BUS 409 DISCUSSION WEEK You are the HR Manager for the Pleasantville School District. Although it hadn't done so before, the district recently implemented a person-focused pay program. This program offers a pay increase to teachers who pursue additional education and training. You were on the team that developed this policy, which has been approved but has not yet been disseminated district-wide. One of the high school teachers has scheduled an appointment with you to review how the program works. You plan to review the policy with the teacher and give him a paper copy as a leave-behind piece. In this post: · Write the policy for the Pleasantville School District's person-focused pay program that will be shared with the teacher. At a minimum, be sure to address the person-focused pay program's: . Purpose and description, including effective policy dates. . Eligibility requirements. (Who is eligible to participate in the program?) . Acceptable types of education and training. (What is eligible for reimbursement?) . Awards for successful completion of training or education (promotional opportunities, compensation, non-monetary rewards, et cetera). Person-focused pay plans reward employees for acquiring job-related, knowledge, skills, or competencies rather than for demonstrating successful job performance. I copy this section from the Textbook…. I thought it would help me. (see below) Description - Person-Focused Pay Reward employees for acquiring job-related knowledge, skills, or competencies rather than for demonstrating successful job performance. Person-focused pay rewards employees for the promise of performance in the future; merit pay and incentive pay reward employees for the promise fulfilled (job performance). This approach to compensating employees often refers to three basic types of person-focused pay programs: pay-for-knowledge, skill-based pay, and competency-based pay. Sometimes, companies combine person-focused pay programs with traditional merit pay programs by awarding pay raises to employees according to how well they demonstrate competencies on the job. Usage of Person-Focused Pay A wide variety of employers have established person-focused pay programs. Some targeted studies and anecdotal information suggest that companies of various sizes use person-focused pay programs. Many of the companies known to be using this kind of pay system employ between approximately 150 and 2,000 employees and the average age of the companies is approximately 10 years. This study also conjectures that hundreds of Fortune 1,000 firms use skill-based pay for their manufacturing or production workers. There is limited published evidence regarding the effectiveness of person-focused pay plans. One study found that a skill-based pay plan in a manufacturing setting increased plant productivity by 58 percent, lowered labor cost per part by 16 percent, and generated favorable quality outcomes (82 percent scrap reduction).7 Another study demonstrated.

1. BUS 409 DISCUSSION WEEK
You are the HR Manager for the Pleasantville School District.
Although it hadn't done so before, the district recently
implemented a person-focused pay program. This program
offers a pay increase to teachers who pursue additional
education and training. You were on the team that developed
this policy, which has been approved but has not yet been
disseminated district-wide.
One of the high school teachers has scheduled an appointment
with you to review how the program works. You plan to review
the policy with the teacher and give him a paper copy as a
leave-behind piece.
In this post:
· Write the policy for the Pleasantville School District's person-
focused pay program that will be shared with the teacher. At a
minimum, be sure to address the person-focused pay program's:
. Purpose and description, including effective policy dates.
. Eligibility requirements. (Who is eligible to participate in the
program?)
. Acceptable types of education and training. (What is eligible
for reimbursement?)
. Awards for successful completion of training or education
(promotional opportunities, compensation, non-monetary
rewards, et cetera).
Person-focused pay plans reward employees for acquiring job-
related, knowledge, skills, or competencies rather than for
demonstrating successful job performance.
I copy this section from the Textbook…. I thought it would help
me. (see below)
Description - Person-Focused Pay
Reward employees for acquiring job-related knowledge, skills,
or competencies rather than for demonstrating successful job
performance. Person-focused pay rewards employees for the

2. promise of performance in the future; merit pay and incentive
pay reward employees for the promise fulfilled (job
performance). This approach to compensating employees often
refers to three basic types of person-focused pay programs: pay-
for-knowledge, skill-based pay, and competency-based pay.
Sometimes, companies combine person-focused pay programs
with traditional merit pay programs by awarding pay raises to
employees according to how well they demonstrate
competencies on the job.
Usage of Person-Focused Pay
A wide variety of employers have established person-focused
pay programs. Some targeted studies and anecdotal information
suggest that companies of various sizes use person-focused pay
programs. Many of the companies known to be using this kind
of pay system employ between approximately 150 and 2,000
employees and the average age of the companies is
approximately 10 years. This study also conjectures that
hundreds of Fortune 1,000 firms use skill-based pay for their
manufacturing or production workers. There is limited
published evidence regarding the effectiveness of person-
focused pay plans. One study found that a skill-based pay plan
in a manufacturing setting increased plant productivity by 58
percent, lowered labor cost per part by 16 percent, and
generated favorable quality outcomes (82 percent scrap
reduction).7 Another study demonstrated that participants in a
skill-based pay program increased their skills, and maintained
increased skill levels back on the job. A more recent study
examined attitudes among participants in a skill-based pay plan.
The researchers found that these plans are perceived to produce
superior work outcomes.
Reason for the Person-Focused Pay
Person-focused pay programs represent important innovations in
the compensation field. Person-focused pay systems imply that
employees must move away from viewing pay as an entitlement.
Instead, these systems treat compensation as a reward earned
for acquiring and implementing job-relevant knowledge and

