Final answer:
Person-based pay systems are based on employee characteristics and are most effective when employee development is a priority. These systems can be costly and require careful management and investment in training. They are also informed by broader economic forces such as labor supply and demand, and they may not always be directly correlated with job satisfaction.
Step-by-step explanation:
Pay systems in which employee characteristics, rather than the job, help to determine pay and are known as person-based pay. Such systems work best in environments where skill and knowledge levels are clearly defined, and where the development and training of employees are highly valued. Content loaded in this context refers to the attributes of the employee that the pay system takes into account, such as their skills, education, and experience.
These person-based pay systems can indeed be costly in terms of both administration and the necessary training to develop employee skills to the required levels. This payscale is analyzed in contrast to job-based pay systems where the job itself, not the individual worker characteristics, primarily determines compensation. While person-based pay systems are focused on the individual and their growth, these systems also consider broader economic factors such as supply and demand for certain skills in the workforce, the levels of employment, and the availability of jobs. What's often debated is the correlation between job satisfaction and pay levels, with some research suggesting job content factors might be more predictive of job satisfaction, and that individuals may adjust to higher pay levels over time.