Human Resource Management 2e

APPENDIX F

Competency-Based Pay

Introduction

Competency management has now emerged as one of the key objectives of compensation administration. Competency management has two-fold objectives of (i) attracting, developing, and retaining competent employees and (ii) ensuring high level of performance, loyalty, and commitment from them. When an organization looks for certain essential behaviour among employees, it must be ready to adequately reward such behaviour. In this regard, organizations can use competency framework for defining the behaviour expected from an employee to attain effective job performance. This framework also helps employees to know clearly what is expected of them in terms of behaviour and job role.

An ideal compensation system ...