What differences and similarities exist between skill-based pay structures and competency-based pay structure?
Skill-based pay structures reward individual members of a team for possessing, acquiring, and applying skills they have learned and putting them towards accomplishing goals for the organization. This type of pay structure fosters a learning environment where individuals strive to learn new skills in order to receive an increase to their base salaries. A skill-based pay structure is very beneficial when a team is required to know many different functions. Within this pay structure, the organization determines new skills that must be developed in order to help the organization run more effectively. Flexibility is increased within the workforce because members of a team broaden their ...
This solution discusses the differences and similarities that exist between skill-based and competency-based pay structures.