Question

Compare and contrast the use of pay ranges (pay structure of job-based pay) with broadbanding (pay structure of skill/competency -based pay). How does skill/competency based pay provide flexibility to HR departments? Explain.

Answer 1

In a job based pay structure the person is paid on the basis of the positional responsibilities whereas in skill based pay structure the person is paid on the basis of skills he or she brings on table.

In job based structure one gets paid for the value of work that is performed whereas in skill based structure superviser assess the value of skills possessed by person and qualities that are brought on the table. The process of raise in pay is clear in job based structure as one has to simply get promotion to earn more money whereas in skill based structure the path to increased earning is informal and dependent on learning new skill or sharpening existing skills. The salaries are easier to compare with competiotion in the job based structure as compared to skill based structure.

Skill based structure provides flexibility to HR department in the everchanging market. As the organization grows thay can seek the pay structures that align with their work environment. Skill based also help in evaluating employees In job based the the raises are limited but in skill based the employee's skills help them to get good raises and this keep employees more satisfied and turover rates low.