Pay For Learning Programs

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  • Pay For Learning Programs

    1. 1. Pay-for-Learning Programs Jason Burhans Penn State University February 14, 2002
    2. 2. Overview <ul><li>Pay-for-Learning Programs Defined </li></ul><ul><li>A Brainstorming Exercise: </li></ul><ul><li>How can this tool help me in business? </li></ul><ul><li>How It Works </li></ul><ul><li>Examples from industry </li></ul><ul><li>An Exercise </li></ul><ul><li>Summary </li></ul><ul><li>Bibliography </li></ul>
    3. 3. Pay-for-learning Programs Defined <ul><li>Pay-for-learning Programs are programs that compensate employees for knowledge and skills that they posses rather than for the job that they actually perform. </li></ul>
    4. 4. Pay-for-learning Programs Defined (Continued) <ul><li>Pay-for-learning Programs are also known as pay-for-knowledge, skill-based compensation, knowledge-based pay, or pay-for-skill. </li></ul>
    5. 5. Brainstorm <ul><li>Take a moment to consider how you or your co-workers salaries might change if a Pay-for-learning program was initiated at your company? </li></ul><ul><li>How do you think a program like this could improve quality in your profession? </li></ul>
    6. 6. Critical elements of a knowledge and skill-based pay system <ul><li>Specification of knowledge and skills </li></ul><ul><li>Knowledge and skill measurement </li></ul><ul><li>Training of evaluators </li></ul><ul><li>Feedback and professional development </li></ul><ul><li>Development of a staged career system linked to knowledge and skills </li></ul><ul><li>Linking pay levels to knowledge and skill levels </li></ul><ul><li>Minimum competencies required for employment </li></ul><ul><li>Growth expectations over the career (timing and level) </li></ul><ul><li>Implementation and evaluation </li></ul><ul><li>Development and design process. </li></ul>
    7. 7. Start up Costs <ul><li>Informing and educating employees of new system </li></ul><ul><li>Training and development costs associated with employees learning new skills </li></ul><ul><li>Intangible costs </li></ul>
    8. 8. Pay-for-Learning Basics <ul><li>Give employees the opportunity to continually develop their skill sets to contribute to the company </li></ul><ul><li>Provide an environment to foster learning </li></ul><ul><li>Recognize and reward people for their contributions and advancements. </li></ul>
    9. 9. Using Pay-for-Learning Systems <ul><li>These systems allow companies to pay employees for their value to their organization and provides a way for employees to influence their own pay. </li></ul><ul><li>Implementation is usually done in one of two basic methods. </li></ul><ul><ul><li>Knowledge-growth systems </li></ul></ul><ul><ul><li>Multiple Skills systems </li></ul></ul>
    10. 10. Knowledge-Growth Systems <ul><li>This method pays employees based upon the range of skills they posses in a single specialty or job classification. </li></ul><ul><li>It’s Basically a technical skills ladder </li></ul><ul><li>They are sometimes called “Vertical” systems because pay is tied to the depth of knowledge or skill in a defined job. </li></ul>
    11. 11. Multiple Skills Systems <ul><li>Pay progression is tied to the number of different jobs an employee can perform throughout the entire organization </li></ul><ul><li>Multi-skilled-based systems are sometimes called horizontal systems </li></ul><ul><li>These promise the benefits of greater labor flexibility and job mobility for employees </li></ul>
    12. 12. Benefits of Pay - For - Learning <ul><li>Benefits include increases in the following areas: </li></ul><ul><ul><li>Job satisfaction </li></ul></ul><ul><ul><li>Job security </li></ul></ul><ul><ul><li>Flexibility </li></ul></ul><ul><ul><li>Communication </li></ul></ul><ul><ul><li>Problem Solving </li></ul></ul>
    13. 13. Concerns With Pay-for-Learning <ul><li>How to pay for more skilled workers </li></ul><ul><li>Management and Seniority issues when implementing a new promotion system </li></ul><ul><li>Ensuring quality or productivity improves enough to ensure the return on investment for the new program is worth it </li></ul>
    14. 14. Real World Using Pay-for-Learning <ul><li>General Motors </li></ul><ul><li>Ford Motor Company </li></ul><ul><li>AT&T </li></ul><ul><li>Corning </li></ul><ul><li>Maxwell House </li></ul><ul><li>Volvo </li></ul>
    15. 15. An Exercise <ul><li>Get with a group of two or three other people. </li></ul><ul><li>Produce a list with all the benefits and disadvantages that you learned here today. </li></ul><ul><li>Come up with suggestions, based on what you know about Pay – For – Learning programs, on what steps would be needed to start such a plan at your company. </li></ul>
    16. 16. Summary <ul><li>Pay for Learning is a quality tool designed to educate and motivate to make employees more knowledgeable and efficient in an attempt to increase overall quality of product and firm </li></ul><ul><li>Pay for Learning Systems are used in about 5 % – 8 % of corporations in the United States, most of whom are manufacturing firms </li></ul><ul><li>Pay for Learning Systems are in there infancy, yet have shown good results when backed by the workforce </li></ul>
    17. 17. Bibliography <ul><li>Boyett, Joseph H.; Boyett, Jimmie T., 1998. “ The Pay-for- Knowledge Design Workbook” . http://www.jboyett.com/excerpt3.htm </li></ul><ul><li>H.R. Zone, 2000. “What to do about Skill Based Pay?” http:// www. hrzone .com/topics/skill_based_pay.html </li></ul><ul><li>Kim, Dong-One; Mericle, Kenneth, 1996. “ Skill-Based Pay and Work Reorganization in High Performance Firms”. http://ist- 0 socrates.berkeley.edu/~iir/ncw/wpapers/mk1/index.html </li></ul><ul><li>Oden, Alan, 1998. ‘Knowledge- and Skill-Based Pay” . http://www.wcer.wisc.edu/cpre/tcomp/researc h/ </li></ul><ul><li>S. Thomas Foster, 2001. Managing Quality: An Integrative Approach . Upper Saddle River, NJ: Prentice-Hall, Inc. (pgs 415-416) </li></ul>

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