Author Question: Competency-based pay systems offer employers more flexibility but are less efficient than ... (Read 96 times)

awywial · **on:** Jul 7, 2018

Competency-based pay systems offer employers more flexibility but are less efficient than traditional job evaluation methods.

Indicate whether this statement is true or false.

Question 2

What are the key differences between competency-based pay and traditional job-based pay? Which method would you prefer if you were an employee? Why?

What will be an ideal response?

lkanara2 · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

Answer: TRUE

Answer to Question 2

Answer: With job-based pay (JBP), the employee receives the pay attached to the job regardless of whether the employee has the necessary competency for performing the job. With competency-based pay (CBP), the supervisor certifies employee competency prior to any pay increases. With JBP, pay changes when one switches jobs. With CBP, one must demonstrate proficiency prior to getting a raise. Also, one could do a lower-paying job but still receive a higher pay based on skill. JBP systems may tie pay to grade or seniority. CBP pays for competencies, not seniority. There is more advancement possible with CBP plans than with JBP. CBP enhances organizational flexibility because workers' skills are applicable to more jobs, and therefore more portable.