COMPENSATON AND BENEFITS

BUSS2103

Unit 5: PERSON FOCUSED PAY

Learning objectives
• Define person-focused pay.
• Describe the usage of person-focused pay.
• Name and explain the reasons companies adopt person-focused pay
programs.
• Summarize the varieties of person-focused pay programs.
• Contrast person-focused pay with job-based pay.
• Explain the advantages and disadvantages of person-focused pay
plans.
Person focused pay defined
• reward employees for acquiring job-related, knowledge, skills, or
competencies.
• rewards employees for the promise of performance in the future
• Pays for knowledge, skills, and competencies
The core of person-focused pay
A learning organization is a firm that recognizes the critical
importance of continuous performance-related training and
development, and takes appropriate action.

Strategic
Training & Improved
Development Performance Objectives
achieved
Types of Person focused Pay
Types of Person focused Pay
Types of Person focused Pay
Reasons for Person Focused Pay
Types of Person Specific Pay

Stair step Skill block

model model

Job-point Cross-
accrual departmental
model model
The Skill Block model
• The skill blocks model also
applies to jobs from within
the same job family.
• Just as in the stair–step
model, employees
progress to increasingly
complex jobs; however, in
a skill blocks program,
skills do not necessarily
build on each other.
Job accrual model
• A job-point accrual model encourages employees to develop skills and
learn to perform jobs from different job families.
• Job-point accrual methods create organizational flexibility and
promote company goals by assigning a relatively greater number of
points to skills that address key company concerns
Cross Departmental model
• Cross-departmental models promote staffing flexibility by training
employees in one department with critical skills they would need to
perform effectively in other departments.
• The job-point accrual model and the cross-departmental model are
similarly arranged, but the intended purposes of these programs
differ.
• The job-point accrual model encourages employees to learn skills and
acquire knowledge that bear directly on companies’ attainment of
competitive advantage
Person focused pay vs Job-based pay

Person focused Job-based

• Compensate employees for • Compensate employees for jobs
developing the flexibility and they currently perform (seniority
skills to perform a number of pay, merit pay)
jobs tasks effectively