Articles

Andrew Dickson, Hay Group Product Manager: Decision Tree

In all organisations there is an odd dynamic at play when it comes to remuneration. It does not matter how well-paid employees are, if they feel that they are paid differently (worse) to their colleagues, and they cannot see or understand the reason for this, they will be unhappy. One of the most important elements in remuneration is internal equity. When your internal equity is out of balance, i.e. when two people doing the same job, with the same inputs (education, skill, experience) are paid very differently, one of them is bound to be unhappy. In a way, internal equity is

far more important than external benchmarking.

Take, for example, two newly-qualified engineers, both of whom are starting work for the first time. Engineer A is paid $5,000 a month, when the average in his organisation is $4,000. Engineer B is paid $6,000 a month, when the average is $7,000. Which engineer do you think is the happier?

Engineer A is the happier. Relative to his colleagues, he is paid above the average and will feel valued and appreciated. Although Engineer B is earning more than Engineer A, Engineer B will feel under-valued and less appreciated.

However, if Engineer B understands why there is a difference in salary, and what needs to be done to move to a higher salary band, the feeling of being undervalued can be changed into a drive for achievement.  But to do this, we need to understand the differences in job rankings in an organisation.

Enter job evaluation. Job evaluation is about defining and comprehending the complexities of jobs in an organisation and how they fit together. Job evaluation systems require an understanding of the job being evaluated, including what is required of the person in the job (knowledge and skills), what processes have to take place (judgement required, planning and communication), and the impact the job has for the organisation.

By evaluating all the jobs in an organisation and providing feedback to the employees (either by grade or by broad band), they understand where they fit in the organisation and what needs to be done to move to another level.

However, the job evaluation process itself needs to be done properly. This means that the process needs to be consistent, fair, transparent and credible. Most job evaluation systems are all of these things, yet fail at a fundamental level: the perception of these systems is that they are not consistent, fair, transparent or credible.

It then becomes necessary to change employees’ perceptions of job evaluation. The easiest and most cost effective way to do so is to include employees in the process. A computerised job evaluation system, such as HayGroup Decision Tree, is just such a system, which adds value but at the same time simplifies the process.

Typically computerised systems do not involve a full committee to evaluate a job. The system is loaded onto a facilitator’s laptop (making it portable) and the facilitator, incumbent and the incumbent’s manager answer system-based questions to determine the grade of the job. By having the manager and the incumbent participate in the process, you immediately de-mystify the processes, making it clearer and perceptibly fairer. The incumbent immediately buys into the process and is far more willing to accept the results. Further, having chosen the most appropriate answer from a list, the incumbent has gained an understanding of what differentiators there may be in other positions, making it easier to justify different grades for similar positions in an organisation.

Where organisations inevitably fall short is after the job evaluation process. With many job evaluation systems the process stops once the evaluation committee has verified the results and sent them off to Human Resources. It is paramount that results are communicated to the organisation. Employees need to understand where they fit in the organisation, where other positions (note: not people) fit in the organisation and the relationship between the jobs in an organisation. Once an employee has this understanding, justifying differences in pay between jobs, and also between individuals, becomes that much easier.

In South Africa, the amended Employment Equity Bill which seeks to ensure that workers are paid the same for the work of equal value was passed in the National Assembly in October 2013 and is expected to be signed into law in the near future. The bill seeks to end unfair discrimination by employers in respect of terms and conditions of employment of employees doing the same work, similar work or work of equal value and protection against unfair discrimination.

The question is, is your job evaluation process able to help you with all of this?

For more information on Hay Group Decision Tree or to discuss the complexities of job evaluation, please contact Andrew Dickson at This email address is being protected from spambots. You need JavaScript enabled to view it.

Ends.

Issued by:                                                      Kathy Mumford

On behalf of:                                                  Hay Group South Africa

For further information:                                   Kindly contact Kathy Mumford on 011 783 2632

Date:                                                            11 February 2014

Ref:                                                              DT The importance of job evaluation