Personnel Selection, Contracts, Remuneration, and Social Insurance
Personnel Selection and Recruitment Tools
Personnel selection is the process of choosing individuals with the greatest potential to adapt to a position and meet organizational needs. The primary goal is to find the most suitable candidate, considering both company and employee requirements.
Recruitment Tools
- Capacity Test: Measures intellectual capacity or general intelligence. It’s a high-validity test assessing staff resilience, though not job-specific.
- Personality and Psychological Tests: Evaluate personality traits, motivation, attitude, and values through questionnaires. However, responses can be easily faked or simulated.
- Medical Examination: Involves medical tests to assess physical health and existing conditions. Due to its high cost, it’s recommended only for physically demanding or high-risk positions.
Employment Contract Essentials
An employment contract is an agreement outlining mutual obligations between employer and employee. The employee provides services under the employer’s direction, and the employer provides remuneration.
Contract Provisions (Labor Code Article 10)
- Place and date of contract
- Parties’ identification (nationality, birth dates, worker’s income)
- Nature of services and work location
- Remuneration amount, form, and payment period
- Working hours duration and distribution (unless shift work applies)
- Contract term
- Other agreed-upon clauses
Additional benefits (housing, utilities, food) should be specified. If hiring involves relocation, the origin should be recorded. For mobile workers, the workplace encompasses the company’s entire geographical area.
Remuneration (Labor Code Articles 41 & 42)
Remuneration is the payment (cash and assessable in-kind benefits) provided to the employee by the employer under the employment contract.
Exclusions: Mobilization allowances, cash loss compensation, tool wear, meal allowances, per diems, legal family benefits, seniority compensation (Article 163), and work-related expense reimbursements.
Types of Remuneration
- Salary: Fixed cash payment at regular intervals.
- Bonus: Payment for overtime work.
- Commission: Percentage of sales or other transactions.
- Participation: Share in business or company profits.
- Reward: Portion of employer’s profits benefiting the employee.
Social Insurance Against Occupational Risks (Labor Code Articles 209-211)
Companies must comply with social insurance legislation to protect employee health and safety.
Article 209: Employers are responsible for membership and contributions to compulsory social insurance against occupational accidents and diseases (Law No. 16,744). The work owner is subsidiarily responsible for contractors’ obligations regarding subcontractors.
Article 210: Companies must adopt and maintain health and safety measures as prescribed by law.
Article 211: Occupational accident and disease insurance is financed by a general basic rate and an additional contribution based on company activity and risk, paid by the employer. Funding also comes from fines, investment returns, and recourse against employers.