Competency-based or skill-based pay will hinge partly on what skills employees bring to work and whether or not those skills are needed.

Question

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Competency-based or skill-based pay is directly tied to the skills and abilities that employees possess and utilize in their role. This type of pay structure rewards employees based on their ability to perform specific tasks and achieve desired results, meaning that the skills an employee has are critical in determining their compensation. Additionally, the organization must have a need for those specific skills in order for them to be valued and rewarded in a competency-based pay system.

Competency-Based or Skill-Based Pay Will Hinge Partly on What Skills