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Pay-for-Learning Programs

Pay-for-Learning Programs. Jason Burhans Penn State University February 14, 2002 . Overview . Pay-for-Learning Programs Defined A Brainstorming Exercise: How can this tool help me in business? How It Works Examples from industry An Exercise Summary Bibliography.

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Pay-for-Learning Programs

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  1. Pay-for-Learning Programs Jason Burhans Penn State University February 14, 2002

  2. Overview • Pay-for-Learning Programs Defined • A Brainstorming Exercise: • How can this tool help me in business? • How It Works • Examples from industry • An Exercise • Summary • Bibliography

  3. Pay-for-learning Programs Defined • Pay-for-learning Programs are programs that compensate employees for knowledge and skills that they posses rather than for the job that they actually perform.

  4. Pay-for-learning Programs Defined(Continued) • Pay-for-learning Programs are also known as pay-for-knowledge, skill-based compensation, knowledge-based pay, or pay-for-skill.

  5. Brainstorm • Take a moment to consider how you or your co-workers salaries might change if a Pay-for-learning program was initiated at your company? • How do you think a program like this could improve quality in your profession?

  6. Critical elements of a knowledge and skill-based pay system • Specification of knowledge and skills • Knowledge and skill measurement • Training of evaluators • Feedback and professional development • Development of a staged career system linked to knowledge and skills • Linking pay levels to knowledge and skill levels • Minimum competencies required for employment • Growth expectations over the career (timing and level) • Implementation and evaluation • Development and design process.

  7. Start upCosts • Informing and educating employees of new system • Training and development costs associated with employees learning new skills • Intangible costs

  8. Pay-for-Learning Basics • Give employees the opportunity to continually develop their skill sets to contribute to the company • Provide an environment to foster learning • Recognize and reward people for their contributions and advancements.

  9. Using Pay-for-Learning Systems • These systems allow companies to pay employees for their value to their organization and provides a way for employees to influence their own pay. • Implementation is usually done in one of two basic methods. • Knowledge-growth systems • Multiple Skills systems

  10. Knowledge-Growth Systems • This method pays employees based upon the range of skills they posses in a single specialty or job classification. • It’s Basically a technical skills ladder • They are sometimes called “Vertical” systems because pay is tied to the depth of knowledge or skill in a defined job.

  11. Multiple Skills Systems • Pay progression is tied to the number of different jobs an employee can perform throughout the entire organization • Multi-skilled-based systems are sometimes called horizontal systems • These promise the benefits of greater labor flexibility and job mobility for employees

  12. Benefits of Pay - For - Learning • Benefits include increases in the following areas: • Job satisfaction • Job security • Flexibility • Communication • Problem Solving

  13. Concerns With Pay-for-Learning • How to pay for more skilled workers • Management and Seniority issues when implementing a new promotion system • Ensuring quality or productivity improves enough to ensure the return on investment for the new program is worth it

  14. Real World Using Pay-for-Learning • General Motors • Ford Motor Company • AT&T • Corning • Maxwell House • Volvo

  15. An Exercise • Get with a group of two or three other people. • Produce a list with all the benefits and disadvantages that you learned here today. • Come up with suggestions, based on what you know about Pay – For – Learning programs, on what steps would be needed to start such a plan at your company.

  16. Summary • Pay for Learning is a quality tool designed to educate and motivate to make employees more knowledgeable and efficient in an attempt to increase overall quality of product and firm • Pay for Learning Systems are used in about 5 % – 8 % of corporations in the United States, most of whom are manufacturing firms • Pay for Learning Systems are in there infancy, yet have shown good results when backed by the workforce

  17. Bibliography • Boyett, Joseph H.; Boyett, Jimmie T., 1998. “The Pay-for- Knowledge Design Workbook” . http://www.jboyett.com/excerpt3.htm • H.R. Zone, 2000. “What to do about Skill Based Pay?” http://www.hrzone.com/topics/skill_based_pay.html • Kim, Dong-One; Mericle, Kenneth, 1996. “Skill-Based Pay and Work Reorganization in High Performance Firms”.http://ist-0 socrates.berkeley.edu/~iir/ncw/wpapers/mk1/index.html • Oden, Alan, 1998. ‘Knowledge- and Skill-Based Pay” . http://www.wcer.wisc.edu/cpre/tcomp/research/ • S. Thomas Foster, 2001. Managing Quality: An Integrative Approach. Upper Saddle River, NJ: Prentice-Hall, Inc. (pgs 415-416)

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