BUS 409 DISCUSSION WEEK You are the HR Manager for the Pleasantville School District. Although it hadn’t done so before, the district recently implemented a person-focused pay program. This program offers a pay increase to teachers who pursue additional education and training. You were on the team that developed this policy, which has been approved but has not yet been disseminated district-wide.One of the high school teachers has scheduled an appointment with you to review how the program works. You plan to review the policy with the teacher and give him a paper copy as a leave-behind piece.In this post:Write the policy for the Pleasantville School District’s person-focused pay program that will be shared with the teacher. At a minimum, be sure to address the person-focused pay program’s:o Purpose and description, including effective policy dates.o Eligibility requirements. (Whois eligible to participate in the program?)o Acceptable types of education and training. (Whatis eligible for reimbursement?)o Awards for successful completion of training or education (promotional opportunities, compensation, non-monetary rewards, et cetera).Person-focused pay plans reward employees for acquiring job-related, knowledge, skills, or competencies rather than for demonstrating successful job performance.I copy this section from the Textbook…. I thought it would help me. (see below)Description – Person-Focused PayReward employees for acquiring job-related knowledge, skills, or competencies rather than for demonstrating successful job performance. Person-focused pay rewards employees for the promise of performance in the future; merit pay and incentive pay reward employees for the promise fulfilled (job performance). This approach tocompensating employees often refers to three basic types of person-focused pay programs: pay-for-knowledge, skill-based pay, and competency-based pay. Sometimes, companies combine person-focused pay programs with traditional merit pay programs by awarding pay raises to employees according to how well they demonstrate competencies on the job.Usage of Person-Focused PayA wide variety of employers have established person-focused pay programs.Some targeted studies and anecdotal information suggest that companies of various sizes use person-focused pay programs. Many of the companies known to be using this kind of pay system employ between approximately 150 and 2,000 employees and the average age of the companies is approximately 10 years.This study also conjectures that hundreds ofFortune 1,000firms use skill-based pay for their manufacturing or production workers. There is limited published evidence regarding the effectiveness of person-focused pay plans. One study found that askill-based pay plan in a manufacturing setting increased plant productivity by 58 percent, lowered labor cost per part by 16 percent, and generated favorable quality outcomes (82 percent scrap reduction).7Another study demonstrated that participants in a skill-based pay program increased their skills, and maintained increased skill levels back on the job.A more recent study examined attitudes among participants in a skill-based pay plan. The researchers found that these plans are perceived to produce superior work outcomes.Reason for the Person-Focused PayPerson-focused pay programs represent important innovations in the compensation field. Person-focused pay systems imply that employees must move away from viewing pay as an entitlement. Instead, these systems treat compensation as a reward earned for acquiring and implementing job-relevant knowledge and skills. Advocates of person-focused pay programs offer two key reasons that firms seeking competitive advantage should adopt this form of compensation: technological innovation and increased global competition.Variety of Person-Focused Pay ProgramThere are four varieties of common person-focused pay structures. The first, astairstep modelresembles a flight of stairs, much like the arrangement illustrated inFigure5-3, for an assembly technician. The steps represent jobs from a job family that differ in terms of complexity. Jobs that require more skills are more complex than jobs with fewer skills. For example, an Assembly Technician 1 job requires employees to possess two skills: line restocking and pallet breakdown. An Assembly Technician 3 job requires employees to possess six skills: line restocking, pallet breakdown, burr removal, line jockey, major assembly, and soldering. In terms of the stairs, higher steps represent jobs that require more skills than lower steps. Compensation specialists develop separate stairstep models for individual job families (e.g., clerks or accountants). Thus, a company may have more than one stairstep model, each corresponding to a job family such as accounting, finance, or clerical. No stairstep model should include both clerical workers and skilled trade workers (e.g., carpenters, electricians, and plumbers).Advantages of a Person-Focused Pay PlanAlthough no large-scale studies have clearly demonstrated these benefits, case studies suggest that employees and companies enjoy advantages from person-focused pay programs. Well-designed person-focused pay systems can provide employees and employers with distinct advantages over traditional pay systems. There are potential limitations of person-focused programs.Employees usually like person-focused pay systems for the following two reasons. First, they can provide employees with both job enrichment and job security. Job enrichment