Competency Based Pay
Competency-Based Pay is a pay structure in which employees are paid based on their skill set, knowledge, and experience they carry apart from their respective job profiles. It motivates employees to capitalize on their talent and improve their performance. Competency-Based Pay structure is simple to design as it has access to the ready salary tables. One unique disadvantage of the salary structure is it can be difficult to alter during times of economic hardship. Competency-based pay might also be known as skills-based and knowledge-based pay.
Advantages of Competency-Based pay:
- Boost up employee motivation
- Payment on the basis or skillset brings flexibility in salary structure
- It helps to push employees over and above their comfort zone to achieve more