Competency-based pay is a type of compensation system in which employees are paid based on the specific skills and competencies they bring to their job, rather than on their job title or seniority. In a competency-based pay system, employees are typically evaluated on a set of predetermined competencies, and their pay is determined based on their level of proficiency in those competencies. The goal of competency-based pay is to align employee pay with their individual skills and abilities, and to encourage employees to develop and enhance their competencies in order to improve their earning potential.

Discover the advantages of pay equity: fair compensation, reduced wage gaps, higher morale, and economic growth. Learn how to propagate pay equity effectively. Explore now!

Looking for ways to improve performance management? Performance improvement refers to the process of increasing the efficiency and effectiveness of a system, process, or task. This guide mentions all the ways.