Performance Management Systems and Strategies

MAJOR OBSTACLES TO THE INTRODUCTION OF SKILL-BASED PAY

Although skill-based pay provides multiple benefits, to introduce it, organizations encounter serious problems. Some of the major obstacles to introduce the skill-based pay can be listed as under:

Defining skill sets—It is difficult to document the skill sets of a job. Even though organizations can at the outset document skill sets for a well-defined job, it becomes quickly obsolete. Jobs are getting restructured every now and then with the changing technology and new product designs, rendering redundancy of earlier documented skills. Another problem encountered by the organization is to narrow down skill sets, jobs being highly interrelated. We, therefore, cannot identify job-specific competency ...