Contrast job based and skill based pay
Variable-pay involves paying the employees a form of compensation for performance in addition to the fixed base salary paid. It is a technique opted for by companies to increase the productivity of their staff. It is seen used on a large scale in the Information Technology sector. Skill based pay on the other hand refers to pay that is paid to employees who are willing to undergo a learning or training program to increase the level of their skills. It is pay that reflects the organisations appreciation of the employee acquiring additional skills and training. Both of these are progressive models of remuneration that are adapted to increase productivity by organisations, but that target distinct areas of an employees character. Both seek to motivate an employee through monetary incentives to perform better.
Variable-pay involves paying the employees a form of compensation for performance in addition to the fixed base salary paid. It is a technique opted for by companies to increase the productivity of their staff. It is seen used on a large scale in the Information Technology sector. Skill based pay on the other hand refers to pay that is paid to employees who are willing to undergo a learning or training program to increase the level of their skills. It is pay that reflects the organisations appreciation of the employee acquiring additional skills and training. Both of these are progressive models of remuneration that are adapted to increase productivity by organisations, but that target distinct areas of an employees character. Both seek to motivate an employee through monetary incentives to perform better.
I found it to be more geared in the manufacturing industry and included the following key points:
ReplyDeleteSkill Based Pay is a person based compensation system, rather than job based
Skill based pay plans typically pay 10-15% above market
SBP plans have high success rates in manufacturing environments
Employee and supervisor involvement is related to successful programs
SBP plans require significant administrative investment
Plans must be customized to the organization or business unit
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