Contemporary Topics in Compensation

Learning Objective 4

  • Explain the difference between competency-based and traditional pay plans.

How employers pay employees is evolving. In this section, we’ll look at five important contemporary compensation topics, competency-based pay, broadbanding, talent management, comparable worth, and board oversight.

Competency-Based Pay

Some question whether job evaluations’ aim to slot jobs into narrow cubbyholes (“Machinist I,”“Machinist II,” and so on) might not actually be counterproductive in high-performance work systems. Systems like these depend on flexible, multiskilled job assignments and on teamwork. There’s thus no place here for employees to say “That’s not my job.” Competency-based pay (and ­broadbanding, ...

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