How to develop a competence-related pay scheme

This toolkit offers a practical description of what you need to do in order to develop and implement competence-related pay in your own organisation. It describes a systematic and comprehensive approach for analysing, diagnosing and designing a scheme, highlighting all the key phases involved.

Use this toolkit to understand:

  • what is competence-related pay

  • why organisations introduce competence-related pay

  • the evidence regarding the prevalence of competence-related pay in the UK

  • its key characteristics and components

  • what are the pros and cons

  • key ingredients for success

  • how a range of diverse organisations has articulated their competence-related pay schemes

  • strategies available for introducing competence-related pay.

This toolkit includes:

  • checklists to determine your readiness for competence-related pay

  • some easy-to-digest lessons to help you analyse the conditions most favourable for introducing and operating competence-related pay

  • the key steps that you should follow to plan and implement a new competence-related pay scheme

  • a listing of sources of further information.

For more details see our review, published in the 'News' section of, 2 July 2004.

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