Design Research, Based On Skills And Ability To Pay

Compensation management has always been an indispensable part of human resource management. As time changed, compensation management must change to meet the need of human resource management. In the era of knowledge-based economy, business is facing global competition and turbulence environment. More and more knowledge organizations expect to strengthen their core competence by constantly improving employee's skills and competencies. At the same time, an inevitable trend among companies is to become flatter in order to increase competitiveness. The change of organization structure is likely to reduce the opportunity of vertical promotion. If organizations continue to use traditional job-based pay system, it may be hard to gain, motivate and retain knowledge works.Nowadays, human resource management is focus more on competence than job. Traditional job-based pay system has no longer met the needs of motivation. At this circumstances, skill and competency-based pay system was born to make up the weakness of traditional pay system. So it has been more and more popular especially in knowledge organizations.This paper summarizes previous study in this field and demonstrates the necessity of skill and competency-based pay system. Then, it presents the process and methods to design skill and competency-based pay system. Finally, it analyses problems that companies may face when applying the pay system and presents some countermeasures to solve the problems.This paper organizes its chapters as follows:1. The research backgroundSkill and competency-based pay system is the outcome of...