Chapter 6

1. Person-Based Structures Chapter 6

2. 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 • Evidence of Usefulness of Results • Bias in Internal Structures • The Perfect Structure

3. Exhibit 6.1: Many Ways to Create Internal Structure

4. 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 • Avoids bottle necks • Avoids idling

5. What is a Skill-Based Structure? Skill-based structures link pay to the depth or breadth of the skills, abilities, and knowledge person acquires 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.

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

7. Exhibit 6.2: Skill Ladder at Balzer Tool Coating

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

9. “How To” – Skill Analysis • To build a structure, a process is needed to describe, certify, and value the skills • What is the objective of the plan? • What information should be collected? • What methods should be used? • Who should be involved? • How useful are the results for pay purposes?

10. Exhibit 6.3: Determining theInternal Skill-Based Structure

11. What Is Skill Analysis? Systematic process of identifying and collecting information about skills required to perform work in an organization.

12. “How To” – Skill Analysis (cont.) • What information to collect? • 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

13. “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

14. Exhibit 6.4: FMC’s Technician Skill-Based Structure

15. 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? • Characteristics of the organization or of the employee?

16. Exhibit 6.5: Determining the InternalCompetency-Based Structure

17. 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

18. Competency-Based Approaches • Exhibit 6.6: TRW Human Resources Competencies • Exhibit 6.7: Sample Behavioral Competency Indicators

19. Exhibit 6.6: TRW Human Resources Competencies

20. 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”

21. Exhibit 6.7: Sample Behavioral Competency Indicators

22. Purpose of the Competency-Based Structure • Organization strategy • Exhibit 6.8: Frito-Lay Managerial Competencies • Work flow • Fair to employees • Motivates behavior toward organization objectives

23. Exhibit 6.8: Frito-Lay Managerial Competencies

24. “How To” – Competency Analysis • Objective • What information to collect? • One scheme to classify competencies includes • Personal characteristics • Visionary • Organization specific • Examples • Refer Exhibit 6.9, Exhibit 6.10, and Exhibit 6.11

25. Exhibit 6. 9: 3M Leadership Competencies

26. Exhibit 6.10: Behavioral Anchors for Global-Perspective Competency

27. Exhibit 6.11: The Top 20 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. Exhibit 6.12: Product Development Competency for Marketing Department at a Toy Company

30. Exhibit 6.13: Toy Company’s Structure Based on Competencies

31. 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 continuously • Supports business operations • In practice, during evaluation of higher-value, nonroutine work, distinction between job- versus person-based approaches blurs

32. Administering the Plan • A crucial issue is the fairness of the plans administration • Sufficient information should be available to apply the plan • Communication and employee involvement are crucial for acceptance of resulting pay structures

33. Evidence on Usefulness of Results • Reliability of job evaluation techniques • Different evaluators produce same results • 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 • Validity of job evaluation is measured in two ways

34. Evidence on Usefulness of Results (cont.) • Validity (cont.) • Validity of job evaluation is measured in two ways • Degree of agreement between rankings; ranking of benchmarks • ‘Hit rates’; pay structure for benchmark jobs as criterion • Definition of validity needs broadening to include impact in pay decisions • Acceptability • Formal appeals process • Employee attitude surveys

35. 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 • Compensable factors related to employee requirements – education and experience – does not reflect bias

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

37. Recommendations to Ensure JobEvaluation 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

38. Exhibit 6.14: Contrasting Approaches