A5 - Person-Based Pay Systems Flashcards
- type of comp. plan that links pay to the depth or breadth of the skills, abilities and knowledge a person acquires that are relevant to the work
- pay indiv. for all the skills for which they have been certified regardless of whether the work they are doing requires all or just a few of those particular skills
- wage attaches to the person
skill based
underlying, broadly applicable knowledge, skills and behaviors that form the foundation for successful work perf. an any level or job in the org.
core compentencies
internal pay system that pays EEs for the highest level of skills/competencies that are achieved regardless of the work they perform
person-based
characteristic of someone who possesses a global perspective and takes the initiative in moving the org. in new directions
visionary
types of Person-Based Structures
- Skill
- Compentencies
- a compensation practice whereby EEs are paid for the # of different jobs they can adequately perform or the amt of knowledge they possess
- work often involves teams, multiskills, and flexibility
- ADV - ppl can be deployed in a way that better matches the flow of work
skill-based structure
(pay-for-knowledge plans)
types of skill plans
- depth (specialists)
- breadth (generalists w/ knowledge in all phases of ops)
types of skill plans
Depth (specialist)
- exp = specialists in corp. law, finance, or welding and hydraulic maint.
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pay is based on knowledge of the indiv. doing the job rather than on job content or output
- exp = teachers
- basic responsibilities under this system don’t chg much and if they do, its over a long period of time
- usually no guarantee that courses taken improve skills under this system
types of skill plans
Breadth (generalist/multiskill)
- systems that link pay to the # of different jobs (breadth) an EE is certified to do, regardless of the specific job he or she is doing
- EEs can be assigned to any job for which they are certified, based on the flow of work
- responsibilities for workers under this plan can chg drastically over a short-period of time
- usually designed to ensure that all the skills are clearly work-related
- training improves skills that the company values
Purpose of Skill-Based Structure
- supports the strat. and objs
- supports work flow
- is fair to EEs
- motivates behavior toward org. objs.
The process for determining a skill-based struct.
- Skill analysis
- skill blocks
- skill certif.
- skill-based struct.
**to build the struct, a process is needed to describe, certify, and value the skills
basic units of knowledge EEs must master to perform the work, satisfy cust., and achieve business objs.
skill blocks
a systematic process to ID and collect info about the skills required to perform work in an org.
skill analysis
major skill analysis questions
- What is the obj. of the plan?
-
What info s/b collected?
- far less uniformity in use of terms in person-based plans than in job-based plans
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What methods s/b used to determine and certify skills?
- may use peer reviews, OTJ demos, or tests to certify that EEs possess skills and are able to apply them
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Who s/b involved?
- EE involvement is almost built into skill-based plans as a source of info on defining the skills, arranging them into hierarchy, bundling them into skill blocks, and certifying whether a person actually possesses the skills
- How useful are the results for pay purpose?
Skills analysis
What info to collect?
- far less uniformity in use of terms in person-based plans than in job-based plans
- compensation approach that links pay to the depth and scope of competencies that are relevant to doing the work
- typically used in managerial and prof. work where what is accomplished may be difficut to ID
- alot of confusion caused by not really knowing what compentencies are
competency-based system
basic knowledge and abilities EEs must acquire or demonstrate in a competency-based plan in order to successfully perform the work, satisfy cust., and achieve business objs.
competency
The process for determining a competency-based struct.
**start by looking at the work perf’s in org.
**do not hone in on specific tasks
**try to abstract the underlying, broadly applicable knowledge, skills, and behaviors that form the foundation for success at any level or job in the org
- core competencies
- competency sets
- behavioral descriptors
- competency-based struct
- the underlying, broadly applicable knowledge, skills, and behaviors that form the foundation for success at any level or job in the org.
- often linked to mission stmts that express an org’s philosophy, values, bus. strats., an dplans
core competencies
this translates each core competency into action
competency sets
- observable behaviors that indicate the level of competency w/in each set
- may be used for staffing and eval. as well as for pay purposes
- anchor the degree of a competency required at each level of complexity of the work
- make the competency more concrete
competency indicators
early conceptions of competencies
how are competencies defined?
