Projected staffing requirements were reduced due to increased productivity. In addition to increasing competencies, the company needed to communicate the basis on which pay decisions were made for this group. Because the technical skills required to perform this type of work are well-defined in great detail, skill sets were chosen as the primary criteria on which differences in base pay are determined. Each employee s skill level is assessed annually to determine the proper classification. Each employee s performance is evaluated annually, and this rating determines the actual wage rate within the range.
Performance is measured in terms of traits and behaviors as well as goal achievement.
No cash bonuses or stock options are available. This approach has resulted in a measurable increase in skills levels. Because the company is able to provide ongoing training opportunities, employees have control, through their own initiative in acquiring training, over their own pay. Undesirable, pay-related turnover has been minimal. The associated documentation contributes to the company's ability to bid competitively for government contracts because it is able to justify estimated wage rates.