Answer to Question 1
Answer: TRUE
Answer to Question 2
Answer: Skill-based pay is a system that compensates employees for their job-related skills and knowledge, rather than how well he or she performs on the present job. Essentially, job descriptions, job evaluation plans, and job-based salary surveys are replaced by skill profiles, skill evaluation plans, and skill-based salary surveys. The system assumes that employees who know more are more valuable to the firm and, therefore, they deserve a reward for their efforts in acquiring new skills. When employees obtain additional job-relevant skills, both individuals and the departments they serve benefit. Competency-based pay is a compensation plan that rewards employees for the capabilities they attain. It is a type of skill-based pay plan for professional and managerial employees. Today, there are many alternatives to choose from-core, organizational, behavioral, and technical competencies. The disappearance of the traditional job provides the primary rationale for this change. Today, employees often have variable and unstable work assignments, with roles that cannot be assigned a valid pay rate through traditional job evaluation plans. Often, considerable time must be spent determining the specific competencies needed for the different jobs. Blocks of competencies are then priced, and management must invest considerable time in developing, implementing, and continuing such a system.
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