Defining Person-Focused Pay: Competency-Based, Pay-For-Knowledge, and Skill-Based Pay
1 Define person-focused pay.
Person-focused pay plans reward employees for acquiring job-related, knowledge, skills, or competencies rather than for demonstrating successful job performance. Person-focused pay rewards employees for the promise of performance in the future; merit pay and incentive pay reward employees for promise fulfilled (job performance). This approach to compensating employees often refers to three basic types of person-focused pay programs: pay-for-knowledge, skill-based pay, and competency-based pay. Sometimes, companies combine person-focused pay programs with traditional merit pay programs by awarding pay raises to employees according ...
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