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Where do competencies fit in? Competencies can be used in a variety of ways to guide the pay structure and compensation processes within an organization. If the organization has a set of core competencies that all employees should possess at varying levels across the organization, then these competencies can form the basis for some of the compensable factors used for the determination of base pay for various roles or positions. Also, managers can base merit increase or bonus decisions partly on the extent to which employees have demonstrated certain competencies on the job.
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