Job Versus Individual Pay
Most traditional compensation systems assume that in setting base compensation, a firm should evaluate the value or contributions of each job, not how well the employee performs it.38 This means that the minimum and maximum values of each job are set independently of individual workers, who must be paid somewhere in the range established for that job.
In a knowledge-based pay or skill-based pay system, employees are paid on the basis of the jobs they can do or the talents they have that can be successfully applied to a variety of tasks and situations.39 Thus, the more hats an individual can wear, the more pay he or she will receive. Employees’ base compensation increases as they become able to perform more duties successfully. ...
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