25% 1. 75% 1. 25% 7. 50% Using the two-dimensional matrix is aligned to the pay philosophy of considering both individual performance and competitiveness against the market. 46

Slide Title Communications Planning and Key Messages 47

Communication Management Objectives Slide Title General Objective: • To identify the appropriate messages for respective audiences to be delivered through effective communication channels • To equip the communication core team on change and communication management for the CPCS Specific Objectives: l l l To identify and understand the key stakeholders and their current perceptions about the change To identify key messages and communication channels to implement the CPCS To create communication toolkits to provide select communication and change champions to deliver the messages 48

Role of Communication Core Team Slide Title l l Advocate of change. Assist in explaining and providing context on CPCS Link. Bridge the gap between the employees and management and/or GOCCs and GCG l Listen to what employees say about CPCS l Observe how employees react, feel about the changes l Act — Document feedback received — Provide feedback to Core Team and/or GCG on the concerns received and observations noted — Address questions or misperceptions — Direct questions or misperceptions to the right party — Participate in communication management meetings and brainstorm on interventions — Support GCG in addressing or articulating the responses to issues / questions raised 49

An effective Communication Strategy supports Slide Title the Change Initiative Objectives Targeted, measurable objectives and the specific strategies needed to achieve success Audience Analysis Who needs to know when and, for key communicators, what their role is in the process Key Messages Critical messages that become the touchstone for the entire communication process Channels Plan Using the right channel for specific communication interventions Timing Delivering messages in a timely, thoughtful and integrated way Success Measures Guidelines for success and methods of data-gathering 50

Communication Toolkit Slide Title l Overall CPCS Communication Plan l Executive Order l Presentation Decks, tailor-fit according to the following audiences: l l GOCC Executives (high-level content) GOCC HR and Line Managers (technical content; same material to be used in train-the-trainer sessions) All Employees (for general town hall assemblies) Frequently Asked Questions (FAQs) 51

Key Communication Message: Slide Title New Leveling Methodology • An objective basis for establishing job levels was used - The CPCS adopted a proven job evaluation methodology used globally - Jobs were evaluated based on job content and not on jobholders’ qualifications, tenure or performance • No comparison may be made between the old index of occupational services and SSL vs. the new position classification system - The job evaluation rating plans are different - The new system is job-based The previous SSL salary grades and steps will no longer apply. The new CPCS job grades will now be adapted. 52

Key Communication Message: Slide Title New Leveling Methodology CPCS adapted the Towers Watson proprietary job leveling methodology Global Grades Career Band • Provide the underpinning (foundation) for both Executive Benchmarks and the Career Levels • Determines the start and end points of a career progression Groups jobs with similar level of contribution or broad employee category Career Level • Discernible broad step in a career progression • Consistent across organizations • Reflects normal market progression of jobs requiring higher levels of competence and knowledge as people advance in their careers 53

Key Communication Message: Slide Title New Leveling Methodology • Perceived move to a lower level - This is not a demotion. - There will be no pay cut nor discontinuance of benefits currently enjoyed. - There may be an opportunity for the incumbent to aspire for a job commensurate to his qualifications and experience. - If a new person is hired for the job, the new person’s pay and benefits will be in accordance with the job level of the job and not the level of the predecessor incumbent of the role. • Perceived move to a higher level - This is not a promotion. - An assessment will be made of the person occupying the job to determine whether his qualifications warrant movement to the level where the job belongs. - Once the incumbent is confirmed, all the salaries and benefits attributed to the level of the job will be accorded the jobholder. Should the qualifications and experience of the incumbent jobholder not match that of the new role, then this may be an opportunity to move the incumbent to a job more suitable to his qualifications and experience. 54

Key Communication Message: Slide Title Implications of the New Compensation System • The Salary Ranges were developed to be generally closer to the roles in the private sector doing comparable work, within the affordability limits and sustainability capacities of the GOCCs • As an outcome of the updated position classification and Salary Ranges, not all employees’ current salaries will fall neatly into the new Salary Ranges. This outcome is typical even with the private sector. ILLUSTRATION: Current pay vs. new Salary Ranges 55

