Competency-Based Pay System Pros And Cons

ompetency-based pay systems have several pros and cons for both the employees and the employer. Within this pay system there would be no seniority factor. This factor would be eliminated because the importance is placed on the employee’s ability and competency of the employee to do the job. This pay system provides an incentive to achieve. This incentive drives the employees to achieve at a greater level because they would be paid for the achievements that they accomplish. A cultural improvement is accomplished because it promotes the self-development of the employee.

Some cons to the competency based pay system is the it would create subjectivity which inhibits the evaluation process which needs to occur. The subjectivity would want employees