To grade or not to grade, that is the question?
In theory, job grading/evaluation is straightforward:
Jobs are grouped into grades or bands.
Jobs in the same grade/band are treated as being equal for the purposes of pay and benefits.
Normally the jobs have gone through a grading process and once complete enable the business to map and align roles and responsibilities, often summarising in one relativity chart.
If you have worked in a large organisation, you’ve likely had some experience of grading structures and the politics that can accompany them. My first experience was in local government and the structure was simple to understand. You started at the bottom of the grade and moved up each year. The only way to obtain a higher pay rate was to build up your length of service (or move to a different job).
It was sometimes difficult to retain high performers and it could be frustrating for line managers who had little influence over the remuneration of their team members. It often led to resentment and disengagement.
My experiences in the private sector have varied. It is certainly more common to have a ‘broadband’ structure. Under this system, each grade (band) has a ‘broad’ salary range sometimes up to £20k. Generally, you also find overlap i.e. you could be at the higher end of ‘grade 3’ with a salary of £40k but could also be at the lower end of ‘grade 4’ with the same salary – the difference being the benefits package (cars, pensions, healthcare, etc). The theory behind broadbanding stacks up. It provides clarity with regards to the sizing of roles, supports ‘equal pay’ and provides managers with some flexibility around individual compensation. In practice, success can vary!
This week I’m returning to one of my clients to review some new roles they’ve added to their manufacturing function. We introduced a grading structure a few years ago after they had grown significantly and were experiencing ‘grade drift’, along with some grumbles around pay inconsistency. In terms of evaluation, it was an appropriate time for a more formal approach.
HAY methodologies are internationally recognised and the most widely used job evaluation method – but if you haven’t had training/experience the ‘guide chart’ alone is enough to put you off! For this client, I acted as the HAY trained facilitator and we had a panel of people from around the organisation contributing to the scoring discussions. It can be difficult for the direct line manager to detach the role from the person currently undertaking it, so it’s good practice to get at least one person on the panel who is completely independent – finance is normally a safe bet.
As with any initiative, it needs a level of ‘maintenance’. Jobs change, organisations change, the landscape can change. It’s important that job evaluation keeps up with the operation of the wider business, otherwise, it will become outdated and cause employees to question its relevance and credibility. This week I will facilitate the evaluation of two new roles in their structure to determine how they fit with their existing relativity chart. I always look forward to these discussions as I learn so much about my client’s business.
If you think that it might be the right time for you to add some formality to your job grading to support fairness, consistency and equal pay, drop me an email firstname.lastname@example.org
I’m a HR Consultant providing outsourced solutions to the SME market on a retained, project or ad hoc basis across the UK.