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Advantage of a skill-based plan is that people can be deployed in a way that better matches the flow of work◦ Avoids bottle necks◦ Avoids idling
Skill-based structures link pay to the depth or breadth of the skills, abilities, and knowledge person acquires that are relevant to the
work.
In contrast, a job-based plan pays employees for the job to which they
are assigned, regardless of the skills they possess.
Skill plans can focus on ◦ Depth based
Specialist◦ Breadth based:
Generalist/ multiskilled based
Supports strategy and objectives
Supports work flow
Fair to employees
Motivates behavior toward organization objectives
Supports strategy and objectives
Supports work flow
Fair to employees
Motivates behavior toward organization objectives
To build a structure, a process is needed to describe, certify, and value the skills
◦ What is the objective of the plan?
◦ What information should be collected?
◦ What methods should be used?
◦ Who should be involved?
◦ How useful are the results for pay purposes?
Systematic process of
identifying and collecting
information about skills required to
perform work in an organization.
What information to collect? ◦ Foundation skills◦ Core electives◦ Optional electives
Whom to involve?◦ Employees and managers
Establish certification methods◦ Peer review, on-the-job demonstrations, or tests,
or formal tests
Guidance from the research on skill-based plans◦ Design of certification process crucial in
perception of fairness◦ Alignment with organization’s strategy◦ May be best for short-term initiatives
Several perspectives on what competencies are and what they are meant to accomplish◦ Skill that can be learned and developed or a trait
that includes attitudes and motives?◦ Focus on the minimum requirements that the
organization needs to stay in business or focus on outstanding performance?
◦ Characteristics of the organization or of the employee?
Core competencies◦ Related to mission statements expressing
organization’s philosophy, values, business strategies, and plans
Competency sets◦ Translate each core competency into action
Competency indicators◦ Observable behaviors that indicate the level of
competency within each set
Exhibit 6.6: TRW Human Resources Competencies
Exhibit 6.7: Sample Behavioral Competency Indicators
Organizations seem to be moving away from the vagueness of self-concepts, traits, and motives
Greater emphasis on business-related descriptions of behaviors “that excellent performers exhibit much more consistently than average performers”
Competencies are becoming “a collection of observable behaviors that require no inference, assumption or interpretation”
Organization strategyOrganization strategy
Exhibit 6.8: Frito-Lay Exhibit 6.8: Frito-Lay Managerial Managerial CompetenciesCompetencies
Work flowWork flow
Fair to employeesFair to employees
Motivates behavior Motivates behavior toward organization toward organization objectivesobjectives
Organization strategyOrganization strategy
Exhibit 6.8: Frito-Lay Exhibit 6.8: Frito-Lay Managerial Managerial CompetenciesCompetencies
Work flowWork flow
Fair to employeesFair to employees
Motivates behavior Motivates behavior toward organization toward organization objectivesobjectives
Objective What information to collect?
◦ One scheme to classify competencies includes Personal characteristics Visionary Organization specific
◦ Examples Refer Exhibit 6.9, Exhibit 6.10, and Exhibit 6.11
Whom to involve?◦ Competencies are derived from executive
leadership’s beliefs about strategic organizational intent
Establish certification methods Resulting structure
◦ Designed with relatively few levels Guidance from the research on competencies
◦ Appropriateness to pay for what is believed to be the capacity of an individual as against what the individual does
Purpose of job- or person-based plan◦ Design and manage an internal pay structure to
help achieve organizational objectives
Reflects internal alignment policy continuously
Supports business operations In practice, during evaluation of higher-value,
nonroutine work, distinction between job- versus person-based approaches blurs
A crucial issue is the fairness of the plans administration
Sufficient information should be available to apply the plan
Communication and employee involvement are crucial for acceptance of resulting pay structures
Reliability of job evaluation techniques◦ Different evaluators produce same results
◦ Can be improved by using evaluators familiar with the work and who are trained in job evaluation
Validity◦ Degree to which evaluation achieves desired results
◦ Validity of job evaluation is measured in two ways
Validity (cont.)◦ Validity of job evaluation is measured in two ways
Degree of agreement between rankings; ranking of benchmarks
‘Hit rates’; pay structure for benchmark jobs as criterion
◦ Definition of validity needs broadening to include impact in pay decisions
Acceptability◦ Formal appeals process
◦ Employee attitude surveys
Gender bias◦ No evidence that job evaluation is susceptible to
gender bias
◦ No evidence that job evaluator's gender affects results
◦ Compensable factors related to job content – contact with others and judgment – does reflect bias
◦ Compensable factors related to employee requirements – education and experience – does not reflect bias
Wages criteria bias◦ Job evaluation results may be biased if jobs held
predominantly by women are incorrectly underpaid
Define compensable factors and scales to include content of jobs held predominantly by women
Ensure factor weights are not consistently biased against jobs held predominantly by women
Apply plan in as bias free a manner as feasible◦ Ensure job descriptions are bias free◦ Exclude incumbent names from job evaluation
process◦ Train diverse evaluators