refers to a job design approach that creates more intrinsically motivating and interesting work environments. Companies can enrich jobs by combining narrowly designed tasks so an employee is responsible for producing an entire product or service.So far, evidence does suggest that person-focused pay plans lead to increased employee commitment, enhanced work motivation, and improved employee satisfaction.These results are probably due to the fact that well-designed, person-focused pay plans promote skill variety and autonomy. Some experts attribute these positive outcomes of person-focused pay programs to the fact that employees can increase their skills and be paid for it.Second advantage for employees is that, because person-focused pay programs create more flexible workers, these programs can represent better job security for employees. Rather than being laid off during periods of low product demand, employees can perform a variety of jobs that draw on the skills they have attained through person-focused pay programs. During periods of slow sales, many companies conduct inventories of their products. Customer service employees who have learned inventory accounting techniques are less likely to be laid off during periods of low sales than those who have not. Furthermore, employees who update their skills will also be more attractive applicants to other employers. Clerical employees who become proficient in the use of Windows-based computer software will have more employment opportunities available to them than clerical employees who have resisted learning these programs. Likewise, HR professionals who become familiar with important employment laws, such as the Fair Labor Standards Act, will probably have more employment opportunities available to them than will HR professionals who choose not to become familiar with these pertinent laws.Employers like person-focused pay systems because, when properly designed and implemented, these programs can lead to enhanced job performance, reduced staffing, and greater flexibility. First, person-focused pay programs can influence both the quantity and the quality of an employee’s work. Employees who participate in a person-focused pay program often exhibit higher productivity levels because employees who know more about an entire process may also be able to identify production shortcuts that result in increased productivity.Third, person-focused pay systems provide companies with greater flexibility in meeting staffing demands at any time. Quite simply, because participants in person-focused pay plans have acquired a variety of skills, they can perform a wider range of tasks. This kind of staffingflexibility helps companies when unexpected changes in demand occur.Disadvantages of a Person-Focused Pay PlanAlthough person-focused pay programs present many advantages, they have four possible limitations. First, employers feel that the main drawback of person-focused pay systems is that hourly labor costs, training costs, and overhead costs can all increase. Hourly labor costs often increase because greater skills should translate into higher pay levels for most workers. Because training is an integral component of person-focused pay systems, training costs are generally higher than they are at companies with job-based pay programs. These costs can be especially high during initial start-up periods as HR professionals attempt to standardize employee backgrounds. This process begins with assessing the skill levels of employees. Federal Express tests its employees twice per year.The company pays for four hours of study time and two hours of actual test time, which are bound to be quite expensive.Second, person-focused pay systems may not mesh well with existing incentive pay systems.When both person-focused and incentive pay systems are in operation, employees may not want to learn new skills when the pay increase associated with learning a new skill is less than some incentive award employees could earn based on skills they already possess. Employees often place greater emphasis on maximizing rewards in the short term rather than preparing themselves to maximize the level of rewards over time, which can be facilitated through person-focused pay programs.Third, effective person-focused pay programs depend, in large part, on well-designed training programs. There is a lot at stake: Person-focused pay systems include costly training programs, and these systems award pay raises to employees who successfully complete training. These programs also require that employers bear the price of base pay and benefits while employees attend training during regular work hours. Companies must wait patiently before realizing a return on investment for training. Several months may pass before employees apply newly learned knowledge and skills to their jobs. After all, practice makes perfect, and training programs cannot anticipate all the circumstances employees face when performing their jobs.Fourth, companies struggle with determining the monetary value of skill and knowledge sets. As we will discuss in Chapter 7, compensation surveys report the monetary value of entire jobs rather than individual skill sets. This fact is not surprising because most companies subscribe to job-based pay approaches as we described in Chapters 3 and 4, so it makes sense that surveys will focus on whole job value. In addition, knowledge and skill sets are usually company specific, which would make comparability difficult if surveys were common.