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    HRM - Project by Purvesh Shah: On Competency Based Pay (24 Feb 2016) College # SIES AIMA BATCH 2015-2017

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    Janry Simanungkalit
    Competency-based pay structures reward employees based on the skills, knowledge and experience they apply in the workplace rather than their job title or position. This approach is designed to motivate employees to become aspirational, build on their existing skills and apply these in their job. Competency-based pay plans have pros such as not being based on seniority and incentivizing employees to achieve, but they also have cons such as introducing subjectivity, potentially favoritism, and difficulty relating competencies to actual performance. The document discusses competency-based pay, providing pros and cons of this approach to compensation.

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    HRM - Project by Purvesh Shah: On Competency Based Pay (24 Feb 2016) College # SIES AIMA BATCH 2015-2017

    Uploaded by

    Janry Simanungkalit
    23 views6 pages
    Competency-based pay structures reward employees based on the skills, knowledge and experience they apply in the workplace rather than their job title or position. This approach is designed to motivate employees to become aspirational, build on their existing skills and apply these in their job. Competency-based pay plans have pros such as not being based on seniority and incentivizing employees to achieve, but they also have cons such as introducing subjectivity, potentially favoritism, and difficulty relating competencies to actual performance. The document discusses competency-based pay, providing pros and cons of this approach to compensation.

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    competencybasedpaysmallppt-160224151554

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    Competency-based pay structures reward employees based on the skills, knowledge and experience they apply in the workplace rather than their job title or position. This approach is designed to motivate employees to become aspirational, build on their existing skills and apply these in their job. Competency-based pay plans have pros such as not being based on seniority and incentivizing employees to achieve, but they also have cons such as introducing subjectivity, potentially favoritism, and difficulty relating competencies to actual performance. The document discusses competency-based pay, providing pros and cons of this approach to compensation.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    23 views6 pages

    HRM - Project by Purvesh Shah: On Competency Based Pay (24 Feb 2016) College # SIES AIMA BATCH 2015-2017

    Uploaded by

    Janry Simanungkalit
    Competency-based pay structures reward employees based on the skills, knowledge and experience they apply in the workplace rather than their job title or position. This approach is designed to motivate employees to become aspirational, build on their existing skills and apply these in their job. Competency-based pay plans have pros such as not being based on seniority and incentivizing employees to achieve, but they also have cons such as introducing subjectivity, potentially favoritism, and difficulty relating competencies to actual performance. The document discusses competency-based pay, providing pros and cons of this approach to compensation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    HRM – Project by Purvesh Shah

    on Competency Based Pay (24th Feb 2016)


    College # SIES AIMA BATCH 2015-2017
    Competency-based Pay

     What is Competency-based Pay?

    Companies that use competency-based pay structures


    reward employees based on the skills, knowledge and
    experience they apply in the workplace rather than their
    job title or position.
    This approach is designed to motivate employees to
    become aspirational, build on their existing skills and
    apply these in their job.
    Why use ??
    Competency Based Pay Plans PROS
     No Seniority Factor
     For less experienced employees, a benefit of competency-based pay is that the level of
    seniority has little bearing on compensation. Instead, the emphasis is placed strictly on
    how well the employee performs in relation to competencies such as leadership skills or
    attention to detail. This can reduce the feeling that the employee must "pay his dues" to
    receive higher compensation.

     Incentive to Achieve
     Competency-based pay plans may also result in increased incentive for the worker to
    become a high achiever. She can focus on the attributes that are part of her evaluation
    process, with the understanding that if she does well in these areas, she will be rewarded
    accordingly.

     Culture of Improvement
     A competency-based pay system can create a "culture of Improvement," according to the
    American Academy of Family Physicians. Because compensation is based on showing
    improvement in the chosen competencies, a large emphasis is placed on self-development.
    This can result in a pervasive cultural attitude that the better you perform, the bigger the
    reward.
    Competency Based Pay Plans CONS
     Subjectivity
     competency-based plans rate employees according to general criteria instead of specific
    accomplishments, a potential drawback is that they introduce subjectivity into the
    evaluation process. Concepts such as leadership and the ability to multitask are open to
    interpretation, resulting in the possibility of an inaccurate rating.

     Favoritism
     Another possible drawback to competency-based pay plans is that they can result in the
    perception of favoritism, according to Locate Staffing. If one worker perceives herself as
    more valuable than another but discovers that the other employee received a larger pay
    increase, she may draw the conclusion that she is being treated unfairly. Dissension can
    be an unwanted byproduct.

     Relationship of Competencies to Performance


     It can be difficult to establish which competencies actually result in improved job
    performance or productivity. For example, if your customer service representative
    increases the number of inquiries he handles in a day, is it because of an improved ability
    to multitask or increased attention to detail that helps him resolve issues more quickly?
    Thank You

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