Edward Lawler III and Christopher G. Worley

Paying the person rather than the job has its most significant impact on organizational culture and employees’ motivation to change. Instead of being rewarded for moving up the hierarchy, people are rewarded for increasing their skills and developing themselves. This can reinforce a culture in which personal development and a highly talented workforce are receptive to change. It can be especially helpful when an organization needs to improve its competencies and capabilities, because the company can use pay to motivate individuals to develop needed skills.

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