skill/knowledge based pay competency modeling
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Skill/Knowledge Based Pay Competency Modeling. MANA 5322 Dr. Jeanne Michalski [email protected]. Skill Based Pay. Rewards employees for the sets of skills they acquire rather than for the job they are performing at a point in time. - PowerPoint PPT PresentationTRANSCRIPT
Skill Based Pay
Rewards employees for the sets of skills they acquire rather than for the job they are performing at a point in time.
A job-based plan pays employees for the job to which they are assigned, regardless of the skills they possess.
Skill Based Pay
Skill breadth – learning all the different positions in a team
Skill depth – increasing expertise as in an apprenticeship ladder
Vertical skills – management skills and knowledge of the business
Common Applications
Base-pay systems Non-exempt employees Manufacturing sector Enhances employee involvement (such as self-
managed teams)
Results Skill Based Pay Plans (SBP)
Study of 97 skill based pay plans found 66% were successful
Increased workforce flexibility Reduced staffing requirements Increased productivity (58% improvement in
productivity in one plant) Longitudinal study 61% firms continued using SBP Impressive results when using SBP but other factors
play a part: extensive training engagement of employees in business high level of communication
Critical Factors for long-term Success of Skill Based Pay Sound customization of the SBP design to address
the organization’s specific business conditions, technologies and work systems
Solid hiring, training, job rotation and certification systems
Skill recertification processes Renewal processes that adapt to changing
conditions Leadership that supports the plan Competitive wage assessment
Biggest Downside to Skill Based Pay?
Competency Models
Competency models identify the knowledge, skills, and abilities necessary to successfully perform critical work functions across an organization, industry, or occupation.
Competency Definition/Example
A competency is a personal characteristic (skill, knowledge, trait, motive) that drives behavior leading to outstanding performance. An example of a competency is "conceptual thinking", defined as: finding effective solutions by taking a holistic, abstract or theoretical perspective. A person demonstrating this competency would probably be able to: Notice similarities between different and apparently unrelated
situations Quickly identify the central or underlying issues in a complex
situation Create a graphic diagram showing a systems view of a situation Develop analogies or metaphors to explain a situation Apply a theoretical framework to understand a specific situation
Competency Models
“Core Competencies” for sustainable competitive advantage.
More general descriptions that cut across many categories of jobs.
Integrated with selection, training, and performance management.
Competencies Behavioral indicators Validation
Elements of Competency Model
Depends on Purpose – no agreement, but generally include: Significance of meeting organization’s strategies
(sometimes implied in the development of core competencies)
Expected outputs or results of performance Competencies for fully successful performance Competencies that distinguish exemplary
performance (if identified) Behavioral indicators that describe when competence
is being used appropriately
Steps in Developing Competency Models Gather Background Information
Catalog and review existing resources Decide for each job family how to gather
data Comprehensive job analyses Expert panel Structured interview
Identify set of generic competencies, if possible
Steps in Developing Competency Models Collect and Analyze Data
Identify themes Develop draft model
Competencies Clusters Indicators or levels
Steps in Developing Competency Models Review with sponsors/key leaders
Discuss each competency Names and definition Specific behaviors used to describe
competency Elimination of any competency Additional competencies
Revise model Communicate Model and Uses
Anheuser-Busch Competencies
1. Task force (HR staff and facilitator) identified key business imperatives.
HR Staff and consultants Company strategy and business objectives Mission and values
2. Focus groups of managers reviewed competencies Narrowed and prioritized list Confirm or edit 4-5 specific employee behaviors for each
competency
Anheuser-Busch Competencies
3. Questionnaires sent to supervisors who were asked to rate the frequency that each behavior was exhibited by:
Top performers – “role models” Satisfactory or competent employees Employees who need improvement
4. Completed competencies integrated with selection and performance management system.
I. Achieving Competitiveness
Customer Focus: Aggressively monitors and anticipates customer requirements and responds to them in an appropriate manner.
Business Focus: Strategically monitors business performance and environment to enhance competitive position.
