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6-1
2010 McGraw Hill Ryerson
Job-based
(Chapters 4-5)
Person-based (Chapter 6)
Skills
Competencies
Collect, summarize
work information
Job analysis
Job descriptions
Determine what to
value
Job evaluation:
classes or
compensable factors
Skill blocks
Assess value
Certification
process
Translate into
structure
Job-based structure
Person-based Person-based
structure
structure
Competency sets
Competency
indicators
6-2
2010 McGraw Hill Ryerson
Types of Skill-Based
Pay Plans
1. Specialist: In-Depth
1. Generalist / Multiskill-Based:
Breadth
6-4
2010 McGraw Hill Ryerson
Contrasting Approaches (2 of 2)
Job-Based
Skill-Based
Competency-Based
Employee focus
Seek skills
Seek competencies
Procedures
Job analysis
Job evaluation
Skill analysis
Skill certification
Competency analysis
Competency
certification
Advantages
Clear expectations
Sense of progress
Pay based on value of
work performed
Continuous learning
Flexibility
Reduced work force
Continuous learning
Flexibility
Lateral movement
Limitations
Potential bureaucracy
Potential inflexibility
Potential bureaucracy
Requires cost controls
Potential bureaucracy
Requires cost controls
6-6
Skill Analysis
a systematic process to identify and
6-7
2010 McGraw Hill Ryerson
Skill blocks
Skill
certification
Skill-based
pay structure
Basic Decisions
What is the objective of the plan?
What information should be collected?
What methods should be used to determine
and certify skills?
Who should be involved?
How useful are the results for pay purposes?
6-8
2010 McGraw Hill Ryerson
Competency
sets
Behavioural
descriptors
Competency
based pay structure
Basic Decisions
What is the objective of the plan?
What information should be collected?
What methods should be used to determine
and certify competencies?
Who should be involved?
How useful are the results for pay purposes?
6-9
2010 McGraw Hill Ryerson
Competencies
underlying, broadly applicable knowledge,
skills, and behaviours that form the
foundation for successful work performance
(exhibited by excellent performers more
consistently than average performers)
6-10
2010 McGraw Hill Ryerson
Competency-Based Pay
Terminology
Taken from mission statement; for example, business
awareness.
CORE
COMPETENCY
COMPETENCY SETS
Grouping of factors that translate core competency
into observable behaviour; for example, cost
management, business understanding.
COMPETENCY
INDICATORS
Observable behaviours that indicate the
level of competency within a
competency set. For example,
identifies opportunities for savings.
6-11
2010 McGraw Hill Ryerson
Competency Analysis
a systematic process to identify and
collect information about the
competencies required for successful
work performance
collect information on:
personal characteristics
visionary competencies
organization-specific competencies
understanding
understanding
Customer
Customer service
service
orientation
orientation
Influence
Influence and
and impact
impact
Organization
Organization awareness
awareness
Networking
Networking
Directiveness
Directiveness
Teamwork
Teamwork & cooperation
Developing
Developing others
others
Team
Team leadership
leadership
Technical
Technical expertise
expertise
Information
Information seeking
seeking
Analytical
Analytical thinking
thinking
Conceptual
Conceptual thinking
thinking
Self-control
Self-control
Self-confidence
Self-confidence
Business
Business orientation
orientation
Flexibility
Flexibility
6-13
Avoiding Bias in
Pay Structures
1.
2.
3.
Contrasting Approaches (1 of 2)
Job-Based
Skill-Based
Competency-Based
What is valued
Compensable factors
Skills
Competencies
Skill levels
Competency levels
Mechanisms to translate
into pay
Pay structure
Based on job
performed/market
Based on competency
developed / market
Pay increases
Promotion
Skill acquisition
Competency development
Managers focus
Conclusion
internal pay structures need to be aligned with
the organizations business strategy and
values, the design of the work flow, and a
concern for the treatment of employees
techniques for establishing internally aligned
structures include the job-based approach (job
analysis and job evaluation) and person-based
approaches (skill/competency-based plans)
these techniques can aid in achieving the
objectives of the pay system when they are
properly designed and managed
6-17
2010 McGraw Hill Ryerson