Your pay scale can tell you how long someone has been working at the company. It can’t tell you what they’re capable of doing. As long as raises are calculated based on a multiplier and a hire date, the operator who runs four machines, troubleshoots issues, and trains new hires is worth the same as the one who operates a single machine.
The compensation based on skills Pay people based on what each person knows how to do, can demonstrate, and practices on a daily basis, rather than the position they hold. This system is implemented to build loyalty and increase versatility, with the impact on salaries coming later. This guide explains why this approach is gaining traction in the industry—including outside of France, where different labor laws apply—how to structure the pay scale, and what mistakes to avoid to ensure a smooth rollout.
Why Salary Alone Is No Longer Enough in the Industry
Replacements are expensive, and versatile candidates are becoming scarce—two recent trends that the salary calculation method has never taken into account.
The Limitations of Pay Scales Based on Seniority and Position
French industrial pay scales are based on industry-wide collective bargaining agreements, which assign a coefficient to each position and structure pay increases based on the number of years spent with the company. The system is simple to administer but says nothing about an employee’s actual skills.
An operator who covers three stations on a production line is worth more than one who works a single station, and no standard pay scale allows you to reflect that. A sense of injustice then takes hold on the shop floor. In our study on the Operator 4.0, conducted with OPEO and LHH among 110 French-speaking manufacturers, 20 % of respondents cite fairness among operators as one of the challenges they face in managing assignments.
The same study identifies skills development and versatility at the top of the 2025 challenges, with 75 % of the respondents in question, far ahead of all other topics, and 56 % consider their operators' level of versatility to be insufficient. A pricing structure that does not reward expanding the scope therefore works against the top priority of production sites.
The European directive on pay transparency, which takes effect in June 2026, will also require you to objectively justify any pay disparity. Seniority alone will be a weak justification.
What does it mean to pay based on skills rather than job title?
Skill-based pay links pay increases to skill level. Each verified level of proficiency results in a pay increase, which opens up opportunities for horizontal advancement by expanding the scope of responsibilities—whereas the traditional pay scale offered only a vertical path to the position of team leader.
On a machine, the operator progresses from «operating under supervision» to «autonomous setup,» then to «troubleshooting,» and each level is worth one increment: €0.30/hour at level 1, €0.60/hour at level 2. Advancement is then determined by in depth, within a single subject area.
Two validated machines count as Level 1, four machines as Level 2, and so on. This time, the calculation is done in breadth, by building on certified competencies. This approach accelerates the shift toward versatility, while the tiers better ensure the actual technical proficiency required for critical positions. At a multi-line facility, start by focusing on the combination of skills—which is easier for teams to understand—and introduce the levels once the framework has stabilized.
Both rely on technical skills (operating machinery, certifications, quality procedures) and behavioral skills, such as training a colleague or coordinating a team in the absence of the shop foreman. This approach builds on the shift from GPEC to GEPP—mandatory for companies with more than 300 employees since the 2005 Borloo Act, which introduced soft skills alongside technical skills.
What are the benefits for the company and the operators?
Retain talent and reduce turnover
When compensation reflects what each person is capable of doing, perceived fairness increases. Everyone sees the reward for acquiring a new skill and knows what they still need to achieve to reach the same pay level as a higher-paid colleague. Healthy competition replaces the suspicion of favoritism that often accompanies discretionary raises.
Our study on the 4.0 operator notes, in passing, a discrepancy. Career advancement and skills development rank only third among the retention factors cited by manufacturers, with 44 % of respondents, behind work environment (66 %) and quality of life at work (53 %). Yet these same respondents rank skills development as their top challenge. Almost no one has made it a structured retention strategy.
Increasing Production Versatility and Agility
A versatile team can handle absences and production peaks without relying on temporary workers, and each multi-station operator reduces your dependence on those «key workers» whose sick leave can bring an entire production line to a standstill.
One of our industrial clients has gone from 12 % to 34 % of versatility over a team in four months, once the milestones have been announced and the approvals have been kept up to date.
I used to have a lot of paperwork. Now everything is organized and traceable. Mercateam fosters healthy competition: the team becomes more versatile, and management can plan much more easily.
Setting the increments, caps, and expiration rules before the announcement helps keep the impact on your payroll predictable. Without a cap established in writing from the outset, a generous program becomes impossible to rein in without appearing to be rolling back social benefits.
How do you develop a competency-based pay scale?
The process of constructing the grid is far more daunting than the concept itself, and many projects stall at this point because there is no established method for converting from the reference system to euros.
Mapping Skills Using a Matrix
List the skills required for each position, distinguishing between technical skills (machine operation, quality control, first-level maintenance) and regulatory certifications (CACES, electrical certification, industry-specific certifications). These certifications have their own expiration dates and are not subject to negotiation in a company-wide agreement.
Three to four proficiency levels are sufficient, ranging from novice to trainer, including independent and expert levels. Beyond that, evaluators can no longer distinguish between the levels, and the skills matrix loses its reliability. When used properly, it photographs your team station by station, person by person.
Excel can handle up to about fifteen people. After that, files start to duplicate, versions diverge, and no one trusts a spreadsheet that hasn’t been updated in three months. A skills management platform then becomes the only way to keep the data up to date.
