The Differences in a Skill Base Pay and a Job Base Pay by Erin Stertz-Follett - Updated September 26, Pay scales have traditionally been defined by the qualifications, experience and knowledge required to perform job duties at a certain level. In other words, pay is centered on the job, not the person. Skill-based pay, also referred to as knowledge-based pay, is person-focused.
Formally writing down how employees are performing helps them to become more productive and, subsequently, helps the company meet its financial goals. Choosing the type of performance appraisal depends on the needs of your company.
Performance evaluations can be based on the job duties or on the skill set required of the person occupying the position. Purpose of Evalutions Ideally, an employee performance evaluation system will be in place prior to hiring your first employee.
Your requirements to satisfactorily fulfill the duties of the position are spelled out in writing, and the employee signs a form acknowledging that she has read and understood it.
Throughout the performance period, your feedback to the employee on progress is imperative so there are no surprises when she receives a formal review. As soon as the evaluation period is over, you should administer the appraisal report and let the employee know that you will help in any areas that are less than satisfactory.
Job-Based Evalution Job-based employee performance evaluations focus on the duties of the position and the tasks required to perform them successfully. This is a standard type of evaluation you can use for all employees filling the same position.
First you must perform a job analysis, separating all duties into large categories, such as essential functions and communication.
Under the categories of the position, specify tasks required to fulfill them. Be thorough in your analysis and ask your manager or the human resources department to review it. This will be the performance plan for the position.
Each employee will receive the plan, sign it and be reviewed formally at the end of the rating period based on the duties outlined. It takes into consideration the knowledge, skills and abilities the employee possesses upon hire and learns in the course of the rating period.
In this way, an employee is compensated fairly for what he brings to the organization and is not given pay increases based on general duties. Once he masters a skill, you are able to focus on the development of other areas in relation to how they benefit the company.
Considerations Job-based performance evaluations are simpler to administer. Once the plan is in place for the job, and as long as the duties do not change, you can use it for all current and future employees who fill that position. Because you will be using the plan on many occasions, it becomes less complicated for you to complete.
Person-based evaluations, on the other hand, are specific to each employee. Although employees who fill the same position will possess similar knowledge, skills and abilities, you will have to review and revise the plan with each new hire, and you will need to study it carefully prior to administering the formal appraisal.Aug 08, · Pay-structure models are variants of either job-based pay models or ones based on knowledge.
Each has advantages and disadvantages. If you believe you have skills and abilities that go beyond a job description, you may prefer being hired by a . Pay based on depth and breadth of skills and abilities a person acquires that are relevant to the work Different pay for same jobs Pay individuals for skills THEY HAVE, not necessarily exact match to skills required by job.
Aug 08, · Pay-structure models are variants of either job-based pay models or ones based on knowledge. Each has advantages and disadvantages. If you believe you have skills and abilities that go beyond a job description, you may prefer being hired by a company that uses a knowledge-based pay system.
Person-Based Pay vs. Job-Based Pay.
February 23, by mattperman Leave a Comment. The alternative that is being increasingly adopted is person-based pay.
It bases pay on each individual’s skills and competencies. Facebook. Twitter. Google+. Matt is the author of What’s Best Next. This approach is based on the assumption that job worth can be determined and that the person doing the job is worth only as much as the job itself is worth.
It is not clear that the worth of people can be equated with the worth of their job. Rewards for Skills. Skill-based pay rewards a person for what he is worth based on his set of skills, rather than what the job itself is worth.
There is a base rate of pay for minimum skills, but pay progression is directly tied to skills acquisition.