28 Apr 2022


Job-Based and Person-Based Structures

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Academic level: College

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Job-based pay structure is a more of traditional compensation structure, where jobs are slotted into salary schedules or plans. The structure is based on payable factors ascertained by the job and salary is determined by its responsibilities, and in some instances its work conditions regardless of the skills involved. Each position is allocated a pay level found on job responsibilities and the only difference in pay is founded on the seniority, as well as education. In this structure the individual is compensated for the job they have been allocated, despite the skills they posses. The structure offers personnel a more predictable way of compensation for the job, which makes it easier to plan and a budget for pay increase each year. For example, an individual working in a cement manufacturing plant will get a pay based on the task accomplished. This means that one should finish an assigned task to be paid (Jackson & Schuler, 2003). 

Person-based structure or skill-based structure of compensation connect compensation to the depth or breadth of the capabilities, skills along with know-how a person acquires, which is relevant to the specific job. The structure functions in a manner that it pays a person for all the skills for which they have received certification regardless of whether the duty they are performing needs all or just a few of those specific skills. This structure has been seen as effective in increasing productivity and inspire employee flexibility, as well as promote a high-employee participation (Heneman, 2002). The structure is also effective in lowering costs in an organization. For one in this structure to get a pay rise, one should pursue further education. For example, teachers’ pay is determined by the level of knowledge and higher education the better the pay. 

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Heneman, R. L. (2002). Strategic reward management: Design, implementation, and evaluation . Greenwich, Conn: Information Age Publ.

Jackson, S. E., & Schuler, R. S. (2003). Managing human resources through strategic partnerships. Mason (OH: South-Western

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