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Person Focus to Pay by Dr. G C Mohanta
1. Person Focus to Pay
Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)
Professor
Al-Qurmoshi Institute of Business Management
Hyderabad
2. Person Versus Job Based Pay
Fredrick Taylor in Scientific Management focused
on the basic elements of the job
Lead to job focused way of organizing work
Criticisms of job based structure
Reduces flexibility
“Not my job” syndrome
Little reason to acquire information & skills outside of
narrow job
Doesn’t help people understand what other people do
3. Person Focus to Pay
Pay-for-Knowledge
Skill Based Pay
Competency Based Pay
4. Skill Based Pay
Pay is tied to skills, abilities & knowledge that an
individual possesses
- Manufacturing jobs
- Flexibility to re-assign people to where work is needed
Depth: pay for having a deep level of knowledge
within a job
e.g. teachers pay increases with amount of education:
bachelors, masters, doctorate degree
Breadth: Pay for generalist knowledge
5. Breadth
Increased pay for more knowledge
Pay increases come with certification of new
skill
◦ e.g., Microsoft Certification; SHRM Certification
◦ Skill certification can also come from internal assessment
Employees can be assigned to new jobs, based
upon certification
Pay increases with the more certifications held
For example: 75.00 base pay + 10.00/hr for skill in
each machine
6. Why Skill Based Pay?
Ensures workers have needed skills
◦ Assumes good tests
Supports the organizational work flow
◦ Workers trained & ready to move to assignments as needed
Fairness
◦ Depends on how training conducted
◦ Who pays for training
◦ Means two people doing same task at different pays
Motivation
◦ Motivation is to get training, not necessarily to perform task
well
7. Skill Based Pay
Employees accept skill based pay
Where Certification procedures are viewed as fair
It is easy to communicate
Whether Productivity is increased?
Mixed results
61% of those implementing SBP, were using it 7 years later
Depends on strategy more compatible with innovation, not low cost
Usefulness varies based upon setting
8. Competencies
What are competencies?
Skill /expertise that can be learned & developed
Knowledge (accumulated information)
Self concept (attitudes, values, self image)
Traits (general disposition to behave in a certain way)
Motives (thoughts that drive behavior)
Competencies - characteristics of the person:
personality, attitudes, knowledge, skills & behaviours
9. Competencies
Knowledge & Skills: Essential characteristics for the
job
Can be tested: Observable and Measurable
Self concepts, traits, & motives
Not Directly Measurable must be inferred from actions
Self concept (identifies with the team)
Trait (flexibility)
Motive (drive to produce results)
Much more parameters subjectively assessed
10. Core Competencies
Derived from mission statement: values &
attitudes
JetBlue embraces five values that represent
the company and create its unique culture:
Safety, Caring, Integrity, Fun and Passion
11. Competency Effectiveness
Organization Strategy
◦ Competencies are likely to fit with organization’s
strategy
Work Flow
◦ Competencies are designed to convey values and
enhance work flow
◦ Effectiveness likely to depend upon culture
Fair to Employees
◦ Empower employees to take charge of own
development
◦ Subjective
Motivation towards organization’s objectives
12. Key is the Assessment
How do you certify that
someone has these
competencies
How to tie to pay
How to justify in a
court of law
Level Phase Title
4 Expert Visionary
3 Advanced Coach
2 Resource Contributor
1 Proficient Associate
13. Pay for Knowledge
Employee Advantages
Skill Variety
Task Variety
Autonomy
Feedback
Employer Advantages
Communicates Culture
Product or Service qualities
Leaner Staffing cross usage
Flexibility
14. Pay for Knowledge programs
Pay for Knowledge programs have the potential to
help employers compete in global environment
It gives employees the opportunity to learn