Person Focus to Pay

1. Person Focus to Pay
Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)
Professor
Al-Qurmoshi Institute of Business Management
Hyderabad

2. Person Versus Job Based Pay
Fredrick Taylor in Scientific Management focused
on the basic elements of the job
Lead to job focused way of organizing work
Criticisms of job based structure
Reduces flexibility
“Not my job” syndrome
Little reason to acquire information & skills outside of
narrow job
Doesn’t help people understand what other people do

3. Person Focus to Pay
Pay-for-Knowledge
Skill Based Pay
Competency Based Pay

4. Skill Based Pay
Pay is tied to skills, abilities & knowledge that an
individual possesses
- Manufacturing jobs
- Flexibility to re-assign people to where work is needed
Depth: pay for having a deep level of knowledge
within a job
e.g. teachers pay increases with amount of education:
bachelors, masters, doctorate degree
Breadth: Pay for generalist knowledge

5. Breadth
Increased pay for more knowledge
Pay increases come with certification of new
skill
◦ e.g., Microsoft Certification; SHRM Certification
◦ Skill certification can also come from internal assessment
Employees can be assigned to new jobs, based
upon certification
Pay increases with the more certifications held
For example: 75.00 base pay + 10.00/hr for skill in
each machine

6. Why Skill Based Pay?
 Ensures workers have needed skills
◦ Assumes good tests
 Supports the organizational work flow
◦ Workers trained & ready to move to assignments as needed
 Fairness
◦ Depends on how training conducted
◦ Who pays for training
◦ Means two people doing same task at different pays
 Motivation
◦ Motivation is to get training, not necessarily to perform task
well

7. Skill Based Pay
Employees accept skill based pay
Where Certification procedures are viewed as fair
It is easy to communicate
Whether Productivity is increased?
Mixed results
61% of those implementing SBP, were using it 7 years later
Depends on strategy more compatible with innovation, not low cost
Usefulness varies based upon setting

8. Competencies
What are competencies?
Skill /expertise that can be learned & developed
Knowledge (accumulated information)
Self concept (attitudes, values, self image)
Traits (general disposition to behave in a certain way)
Motives (thoughts that drive behavior)
Competencies - characteristics of the person:
personality, attitudes, knowledge, skills & behaviours

9. Competencies
Knowledge & Skills: Essential characteristics for the
job
Can be tested: Observable and Measurable
Self concepts, traits, & motives
Not Directly Measurable must be inferred from actions
Self concept (identifies with the team)
Trait (flexibility)
Motive (drive to produce results)
Much more parameters subjectively assessed

10. Core Competencies
Derived from mission statement: values &
attitudes
JetBlue embraces five values that represent
the company and create its unique culture:
Safety, Caring, Integrity, Fun and Passion

11. Competency Effectiveness
 Organization Strategy
◦ Competencies are likely to fit with organization’s
strategy
 Work Flow
◦ Competencies are designed to convey values and
enhance work flow
◦ Effectiveness likely to depend upon culture
 Fair to Employees
◦ Empower employees to take charge of own
development
◦ Subjective
 Motivation towards organization’s objectives

12. Key is the Assessment
How do you certify that
someone has these
competencies
How to tie to pay
How to justify in a
court of law
Level Phase Title
4 Expert Visionary
3 Advanced Coach
2 Resource Contributor
1 Proficient Associate

13. Pay for Knowledge
Employee Advantages
Skill Variety
Task Variety
Autonomy
Feedback
Employer Advantages
Communicates Culture
Product or Service qualities
Leaner Staffing cross usage
Flexibility

14. Pay for Knowledge programs
Pay for Knowledge programs have the potential to
help employers compete in global environment
It gives employees the opportunity to learn