Among the advantages of skill-based pay are the following:
It contributes to job enlargement and enrichment by breaking down narrow job classifications.
Flexibility is increased by encouraging the performance of multiple tasks. It enables job rotation, and filling of temporary vacancies due, for instance, to absenteeism. It therefore contributes to a leaner workforce.
=> It enhances productivity and quality through better use of human resources.
=> It facilitates technological change, which may meet with resistance in a purely job-based system.
=> The higher pay levels, continuous training, and job enlargement through the broadening of skills, tend to reduce staff turnover.
=> Elimination of unnecessary jobs can result from a workplace having broad, rather than narrow, skills. It also reduces the need for supervision.
=> Job satisfaction is engendered through employees having greater control over the planning and implementation of their work.
=> Broadening of skills leads employees to develop a better perspective of operations as a whole.
=> It is an incentive for self-development.
=> It provides employment security through skills enhancement.
=> It reduces the need to look to promotion to higher levels (which are always limited) as the only way to enhance earnings, and it facilitates the planning of an employee’s career development path.
=> Since the reward flows from the application of a skill and it does not reduce opportunities for others to similarly increase their skills and earnings, there is likely to be less competition among individuals.
=> Since the pay increases on account of skills are linked to a measurable standard, the criticism of subjectivity often associated with performance appraisals and individual-based performance-related pay, is avoided
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