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Chapter 6

Person-Based Structures. Chapter 6. Exhibit 6.1: Many Ways to Create Internal Structure. 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. What is a Skill-Based Structure?.

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Chapter 6

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  1. Person-Based Structures Chapter 6

  2. Exhibit 6.1: Many Ways to Create Internal Structure

  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 theInternal 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 InternalCompetency-Based Structure

  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 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

  35. Exhibit 6.14: Contrasting Approaches

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