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    Competancy Based Pay: Presented by Abhishek.S.Kulkarni

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    Abhishek .S. Kulkarni
    Competency-based pay links an employee's pay to their demonstrated competencies and behaviors rather than just job responsibilities or seniority. The document discusses what competencies are, how competency-based pay systems work, potential benefits like improved motivation and performance, and challenges like difficulty measuring competencies objectively. It provides a 3-step process for introducing competency-based pay and considers when such a system may be appropriate.

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    Competancy Based Pay: Presented by Abhishek.S.Kulkarni

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    Abhishek .S. Kulkarni
    72 views15 pages
    Competency-based pay links an employee's pay to their demonstrated competencies and behaviors rather than just job responsibilities or seniority. The document discusses what competencies are, how competency-based pay systems work, potential benefits like improved motivation and performance, and challenges like difficulty measuring competencies objectively. It provides a 3-step process for introducing competency-based pay and considers when such a system may be appropriate.

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    Competancy Based Pay(New)

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    Competency-based pay links an employee's pay to their demonstrated competencies and behaviors rather than just job responsibilities or seniority. The document discusses what competencies are, how competency-based pay systems work, potential benefits like improved motivation and performance, and challenges like difficulty measuring competencies objectively. It provides a 3-step process for introducing competency-based pay and considers when such a system may be appropriate.

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    72 views15 pages

    Competancy Based Pay: Presented by Abhishek.S.Kulkarni

    Uploaded by

    Abhishek .S. Kulkarni
    Competency-based pay links an employee's pay to their demonstrated competencies and behaviors rather than just job responsibilities or seniority. The document discusses what competencies are, how competency-based pay systems work, potential benefits like improved motivation and performance, and challenges like difficulty measuring competencies objectively. It provides a 3-step process for introducing competency-based pay and considers when such a system may be appropriate.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 15

    COMPETANCY BASED PAY

    Fiona Neathey and Peter Reilly,IES

    Presented By
    ABHISHEK.S.KULKARNI (753)

    http://www.employment-studies.co.uk/pdflibrary/mp25.pdf
    What is competency?

    A competency is defined as a behavior or


    set of behaviors that describes excellent
    performance in a particular work context
    What is competency-based pay?

    ‘Competency-based pay can be defined as


    paying for the development and application
    of essential skills, behaviours and actions
    which support high levels of individual, team
    and organisational performance.’
    continued...
    Armstrong and Baron, gives the following as some
    of the distinguishing features of competency-based
    pay:
    It is based on an agreed framework of
    competencies
    It is not based on the achievement of specific
    results, such as targets or projects completed.
    However, it is concerned with the attainment of
    agreed standards of performance.
    How are reward and competency linked?

    Brown and Armstrong (1999) summarise two


    main ways of linking competency and reward:
    1) Job-focussed process
    - which uses competencies wholly or
    partly as a way to evaluate jobs
    2) People-focussed process
    - links individual pay to level of
    competence
    Introducing competency-based pay

    3 Steps :

    1. Establishing a competency framework


    2. Assessment of competencies for reward purposes
    3. Introducing the competency-based reward
    system
    Benefits
     Improves employee motivation
     Encourages better performance
     Providing greater objectivity in pay
    determination
     Competency-based pay also recognises that how
    the job is done is as important as the end result
     Provides greater flexibility and responsiveness to
    changing business needs
    When is it appropriate to introduce
    competency-based pay?

     A well-established competency framework


    already in use for development and recruitment
     Established criteria for measurement/assessment
    of competencies
     The organisation has a specific objective of
    increasing the level of competence amongst its
    workforce
    continued..
     The organisation plans to move to a broad-
    banded pay structure or already has such a
    structure in place
     The organisation wants to move to a flatter
    structure.
    How effective is competency-based pay?
    CBP can

     Promote need for greater competence


     Facilitate lateral career development
     Help to integrate role and generic competences
    with organisational competences.
     Boost co-operation and teamwork
     Provide a framework for salary progression where
    promotion opportunities are limited
    continued..

     Increase employee satisfaction through the


    provision of development opportunities
     Provide a link between reward strategy and
    overall corporate objectives.
     Lead to a focus on the totality of the job rather
    than just what is achieved
    Potential problems and pitfalls
     The likely impact of competency-based pay on
    other competency initiatives
     Fears concerning employees’ reactions
     Doubts in general about linking competencies to
    pay
     They can be time-consuming and expensive to
    implement
     The objective measurement of competencies is
    difficult to achieve.
    continued..
     If competency is linked with other means of
    determining reward, the link with pay may be
    unclear, which will reduce any motivational
    impact of competency-based pay
     If not properly controlled, there is a risk of pay
    drift without performance improvement
     Competency-based pay systems make
    considerable demands on line managers, who
    require considerable training and support.
    Conclusion
     Competency-based pay has been found by some
    organisations to bring substantial benefits in
    changing organisational culture and in supporting
    broader HR strategies.
     Employers may be wary of the potential pitfalls of
    competency-based pay, which include escalating
    costs, heavy demands on management time,
    problems of assessment, employee resistance and
    equal opportunities considerations.

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