In the more than 50 years that trad

In the more than 50 years that traditional pay structures have been used, significant changes in the way businesses operate have taken place, and many compensation professionals think that traditional, job-based systems don’t serve current employer needs. Some organizations may strongly consider skill sets as determining factors for pay decisions, awarding increases to employees who possess skills that are critical to the organization’s success. Other organizations may provide additional compensation for the development and acquisition of new skills. An example of this can commonly be found in manufacturing environments, where an entry-level operator who acquires additional skills for the position receives additional compensation for these skills. One method for doing this is competency based compensation.