Job Evaluation + Market Pricing = Job levelling

 

The idea of job levelling was advanced back in 1956 by Elliot Jaques, who suggested adopting time span as the method to determine levels of work (Armstrong, 2010). Job levelling, also known as titling, like job evaluation essentially aims at helping employers to determine internal relatives and job hierarchies in order to develop and operate fair and consistent pay systems within their organizations.

 

 

 

According to the mechanism of levelling the different levels of jobs, and eventually the different grades within a job family (career architecture), are identified by means of a process aiming at pinpointing and outlining “a clear set of standardized requirements.” These requirements are in turn used to transparently delineate and define the career paths available within an organization, which essentially show and describe how individuals can progress from one level to the higher one (Chen and Rosenstein, 2009).

The exercise is performed by means of a prearranged framework based on a variable number of different criteria or factors, which can and usually are essentially the same as those used to design and conduct the job evaluation exercise. The identified model can be applied to the overall business, regardless of the different functions and units existing within it. Nonetheless, according to the different circumstances, needs and in general whenever different types of competencies are required to more properly and effectively perform and hence outline the different groupings of jobs being the object of assessment, a number of different frameworks can be also developed for the diverse functions existing within the same organization. In this case, each scheme is designed and developed according to the peculiarities of each function or unit taking into due consideration the skills and competencies, which mostly affect the level of performance of each specific category of jobs.

 

Job levelling schemes should be consistent and coherent with the job profiles associated with the different levels identified, in order for the former to express the degree and level of responsibility associated with the job and the latter to describe the job requirements in terms of tasks and skills (Chen and Rosenstein, 2009). Once the process has been completed, employers will be able to determine whether the salary rates they offer their employees are higher or lower than those offered in the relevant labour market by the other organizations. Additionally and not negligible, as it is the case for the job evaluation exercise, in order to prevent the likely pitfall associated with equal pay legislation, evaluators should also ensure that individuals carrying out jobs of the same level are equally paid irrespective of any difference in gender, ethnicity, religion or sexual orientation.

 

As contended by Armstrong (2010), job levelling whether applied to compensation only can essentially be deemed “as no more than another name for job evaluation.” Job levelling can indeed reveal to be particularly useful for other important reasons; but even though it might be introduced only to improve an organization reward management practises, it can reveal particularly significant to enable employers to overcome the problems arising when the way the organization values internal jobs diverges from the way equivalent jobs are evaluated in the external environment (Hay Group, 2013).

 

 

The scope of job evaluation is that to enable employers to determine internal relativities and hence internal pay fairness, whereas market pricing is aimed at establishing pay rates competitiveness taking into consideration the pay rates typically offered in the external labour market. By taking and combining the best features of the two approaches, job levelling can indeed enable employers to achieve better results.

 

 

 

The objectives pursued by the two methods are equally, crucially important, but it should not be overlooked that, in the case employers should pay individuals salaries well-above the current market rates associated with any given level or grade, the business would be practically wasting money; whereas in the case an organization should pay lower rates than those prevailing in the labour market for jobs of equal value, employers would inadvertently seriously jeopardize their capability to attract and retain talented individuals (Hay Group, 2013). Job levelling as an approach based on both job evaluation and market pricing best elements can enable employers to actually design and develop sound and consistent financial reward systems.

 

 

 

The scheme can either be based on a single feature or on a combination of different factors. In the case of the Birkbeck University of London (Hay Group, 2007), for instance, the introduction of job levelling led to a scale formed by ten levels. For each level an outline of the roles included in it and a summary of the “representative tasks or activities” associated with each role are provided. The programme is basically underpinned by three factors: knowledge, skills and experience.

