The traditional and most widely used approach to developing a pay structure focuses on setting pay for jobs or group of jobs. This emphasis on jobs has certain limitations. The precise definition of a job responsibility can contribute to an attitude that some activities “are not in my job description”, at the expense of flexibility, innovation, quality, and customer service. Organizations may avoid change because it requires repeating the time consuming process of creating job descriptions and related paperwork. Another change related problem is that when the organization needs a new set of competencies, the existing pay structure may be rewarding the wrong behaviours. Finally, a pay structure that rewards employees for winning promotions may discourage them from gaining valuable experience through lateral career moves.
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