Scenario 9.1
Denton and Denton Inc. (D&D Inc.) is a small graphic design firm that designs tray liners for various small food chains across Canada and a major chain in the United States. D&D currently has 20 employees who are paid hourly rates for time worked, not projects completed. These workers consider themselves valuable, knowledge-based workers, and now that the company is expanding its client base they are not happy with the current pay structure. Management claims that this pay structure, ranging from $20 to $65 per hour, is based on collapsing the pay ranges for four job bands.
-Refer to Scenario 9.1. Given that these employees are skilled-based/knowledge workers, which of the following is a more effective way to compensate them?
A) piece rate pay system
B) hourly rate based on task completed
C) salaried employee system
D) competency-based pay system

Question

Quizplus · Accepted Answer

Competency-based pay systems are more effective for knowledge-based workers because they reward employees for their skills, knowledge, and contributions to the company, rather than just the hours worked or tasks completed. This aligns better with the nature of their work and their perception of their value to the company.

Scenario 9.1 Denton and Denton Inc. (D&D Inc.) Is a Small Graphic