Person Focused Pay Essay

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Pay is an important job attribute and has a significant influence on job attractiveness and subsequent job choice decisions (Cable & Judge, 1994). Pay scales has been set based on the qualifications, experience and knowledge of the position and job requirements. However, pay that is centered on the person, and knowledge of the individual is referred to as person-focused pay. This type of pay rewards employees for improving and acquiring new skills or knowledge. This type of pay structure is usually utilized for jobs requiring physical labor such as in a manufacturing working environment. Employees can receive this pay for becoming proficient at different skill levels. All these additional skills are based on the premise that employees will receive …show more content…
The first advantage to person-focused pay programs is that they provide employees skill variety which leads to job security (Martocchio, 2013). Skill variety gives employees the opportunity to learn new skills that can be utilized in different areas of the business. As an example, an employee that is an electrician apprentice can earn more money for that specific skill set. Whereby, the company can use those skills on various pieces of equipment within the manufacturing plant, if there is a labor shortage they can utilize them. Next, this pay structure provides employee job security. In the manufacturing environment if there is a downturn in the economy which decreases the demand for the products it produces the company may have a layoff. If this happens, employees with multiple skill sets may be utilized in other areas of the business or they will have the skills that would make them more attractive applicants to other companies. Finally, this pay structure is an advantage because they increase employee motivation, reduces turnover and they have a more committed

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