6-1

Chapter

Person-Based Structures

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After discussing Chapter 6, students should be able to:

Learning Objectives

6-2

1. Discuss the differences and similarities

2. 3. 4. 5.

between job-based structures, skill-based plans, and competency-based plans. Identify the major decisions involved in developing skill-based plans and competencybased plans. Discuss the advantages and disadvantages of employee involvement in the evaluation of work. Understand the key aspects associated with the administration of a job evaluation plan. Describe the key criteria to assess the usefulness of the results of each of the approaches to job evaluation.
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6-3

Chapter Topics
Person-Based

Structures: Skill Plans How to: Skill Analysis Person-Based Structures: Competencies How to: Competency Analysis One More Time: Internal Alignment Reflected in Structures Administering the Plan Results: How Useful? Bias in Internal Structures The Perfect Structure
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Exhibit 6.1: Many Ways to Create Internal Structure

6-4

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6-5

What is a Skill-based Structure?

Links pay to the depth or breadth of the skills, abilities, and knowledge a person acquires that is relevant to the work. Structures based on skill pay individuals for all the skills for which they have been certified regardless of whether the work they are doing requires all or just a few of those particular skills. In contrast, a job-based plan pays employees for the job to which they are assigned, regardless of the skills they possess.
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6-6

Types of Skill Plans

Specialist:

Depth

Generalist/Multisk

ill-Based: Breadth
Exhibit

6.2: Skill Ladder at Balzer Tool Coating

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6-7

Purpose of the Skill-Based Structure

Supports

strategy and objectives work flow

Supports Fair

to employees

Motivates

behavior toward organization objectives

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Exhibit 6.3: Determining the Internal Skill-Based Structure

6-8

Internal alignment

Skill analysis

Skill blocks

Skill certification

Skill-based structure

Work relationships within organization Basic Decisions What is the objective of the plan? What information should be collected? What methods should be used to determine and certify skills? Who should be involved? How useful are the results for pay purposes?
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6-9

What Is Skill Analysis?

Systematic process to identify and collect information about skills required to perform work in an organization.
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6-10

How To Skill Analysis

What

information to collect?

Exhibit

6.4: General Mills Skill-Based Structure 6.5: FMCs Technician Skill-Based Structure

Exhibit

Whom

to involve? certification methods on skill-based plans

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Establish Research
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How Is SBP Different From a Job-Based Pay System?

Skills

6-11

or skill units, rather than jobs are compensable

of skill units is measured and certified

Mastery

Pay

changes do not necessarily accompany job changes emphasis placed on seniority in pay determination
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Little

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6-13

Disadvantages of Skill-Based Pay

Average High

pay of employees likely higher

labor costs, if productivity increases do not offset additional costs

systems more complex systems require a major investment in training

SBP SBP

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6-14

So, Whats a Competency?

Learned Traits

skill

such as behaviors and motives

Demonstrable

characteristics of a person, including knowledge, skills, and behaviors, that enable performance of an organization

Characteristics

Independent
An

of a job or position

employee can transport them from one job to another

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Exhibit 6.6: Determining the Internal

Competency-Based Structure

6-15

Internal alignment

Core competencies

Competency sets

Behavioral descriptors

Competency based structure

Work relationships within organization Basic Decisions What is the objective of the plan? What information should be collected? What methods should be used to determine and certify competencies? Who should be involved? How useful are the results for pay purposes?
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6-16

Terms in Competency Analysis

CORE COMPETENCY
Taken from mission statement; for example, business awareness.

COMPETENCY SETS
Grouping of factors that translate core competency into observable behavior; for example, cost management, business understanding.

COMPETENCY INDICATORS
Observable behaviors that indicate the level of competency within a competency set. For example, identifies opportunities for savings.

