on job analysis, some organizations are emphasizing competencies more than tasks. A growing number of organizations, including Bayer Corporation, are paying employees for the competencies they have rather than just for the specific tasks being per- formed. Paying for competencies rewards employees who are more versatile and have continued to develop their competencies. In knowledge-based pay (KBP) orskill-based pay (SBP) systems, employees start at a base level of pay and receive in- creases as they learn to do other jobs or gain other skills and therefore become more valuable to the employer. For example, a printing firm has two-color, four- color, and six-color presses. The more colors, the more skill required of the press operators. Under a KBP or SBP system, press operators increase their pay as they learn how to operate the more complex presses, even though sometimes they may be running only two-color jobs. The HR Perspective describes research on such a plan.
A survey sponsored by the American Compensation Association (ACA) found that the success of competency plans requires managerial commitment to a phi- losophy different from the one that has existed traditionally in organizations.5 This approach places far more emphasis on training employees and supervisors. Also, workflow must be adapted to allow workers to move from job to job as needed.
When an organization moves to a competency-based system, considerable time must be spent identifying what the required competencies are for various jobs.6 Then each block of competencies must be priced using market data. Pro- gression of employees must be possible, and they must be paid appropriately for all of their competencies. Any limitations on the numbers of people who can ac- quire more competencies should be clearly identified. Training in the appropriate competencies is particularly critical. Also important to a competency-based sys- tem is a means for certification of employees who have acquired certain compe- tencies. Further, a process must exist for verifying that employees maintain competencies. In summary, use of a competency-based system requires significant investment of management time and needs a continuous commitment by top management.