Traditional pay

Generally, traditional pay structures involve annual salary or hourly rates with raises based on seniority or merit. This week, you review some alternative approaches, including incentive pay and person-focused pay. Your assessment of incentive-based pay includes individual incentive plans, group incentive plans, and company-wide incentive plans.

Although incentive-based pay is linked to performance, person-focused plans focus on competencies. Martocchio (2020) states that “a competency refers to an individual’s capability to orchestrate and apply combinations of knowledge and skills consistently over time to perform work successfully in the required work situations” (p. 111).