Person focused plans
Transcript of Person focused plans
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Person - Focused Plans
Rewards employees for acquiring job - related
– Competencies– Knowledge – Skills
2 main types– Pay - for - knowledge – Skill - based pay
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Pay - For - Knowledge Plans
Reasons for adoption– Removes entitlement label
– Connects pay to job-related abilities
– Increases employee autonomy
– Technological innovations
– Increased global competition
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Pay-for-KnowledgeModels
Stair - step
Skill - block
Job - point accrual
Cross - departmental
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Person - Focused Pay
Compensates employees for flexibility
Compensated for potential contributions
– Based on skills & knowledge
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Job - Based Pay
Compensates employees for current jobs
Pay limits set for each job
Evaluations based on job descriptions & objectives
2 main types– Merit pay– Incentive pay
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Job Characteristics Theory
Employees more motivated to perform jobs that contain
Skill variety
Task identity
Autonomy
Feedback
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Employee Advantages – Pay for Knowledge
Can provide job enrichment
Can provide job security
Can make jobs more intrinsically
motivating
Can make jobs more interesting
Increases employees’ flexibility
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Advantages To Employers
Leads to enhanced job performance
Leads to reduced staffing
Leads to greater flexibility
Improves quality Increases productivity levels
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Disadvantges
Can increase hourly labor costs
Can increase training costs
Can increase overhead costs
May not mesh well with existing incentive pay systems
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Lowest - Cost Competitive Strategy
Lowers output costs per employee Training should improve productivity Improves product & service quality Long - term gains should outweigh short - term costs
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Differentiation Competitive Strategy
Requires employees who are– Creative– Open - minded– Risk - takers
Requires long - term focus
Pay - for - knowledge effective with work teams