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Person-Based Structures

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1 Person-Based Structures
Chapter 6

2 Exhibit 6.1: Many Ways to Create Internal Structure
See Exhibit 6.1, text page 155

3 Person-Based Structures: Skill Plans
Advantage of a skill-based plan is that people can be deployed in a way that better matches the flow of work

4 What is a Skill-Based Structure?
Skill-based structures link pay to the depth or breadth of the skills, abilities, and knowledge persons acquire that are relevant to the work. In contrast, a job-based plan pays employees for the job to which they are assigned, regardless of the skills they possess.

5 Types of Skill Plans Skill plans can focus on Depth based
Specialist Breadth based: Generalist/ multiskilled based

6 Purpose of the Skill-Based Structure
Supports strategy and objectives Supports work flow Fair to employees Motivates behavior toward organization objectives

7 Exhibit 6.3: Determining the Internal Skill-Based Structure

8 “How To” – Skill Analysis
To build a structure, a process is needed to describe, certify, and value the skills What information to collect? (Exhibit 6.4: FMC’s Technician Skill-Based Structure) Foundation skills Core electives Optional electives Whom to involve? Employees and managers Establish certification methods Peer review, on-the-job demonstrations, or tests, or formal tests

9 Exhibit 6.4: FMC’s Technician Skill-Based Structure

10 “How To” – Skill Analysis (cont.)
Guidance from the research on skill-based plans Design of certification process crucial in perception of fairness Alignment with organization’s strategy May be best for short-term initiatives

11 How is SBP Different From Job-Based?
Skills or skill units are compensable, rather than jobs (although note that job-based pay does typically involve skill as compensable factor) Mastery of skill blocks measured and certified Pay changes don’t necessarily accompany job changes Little emphasis placed on seniority in pay determination

12 Potential Effects of Skill-Based System
Higher productivity Lower costs (???) Higher quality Lower staffing levels Lower absenteeism Lower turnover Improved relations with labor union

13 Disadvantages of Skill-Based Pay
Average pay of Ees likely higher High labor costs, IF productivity increases do not offset additional costs SBP systems more complex SBP systems require major investment in training

14 Person-Based Structures: Competencies
Several perspectives on what competencies are and what they are meant to accomplish Skill that can be learned and developed or a trait that includes attitudes and motives? Focus on the minimum requirements that the organization needs to stay in business or focus on outstanding performance?

15 Exhibit 6.5: Determining the Internal Competency-Based Structure
See Exhibit 6.6, page 166

16 Terms in Competency Analysis
Core competencies Related to mission statements expressing organization’s philosophy, values, business strategies, and plans Competency sets Translate each core competency into action Competency indicators Observable behaviors that indicate the level of competency within each set

17 Competency-Based Approaches
Exhibit 6.6: TRW Human Resources Competencies Exhibit 6.7: Sample Behavioral Competency Indicators

18 Exhibit 6.6: TRW Human Resources Competencies

19 Defining Competencies
Organizations seem to be moving away from the vagueness of self-concepts, traits, and motives Greater emphasis on business-related descriptions of behaviors “that excellent performers exhibit much more consistently than average performers” Competencies are becoming “a collection of observable behaviors that require no inference, assumption or interpretation”

20 Exhibit 6.7: Sample Behavioral Competency Indicators

21 Exhibit 6.8: Frito-Lay Managerial Competencies

22 “How To” – Competency Analysis
What information to collect? Examples Refer Exhibit 6.9, Exhibit 6.10, and Exhibit 6.11

23 Exhibit 6. 9: 3M Leadership Competencies

24 Exhibit 6.10: Behavioral Anchors for Global-Perspective Competency

25 Exhibit 6.11: The Top 20 Competencies

26 Exhibit 6.12: Product Development Competency for Marketing Department at a Toy Company

27 Exhibit 6.13: Toy Company’s Structure Based on Competencies

28 “How To” – Competency Analysis (cont.)
Whom to involve? Competencies are derived from executive leadership’s beliefs about strategic organizational intent Establish certification methods Resulting structure Designed with relatively few levels Guidance from the research on competencies Appropriateness to pay for what is believed to be the capacity of an individual as against what the individual does

29 One More Time: Internal Alignment Reflected in Structures
Purpose of job- or person-based plan Design and manage an internal pay structure to help achieve organizational objectives Reflects internal alignment policy Supports business operations In practice, during evaluation of higher-value, nonroutine work, distinction between job- versus person-based approaches blurs

30 Administering the Plan
A crucial issue is the fairness of the plan’s administration Sufficient information should be available to apply the plan (i.e., ‘manual’) Communication and employee involvement are crucial for acceptance of resulting pay structures Appeals process

31 Evidence on Usefulness of Results
Reliability of job evaluation techniques Can be improved by using evaluators familiar with the work and who are trained in job evaluation Validity Degree to which evaluation achieves desired results Acceptability Formal appeals process Employee attitude surveys

32 Bias in Internal Structures
Gender bias No evidence that job evaluation is susceptible to gender bias No evidence that job evaluator's gender affects results Compensable factors related to job content – contact with others and judgment – does reflect bias against work done predominantly by women Compensable factors related to employee requirements – education and experience – does not reflect bias

33 Bias in Internal Structures (cont.)
Wages criteria bias Job evaluation results may be biased if jobs held predominantly by women are incorrectly underpaid

34 Recommendations to Ensure Job Evaluation Plans Are Bias Free
Define 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 See text pages

35 Exhibit 6.14: Contrasting Approaches

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