What Is Competency-based Pay?
Competency-based pay is a pay structure in which companies reward employees in accordance with:
- their level of skills,
- knowledge, and
Rather than paying them just for their job title or position.
This helps companies to keep their employees motivated and constantly developing their skills.
If a company pays an employee based on their knowledge, experience, etc, this employee will be interested in learning and developing their skills in order to get higher compensation.
In a competency-based pay structure, staff can increase their pay by getting better at their skills and gaining knowledge associated with their job taking their work to the next level.