Source: Frank Giancola, Benefits & Compensation Digest, May 2007
Compensation experts agree that skill-based pay is the wave of the future for compensating employees. In this approach, the skills of employees, instead of their jobs, are used to determine base pay. What compensation professionals may not realize is that this is much more than a new way to deliver pay. Adoption usually requires major changes in training and employee development programs, as well as the methods used to select and evaluate employees. Employers considering this method of pay should take into account a number of factors.