A Pay-for-Skill & Multi-skill Approach to Survival

In the face of global competition, economic challenges, changing demographics and technological advancements, manufacturers now have to re-think work rules and compensation practices that no longer reflect current foreign and domestic realities, the exuberance of innovation, youthful optimism for change, an aging workforce and new technologies.  The environment of “how work is done” as opposed to “how well work is done” must share the spotlight when assessing how to conduct business.  The rigid and traditional work and pay designs of the past fail to meet the needs of emerging technology, the interdependence between functional manufacturing areas, high performance workplace requirements, employee retention, new quality systems and cost outputs sensitive to workers knowledge, ability, skill and "know-how." 

New and innovative work & reward structures involve changing the work system itself, creating advanced and flexible skilled professionals, ISO/TS compliant training and cross-functional work teams, and rewarding positive performance through pay-for-skill training and compensation systems.  If done properly, these multi-skill/pay-for-skill strategies can bring job enhancement and satisfaction, cost cutting, profit contributions and create a positive environment based on worker retention, advancement and recognition to your manufacturing operation.

However, these changes in pay and responsibility mean that training can no longer be just a “scabbed-on” function of the human resources department but an integral part of the change process where team members and workers are rewarded for continuously improving their operations and developing more skills.  Consequently, many plants are adopting new labor models that capitalize more on the intellectual capacity of the workforce than its brawn.  These new work structures are replacing decades-old, rigid systems of plant-floor jurisdictions and boundaries that have institutionalized waste, redundancy, inefficiency and compensation based on seniority instead of performance.

There is no room for unrealistic, arbitrary or capricious decision making when embarking on a pay-for-skill and/or multi-skill imitative.  Although there are several successful models, concepts and proven methods, there is no one way, master plan or “recipe” that fits all circumstances – being more of a “chef” than a “cook.”  However, the approach should be based on designing, developing and administering a defendable competency-based, pay-for-skills program through your workers as opposed to doing it to your workers. Empowering your own internal resources not only minimizes dependency on outside providers but capitalizes on the expertise of your best people in order to get buy-in for the new compensation program and develop worker-ownership to sustain it over the long run.  However, these changes in skill, responsibly and pay are not easy.  As one manager said "It’s like trying to change the oil in your car while driving down the highway at 65 mph."

Contact PMA’s WorkingSolutions about how to design, develop, setup and implement pay-for-skill / multi-skill, competency-based work design and resultant training programs in your plant.