13th Month Pay Questions and Answers

November is the month all these questions land in my inbox that I answer one by one. Each time, I have to do some researching of my own to validate my own understanding of how it works because I've not done HR admin work for quite a while. I decided that now may be the best time to talk about it and share some informational resources as you compute for 13th month pay both as an employer or employee. If you are paying for the first time, this post may be helpful as you don't want to start a wrong practice that you will have to change later. If you pay more than you have to now and then realize you're doing it all wrong, you will have a problem changing it back to normal due to the non-dimunition clause indicated in the law.

Please note that I am neither a lawyer nor an expert on the law, so if you find some of the information here as wrong or outdated, please let me know as I would gladly change it if there is a good basis. Let's get started.

What is the 13th Month Pay?

The 13th Month pay by definition according to the labor code means one twelfth (1/12) of the basic salary of an employee within a calendar year. Please take note of the because it has something to do with how you compute for it. The 13th month pay is mandated under Presidential Decree No. 851 by former President Ferdinand Marcos. Some changes were made in the revised guidelines issued during the time of President Corazon Aquino. Check the links for details on this law.

HR Philippines is Conducting a Fundamental Supervisory Skills Workshop

Send your supervisors to this rare training opportunity. I am running a workshop with some of the well respected training professionals in the industry like Jet Nera, Sonnie Santos and Raffy Perfecto on December 5 and 6, 2011.  If you wish to know more about the program, download the document here:

HR Philippines Fundamental Supervisory Skills Workshop

The Importance of Having a Management Development Strategy

I sometimes wonder how we are more careful of hiring an entry-level employee than promoting a person to a supervisory or managerial person.  The damage of wrong hire have already been talked about and estimated but many of us continue to take unnecessary risk in raising people to what the Peter Principle points out as their level of incompetence.

A managerial or supervisory role is so important and dealing with having the wrong person in place is so messy that I believe organizations need to have a strategy for selecting candidates for  these roles, prepare them and then continue to develop them. If John Maxwell is to be believed, everything rises and falls on them. As usual, I have some recommendations.

Use a Competency Model
Mapping the ideal competencies for important positions in your organization is very useful. It can be used to objectively assess your candidates' readiness to take on the role. It can also be used determine the needed developmental interventions for employees who are not yet ready but have the potential.