This is called person or competency based pay structure and is an alternative approach to the job based pay practice. The competency based model is designed on a pay structure that places emphasis on competencies, knowledge and skills needed to perform a specific job while linking an employee’s performance with the organizational strategy...
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Each approach attempts to use the internal work structures to facilitate a fair and equitable approach to the compensation strategy for the company. However, the competency based approach traditionally provides a link between company performance, development of employee skills and knowledge which serves as a motivator to employees...
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