CHAPTER 12
TEAM-BASED PAY IN A KNOWLEDGE-BASED WORLD
One of the “hottest” organizational topics of the ’90s was the development and use of teams
within the organization. As organizations continue to reduce the size of their work force and decrease the
numbers and levels of management, teams are being recognized as a way to improve performance while
“downsizing.”
Complementing the development and use of teams has been the acceptance of skill-, knowledge-,
and competency-based pay plans for team members. Possibly the major difference between these team-
based pay plans and the more traditional job evaluation-based pay plan is that skill-, knowledge-, and
competency-based plans relate very closely to the skill, knowledge, and competencies required of team
members.
KEY CONCEPTS
2. A critical characteristic of a team is the number of members with seven being an ideal size.
4. Self-managed work teams reduce the number of managers required by an organization.
6. Broadbanding is being used in the design of pay plans for teams.
7. Upward movement through a broad band depends on skill, knowledge, or competency
SIGNIFICANT POINTS OF INTEREST
2. Self-managed work teams are enjoying widespread popularity.
4. Movement upward through a broad band depends on team required knowledge and skills
and competencies acquired and demonstrated by the team member.