Chapter 6.docx

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University of Guelph
Human Resources and Organizational Behaviour
HROB 3010
Rhonda Gordon

Chapter 6: Person-Based Pay Structures Person-Based Pay Structures Skill-based pay structures- link pay to the depth or breadth of the skills, abilities and knowledge a person acquires that are relevant to the work -skill based usually applied to blue-collar work -competency based usually applied to white collar work -majority of applications of skill based pay have been found in manufacturing and assembly work where work can be specified and defied -people can be deployed in a way that better matches the flow of work (avoid bottlenecks and idle hands) -pay individuals for all the skills for which they have been certified regardless of whether the work they are doing requires all or just a few of those particular skills -very different approach compared to job-based plan, which pays employees for the job to which they are assigned, regardless of the skills they possess Types of Skill Plans Specialist: Depth – pay on knowledge level (more knowledge, more effective and flexible =higher pay), seniority associated with pay increase, (specialists in corporate law, finance, welding) Generalist/Multiskill-Based: Breadth – earn pay increases by acquiring more knowledge (knowledge is specific to range of related jobs), pay increases come with certification of new skills, rather then job assignments(generalists with knowledge in all phases of operations (manufacturing, finance, maintenance, human resources)) Purpose of the Skill-Based Structure Supports the strategy and objectives- skills on which a structure is based should be directly related to organizations objectives and strategy Supports Workflow- skill based plan can more easily match people to changing workflow Is Fair To Employee- employees like potential of higher pay that comes with learning -encouraging employees to take charge of own development, skill-based plans may give them more control over their work lives -favoritism and bias may play role in determining who gets first crack at training necessary to become certified at higher paying skill level -employees complain they are forced to pick up slack for those who are out for training -courts have not yet been asked to rule on legality of two people doing the same task for different skill-based) pay Motivates Behavior Toward Organization Objectives- person-based plans have potential to clarify new standards and behavioral expectations How To: Skill Analysis Skill analysis-a systematic process to identify and collect information about skills required to perform work in organization Skill category- grouping of related blocks of varying skill levels that represent all activities of a single job family or steps in a process (ie. Production technician) Skill block- grouping of skills, activities, or behaviors (ie bearing housing assembly) Skill-smallest unit of analysis, a specific statement of what a person does (ie. Inspect oil levels and all filters) Determining the Internal Skill-Based Structure: Skill Analysis Skill Blocks Internal -similar to task -related skills Skill Skill-Based Pay Alignment statements in can be grouped Certification Structure job analysis together What Information To Collect -far less uniformity in use of terms in person-based plans than in job-based plans -foundation skills- include quality seminar videos on materials, handling and hazardous materials, three day safety workshops -core electives- necessary to facility’s operations (ie. Welding, paining, finishing, assembly, inspection) and each skill is assigned point value -optional electives- additional specialize competencies (range from computer applications to team leadership and consensus building) Whom to Involve? -employee involvement almost always built into skill-based plans -employees source for defining skills, arranging them into hierarchy, bundling them into skill blocks, and certifying whether a person actually possesses the skills Establish Certification Methods -some organizations use peer reviews, on-the-job demonstrations, and tests for certification -leaders and peers used in certification process -newer skill-based applications have been moving away from on-demand review and toward scheduling fixed-review points during the year -scheduling makes easier to budget and control payroll increases -many plans require employees be recertified because skills can get rusty when not used frequently -skill based plans become increasingly expensive as the majority of employees become certified at the highest pay levels -employers combatting higher labour costs by having leaner staffing and requiring employees to stay at rate for certain length of time before taking training and moving to higher rate Guidance From the Research on Skill-Based Plans -skill based plans generally well accepted by employees because it is easy to see connection between plan, the work, and the size of paycheck -plans provide strong motivation for individuals to increase their skills (‘learn to earn’ popular slogan use in these plans) -skill based approaches may be only short-term initiatives for specific settings Person-Based Pay Structures: Competencies Internal Core Competency Behavioural Competency- Alignment Competencies Sets Descritors Based Structure Competencies- underlying, broadly applicable knowledge, skills, and behaviors that form the foundation for successful work performance Competency-based pay structure- links pay to work-related competencies Core competencies- competencies required for successful work performance in any job in the organization -those that form foundation for successful performance at all jobs in the organization (often linked to mission statements that express organizations philosophy, values, business strategies, and plans) -taken from mission statement Competency sets- specific components of a competency -begin to translate each core competency into action -grouping of factors that translate core competency into observable behavior Competency indicators-observable behaviors that indicate the level of competency within each competency set -may be used for staffing and evaluation and pay purposes Defining Competencies -early conceptions of competencies are based on five areas: 1. skills (demonstration of expertise) 2. knowledge (accumulated information) 3. self-concepts (attitudes, values, self-image) 4. traits (general disposition to behave in a certain way) 5. motives (recurrent thoughts that drive beha
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