Pay for Performance
Pay for Skills, Pay for Performance, Pay for
Knowledge are three phrases that refer to new performance-based reward
systems that are replacing seniority-based reward systems as the demand for more
a knowledgeable, more highly skilled, and more flexible work force increases.
As jobs change and become more complex, employees have
to acquire the knowledge and skills needed to perform these jobs to move forward
as their companies move forward. As a result, many companies are beginning to
provide continuing and upgrade training and they are restructuring outdated
apprentice programs. As jobs change and training is provided, companies are
linking the acquisition of job knowledge and job skills to pay for performance
systems designed to stimulate employee growth and development.
However, pay for performance systems must be carefully
planned and implemented because they are governed by the provisions of 41 Code
of Federal Regulations, Chapter 60, Part 60-3, Uniform Guidelines on Employee
Selection Procedures. As is noted in the Code, "These employment
decisions include but are not limited to hiring, promotion, demotion, membership
(for example, in a labor organization), referral, retention, and licensing and
certification, to the extent that licensing and certification may be covered by
Federal equal employment opportunity law. Other selection decisions, such as
selection for training or transfer, may also be considered employment decisions
if they lead to any of the decisions listed above."
When these employment decisions involve any type of
testing, both written and performance tests, these tests must be valid and meet
the criteria established in the Standards for Educational and Psychological
Testing. To ensure the tests are valid, they must be based on a thorough job
and task analysis. Written tests that assess the employee's acquisition of job
knowledge are derived from the learning objectives that are themselves derived
from the knowledge requirements identified during the job and task analysis.
Performance measures that assess the employee's acquisition of job skills are
derived from the skill requirements identified during the job and task analysis.
Additionally, those responsible for assessing employee
performance must be trained so that performance appraisal is consistent and
unbiased. Accurate records of performance appraisal must be maintained.
If you are interested in implementing a pay for
performance system, APS can assist you in meeting the requirements of the Code
of Federal Regulations. We can help you develop policies and procedures that
ensure a smooth implementation of the program, conduct a job and task analysis
to identify skill and knowledge requirements, develop evaluation tools, and
train your personnel to be performance evaluators.
For more information, email us at info@aps-online.net
or call Greg Pancerev at 610-987-4054
