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Skill-based Pay Program Improves Customer Service

June 1, 1993
Related Topics: Compensation Design and Communication, Service, Featured Article
As a supplier of products to the telecommunications industry, Northern Telecom serves a constantly changing marketplace. Customer demands are high, the pace is rapid and the products made by the company are evolving continually. This constant change puts pressure on all Northern Telecom employees to stay abreast of new product technologies, but the product installers feel the pressure most of all.

To encourage field technicians to keep their skills current and to ensure that they're adequately compensated for their increasing skill levels, Northern Telecom established a skill-based pay program in 1991 for the 1,200 installation-department employees. This program is called Fast Forward.

"This is a true pay-for-skills program," explains Dennis Garfield, director of installation at the company's Technical Installation Center in Raleigh, North Carolina. "The only way our field technicians can receive an increase in their base pay is through the attainment of new skills."

All of the installation skills that Northern Telecom employees need are listed on a document called the Skills Capability Record (SCR). Each skill on the SCR is assigned a point value, based on the difficulty of attaining that skill as well as on how important that skill is to the installation department. Skills range in value from two to 40 points, with the high-point skills considered to be the most important.

These points correspond to salary zones that are divided into 100-point increments. As field technicians earn additional points, they move into higher salary zones. "Now there's no such thing as a dollar per point," Garfield emphasizes. "For field technicians to receive an increase in base salary, they must move into a new zone—into another 100-point increment. In other words, someone could go from 699 to 700 points and be eligible for a pay increase."

Employees receive these points when they demonstrate that they can perform a particular skill on a job site without supervision. When this is done, they are certified in that skill by a certification committee that includes:

  • The district manager
  • The employee's immediate supervisor
  • A representative from human resources
  • A peer.

In Fast Forward's first 18 months, close to 90% of Northern Telecom's field technicians received some sort of skill-based pay increase. What impact has this had on customer service? "We've heard many positive remarks from customers about our technicians' ability to answer their questions about our products," Garfield explains. "Additionally, we have a formal survey that's completed after every job, geared specifically to the installation activity. The surveys are coming back with much higher ratings today than they did two years ago."

Personnel Journal, June 1993, Vol. 72, No.6, p. 64G.

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