Incentive and Person-Centered Pay Systems

Managers and Organizational Wellness

Managers are tasked with facilitating employee and organizational wellness in order to reach the organization's set targets and goals. Payment plans used to activate organizational teams may play a role in the expansion and profitability of the firm. There are numerous pay methods available to help companies keep alert and motivated. In this study, we will look at several types of incentive pay and person-focused compensation systems and how they affect overall organizational behavior.

Skill-Based Pay

By way of a skill-based pay plan, remuneration level is founded on the skill and the ability of an employee to perform contrasting to job label. This system is applied with a fixed skills allocated to a particular pay evaluation. The personal, focused payment model, the Skills Block Model concentrates on the individual competence (Martocchio, 2003). This model works likewise as the stair-step model, but in this case, the expertise does not progress further. In both skill-based pay and skill block model, the workers are allowed to advance more rapidly by education on the needed proficiency and not automatic in sequence. The human resources can pass over the levels if they have the expertise. Also, the skill-based pay has a definite wide range rewards system since it involves a broader scope of skills while skill block model focuses just within one job category.

Competency-Based Pay

To a certain extent searching for a particular proficiency, the competency-based method concentrates on the employee's behavior and personality contrasting to the individual set of skills. In Competency-based pay and Stair Step Model, they both focus on what the worker can develop into against the skills they may possess (Stone & Rosopa, 2017). The chain of command on both models represents various jobs characteristics from an individual task group as well as variation of jobs level of involvedness and progression towards the top. They further differ in acquisition of skills whereby in competency-based pay skill is diverse while stair-step model the proficiency builds up as one progresses.

Broad Banding

In Broad banding, the entire jobs in a distinct group is allocated a specified pay category. For instance, a person operating in customer care service, or in every part of the organizational subordinate are rewarded in the equivalent collective group. McDonald's employs this reward perspective in its corporate offices, affirming that it consents to for suppleness in payment terms, change, and development of employees. (Martocchio, 2003). In Broad banding and Job point accrual model they both Creates flexibility in the organization and endorse goals of the company by turning over a moderately larger figure of tips into skills that deal with company's strategic matters. Both models support the workforce to increase their abilities and gain knowledge of performing jobs in the same job category and benefits the employee in that the more points they accumulate, the elevated payment amount of the employee will be.

Variable Pay System

This form of structure offers workers by pay on the contrary to the relative skill of specific objectives or successes in line with their salary. For instance, a salesperson might take delivery of a particular payment base, however, bring in more if they achieve the sales ratio. For both Variable pay system and Cross-departmental model, they promote workers to be skilled at jobs in their units to gain skills to aid at some point during the slump(Stone & Rosopa, 2017). Benefits of the pay system to the employers is that enhances job execution, reduced staffing, and better suppleness. On the other hand, managers acknowledge that the primary negative aspect of pay system is the costs of labor, the cost of training, and operating cost. This pay does not mesh well with real incentive compensation systems. Moreover, the system is reliant on a well-planned training structure which involves expensive training plans, thereby leaving companies to strain to establish the financial assessment of skill and knowledge regulation. The human resource department plays a crucial role in the facilitation of the pay system. Their central role is to review human resources about the incentives they would find of importance (Stone & Rosopa, 2017). Clarify to workers how the incentives functions, taking into account what performance level is essential for them to gain from it. Frequently monitoring the employees to determine if the plans satisfy their needs. Consultation with the workers who are exiting the organization willingly to identify if the incentive pay system had something to do with their choice of departure.

The Importance of Pay Plans

A pay plan is apparently a constructive tool for any organization, which entices people to work towards the realization of the organizational goal. Motivation is key whereby the high performers are rewarded, and low performers discounted or punished, show a relationship to larger company performance. Nevertheless, accomplishing these objectives entails further evaluation, strategic plan, performance gauging, and assessment to establish whether the payment plan is finally working as projected. In an organizational set up for motivational rewards may develop intense as businesses participate progressively on a worldwide scale.


Stone, D. L., & Rosopa, P. J. (2017). The Advantages and Limitations of Using Meta-analysis in Human Resource Management Research.

Martocchio, J. J. (2003). Employee benefits: A primer for human resource professionals. Boston, USA: McGraw-Hill.

Deadline is approaching?

Wait no more. Let us write you an essay from scratch

Receive Paper In 3 Hours
Calculate the Price
275 words
First order 15%
Total Price:
$38.07 $38.07
Calculating ellipsis
Hire an expert
This discount is valid only for orders of new customer and with the total more than 25$
This sample could have been used by your fellow student... Get your own unique essay on any topic and submit it by the deadline.

Find Out the Cost of Your Paper

Get Price