2. Productivity Standards

B. ProductivityStandards

The employer has the prerogative to prescribe the standards of productivity which may be used as:

• Incentive scheme - Employees who surpass the productivity standards or quota are usually given additional benefits; and
• Disciplinary scheme - Employees may be sanctioned or dismissed for failure to meet the productivity standards or quota. (Chan)

Q: May an employer impose productivity standards for its workers?

A: YES. An Er is entitled to impose productivity standards for its workers. In fact, non-compliance may be visited with a penalty even more severe than demotion. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. Failure to meet the sales quota assigned to each of them constitutes a just cause for their dismissal, regardless of the permanent or probationary status of their employment.

Likewise, failure to observe prescribed standards of work or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency may consist of failing to complete work goals or quotas within a reasonable time or of producing unsatisfactory results.

This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the Er’s interest. (Leonardo v. NLRC, G.R. Nos. 125303 & 126937, 16 June 2000)