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Person Focus to Pay
Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)
Professor
Al-Qurmoshi Institute of Business Management
Hyderabad
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
Person Focus to Pay
Pay-for-Knowledge
Skill Based Pay
Competency Based Pay
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
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
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
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
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
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
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
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
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
Pay for Knowledge
Employee Advantages
Skill Variety
Task Variety
Autonomy
Feedback
Employer Advantages
Communicates Culture
Product or Service qualities
Leaner Staffing cross usage
Flexibility
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

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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