Question

Briefly discuss designing job-based pay systems (e.g., merit pay, sales incentive pay) and person-focused programs. What considerations arise when making a transition from using a job-based pay system to using a person-focused plan?

Answer 1

Job based system:

• It is the traditional method to pay employees on the basis of kind of job is being performed by them.
• In job based system basic pay scale is already defined in the beginning of the contract between the employer and employee.
• This system ensure that higher position in the organisation are paid more.
• Job based payment method can be best used where there is stability, routine and Job are standardise with distinction.

Person focused payment system:

• It takes remuneration into consideration as an incentive for applying their skill and knowledge in various tasks.
• person focused pay system employees will use their best "skills and knowledge" to perform work assigned to them to be paid more which will allow organisation to become competitive in the market.
• It motivates employee, encourages thier skill growth and boost them to learn more skils.

Considerations arising while moving from job to person focused pay

• Employees resist to person focused pay as they will be deprived from basic pay scale which is assigned to them in job based payment system.
• employees has to start working unlimited hours in erson where as they are aid for each minute they work extra in the job based payment system.
• All the employees are entitled to certain designations in job payment system and compensation is linked to the title whereas in person based payment system employees are entitled to designation but are not linked to compensation.
• Employees with more skills and talent will support person based payment system whereas Employees with obsolete skills will resist person based payment system.