Key Communication Message: Slide Title Implications of the New Compensation System Employee Group Key Communication Message All employees “Your compensation is a private and confidential matter and should NOT be discussed openly with others. ” Red Circle Employees whose pay is beyond the maximum of the proposed salary range. “Your pay is above the market. You will continue to receive salary increases but expect these increases to be smaller than the average. You will be eligible to receive the variable pay commensurate to your level. ” Green Circle Employees whose pay is below the minimum of the proposed salary range. “A review of your pay will be made to bring it to the level accorded to the range of pay for your job, considering your own performance in the job. The improvements may be spread out across several years based on affordability limits due to regulatory provisions in our concession agreement. ” 56

Key Communication Message: Slide Title Implications of the New Compensation System Employee Group Key Communication Message New hires “Your salary is set at the minimum of the salary range. Premium may be extended depending on very special circumstances and are subject to appropriate approvals. ” Promotions “Promotions are subject to promotion guidelines. Candidates for promotion must successfully assume the requirements of the next level role. All promotions are based on the availability of roles at the higher level. “ CBA-covered jobs “While recognizing the constitutional right of workers to selforganization, collective bargaining and negotiations, the Governing Boards of all covered GOCCs may not negotiate with their officers and employees the economic terms of their CBAs. ” “CNA Incentives which primarily cover savings from the COBs of Chartered GOCCs, shall now be extended to nonchartered GOCCs to promote the uniformity of allowable incentives within the GOCC Sector. ” 57

Slide Title Job Titles and Typical Qualification Standards 58

Job Titling Slide Title These are recommended titles that will allow for alignment across GOCCs. These titles may be applied after the Job Leveling has been approved by GCG. A. Management 1. Executive Career Band (EX) – Job titling in the Executive Career Band will follow respective organizational job titles currently used. Career Band Career Level Job Grade 20 19 18 Executives EX 17 16 15 Sample Job Titles (For Illustration Purposes Only) Chief Executive Officer Chief Operating Officer Executive Vice President Senior Vice President Assistant Vice President 59

Job Titling Slide Title 2. Supervisory Management Career Band. GOCC Unit / Department + Prescribed Level Title Example: Accounting Asst. Manager (M 2 -JG 13) Logistics Supervisor (M 1 - JG 11) Career Band Career Level Job Grade M 5 17 M 4 M 3 Supervisory/ Management M 2 16 15 14 13 Prescribed Grade Title Sample Job Titles (For Illustration Purposes Only Not Applicable (Only for Global and International Organizations) Head HR Head Senior Manager HR Manager Assistant Manager HR Assistant Manager 12 Senior Supervisor Compensation Senior Supervisor 11 Supervisor Compensation Supervisor Junior Supervisor Compensation Junior Supervisor M 1 10 60

Illustration Typical Qualification Standards Slide Title Career Band Executives Career Level Job Grade EX 20 19 18 17 16 15 Qualification Standards Educational Attainment Bachelor or Post-Graduate Degree or Professional Qualification No. of Years Work Experience 12 -15 years prior relevant formal training or work experience in an executive or function strategist role 61

Illustration Typical Qualification Standards Slide Title Career Band Career Level Job Grade M 5 17 M 4 M 3 16 15 Qualification Standards Educational Attainment No. of Years Work Experience 11 -15 years prior relevant formal training or work experience in a managerial role 14 M 2 Supervisory/ Management 13 12 11 M 1 10 7 -8 years prior relevant formal training or work experience in a Bachelor or Post-Graduate Degree managerial role or Professional Qualification 5 -6 years prior relevant formal training or work experience in a supervisory role 4 -5 years prior relevant formal training or work experience in a supervisory role 62

Slide Title END A competitive and reasonable Compensation and Position Classification System (CPCS) that supports and encourages performance-driven, productive, and efficient organizations. The CPCS will help institutionalize compensation reforms in the GOCC Sector.