Why are competency-based compensation, broad banding, and variable pay all related to changing strategies for compensating employees? List the positive and negative aspects associated with using salary-only and commission-only sales compensation plans. Why are benefits communications and flexible benefits systems so intertwined?© BrainMass Inc. brainmass.com October 2, 2020, 1:17 am ad1c9bdddf
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Q: Why are competency-based compensation, broad banding, and variable pay all related to changing strategies for compensating employees?
A: Competency-based compensation, broad banding, and variable pay are all ways of compensating a company's top performers and most valuable employees. The traditional method of compensation - base pay for doing a job. The total rewards approach places value on the individual versus on the job.
1) Competency-based pay
Competency-based pay rewards an employee for meeting expectations. Pay based on knowledge or skills starts an employee off at a base rate of pay. As the employee learns other jobs or skills, he becomes more valuable to the organization. The organization rewards the employee for the new competencies he acquires with a pay raise.
2) Variable pay
Variable pay compensates an individual, a team, or a group for organizational performance, usually via bonuses, incentives or stock options. When I worked the temporary job at SDG&E, we were ...
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