Chapter 20: Pay for Skills, Knowledge, and Competencies

Compensation systems that pay for skills, knowledge, and competencies (SKCs) use a logic different from conventional job-based pay systems. More familiar, job-based pay systems compensate for the jobthat an employee is performing at a particular time. In contrast, systems that pay for skills, knowledge, and competencies reward the employee’s repertoire of capabilities. Moreover, compensation typically follows a formal certification that the employee has acquired SKCs. In contrast, the trigger for a change in job-based pay is a change in the employee’s job, not a demonstration of accomplishment. In the extreme, the employee’s job-base compensation level may change during the course of the workday as the person temporarily changes jobs.