Skill-Based Pay and Employee Attitudes

Faced with continuing competitive pressures over the past few decades, organizations have been driven to seek more innovative approaches to management. In the compensation management area, skill-based pay (SBP) is one such innovative approach that is being increasingly applied. However, there is a paucity of research on this approach to pay and the consequences of applying it relative to the more traditional job-based approach to pay. This study examines how SBP affects employees perceptions of their employment relationship with particular focus on organizational commitment and role orientation.