What is competence related pay

It fits with the concept of human capital management, which emphasises the skills and competencies people bring with them to the workplace. Paying for competence focuses the organisation forwards, not backwards. This means that the line manager needs to spend less time looking at what has happened in the past although evidence-based learning remains very valuable , but rather on the future, and the standards and expectations you have of your individual team members. There is less emphasis on quantitative targets, which is more appealing, because it rewards people for what they are capable of doing rather than results over which they often have little control.

However, competency-related pay does raise questions. What are we paying for? Employees are assessed against these factors to determine how they rate against a fully satisfactory standard.

Taking the know-how factor as an example, the top, middle and bottom levels of a five level set of competence descriptions may be defined as:. Top level: the employee is widely recognized by colleagues and managers as an all round expert in every aspect of the work and its context. Middle level: the employee needs little or no help with the know how required to handle adequately all the normal elements of the work, though could still benefit from a broader understanding or its theoretical or strategic context.

Bottom level: the employee frequently has to be given information or advice about the why, what and how of the work and its context. A year later, an assessment is made of the extent to which that years targets have been met, and the outcome of this assessment is an overall performance rating, which then determines pay levels.

CBP CBP is still an annual assessment but this of the employees overall performance compared with a set of competencies It looks at the totality of the employees performance-the whole person in the whole job-not only those job elements that a PRP scheme might select for targeting in a particular year. PRP objectives require annual discussion and agreement. It is restricted to decisions about individual pay awards.

Competencies are nonnegotiable and permanent, changing only when there are fundamental changes in the nature of the work. Difficulties in setting measurable performance targets for important qualitative factors Difficulties in converting assessments of varying performance against a large number of targeted factors into the single rating needed for calculating PRP.

Difficulties in assessing the impact on target achievement of unexpected events or performance of other employees Manipulation of targets by employees to ensure that they achieve high levels of performance pay Adverse effects on teamwork of objectives that ignore the need of collaborative working relationships.

In a broad banded pay structure, different segments of each band can relate to different levels of overall competence. Competence assessment can be linked with the size of annual pay award. Competence assessment can be linked directly to training and development plans.

CBP is credible only if employees share the management view of competencies needed in their jobs CBP is more subjective than PRP Its nature is wide ranging, thus it gives a more realistic view of the totality of good performance. Buka menu navigasi. Tutup saran Cari Cari.

Pengaturan Pengguna. Lewati carousel. Karusel Sebelumnya. Karusel Berikutnya. Apa itu Scribd? Competency Based Pay. Diunggah oleh Hriday Prasad. Apakah menurut Anda dokumen ini bermanfaat? Apakah konten ini tidak pantas? Laporkan Dokumen Ini. Tandai sebagai konten tidak pantas. Unduh sekarang. Judul terkait. A competency-based pay system can create a "culture of Improvement," according to the American Academy of Family Physicians.

Because compensation is based on showing improvement in the chosen competencies, a large emphasis is placed on self-development. This can result in a pervasive cultural attitude that the better you perform, the bigger the reward.

Because competency-based plans rate employees according to general criteria instead of specific accomplishments, a potential drawback is that they introduce subjectivity into the evaluation process. Concepts such as leadership and the ability to multitask are open to interpretation, resulting in the possibility of an inaccurate rating. Another possible drawback to competency-based pay plans is that they can result in the perception of favoritism, according to LocateStaffing.

If one worker perceives herself as more valuable than another but discovers that the other employee received a larger pay increase, she may draw the conclusion that she is being treated unfairly. Dissension can be an unwanted byproduct. It can be difficult to establish which competencies actually result in improved job performance or productivity.