COMPETENCE-RELATED PAY
Why are employers so reluctant to adopt competence pay?
So what explains the paradox between employers' widespread use of competencies for recruitment, training and performance assessment, and their reluctance to use them for pay purposes? IRS reckons it has some of the answers.
In a one-page review of recent e-reward.co.uk research in the area, the IRS journal Competency & Emotional Intelligence puts forward some of the principal reasons why it believes employers have found that competence pay represents such a major stumbling block.
Assessment processes developed for other purposes
As Neil Rankin, the journal's editor and author of the review, points out, existing assessment processes will have been developed for other purposes, such as assessing job applicants' competencies during selection or employees' competencies as part of training needs analysis. "The introduction of competency-related pay will often require significant changes to these processes or the development of a new assessment model," says Rankin. "In either case, there is a risk that the different uses of competencies may damage each other, rather than provide mutual support as intended."
Line managers may find the process onerous
Competence-related pay relies heavily on well-trained and committed line managers to measure and assess competence fairly and consistently. But as Rankin explains: "There are often concerns that line managers will find it too difficult or onerous to assess their staff's competencies objectively and consistently for reward purposes."
What's more, while appraisals and training assessment may focus on a few key competencies, the reward system may require each line manager to assess each member of staff against all relevant competencies. Says Rankin: "Where competencies are differentiated into levels of performance, this might involve a line manager considering 50 or more assessment criteria for each person."
Want to know more?
Title: "Reward and competencies: solving the mystery", Competency & Emotional Intelligence, Summer 2004, IRS.
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Posted 16 July 2004