Contrasting Person-Focused Pay With Job-Based Pay
5 Contrast person-focused pay with job-based pay.
Companies institute job-based pay plans or person-focused pay plans based on very different fundamental principles and goals. Table 5-1 lists the key differences between these two pay programs. Job-based pay compensates employees for jobs they currently perform, which include seniority pay, merit pay, and incentive pay. Human resource professionals establish a minimum and maximum acceptable amount of pay for each job. Under seniority plans, employees receive automatic increases over time based on the assumption that they are further developing their capabilities, which translate into higher job performance. In the case of merit pay, managers ...
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