Skill-Based Pay Structure
The process of creating the pay structure depends on whether the pay is job-based, competency-based, or skill-based.
The pay based on the results of a competency-based evaluation considers the level of competencies required for successful performance. In this method, the level of competencies values the job and the pay is based on the use of competence but not the results. The competency-based pay structure focuses on individuals. Salaries and raises are based on how well employees acquire the core competencies needed for their positions.
The skill-based pay is based on the skills of employees but not their job. So, like the competency-based pay, this method also focuses on individuals and their skills. "Workers are compensated for …show more content…
each new skill that allows them to perform new tasks on the job. As workers gain each additional skill, their pay rate goes up". Skill-based pay rewards employees who learn new skills and acquire new knowledge.
The company, where I worked before entering the University, uses the job-based pay grades.
The employees in the company are paid based on their grades. A new employee usually starts with the first level in the pay grade. After working in the company in the same position for some period of time (usually one year in our company), an employee gets increase within the same pay grade. If an employee reached the highest level in the pay grade or move to another position then the employee moves up to the next pay grade level. For example, when I got promotion - I was moved up to the next grade.
This method helps avoid the discrimination issues as male and female employees working in the same position are paid equally.
Working as the financial and administrative officer in the company, I know that using this method of payment it is easier to budget and plan payroll increases each year.
It was very interesting for me to read The Compensation In The Context Of Globalization in our book. Working for an American company in my country, our salary is, of course, higher than the wages in the government institutions and local private companies but, I guess, much less than Deloitte employees get in the US. I think it is fair as the cost of living in Turkmenistan, my home country, is lower than in the
US.
Globalization at the international market involves the active people from various countries of the world. It ensures the inflow of the most competent, flexible and motivated employees. Workers living in the developing countries with low costs of life can offer services at a reduced rate as compare to the rates in the countries with higher standards of living.
The economic situation and living conditions, for example, in my country lead to the outflow of highly-qualified specialists from the country. Thus, many large companies faces with the problem of the shortage of qualified workers at the local market and sometimes they hire top-level executive specialists from foreign countries, whose salary is much higher than the local wages.
References:
What Are the Differences Between Skill-Based Pay & Competency Pay?
By Sharon O 'Toole, eHow Contributor
The Differences in a Skill Base Pay and a Job Base Pay
By Erin Stertz-Follett, eHow Contributor
Job-Based Pay vs. Knowledge-Based Pay by Neil Kokemuller, Demand Media
The pay based on the results of a competency-based evaluation considers the level of competencies required for successful performance. In this method, the level of competencies values the job and the pay is based on the use of competence but not the results. The competency-based pay structure focuses on individuals. Salaries and raises are based on how well employees acquire the core competencies needed for their positions.
The skill-based pay is based on the skills of employees but not their job. So, like the competency-based pay, this method also focuses on individuals and their skills. "Workers are compensated for …show more content…
each new skill that allows them to perform new tasks on the job. As workers gain each additional skill, their pay rate goes up". Skill-based pay rewards employees who learn new skills and acquire new knowledge.
The company, where I worked before entering the University, uses the job-based pay grades.
The employees in the company are paid based on their grades. A new employee usually starts with the first level in the pay grade. After working in the company in the same position for some period of time (usually one year in our company), an employee gets increase within the same pay grade. If an employee reached the highest level in the pay grade or move to another position then the employee moves up to the next pay grade level. For example, when I got promotion - I was moved up to the next grade.
This method helps avoid the discrimination issues as male and female employees working in the same position are paid equally.
Working as the financial and administrative officer in the company, I know that using this method of payment it is easier to budget and plan payroll increases each year.
It was very interesting for me to read The Compensation In The Context Of Globalization in our book. Working for an American company in my country, our salary is, of course, higher than the wages in the government institutions and local private companies but, I guess, much less than Deloitte employees get in the US. I think it is fair as the cost of living in Turkmenistan, my home country, is lower than in the
US.
Globalization at the international market involves the active people from various countries of the world. It ensures the inflow of the most competent, flexible and motivated employees. Workers living in the developing countries with low costs of life can offer services at a reduced rate as compare to the rates in the countries with higher standards of living.
The economic situation and living conditions, for example, in my country lead to the outflow of highly-qualified specialists from the country. Thus, many large companies faces with the problem of the shortage of qualified workers at the local market and sometimes they hire top-level executive specialists from foreign countries, whose salary is much higher than the local wages.
References:
What Are the Differences Between Skill-Based Pay & Competency Pay?
By Sharon O 'Toole, eHow Contributor
The Differences in a Skill Base Pay and a Job Base Pay
By Erin Stertz-Follett, eHow Contributor
Job-Based Pay vs. Knowledge-Based Pay by Neil Kokemuller, Demand Media