Person Focus to PayDr. G C Mohanta, BE, MSc(Engg), MBA,

PhD(Mgt)Professor

Al-Qurmoshi Institute of Business Management Hyderabad

Person Versus Job Based PayFredrick Taylor in Scientific Management

focused on the basic elements of the jobLead to job focused way of organizing workCriticisms of job based structure

Reduces flexibility“Not my job” syndromeLittle reason to acquire information & skills outside

of narrow jobDoesn’t help people understand what other people

do

Person Focus to PayPay-for-Knowledge

Skill Based PayCompetency Based Pay

Skill Based PayPay is tied to skills, abilities & knowledge

that an individual possesses- Manufacturing jobs- Flexibility to re-assign people to where work is

neededDepth: 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

BreadthIncreased pay for more knowledgePay increases come with certification of

new skill◦ e.g., Microsoft Certification; SHRM Certification◦ Skill certification can also come from internal

assessmentEmployees can be assigned to new jobs, based

upon certificationPay increases with the more certifications heldFor 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 communicateWhether Productivity is increased?

Mixed results61% of those implementing SBP, were using it 7 years laterDepends on strategy more compatible with innovation, not

low costUsefulness varies based upon setting

CompetenciesWhat are competencies?

Skill /expertise that can be learned & developedKnowledge (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

CompetenciesKnowledge & Skills: Essential characteristics

for the jobCan be tested: Observable and Measurable

Self concepts, traits, & motivesNot Directly Measurable must be inferred from

actionsSelf concept (identifies with the team)Trait (flexibility)Motive (drive to produce results)

Much more parameters subjectively assessed

Core CompetenciesDerived from mission statement:

values & attitudesJetBlue embraces five values that

represent the company and create its unique culture:Safety, Caring, Integrity, Fun and

Passion

Competency EffectivenessOrganization Strategy◦ Competencies are likely to fit with

organization’s strategyWork 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 payHow to justify in a

court of law

Level Phase Title

4 Expert Visionary

3 Advanced Coach

2 Resource Contributor

1 Proficient Associate

Pay for KnowledgeEmployee Advantages

Skill VarietyTask VarietyAutonomyFeedback

Employer AdvantagesCommunicates CultureProduct or Service qualitiesLeaner Staffing cross usageFlexibility

Pay for Knowledge programsPay for Knowledge programs have the

potential to help employers compete in global environment

It gives employees the opportunity to learn