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Pay as you learn and apply?


I am looking at introducing a career framework underpinned by competency frameworks; where an individuals can increment their salary on the acquisition of new skills via training and development provided by the company. This would need to be consistently evidenced in order to achieve the pay increment. I have spoken with a few practioners and received very mixed reactions to this approach. I work for a medium fast growing IT company which is part of the Dixons group - Does anyone have any experience of either designing or implementing such a system?
Cathy Brady

3 Responses

  1. Motivation differs
    I think before you introduce this kind of pay scheme – you would be best off finding out what motivates your staff.

    If it is money then this kind of approach can pay off well. In my experience though it tends to work best with those who are fairly badly paid in the first place – i.e. call centre operatives, customer services etc.

    By the time people are earning a “comfortable” level of salary then jumping through a set of hoops for a payrise becomes less palatable and they would prefer to be paid on results rather than on what development they have undertaken.

    For example a project manager would expect to be rewarded based on the success of their project not on fulfilling a series of arbitrary training requirements – it’s all swings and roundabouts.

    But the best way to approach this is to consult the people it will affect – they may embrace it wholeheartedly or they may tell you they find it as unappealing as a bath full of baked beans. But at least you’ll know before you spend time, effort and money developing something no-one wants.

  2. …and companies differ too
    As with any element in performance management, competency based salary only works if it meshes with all the other elements and with the company/division goals and ways of working. The reason it gets mixed feedback (as do appraisal and performance related pay) is becuase it’s often introduced where it doesn’t fit and done badly to boot.

    So don’t ask if its a good idea in general. Ask what you are trying to achieve, what else you are doing to achieve it, how CRP would fit in and what the difficulties might be.

    From my experience it does work in a professional services setting, where the more skill is in the staff team, the higher fees you can charge. So there is a direct relationship between business performance and competency that is easy to see for all staff – not just for managers. But this is in the context of lots of training and support, seperate collective profit share based on collective performance and a set of IT based feedback tools.
    It also involves the same competency framework for virtually everyone as everyone does more or less the same job.

    I certainly wouldn’t have tried it in my previos roles in a national optical retailer and in a public sector regeneration agency.

  3. Arian Associates Ltd
    I agree with the comments from Nik below.

    In my experience it is no good dangling a carrot if the recipient does not like carrots !

    Talk to people and simply ask them what sort of rewards package and criteria would be their preferred choice – if they were given one that is.

    Also you don’t state whether you will be looking at UNIT completion or FULL NVQ completion as the benchmark & this is where competency based rewards start to get messy. If indeed you go down this avenue you need to make it very clear from the outset which route to rewards is being used.

    Alternatively you could use a Training Needs Analysis (TNA) monitoring system and ‘sign off’ various tasks as your people are able to carry them out – but what a headache of a job to adminisitrate and keep up to date with. UNIT or FULL NVQ completion would be an easier option if you continue with this reward system.

    Good luck !

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