the pay for knowledge and increases

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Pay for experience and advancement is a payment scheme used by the human resources (HR) department to reward employees depending on their skills and level of professional qualification (Gerhart, 2016). To effectively control an organization's pension programs, HR employees must consider the system's function and model. Since technology has enabled businesses to improve productivity by paying workers, the use of this method would save time and money when it is automated.

Significantly, the scheme credits employees for achieving specific career objectives, qualifications, and training in their area of study. Significantly, through the exercise, it provides a platform for workers to improve their education and expertise (Wilson, 2015). Notably, knowledge-based pay encourages employees to further their education and attain an increase in compensation and other benefits.

As employees’ scope of knowledge widens, they handle lucrative and complex assignments on behalf of the organization comfortably. Therefore, this system is a plan that provides rewards and bonuses toward the managerial, service, or professional workers for learning and mastering a specified skill (Wilson (2015). Particularly, the system is based on worker’s educational achievements in a company. Considerably, the combination of training and development functions of a human resource leads to employee's pay rise.

Fig 1. Pay Knowledge Model Used To Determine Compensation


Scale I

Position Skill Requirement

Check the boxes below and

indicate if by ticking (√) if you

can perform the listed duty

Scale II

Employee Knowledge

Indicate by ticking (√) if you have the following skills

Department of Marketing

Director Of Marketing

Manages the marketing

and sales of

products and services

that meet customer needs

and will make a positive

contribution to the company’s

Financial performance.

In conjunction with senior

management, establishes the

appropriate price guidelines

For company products and services.

Evaluates current marketing

strategy and recommends

new strategy to the executive

Committee when appropriate.

Prepares sales forecasts for

Each fiscal year.

Prepares a departmental budget.

Evaluates current policies, procedures

and practices.

In conjunction with the Human Resources

Department, responsible for selection,

evaluation, and coaching of regional

managers and for ensuring that all sales

Staff receives proper training.

Liaises with other Department

Managers to ensure that overall

Corporate objectives are being accomplished.

Provides support to top management

in identifying strategic issues and

Trends are affecting the company.

Posses a university

Commerce or Business Administration degree


Master of Business



At least ten years

of experience in


of technologies

with at minimum of

five years in management


Ability to develop

, supervise, and

Coordinate workers.

Ability to handle conflict

Of interest in the

Organization. Surpass departmental duties.

Superb communication

Skills. Ability to solve

problem in the


Can cooperate with

managers in the same

the line in the organization.

Department of human resources

Director Of Human Resources

Ensure the acquisition, training,

retention, and motivation of

personnel needed by the

company to achieve its

Corporate goals.

Evaluates HR plan and

Organization Design.

Recommendation of current

HR polices to the executive

committee when


Preparation of the budget in


and assesment of HR goup.

Evaluates current practices, procedures

and policies.

Ensure compensation expenditures

Are effectively deployed in

The company.

Develop a suitable compensation

And reward strategy. Supervises

Implementation of approved

Polices and strategy.

Helping other departments

in navigating through HR

Problems and issues

Providing assistance to

senior officials in selecting

strategic problems and trends

affecting the company.

Posses university

Commerce or

Business Administration

Degree (human resources).

Master of Business

Administration in human resources and Certified

Human Resources


(CHRP) designation.

Experience of ten

years in HR capacity

and a minimum of five years

in management and

technology industry

Coordinate, supervise,

And develop workers.

Handle conflict of

interest among workers. Surpass department performance.

Source: Gerhart (2016)

Recommendations about Managing Future Compensation Increases

Contemporary, companies are striving to manage dynamic changes in their compensation schemes. Barling (2014) asserts that gone are the days when firms used to give equal pay increases to all employees. Currently, modern organizations face many constraints in budgeting for workers’ benefits, compensations, and salary. Thus, they need an effective management system of their payments plans.

Other than the historic pay increase and variables of rewards, such as bonus, profit, and gain sharing, a company should plan. CORE Company should pay attention to the quality of work life rewards to manage future compensation increases effectively. Thus, when a group offers a variable pay rate of approximately six to eight percent in addition to the basic salary, the employees should post better performance (Long, 2014). In fact, the increase should motivate the workers to produce more.

Preferably, CORE Corporation should not reward all employees equally, but it should compensate them depending on their performance. According to Barling (2014), a better system does not reward all workers alike but pays staffs depending on their output. Therefore, the firm should use its structure as a communication tool to deliver a message about its expectations and goal achievement rewards. It should also develop a remuneration philosophy and direction in writing that the board of directors can contently review and deliberate with managers. By doing so, it will have harmonized its operations.

A reward philosophy suggests the pay rate for each employee. It gives 50th percentile for individuals attaining goals and 75th percentile for objectives that result in pay delivery (Long, 2014). Apparently, an organization should not focus much on increasing pay scale but emphasize more on spreading gains through bonuses that are goal oriented. Thus, goal attainment should be compensated alongside organizational and individual goal achievement to enhance teamwork.

In summary, the Pay for Knowledge and Increases is a remuneration system that considers the educational development of employees. In prevents equal payment of employees because each has a different degree of contribution to the productivity of the firm. The system then considers the relative increments in the educational skills of the workers before raising their basic pays by the specified percentiles. The departmental table in the figure 1 above explains the way this system works. Apparently, it is useful, and it saves costs and time.


Barling, J. (2014). Knowledge work in organizational behavior. International journal of management reviews, 2(3), 287-304.

Gerhart, B. (2016). An empirical analysis of a skill-based pay program and plant performance outcomes. Academy of management Journal, 41(1), 68-78.

Long, R.J. (2014).Strategic Compensation in Canada, fifth edition. Nelson, ISBN 978-0-17-650968-2.

Wilson, M.C. (2015). Human Resource Systems and Sustained Competitive Advantage: A Competency-Based Perspective. Academy of Management Review 19(4), 699–727.

November 17, 2022

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