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Paid, Skill-Based Pay, And Competency-Based Pay System

839 Words4 Pages

Prompt #1: Compare the factors being measured in job-based pay, skill-based pay, and competency-based pay. What are the advantages and disadvantages to implementing each of these measurement systems?
Job Based Pay: Job-based pay is a kind of performance evaluation system, which utilizes a point’s system to assess job performance. A written description of the job is used to conduct the evaluation. Then, the job description is scored (using points) in terms of how well an employee is performing their duties (which are based on the job description). Salary levels are appraised based on the points Job-based pay measures how well an employee is performing a job based on the written job description of that particular job (Thompson 2014, pp.57). …show more content…

The company will then identify skills that are needed for each task. Finally, the company develops assessments to determine if an employee has learned the required skills. Employees are paid only for the skills that they currently possess and are actively using. A lot of skill-based programs provide individuals with a pay raise when they acquire new skills. In skill-based pay, the factors being measured are whether or not the employee has learned the skills that are needed to perform tasks related to their job. It also measures how well they are actively using the skills that they have learned (Thompson 2014, pp.57)
Competency Based Pay: In competency-based pay, employees have to prove to their employers that they can use the skills that they already have. Sometimes individuals obtain new skills but never use them or use them ineffectively. This is certainly possible in a skill-based pay assessment. In competency-based pay, the factors being measured include an employee’s skill at performing tasks needed for their job (Thompson 2014,

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