What organizational conditions indicate that skill‐based pay is not for us?

SBP systems usually are ineffective if the work is low‐skill—there is not enough ROI to justify the costs of SBP. Unstable management, organizational structure, or technology is very unfavorable because it is difficult to project the specific SBP design that will meet organizational needs. As with any major change, top management understanding and support is critical. A workforce that is very old on average may have little chance of earning SBP increases before retirement. Finally, a workforce that is low in growth needs is unlikely to want SBP.

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