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Which of the following is NOT a key issue in competency-based pay systems?

. In a competency-based pay system employees are paid
a. on the skills and knowledge they have, whether they use these or not.
b. according to their job performance, measured either by quality or quantity.
c. on the basis of their scores on annual competency tests.
d. on whether they have added value to the organization in the last year.

1 Answer

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Final answer:

The option not associated with competency-based pay systems is d, which concerns whether employees have added value to the organization in the last year, as it aligns more with performance-based pay.

Step-by-step explanation:

The key issue that is NOT related to competency-based pay systems is option d, which references whether employees have added value to the organization in the last year. This approach is more aligned with a performance-based pay system rather than a competency-based one. Competency-based pay systems are designed with the idea of compensating employees for the skills, abilities, and knowledge they possess, regardless of whether these competencies are used at work or not. Moreover, it is a means of pay that focuses on what an employee is capable of doing rather than what they have already done or the results they have achieved.

While job performance may be measured and rewarded in various pay systems, in a competency-based approach, the focus is on personal development and learning. Paying employees based on their scores on competency tests or the competencies that they can demonstrate lies at the heart of the competency-based pay system. This is often separate from valuing an employee based solely on the immediate value or productivity they bring to the company.

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