Person focused plans
Transcript of Person focused plans
Person - Focused Plans
Rewards employees for acquiring job - related
– Competencies– Knowledge – Skills
2 main types– Pay - for - knowledge – Skill - based pay
Pay - For - Knowledge Plans
Reasons for adoption– Removes entitlement label
– Connects pay to job-related abilities
– Increases employee autonomy
– Technological innovations
– Increased global competition
Pay-for-KnowledgeModels
Stair - step
Skill - block
Job - point accrual
Cross - departmental
Person - Focused Pay
Compensates employees for flexibility
Compensated for potential contributions
– Based on skills & knowledge
Job - Based Pay
Compensates employees for current jobs
Pay limits set for each job
Evaluations based on job descriptions & objectives
2 main types– Merit pay– Incentive pay
Job Characteristics Theory
Employees more motivated to perform jobs that contain
Skill variety
Task identity
Autonomy
Feedback
Employee Advantages – Pay for Knowledge
Can provide job enrichment
Can provide job security
Can make jobs more intrinsically
motivating
Can make jobs more interesting
Increases employees’ flexibility
Advantages To Employers
Leads to enhanced job performance
Leads to reduced staffing
Leads to greater flexibility
Improves quality Increases productivity levels
Disadvantges
Can increase hourly labor costs
Can increase training costs
Can increase overhead costs
May not mesh well with existing incentive pay systems
Lowest - Cost Competitive Strategy
Lowers output costs per employee Training should improve productivity Improves product & service quality Long - term gains should outweigh short - term costs
Differentiation Competitive Strategy
Requires employees who are– Creative– Open - minded– Risk - takers
Requires long - term focus
Pay - for - knowledge effective with work teams