Defining Person-Focused Pay: Competency-Based, Pay-For-Knowledge, and Skill-Based Pay
Person-focused pay plans 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 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 ... Premium Essay In: Business and Management Submitted By stbb Person-focused pay plans rewards employees for acquiring job-related competencies, knowledge, and skills. There are two types of competency-based pay programs such as pay-for-knowledge pay and skill-based pay. Incentive pay is defined as compensation, which varies according to a pre-established formula, individual or group goals, and company earnings. Incentive pay adds to base pay as a one-time payment. It is designed to control costs and motivate employee productivity. Body A person-focused pay programs can provide job enrichment and job security to employees. Through job enrichment, it creates a more basic way of motivating employees and an exciting work environment. This can also increase employees' flexibility. According to the job characteristics theory, employees will be motivated to perform jobs that contain a high degree of four core characteristics: skill variety, task identity, autonomy, and feedback. There are some factors that individual incentives need to have which include: incentives include quantity of work output, quality of work output, monthly sales, work safety record, and work attendance. There are four types of individual incentive plans. Piecework plans which reward workers for every item produced over a designated production standard. Management incentive plans award bonuses to managers when they meet or exceed objectives based on sales, profit, production, or other measures for their division. Behavioral encouragement plans award employees for specific behavioral accomplishments like good attendance and safety records. In referral plans, employees receive bonuses for recruitment of highly qualified employees. Conclusion I agree with the statement that “Person-focused pay plans are least preferable compared with individual incentive pay programs.” Individual incentive plans can promote the relationship between pay and... Similar Documents
Free Essay Competency Based Pay...CHAPTER 15: COMPETENCY-BASED PAY Overview: This chapter looks at pay based on competencies, the knowledge, skills, and abilities that make employees valuable to an organization. INTRODUCTION The distinguished Management educator, Ed Lawler, in an article looking back at the dot-com era and its implications for the future of Compensation Administration concludes that this era "accelerated an inevitable move from focusing on paying individuals for the job they do to paying individuals for the skills knowledge and competencies they have."1 This is not the only article that states that paying for the person would replace paying for the job in the future. There was a whole rash of articles in the late 1980's to the mid 1990's that carried the same theme. It is significant that since then there has not been more attention paid to this idea. Competency pay is a fancy term given to the idea of paying for the person rather than the job. In fact, very few compensation plans pay for only one thing. As discussed in the first chapter of this text, pay can be based upon the job, the person or their performance, and most systems are combinations of all three. The real questions are which one will be the base platform for the other two and what weight will each have in the decision of how much to pay the individual. The past chapter focused upon a compensation system based upon the job. In the chapters that follow this one, we will examine how factors relating to the person and to his...... Words: 10995 - Pages: 44
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Premium Essay Human Resourse Management...Fundamentals of human resource management African Studies Centre / University of Groningen / Mzumbe University African Public Administration and Management series, vol. 2 Fundamentals of human resource management Emerging experiences from Africa Josephat Stephen Itika Published by: African Studies Centre P.O. Box 9555 2300 RB Leiden www.ascleiden.nl Cover design: Heike Slingerland Photos: Evans Mathias Kautipe Printed by Ipskamp Drukkers, Enschede ISSN 2211-8284 ISBN 978-90-5448-108-9 © University of Groningen / Mzumbe University, 2011 To all those who believe that African countries, organisations and people have a contribution to make in the meaningful adaptation and application of Eurocentric concepts, theories, assumptions, principles, techniques and practices and in anticipation that such contributions will liberate African managers from mismanagement and inefficiencies. Preface This book is not just one of the many introductions to Human Resource Management that are published, year after year, for use in HRM classes. Authors of those introductions face many challenges, such as the need to produce something that is both theoretically sound and practically valuable, or to find a way to integrate discussions on a variety of topics into one comprehensible teaching tool. The author of this book took up those challenges by, on the one hand, closely following the conventions that HRM scholars all over the world adhere to with regards to the...... Words: 99320 - Pages: 398
Premium Essay Mgt Midterm...Starbucks: · New growth model that tries to get customers to purchase more coffee regardless of its form, venue, or name on the beans · Calls all employees “Partners” o Coffee knowledge, product expertise, great customer service o Treated with dignity and respect · Greet regular customers by name · Baristas slow down make no more than two drinks at a time HRM plays key role in determining survival, effectiveness, and competitiveness of US businesses Competitiveness: a companys ability to maintain and gain market share in its industry · Related to company effectiveness o Satisfies needs of stakeholders HRM help support business strategy and provide services the customers value. Value of a product: determined by its quality and how closely the product fits customers needs. HRM: policies, practices, and systems that influence employees behavior attitudes, and performance · “People practices” Strategic HRM consists of: HR Planning: analyzing and designing work, determining HR needs Recruiting: attracting potential employees · Interviewing, testing Selection: choosing employees Training and Development: teaching employees how to perform their jobs and preparing them for the future· Orientation, productivity enhancement Compensation: rewarding employees Performance Management: evaluating their performance Employee Relations: creating a positive work environment Effective HRM practices are...... Words: 11843 - Pages: 48 Which compensation system is used by organizations to reward workers who undergo training that increases their skills?Incentive. Since skill-based pay emphasizes an employee's knowledge, there's a greater incentive for professionals to train, improve and learn new skills. Companies can benefit from this because employees may continue to grow within their roles.
Which of the following is a characteristic of jobWhich of the following is a characteristic of job-based pay? It compensates employees for the jobs they currently perform.
What is person Focus pay?Person-focused pay rewards employees for the promise of performance in the future; merit pay and incentive pay reward employees for promise fulfilled (job performance).
What is the difference between person focused pay and incentive pay?Person-focused pay is for skill development, but incentive pay is one-time pay for the attainment of goals communicated in advance.
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Which pay plan generally rewards employees for meeting work objectives
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