- Skills - demo. of expertise
- Knowledge - accumulated info
- Self-Concepts - attitudes, values, self-image
- Traits - general disposition to behave in a certain way
- Motives - recurrent throughts that drive behaviors
Purpose of Competency-Based Struct.
- Org. Strat - direct link to org. strat (main appeal)
- describes from the beginning which competencies will spell success for the company
- ID’s compensable factors as part of job eval.
- Work Flow - ensures all the critcial needs of org. are met
- ensure that all critical needs of the org. are met
- more loosely apply to work requiring more tacit knowledge such as in managerial and prof. work
- Fair To EEs - empowers EEs to take charge of their own development
- focuses on optimum perf. that helps EEs maintain their marketability
- Motiviate Behavior Toward Org Objs. - provides guidelines for behavior and keep ppl focused
- provide common basis for comm. and working together
“How To”: Competency Analysis
Basic decisions in creating a competency-based structure
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What is the obj. of the plan?
- most important decision
- if not, vagueness and subj. continue to make competencies a risky foundation for a pay system
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What info to collect?
- personal characteristics, visionary, org.-specific
- not necessarily unique to a company
- Methods used to determine and certify competencies?
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Who is involved?
- exec. leadership’s beliefs about the org. and its strat. intent
- How useful for pay purposes?
The “Great 8” competencies
captures an efficent way the themes around competency frameworks available
- leading and deciding
- supporting and cooperating
- interacting and presenting
- analyzing and interpreting
- creating and conceptualizing
- organizing and executing
- adapting and coping
- enterprising and performing
Reliability of Job Eval. Techniques
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Consistency of the results
- a reliable eval. would be one where different evals. produce the same results
- important b/c several different ppl usually eval. jobs
- results should not depend on which person did the eval
- can be improved by using evals who are familiar w/ the work and trained in the job eval process
- group consensus is another practice to attempt to incr. reliability
Validity of Job Eval. Techniques
- the degree to which the eval. assesses what it is supposed to - the relative worth of jobs to the org.
- measure in 2 ways:
- the *degree of agreement b/w rankings that resulted from the job eval. w/ an agreed-upon* *ranking of benchmarks* used as the criterion
- by “hit rates” - the degree to which the job eval. plan matches (hits) an agreed-upon pay struct. for benchmark jobs
- s/b broadened to include impact on pay decisoins
- studies of the degree to which different job eval. plans produce the same results start w/ the assumption that if different approaches produce the same results, then those results must be “correct”, that is, valid
the ability of a job eval. plan to replicate a predetermined, agreed-upon job stuct.
hit rate
**Acceptibility **of Job Eval. Techniques
- several methods are used to assess and improve EE acceptability
- formal appeals process - EEs that believe that their jobs are eval’d incorrectly s/b able to request reanalysis and/or skills reeval.
- EE attitude surveys - assess perceptions of how useful eval. is as a mgmt tool
recommendations to ensure that job evals. are bias-free
* define the compensable factors and scales to include the content of jobs held predominantly by women
- ensure that factor weights are not consistently biased against jobs held predominantly by women
- apply the plan in an bias-free a manner as feasible
- ensure that the job descripts. are bias-free
**also apply to skill-based and competency-based plans
job-based VS person-based (skill/competency based) approaches
to internal pay systems
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Job-Based
- pay incr’s are gained by promos. to jobs with more responsibility
- Mgrs focus on placing the right ppl in the right job
- controls costs by paying only as much as the work perf’d is worht, regardless of any greater skills the EE may possess
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Person-Based (skill/competency)
- pay incr’s are gained through acquiring more valued skills/competencies
- mgrs must assign the right work to the right ppl, to those w/ the right skills and competencies
- pay EEs for the highest level of skill/competency they have achieved regardless of the work they performed
- maxs flexibilty but also encourages all EEs to become certifed at top rates
- org may experience higher labor costs - offset may be higher productivity
- another disadv - can become complex and burdensome
- Q’s on it’s compliance w/ EPA
