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Person-BasedStructures

Chapter

6

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1. Discuss the differences and similaritiesbetween job-based structures, skill-based plans,and competency-based plans.

2. Identify the major decisions involved indeveloping skill-based plans and competency-based plans.

3. Discuss the advantages and disadvantages of employee involvement in the evaluation of work.

4. Understand the key aspects associated withthe administration of a job evaluation plan.5. Describe the key criteria to assess the

usefulness of the results of each of the

approaches to job evaluation.

Learning Objectives After discussing Chapter 6, students should be able to:

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Chapter Topics

Person-Based Structures: Skill PlansHow to: Skill Analysis Person-Based Structures: Competencies

How to: Competency Analysis One More Time: Internal AlignmentReflected in StructuresAdministering the PlanResults: How Useful?Bias in Internal Structures

The Perfect Structure

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Exhibit 6.1: Many Ways to Create InternalStructure

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Links pay to the depth or breadth of the skills,

abilities, and knowledge a person acquires thatis relevant to the work. Structures based onskill pay individuals for all the skills for whichthey have been certified regardless of whetherthe work they are doing requires all or just a

few of those particular skills.In contrast, a job-based plan pays employeesfor the job to which they are assigned,regardless of the skills they possess.

What is a Skill-based Structure?

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Types of Skill Plans

Specialist: Depth

Generalist/Multiskill-Based: Breadth

Exhibit 6.2: SkillLadder at Balzer

Tool Coating

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Purpose of the Skill-Based Structure

Supports strategy and objectives

Supports work flow

Fair to employees

Motivates behaviortoward organizationobjectives

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Internalalignment

Skill analysis Skill blocks Skillcertification

Skill-basedstructure

Exhibit 6.3: Determining theInternal Skill-Based 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?

Work relationshipswithin organization

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Systematic processto identify andcollect informationabout skills requiredto perform work inan organization.

What Is Skill Analysis?

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How To Skill Analysis

What information to collect?Exhibit 6.4: General Mills Skill -BasedStructure

Exhibit 6.5: FMCs Technician Skill -BasedStructure

Whom to involve?

Establish certification methods

Research on skill-based plans

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How Is SBP Different From a Job-Based Pay System?

Skills or skill units, rather than jobs arecompensable

Mastery of skill units is measured andcertified

Pay changes do not necessarily accompany job changes

Little emphasis placed on seniority in pay determination

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Disadvantages of Skill-Based Pay

Average pay of employees likely higherHigh labor costs, if productivity increasesdo not offset additional costs

SBP systems more complex

SBP systems require a major investment

in training

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So, Whats a Competency?

Learned skill Traits such as behaviors and motives

Demonstrable characteristics of a person,including knowledge, skills, and behaviors,that enable performance

Characteristics of an organization

Independent of a job or position

An employee can transportthem from one job to another

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Exhibit 6.6: Determining the InternalCompetency-Based Structure

Internalalignment

Corecompetencies

Competencysets

Behavioraldescriptors

Competency based 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?

Work relationshipswithin organization

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CORE COMPETENCY

COMPETENCY SETS

COMPETENCYINDICATORS

Taken from mission statement; for example,business awareness.

Grouping of factors that translate corecompetency into observable behavior; forexample, cost management, businessunderstanding.

Observable behaviors thatindicate the level of competencywithin a competency set. Forexample, identifiesopportunities for savings.

Terms in Competency Analysis

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Exhibit 6.7: TRWHuman ResourcesCompetencies

Exhibit 6.8: SampleBehavioralCompetency Description

Examples: Competency-Based Approaches

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Iceberg Model of Competency Levels

KnowledgeSkills

Self-ConceptsTraits

Motives

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Purpose of the Competency-Based Structure

Supports strategy and objectives

Exhibit 6.9: Frito-Lay Managerial Objectives

Supports work flow

Fair to employees

Motivates behaviortoward organizationobjectives

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How To Competency Analysis

ObjectiveWhat information to collect?

Scheme to classify competenciesPersonal characteristicsVisionary Organization specific

Examples

Exhibit 6.10: 3M Leadership CompetenciesExhibit 6.11: Behavioral Anchors for Global-Perspective Competency Exhibit 6.12: The Top Twenty Competencies

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How To Competency Analysis (cont.)

Whom to involve?Competencies are derived from executiveleaderships beliefs about strategic intent

Exhibit 6.13: Product DevelopmentCompetency for Marketing Department at a

Toy Company

Establish certification methods

Resulting structureExhibit 6.14: Toy Companys StructureBased on Competencies

Research on competencies

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Exhibit 6.12: The Top Twenty Competencies

Achievement orientation Concern of quality Initiative Interpersonal

understanding Customer service

orientation

Influence and impact

Organization awareness Networking Directiveness Teamwork & cooperation

Developing others Team leadership Technical expertise

Information seeking Analytical thinking Conceptual thinking Self-control Self-confidence Business orientation Flexibility

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Purpose of job- or person-based planInternal pay structure to help achieveorganizational objectives

Aligned with internal alignment policy Supports business operations

Administering the planManualCommunication to foster employeeacceptanceAppeals process

One More Time: Internal AlignmentReflected in Structures

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Reliability of jobevaluationtechniques

Validity

Acceptability

Criteria toEvaluateUsefulness

of Pay

Structures

Results: How Useful?

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Results: How Useful?

Reliability Different evaluators produce same results

Validity

Degree to which evaluationachieves desired results

Acceptability Formal appeals processEmployee attitude surveysAudits

Exhibit 6.15: Illustrations of Audit Indexes

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Bias in Internal Structures

Gender biasGender of an individual jobholder does not influenceevaluation of a job

Job evaluators does not affect results

Compensable factors related to job content contactwith others and judgment does reflect bias

Compensable factors related to employeerequirements education and experience does not

reflect biasWages criteria bias

Job evaluation results may be biased if jobs heldpredominantly by women are incorrectly underpaid

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Recommendations to Ensure JobEvaluation Plans Are Bias Free

Define compensable factors and scales toinclude content of jobs held predominantly by womenEnsure factor weights are not consistently

biased against jobs held predominantly by womenApply plan in as bias free a manner asfeasible

Ensure job descriptions are bias freeExclude incumbent names from job evaluationprocess

Train diverse evaluators

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Job-Based Skill-Based Competency-Based

What is valued Compensable factors Skill blocks Competencies

Quantify the value Factor degree weights Skill levels Competency levels

Mechanisms totranslate into pay

Assign points that reflectcriterion pay structure

Certification and priceskills in external market

Certification and pricecompetencies in external

marketPay structure Based on job

performed/marketBased on skills certified/market

Based on competencydeveloped / market

Pay increases Promotion Skill acquisition Competencydevelopment

Managers focus Link employees to workPromotion andplacementCost control via pay for job and budget increase

Utilize skills efficientlyProvide trainingControl costs via training,certification, and workassignments

Be sure competenciesadd valueProvide competency developing opportunitiesControl costs viacertification, and work

assignments

Exhibit 6.16: Contrasting Approaches(1 of 2)

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Exhibit 6.16: Contrasting Approaches (2 of 2)

Job-Based Skill-Based Competency-Based

Employee focus Seek promotions toearn more pay

Seek skills Seek competencies

Procedures Job analysis

Job evaluation

Skill analysis

Skill certification

Competency analysis

Competencycertification

Advantages Clear expectationsSense of progressPay based on value of work performed

Continuous learningFlexibilityReduced work force

Continuous learningFlexibilityLateral movement

Limitations Potential bureaucracyPotential inflexibility

Potential bureaucracyRequires cost controls

Potential bureaucracyRequires cost controls