Compensation-Differences Between Jobs Based Rewards and Competencies Basaed Rewards

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3)Differences between jobs based rewards and competencies basaed rewards In job based reward, a small business owner needs to separate the salary or merit pay system from the reward system. Rewards, especially those given on a regular basis such as bonuses, gain sharing, etc., should be tied to an employee's or a group's accomplishments and should be considered "pay at risk" in order to distance them from salary. By doing so, a manager can avoid a sense of entitlement on the part of the employee and ensure that the reward emphasizes excellence or achievement rather than basic competency. In order to reap benefits such as increased productivity, the entrepreneur designing a reward program must identify company or group goals to be reached and the behaviors or performance that will contribute to this. While this may seem obvious, companies frequently make the mistake of rewarding behaviors or achievements that either fail to further business goals or actually sabotage them. If teamwork is a business goal, a bonus system rewarding individuals who improve their productivity by themselves or at the expense of another does not make sense. Likewise, if quality is an important issue for an entrepreneur, the reward system that he or she designs should not emphasize rewarding the quantity of work accomplished by a business unit.. Organization shifting rewarding job status to rewarding job employee for their skills, knowledge and other competencies that lead to superior performance. Employees now received pay increase within each pay band partly based on how well they have acquired new skills and knowledge. Skills- based pay is a variation of competency based reward . the employee’s pay rate depends on the number of skills module that has mastered , not on job performances on particular date. Competency – based rewards improve workforce flexibility

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