Original Date: 04/26/2004
Revision Date: 01/18/2007
Best Practice : Skill Based Pay
With the inception of operations, United Defense, L.P. Armament Systems Division Aberdeen implemented a Skill Based Pay system. The system has been highly effective at motivating employees, encouraging growth in employee skill sets, and nurturing the team environment.
When the United Defense, L.P. Armament Systems Division (UDLP ASD) Aberdeen opened in 1985, it was decided that a Skill Based Pay structure would be implemented. When a person is hired, he or she may fill any vacancy and begin at an entry-level pay rate. Training is provided for new hires in technical production, team interpersonal skills, and production process skills. The employee progresses through seven separate pay steps, is assigned to a work station, and must meet the defined qualification requirements for that work station. Every 18 to 24 months, the employee is rotated to another work station to learn new skills. The progression beyond the third step requires participation in collateral duties (e.g., team leader; schedule, parts, supplies, quality, and bulk representatives). The Skill Based Pay system attracts job applicants who want to learn and control their own destiny.
Employees are not in competition with each other for advancement, but their advancement is based on how well they function as part of the team after they meet the detailed qualification requirements for their work station. The Skill Based Pay system encourages employees to constantly strive for continuous improvement in everything they do. Morale is high, turnover is low, and the job rotation also eliminates the potential for any job becoming routine over time. Since implementing the Skill Based Pay system, UDLP ASD Aberdeen has a highly skilled and motivated workforce.
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