What is the first step in establishing a capability-based pay system in the engineering unit?

The first step in establishing a capability-based pay system in the engineering unit involves identifying the different levels of desired skills. This foundational step is crucial because a capability-based pay system is designed to reward employees based on their skills and competencies rather than solely on their job title or responsibilities. By understanding the specific skills and the various levels of proficiency required, the organization can create a clear framework for compensation that aligns with the actual capabilities of its engineering workforce.

Once the desired skill levels are identified, the organization can then proceed to define the characteristics of successful engineers, benchmark salary data, and create job descriptions. All these subsequent steps rely on a well-defined set of skills and competencies as the basis for how pay will be determined. Thus, establishing the skill levels ensures that the compensation system will be fair, equitable, and closely aligned with the business needs.