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6-17

Examples: Competency-Based Approaches

Exhibit

6.7: TRW Human Resources Competencies

Exhibit

6.8: Sample Behavioral Competency Description

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6-18

Iceberg Model of Competency Levels

Knowledge Skills Self-Concepts Traits Motives

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6-19

Purpose of the Competency-Based Structure

Supports
Exhibit

strategy and objectives

6.9: Frito-Lay Managerial Objectives

Supports Fair

work flow

to employees

Motivates

behavior toward organization objectives

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6-20

How To Competency Analysis

Objective What

information to collect?
to classify competencies

Scheme

Personal

characteristics Visionary Organization specific

Examples
Exhibit

6.10: 3M Leadership Competencies Exhibit 6.11: Behavioral Anchors for GlobalPerspective Competency Exhibit 6.12: The Top Twenty Competencies
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6-21

How To Competency Analysis (cont.)

Whom

to involve?

Competencies Exhibit

are derived from executive leaderships beliefs about strategic intent 6.13: Product Development Competency for Marketing Department at a Toy Company

Establish Resulting
Exhibit

certification methods structure

6.14: Toy Companys Structure Based on Competencies

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Research

on competencies

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6-22

Exhibit 6.12: The Top Twenty Competencies

Achievement orientation Developing others Concern of quality Team leadership Initiative Technical expertise Interpersonal Information seeking understanding Analytical thinking Customer service orientation Conceptual thinking Influence and impact Self-control Organization awareness Self-confidence Networking Business orientation Directiveness Teamwork & cooperation Flexibility
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One More Time: Internal Alignment Reflected in Structures

6-23

Purpose of job- or person-based plan

Internal pay structure to help achieve organizational objectives Aligned with internal alignment policy Supports business operations Manual Communication to foster employee acceptance Appeals process
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Administering the plan

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6-24

Results: How Useful?

Reliability of job evaluation techniques
Criteria to Evaluate Usefulness of Pay Structures

Validity

Acceptability
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6-25

Results: How Useful?

Reliability
Different

evaluators produce same results

Validity
Degree

to which evaluation achieves desired results

Acceptability
Formal

appeals process Employee attitude surveys Audits

Exhibit
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6.15: Illustrations of Audit Indexes

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6-26

Bias in Internal Structures

Gender

bias

Gender Job

of an individual jobholder does not influence evaluation of a job evaluators does not affect results factors related to job content contact with others and judgment does reflect bias

Compensable

Compensable

factors related to employee requirements education and experience does not reflect bias

Wages
Job

criteria bias

evaluation results may be biased if jobs held predominantly by women are incorrectly underpaid
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Recommendations to Ensure Job Evaluation Plans Are Bias Free

Define

6-27

compensable factors and scales to include content of jobs held predominantly by women Ensure factor weights are not consistently biased against jobs held predominantly by women Apply plan in as bias free a manner as feasible
Ensure

job descriptions are bias free Exclude incumbent names from job evaluation process Train diverse evaluators
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Exhibit 6.16: Contrasting Approaches (1 of 2)

Job-Based
What is valued Compensable factors

6-28

Skill-Based
Skill blocks

Competency-Based
Competencies

Quantify the value Mechanisms to translate into pay

Pay structure Pay increases Managers focus

Factor degree weights Assign points that reflect criterion pay structure
Based on job performed/market Promotion Link employees to work Promotion and placement Cost control via pay for job and budget increase

Skill levels Certification and price skills in external market

Based on skills certified/ market Skill acquisition Utilize skills efficiently Provide training Control costs via training, certification, and work assignments

Competency levels Certification and price competencies in external market

Based on competency developed / market Competency development Be sure competencies add value Provide competency developing opportunities Control costs via certification, and work assignments

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6-29

Exhibit 6.16: Contrasting Approaches (2 of 2)

Job-Based
Employee focus Procedures Seek promotions to earn more pay Job analysis Job evaluation

Skill-Based
Seek skills Skill analysis Skill certification

Competency-Based
Seek competencies Competency analysis Competency certification Continuous learning Flexibility Lateral movement

Advantages

Clear expectations Sense of progress Pay based on value of work performed Potential bureaucracy Potential inflexibility

Continuous learning Flexibility Reduced work force

Limitations

Potential bureaucracy Requires cost controls

Potential bureaucracy Requires cost controls

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