Tài Liệu Lecture Compensation Management Unit 4 - Person Based Structure.pdf

8/16/2021 1 Unit 4 PERSON BASED STRUCTURE Instructor Associate Prof Dr Pham Thi Bich Ngoc National Economics University Outline • Person based Pay Competency Based, and Skill Based • Usage of Person b[.]

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Unit 4:

PERSON-BASED STRUCTURE

Instructor: Associate Prof Dr Pham Thi Bich Ngoc

National Economics University

Outline

• Person-based Pay: Competency-Based, and

Skill-Based

• Usage of Person-based Pay Programs

• Reasons to Adopt Person-based Pay Programs

• Varieties of Person-based Pay Programs

• Contrasting Person-based Pay with Job-Based Pay

• Advantages and Disadvantages of Person-based Pay

Programs

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Person-Based Pay

• Rewards employees for acquiring job related, knowledge, skills, or

competencies rather than for demonstrating successful job

performance

• Skill-Based Pay

• Mainly for employees who perform manual labor

• Pay increase based on mastery and use of new job skills

• Pay-for-Knowledge Plans:

• Rewards management, service, or professional employees for

increasing and applying job related knowledge

• Competencies

• An individual’s capability to apply combinations of knowledge

and skills consistently over time to perform work successfully

in the required work situations

Ways to Create Internal Structure

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Skill-Based Structure

• Skill-based structures link pay to the depth or

person acquires that are relevant to the work

• Structures based on skill pay individuals for all the

of whether the work they are doing requires all or

just a few of those particular skills

• The wage attaches to the person

Types of Skill Plans

• Skill plans can focus on depth(specialists in corporate law, finance) and/or

breadth(generalists with knowledge in all phases of operations including

marketing, manufacturing, finance, and human resources)

• Specialist: Depth

• The pay structures based on their knowledge as measured by

education level (for teachers)

• Depth of skills or depth of knowledge refers to the level of

specialization or expertise an employee brings to a particular job

• Generalist/Multiskill Based: Breadth

• employees in a multiskill system earn pay increases by acquiring new

knowledge, but the knowledge is specific to a range of related jobs

• Pay increases come with certification of new skills, rather than with

job assignments

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Purpose of the Skill-Based

Structure

• Supports the organization strategy

• Supports work flow

• Is fair to employees

• Motivate their behavior toward organization

objectives

Process for determining a skill-based

structure

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• Skill analysis is a systematic process of identifying and

collecting information about skills required to perform

work in an organization

• What Information to Collect?

• Whom to Involve?

• Establish Certification Methods

Organizations may use peer review, on-the-job

demonstrations, or tests to certify that employees

possess skills and are able to apply them

Process for determining a skill-based

structure

FMC’s Technician Skill-Based Structure

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Outcomes of Skill-Based Pay Plans

• Skill-based plans are generally well accepted by employees because it is easy to

see the connection between the plan, the work, and the size of the paycheck

→the plans provide strong motivation for individuals to increase their skills

• productivity is higher under skill-based pay

• Employee flexibility is increase under a skill-based pay plan

• Skill-based plans become increasingly expensive as the majority of employees

become certified at the highest pay levels.

• the higher labor costs under skillbased pay (estimated as between 10 and 15

percent) mean that it may be a better fit to companies in industries where labor

costs are a small share of total costs, such as paper and forest products,

chemicals, and food processing.

• The bottom line is that skill-based approaches may be only short-term initiatives for

specific settings

PERSON-BASED STRUCTURES:

COMPETENCIES 11

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Advantages of Person-based Pay Programs

• Provide job enrichment and job security

• Job enrichment refers to a job design approach that creates more

intrinsically motivating and interesting work environments

• Leads to increased employee commitment, enhanced work

motivation, and improved employee satisfaction

• Job security is enhanced because workers are more flexible

• Employers like because programs can lead to enhanced job

performance

• Better quality and quantity of work

• Can rely on leaner staffing because multiskilled employees are

better able to cover for unexpected absenteeism, family or medical

leave, and training sessions that take employees away from work

• Provide companies with greater flexibility in meeting staffing

demands at any particular time

Disadvantages of Person-based Pay Programs

• Hourly labor costs, training costs, and overhead

costs can all increase

• May not mesh well with existing incentive pay

programs

• Employees may not want to learn new skills if increase

for new skills is less than incentive award earned for

existing skills

• Depend in large part on well-designed training

programs which may be costly

• Companies struggle with determining the monetary

value of skill and knowledge sets

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Contrasting Approaches

Contrasting Person-Focused Pay

with Job-Based Pay

• Job-Based Pay

• Compensates employees for jobs they currently perform

• Includes seniority pay, merit pay, and incentive pay

• Seniority pay increases employees pay automatically

over time

• Merit pay awards a permanent addition to base pay,

based on performance

• Incentive pay provides pay raise amounts based on

the attainment of predefined work goals 15

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Contrasting Person-Focused Pay

with Job-Based Pay

• Person-based Pay

• Compensates employees for developing the flexibility

and skills to perform a number of jobs effectively

• Rewards employees on their potential to make positive

contributions to the workplace, based on the successful

acquisition of work-related skills or knowledge

• Person-focused pay plans apply in limited contexts,

because not all jobs can be assessed based on skill or

knowledge

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sáng kiến kinh nghiệm

thư viện kiến thức tổng hợp về mầm non -

mẫu giáo này để chăm sóc và nuôi dạy con của mình ngày một tốt hơn

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Báo cáo giải pháp công tác quản lý Mầm non

tài liệu mầm non mẫu giáo

Kỹ năng sống cho trẻ mầm non

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Tiêu đề	Person-Based Structure
Người hướng dẫn	Associate Prof. Dr. Pham Thi Bich Ngoc
Trường học	National Economics University
Chuyên ngành	Compensation Management
Thể loại	Lecture
Năm xuất bản	2021
Thành phố	Hanoi

Định dạng
Số trang	17
Dung lượng	481,71 KB