Job based pay vs person based pay

TRAINING SESSION OUTLINE

FOR PRESENTER

VENEU – Rasmussen University

DATE – 10/20/2020

TIME - 3:00 P.M.

PRESENTER – Ri

This model rewards an employee for the acquisition of job-related knowledge, competencies rather than for the demonstration of successful job performance. It can be pursued in three ways: competency-based pay, skill-based pay, and pay-for-knowledge. For example, a person would typically be paid more if they supplemented their product synthesis skills with computer skills.

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TOPICS

People-focused pay model

Competency-based vs. job-based pay model

Stair-step compensation model

Advantages of people-focused pay model

Impact of people-focused pay on employee motivation

People-focused pay model TIME: 1HR

Rewards job-related knowledge, competencies

Rather than for the demonstration of successful job performance.

Three ways: competency-based pay, skill-based pay, and pay-for-knowledge.

Competency-based vs. job-based pay model TIME: 1HR

Job-based pay model pays salaries based on compensable factors determined by the job

Salary decided by one’s responsibilities

At times the conditions they work in.

Competency-based pay model increases pay when one learns new skill

Improves the knowledge and skill one already has.

A job-based pay model pays salaries based on compensable factors determined by the job i.e., one’s salary is decided by one’s responsibilities, and at times the conditions they work in. A competency-based pay model, however, increases pay when one learns a new skill or improves the knowledge and skill one already has. For example, if persons A (with a master’s degree) and B (with a bachelor’s degree) are both product analysts, person A will be paid more. In other words, we will be using a stair-step model of payment

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Stair-step compensation model TIME: 1HR

Differential bonus

Difference in the pay based on the level of one’s competencies

This model of pay is a form of a differential bonus. In other words, the difference in the pay two people with the same job title will earn will be based on the level of one’s competencies. For example, if there are two shift engineers working alternating shifts, the one with a higher degree (or additional computer skills) will be paid more because of that added competency.

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Advantages of people-focused pay model TIME: 1HR

Promises both job security and job enrichment

Better chance even elsewhere if they decide to

Good for one’s personal motivation and satisfaction

One great advantage scientists at Marylion will derive from this model is that it promises both job security and job enrichment. It would not be easy for the company to let go of a scientists who has gained exemplary skills in their specific field. In addition, a scientist with improved competencies stands a better chance even elsewhere if they decide to leave (although we wouldn’t encourage this). A people-focused pay model is also good for one’s personal motivation and satisfaction.

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Impact of people-focused pay on employee motivation TIME: 1HR

Guarantees promotion for any scientist who will decide to improve their competencies

Pay rise if a promotion is not presently available

Encourage scientists to pursue specific career paths

Great input to their personal achievements

Opportunity to improve themselves

This pay model almost guarantees promotion for any scientist who will decide to improve their competencies, or at least a pay rise if a promotion is not presently available. Also, this model will encourage scientists to pursue specific career paths, which would be a great input to their personal achievements. It is essentially offering scientists an opportunity to improve themselves. For example, upgrading from a diploma to a bachelor’s degree is a guaranteed pay rise.

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References

Barth, A. L., & de Beer, W. (2018). People-Focused: Respect and Trust. In Performance Management Success (pp. 89-100). Springer, Cham.

Black, J., & Venture, K. L. (2017). The human factor to profitability: People-centered cultures as meaningful organizations. Journal of Organizational Psychology, 17(2), 24-34.

Jong, S. D. (2019). Analysing the change towards a new performance management system at a multinational staffing firm.