TOPIC

Explain the concept of competency and how does competency help in

the compensation designing
 INTRODUCTION

The focus of competencies is centered on characteristics of the employee,

including behaviors, skills and knowledge that can be demonstrated and
positively affect the organization. Competencies emphasize the attributes and
activities that are required for an organization to be successful. Therefore,
human resource practices using Competency Models tap into the employee
capabilities that are aligned to the organization mission and business need.
Competency Models when implemented in totality can impact all of the
agency’s human resource practices including recruitment, selection, 
compensation decisions, performance planning, performance evaluation and 
career development.
 Concepts of Competency

Competency is the capability to

apply or use the set of related
knowledge, skills, and abilities
required to successfully perform
'critical work functions' or tasks
in a defined work setting.
 How does competency help in compensation designing

• Encourages open communication with staff or within teams. Creates an environment

where people are comfortable expressing what is important to them

•  Relates to others in an open and accepting manner.

• Creates an atmosphere of trust

• Recognizes and appreciates the skills and special areas of expertise possessed by
employees.  Acknowledges and appreciates the contributions of others.

• Fair, open-minded and unbiased about each employee.

 Aligning the Competency with the wage rate
1)Keep up with the market trends
2) Be Clear about relationship between
performance and compensation
3)Have well defined criteria
4)Communicate benefits effectively
5)Have a standard pay range
• Conduct a survey to understand pay
scales
• Keep your pay structure updated
• Highlight specific job competencies
• Don’t rely completely on performance
review
• Account for difference in
compensation based on skills
performance levels, among others
• Create a list of all benefits
• Be vocal about the values
• Illustrate how these benefits work
• Have clear guidelines and pay range
• Have a well defined strategy
Thankyou