Designing Person-Focused Programs
4. Describe the essentials of person-focused pay program design.
As indicated in Chapters 3 and 4, merit pay and incentive pay represent job-based approaches to compensating employees. In Chapter 5, we discussed the importance of person-focused pay that many companies recognize. For this discussion, we use the terms knowledge and skills interchangeably, as the design features for both structures are virtually the same. In their purest form, person-focused programs reward employees for the acquisition of job-related knowledge (or skills, in the case of skill-based pay plans). In practice, companies are concerned with how much employees’ performance improves as a result of their newly acquired knowledge. Our focus ...
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