Define pay grades
Once the matrix is in place, the proficiency levels must be converted into euros. Four mechanisms are commonly used in the industry:
- The versatility bonus, calculated based on the number of positions the employee is qualified to fill. Some collective bargaining agreements provide for this (for example, the National Collective Bargaining Agreement for the Construction Industry requires a salary of at least 110 % of the coefficient for a versatile employee), but in most cases, a company-level agreement sets the rules.
- An hourly pay increase for each validated skill, where each certification triggers a fixed increase of approximately €0.30 per hour per level.
- The points system, in which each skill earns points, and the total number of points determines the overall pay grade.
- The mentoring bonus, which compensates for the role of mentor or training specialist: supporting a new hire, validating a practical evaluation, and structuring a job-specific development path.
The last one deserves a few more words. 92 % industrial sites train their operators on the job According to our study, this relies on on-the-job mentors who receive no compensation for their work. Without a bonus, moving from mentor to trainer makes no difference to one’s paycheck, and the best mentors decline training assignments at the very time the factory needs them most. Set a flat rate for as long as the role is active, or base it on the number of training programs actually supervised: a mentor who has been inactive for a year no longer needs to be paid.
Manufacturer
Build Your Step Chart
Name your proficiency levels and assign an amount to each one. The total shows how much an operator earns once they reach that level.
Premium Unit
0,00
0,30
0,60
1,00
Difference between the first and last levels
1.00 €/h
That amounts to approximately €151.67 gross per month on a 35-hour basis for an operator who has reached the highest pay grade.
Assess and certify acquired skills
A compensation program cannot survive on the basis of lenient evaluations. Put it in writing who conducts the evaluation (team leader, internal trainer, external evaluator), what the evaluation covers (on-the-job observation, practical test, questionnaire), and how often recertification is required.
As soon as the role of trainer becomes a paid position, the list of authorized instructors and the records of their activities become part of payroll data as well as training data.
In the audited sectors (ISO 9001, NADCAP in the aerospace industry, GMP in the pharmaceutical industry), electronic signatures, evidence of training time, Time stamps and validation logs are used to prove that an operator was indeed certified on the day they were on duty—which is exactly what the auditor will ask you for.
The alignment between validated skills and assignment schedule This remains the most frequently overlooked issue. An operator whose certification has just expired should no longer be listed as eligible for the position. The very first check that cross-references the two databases is enough to undermine the system’s credibility in the eyes of the teams.
Before entering the first euro into the agreement, determine the purpose of the payment: whether it is based on held versatility or exercised versatility. The theoretical figure counts validated skills, while the actual figure counts positions actually held over a period, as reconstructed from the schedule. An operator certified for four machines but assigned to the same production line for the past eight months shows four positions in the theoretical count and only one in the actual count. Paying based on the theoretical count amounts to compensating for potential that never materializes in production.
Linking the bonus to actual versatility simultaneously resolves the issue of expiration, since a skill that is not practiced ceases to count without the need to organize any recertification test. In return, the employer must give everyone the opportunity to practice. Provide for a guaranteed minimum or a minimum rotation; otherwise, an operator will see their salary decrease through no fault of their own, and the system will backfire on you during a CSE meeting. When established in advance, these rules regarding caps and expiration ensure the system’s long-term viability.
Mistakes That Cause Implementation to Fail
A well-designed system can fail within a year—either because the framework becomes too cumbersome to maintain or because the operators never understood the rules.
A reference system that is too complex or has never been updated
Trying to model everything—every micro-skill, every technical movement, every nuance—results in a 200-line competency framework that no one understands and that no one updates six months later. Virgile Raingeard (Figures.hr) points out that the effort to develop the competency framework «has always been considered too cumbersome and has very rarely been successful.».
Start with the skills that impact production, safety, or quality—one skill per machine or workstation. The skills database will be expanded later. A simple, dynamic system is better than a comprehensive one that gets abandoned after a quarter.
Failing to communicate with the teams
A competency-based compensation program isn’t rolled out via email. Facilitators will ask the same questions in every workshop: How are competencies assessed? What exactly triggers a raise? What happens when a certification expires? Please provide written answers before the announcement.
Involving employee representatives from the very beginning of the framework’s development—rather than only during wage negotiations—establishes them as guardians of fairness.
Front-line managers explain, provide guidance, and approve actions on a daily basis. If they are neither trained nor committed, the program will remain a dead letter. Provide clear resources (FAQs, roadmaps, workshop posters) and schedule regular meetings to adjust the program based on feedback from the field.
How Mercateam Supports Competency-Based Compensation
Mercateam does not handle payroll. The platform provides the data that is essential to the program—namely, who can do what, since when, with what evidence, and in which positions that skill has actually been used.
The matrix is updated in real time, by operator and by workstation. Standardized questionnaires and electronic signatures ensure consistency in evaluations across team leaders. Alerts flag expiring certifications before an operator is assigned to a workstation for which they are no longer authorized. Dashboards provide coverage by workstation, the rate of cross-training, and the return on investment for training—the three metrics your executive committee will require to renew the program.
More than 300 industrial sites use Mercateam to organize their skills management, including Collins Aerospace, Bonduelle, Saint-Gobain, Guerlain, and Valrhona. The platform integrates with existing HRIS and ERP systems (SAP, Oracle, ADP) and complies with ISO 27001 and SOC 2 Type 2 certifications.
