Person centered pay

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Transcript of Person centered pay

  • 1. Person Centered Pay Nancy Brown Johnson 2005
  • 2. Person Centered Pay
    • Pay-for-Knowledge
      • Competency Based Pay
      • Skill Based Pay
    search been wide enough to ensure I've found all the relevant material? +
  • 3. Person Versus Job Based Pay
    • Fredrick Taylor Scientific Management focused on the basic elements of the job
    • Lead to job focused way of organizing work
    • Criticisms of job based structure
      • Reduces flexibility
      • Not my job
      • Little reason to acquire information & skills outside of narrow job
      • Doesnt help people understand what other people do
  • 4. Skill Based Pay
    • Pay is tied to skills, abilities, & knowledge that a worker possesses
    • Manufacturing jobs
    • Flexibility to reassign people to where work is needed
    • Depth : pay for having a deep level of knowledge within a job
      • e.g. teachers pay increases with amount of education: bachelors, masters, doctorate and increase pay more hours
      • Breadth: Pay for generalist knowledge
  • 5. Breadth
    • Increased pay for more knowledge
    • Pay increases come with certification of new skill
      • (e.g., Microsoft certification ; SHRM Certification )
      • Skill certification can come from internal assessment
    • Employees then can be assigned to new jobs based upon certification
    • Pay increases with the more certifications held
    • For example: 7.50 base pay + 1.00/hr for each machine
  • 6. Why Skill Based Pay?
    • Ensures workers have needed skills
      • Assumes good tests
    • Supports the organizational work flow
      • Workers trained & ready to move to assignments as needed
    • Fairness???
      • Depends on how training allocated
      • Who pays for training
      • Means two people doing same task at different pays
    • Motivation
      • Motivation is to get training, not necessarily to perform task well
  • 7. Research
    • Employees accept skill based pay (clear how to make more money)
      • Certification procedures must be viewed as fair
    • Easy to communicate
    • Productivity
      • Mixed results
    • 61% of those implementing sbp were using it 7 years later
    • Depends on strategy more compatible with innovation not low cost
    • Usefulness varies based upon setting
  • 8. Competencies
    • Question: what are competencies?
      • Skill (demonstration of expertise) that can be learned & developed?
      • Knowledge (accumulated information)
      • Self concept (attitudes, values, self image)
      • Traits (general disposition to behave a certain way)
      • Motives (thoughts that drive behavior)
    • Text: competencies as characteristics of the person personality, attitudes, knowledge, skills & behaviors
    • competencies can be a number of things; consequently they stand in danger of becoming nothing Milkovich & Newman
  • 9. Competencies: Fuzziness in Defining Them
    • Knowledge & Skills: Essential characteristics for the job
      • Can be tested: Observable and Measurable
    • Self concepts, traits, & motives
      • Not Directly Measurable must be inferred from actions
      • Self concept (identifies with the team)
      • Trait (flexibility)
      • Motive (drive to produce results)
    • Much more subjectively assessed
  • 10. Core Competencies
    • Derived from mission statement: values & attitudes
    • JetBlue embraces five values that represent the company and create our unique culture:
      • Safety Caring Integrity Fun Passion
      • Exercise: Devise metrics to measure these traits
  • 11. Competency Effectiveness
    • Organization Strategy
      • Competencies are probably more likely to fit with the organizations strategy
    • Work Flow
      • Competencies are designed to convey values and enhance work flow
      • Effectiveness likely to depend upon culture
    • Fair to Employees
      • Empower employees to take charge of own development
      • Subjective
    • Motivation towards organizations objectives
  • 12. Key is the Assessment
    • How do you certify that someone has these competencies
    • & then how to tie to pay
    • Justify in a court of law
    Level Phase Title 4 Expert Visionary 3 Advanced Coach 2 Resource Contributor 1 Proficient Associate
  • 13. Pay for Knowledge
    • Employee Advantages
      • Skill Variety
      • Task Variety
      • Autonomy
      • Feedback
    • Employer Advantages
      • Communicates Culture
      • Product or Service qualities
      • Leaner Staffing cross usage
      • Flexibility
  • 14. Disadvantage
    • Increases training, hourly labor & overhead costs can rise
    • May not fit with other incentive programs
  • 15. Summary
    • Pay for Knowledge programs have the potential to help employers compete in global environment
    • Must give employees the opportunity to learn