Innovation and Change: Actively seeks out new ideas and displays creativity in adapting to changing conditions.
Results Orientation: Demonstrates the drive and persistence to meet and exceed job goals for self or other.
Analysis and Planning: Uses critical thinking to solve problems and develop effective work plans.
Systems Thinking: Improves and integrates business process to meet organizational strategic goals.
Technical / Functional Expertise: Demonstrates, enhances, and shares job-related knowledge and skills.
II. Succeeding Through People
Valuing people: Demonstrates respect for others regardless of personal background.
Commitment to Development: Develop own and others’ capabilities to better meet organizational needs.
Professionalism: Demonstrates candor, composure, and commitment to obligations in work relationships.
Empowerment: Delegates or accepts responsibility to expand own capabilities to take appropriate risks and make decisions.
Influence: Uses appropriate methods to motivate others.
Team orientation: Accepts the team approach and takes necessary action to support its processes and goals.
Uses for Competency Models
Selection Training Performance Management Developmental Planning Career Pathing Compensation
Common Barriers to Success of Competency Models Lack of expertise in building models Complexity of some models seems confusing Limited support by top management Competing priorities Lack of resources Lack of linkage with organizational strategy Lack of ongoing evaluation Not integrated with all HR processes
Sample Competency
ELEMENTS OF COMPETENCY
PERFORMANCE CRITERIA
EXAMPLES OF EVIDENCE
Motivating PeopleMotivate people towards achieving quality results.
A work environment is created which encourages individuals to seek challenges and strive to reach their full potential. Individuals' needs and wants are recognized and where possible incorporated into work assignments consistent with their personal strengths.
Achievements are promoted and rewarded in a way which openly acknowledges the contribution of individuals.
All staff are involved in the development of business plans which demonstrates structured reward and recognition system.
Example of structured feedback on performance.
Class Exercise
Break into groups of no more than 6 Review Working together as a team competency
and identify performance criteria and examples of evidence
Turn in results with names of all in the group
ELEMENTS OF COMPETENCY
PERFORMANCE CRITERIA
EXAMPLES OF EVIDENCE
Working Together as a Team: Actively participates as a member of the teamtoward the completion of team goals.
Advantages of competency models
Disadvantages of competency models
Advantages of competency models Flexibility Integration Cultural fit
Disadvantages of competency models Vague Less defensible Harder to justify paying someone for what
they are capable of doing vs. what they do
Purpose of Job- Person- Based Pay Structures Design and manage internal pay structure that helps
the organization to succeed Reflect internal alignment Support business operations
More research on job evaluation Reliability – high agreement on job ranking (.85-.90) Validity – usually compares structure to benchmark
jobs (studies show similar job ranking but different pay rates)
Homework
Review any available sources i.e. Bureau of Labor Statistics, Chamber or Commerce, Business and Professional Organization Data to compile pay information for multiple level of Accountant positions (Accountant, Sr. Accountant) and Systems Developer positions (programmer, systems analyst, senior systems analyst).
Be sure to get rates from 3 different sources for at least 3 levels of a position (e.g. if you pick Accountant get 3 levels of Accountant data) and include a description of the position from each source to show how the position is similar across the 3 sources.
Include survey date or effective date if available Include mean and median or percentile data if available
Example of one Level of Job
Survey Position Salary
Local Fort Worth community information 9/30/2008
Mail Clerk: Under immediate supervision , assist with the sorting of ordinary and registered incoming mail and processing of outgoing mail. Makes scheduled internal deliveries and pickups of routings among departments. This is an entry-level position.
$24,400
Bureau of Labor Statistics –Regional1/31/2009
Mail Clerk: Prepares incoming mail for distribution, and processes outgoing mail. Distributes and collects mail, determines and affixes postage, and maintains records on postage, registered mail and packages.
$22,500
Local Dallas community information3/31/2009
Mail Messenger: Pick up and deliver incoming and outgoing mail according to prescribed schedule. Picks up and delivers mail and small packages to various locations within the company. Weighs letters and packages and affixes appropriate postage. Entry-level position
$26,800