Pay pegged to learning LO11807

Charles Kerr (
Fri, 10 Jan 1997 20:56:15 -0500

Several things stand out in Pratt & Whitney's new hourly compensation plan
developed at its plant in North Berwick, Maine:

The Plan pegs pay boosts to increased learning and the assumption
of responsibility, not seniority (article in the December 26th Wall Street

Recognition of the significant role that the increased learning of
hourly employees has played in saving the plant.

Acknowledgement of the importance of hourly employees being
willing to assume responsibility. In the Plan the most money for
increases goes to people who are capable of running special cost or
quality projects, a task previously left to managers.

A team of hourly workers had significant input in formulating the
Plan and helped in its implementation.

Roxanne Abbas confirmed, from her consulting experience, that as employees
develop new skills and knowledge, results inevitably improve.

It seems that the Pratt & Whitney plan is particularly well constructed to
achieve results because, in addition to the recognition of learning, it
adds encouragement for employees to take responsibility for making the
learning useful.

Malcolm Burson raises the $64 question of how to measure increased
learning so that it can be translated into an increase in compensation?

The problem is similar to education's concerns with grades, what is
successful completion of a course, what merits awarding a degree and,
bottom line, what has the student really learned.

My experience has been that the best way to address this problem
successfully, and to achieve Trust, is by having heavy input from the
hourly people who will be affected by it. Such a team will propose a
better approach than anything management alone, in its infinite wisdom,
would structure. As important, the odds that the Plan will be well
accepted are an order of magnitude higher. Trust is, as always, the key.

Roxanne Abbas's second posting of 7 January outlines a sound system of
measuring learning that she calls "demonstrated competencies". It begins
by determining the competencies needed by the organization. The second
step is to subjectively establish the present competence level of each
employee. Subsequent reviews measure increases in competency. The
determination of the employee's level is made with input from the
employee, manager, peers and customers.

While this approach may be time consuming, the focus upon what is
important to the organization; how competent am I, as an employee, to
contribute to the organization; and how responsible have I been in doing
so should be time well spent.

The work being done at Pratt & Whitney is important to those interested in
Learning Organizations. I am sending copies of our comments to Mr.
Ponchak, the Pratt & Whitney Plant Manager and hope that he will have time
to reply or, better still, to join our discussions.

Charles Kerr


Charles Kerr <>

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