3. skills. Advocates of person-focused pay programs offer two key
reasons that firms seeking competitive advantage should adopt
this form of compensation: technological innovation and
increased global competition.
Variety of Person-Focused Pay Program
There are four varieties of common person-focused pay
structures. The first, a stairstep model resembles a flight of
stairs, much like the arrangement illustrated in Figure 5-3 , for
an assembly technician. The steps represent jobs from a job
family that differ in terms of complexity. Jobs that require more
skills are more complex than jobs with fewer skills. For
example, an Assembly Technician 1 job requires employees to
possess two skills: line restocking and pallet breakdown. An
Assembly Technician 3 job requires employees to possess six
skills: line restocking, pallet breakdown, burr removal, line
jockey, major assembly, and soldering. In terms of the stairs,
higher steps represent jobs that require more skills than lower
steps. Compensation specialists develop separate stairstep
models for individual job families (e.g., clerks or accountants).
Thus, a company may have more than one stairstep model, each
corresponding to a job family such as accounting, finance, or
clerical. No stairstep model should include both clerical
workers and skilled trade workers (e.g., carpenters, electricians,
and plumbers).
Advantages of a Person-Focused Pay Plan
Although no large-scale studies have clearly demonstrated these
benefits, case studies suggest that employees and companies
enjoy advantages from person-focused pay programs. Well-
designed person-focused pay systems can provide employees
and employers with distinct advantages over traditional pay
systems. There are potential limitations of person-focused
programs.
Employees usually like person-focused pay systems for the
following two reasons. First, they can provide employees with
both job enrichment and job security. Job enrichment refers to a

4. job design approach that creates more intrinsically motivating
and interesting work environments. Companies can enrich jobs
by combining narrowly designed tasks so an employee is
responsible for producing an entire product or service.
So far, evidence does suggest that person-focused pay plans
lead to increased employee commitment, enhanced work
motivation, and improved employee satisfaction. These results
are probably due to the fact that well-designed, person-focused
pay plans promote skill variety and autonomy. Some experts
attribute these positive outcomes of person-focused pay
programs to the fact that employees can increase their skills and
be paid for it.
Second advantage for employees is that, because person-focused
pay programs create more flexible workers, these programs can
represent better job security for employees. Rather than being
laid off during periods of low product demand, employees can
perform a variety of jobs that draw on the skills they have
attained through person-focused pay programs. During periods
of slow sales, many companies conduct inventories of their
products. Customer service employees who have learned
inventory accounting techniques are less likely to be laid off
during periods of low sales than those who have not.
Furthermore, employees who update their skills will also be
more attractive applicants to other employers. Clerical
employees who become proficient in the use of Windows-based
computer software will have more employment opportunities
available to them than clerical employees who have resisted
learning these programs. Likewise, HR professionals who
become familiar with important employment laws, such as the
Fair Labor Standards Act, will probably have more employment
opportunities available to them than will HR professionals who
choose not to become familiar with these pertinent laws.
Employers like person-focused pay systems because, when
properly designed and implemented, these programs can lead to
enhanced job performance, reduced staffing, and greater
flexibility. First, person-focused pay programs can influence

5. both the quantity and the quality of an employee’s work.
Employees who participate in a person-focused pay program
often exhibit higher productivity levels because employees who
know more about an entire process may also be able to identify
production shortcuts that result in increased productivity.
Third, person-focused pay systems provide companies with
greater flexibility in meeting staffing demands at any time.
Quite simply, because participants in person-focused pay plans
have acquired a variety of skills, they can perform a wider
range of tasks. This kind of staffing flexibility helps companies
when unexpected changes in demand occur.
Disadvantages of a Person-Focused Pay Plan
Although person-focused pay programs present many
advantages, they have four possible limitations. First,
employers feel that the main drawback of person-focused pay
systems is that hourly labor costs, training costs, and overhead
costs can all increase. Hourly labor costs often increase because
greater skills should translate into higher pay levels for most
workers. Because training is an integral component of person-
focused pay systems, training costs are generally higher than
they are at companies with job-based pay programs. These costs
can be especially high during initial start-up periods as HR
professionals attempt to standardize employee backgrounds.
This process begins with assessing the skill levels of
employees. Federal Express tests its employees twice per
year. The company pays for four hours of study time and two
hours of actual test time, which are bound to be quite expensive.
Second, person-focused pay systems may not mesh well with
existing incentive pay systems. When both person-focused and
incentive pay systems are in operation, employees may not want
to learn new skills when the pay increase associated with
learning a new skill is less than some incentive award
employees could earn based on skills they already possess.
Employees often place greater emphasis on maximizing rewards
in the short term rather than preparing themselves to maximize
the level of rewards over time, which can be facilitated through

6. person-focused pay programs.
Third, effective person-focused pay programs depend, in large
part, on well-designed training programs. There is a lot at stake:
Person-focused pay systems include costly training programs,
and these systems award pay raises to employees who
successfully complete training. These programs also require that
employers bear the price of base pay and benefits while
employees attend training during regular work hours.
Companies must wait patiently before realizing a return on
investment for training. Several months may pass before
employees apply newly learned knowledge and skills to their
jobs. After all, practice makes perfect, and training programs
cannot anticipate all the circumstances employees face when
performing their jobs.
Fourth, companies struggle with determining the monetary value
of skill and knowledge sets. As we will discuss in Chapter 7,
compensation surveys report the monetary value of entire jobs
rather than individual skill sets. This fact is not surprising
because most companies subscribe to job-based pay approaches
as we described in Chapters 3 and 4, so it makes sense that
surveys will focus on whole job value. In addition, knowledge
and skill sets are usually company specific, which would make
comparability difficult if surveys were common.