 

 

 

Job levelling enabling employers to attain extensive pay consistency across all of the regions these eventually operate in is recently revealing to be particularly effective and suitable for multinational corporations or more in general for the companies geographically expanded at global or virtually global level. It can hence put forward the idea of global levelling, which can be defined as a structured and systematic approach enabling employers to establish a common equality, both in terms of roles and pay, across all of the countries in which these have branches or offices, albeit this does not clearly entail that all the roles are equally paid across all of the different regions.

 

 

 

Not necessarily all of the diverse roles existing within an organization can be the object of job levelling or anyhow not all to the same extent. At multinational corporation level, for instance, supporting roles at large are habitually unlikely to be included in global talent management initiatives; whereas by contrast executive roles are usually all involved without any particular limitation (Bonsels, 2009).

Having recourse to job levelling does not just enable employers to more effectually manage the reward practices targeted at managerial roles; whether properly developed and employed this methodology can indeed enable organizations not only to introduce fair, legally supportable and defensible salary structures, but also to attain a number of additional priceless benefits.

 

Among the most compelling reasons for embracing this approach can definitely be cited:

-      The creation of broad talent management practices better aligned with the organization strategy, objectives and culture;

-      The introduction and implementation of consistent and effective internal and international talent mobility programmes;

-      The prevention of resources dissipation by eliminating overcomplicated and exceedingly onerous administrative burdens, which contributes in turn to improve overheads management and increase the quality of an employer value proposition;

-      The introduction and implementation of more sophisticated and thorough Enterprise Resource Planning (ERP) structures and systems (adapted from Bonsels, 2009).

 

The combined achievement of these aims should enable employers to attain higher levels of performance, but this should not indeed come as a surprise. The process can be also used as an effective means to review and amend the existing reward management practices and talent management strategies, even though these might be apparently considered as appropriate to the current circumstances.

 

The concept and the intended aim of job levelling from its first Elliot Jaques’ formulation are clearly remarkably changed and evolved over time. From a tool enabling employers to define levels of work in terms of time span, it has evolved to a structured process whose benefits are now definitely wider and overarching; ranging from talent to reward management and from cost and risk management to governance (Towers Watson, 2011).  

In addition to enable businesses to better manage their reward and talent management practices, this method can effectually help employers to:

- More effectively administer and oversee, by means of improved HRIS, workforce planning;

- More promptly and accurately identify learning and development needs;

- Develop clearer and more factual and consistent career management programmes;

- Ensure effective succession planning management.

 

One of the most valuable benefits which the introduction of job levelling enables employers to attain is indeed represented by the development of clear, transparent, flexible and adaptable career maps easy to communicate and explain to employees; an opportunity which is actually particularly useful and significant for employees too.

 

A career map can be defined as “a predefined framework with a series of career bands and levels that increase in complexity and responsibility, representing career progression opportunities” (Towers Watson, 2011). As such, a career map provides and outlines, in a clear and comprehensible language, the criteria, requirements and capabilities necessary to progress from a level to the upper one according to the pre-identified factors on the basis of which it is essentially designed and developed. The shift from the traditional numerical “points” system to an outline of roles based on text, clearly makes these schemes more accessible to employees and help them to better identify and understand what an employer is expected from individuals to offer them a career progression (Charman and Blackwell, 2012).

  

In these schemes each existing role is associated with a career band and level; each level is associated in turn with a job family and describes how all of the jobs included in the scheme contribute to the attainment of organizational effectiveness (Towers Watson, 2011). Career maps can be thus tailored and adapted to the changing organizational needs and provide employees a clear and structured vision of the jobs which are or can be needed for the present and future regular unfolding and development of the business activity. This representation can clearly also enable employers to better plan and identify their organization workforce requirements.

 

The way this approach has recently evolved has essentially led to a remarkable shift from the concept of job to that of role. Roles tend in fact to be graded and outlined on the basis of their requirements in terms of accountability, rather than on the basis of the mere enumeration of the activities and tasks typical of each position. This ultimately accounts for a numerical reduction of jobs, roles categories and families, contributing in turn to make the overall framework more sustainable and less likely to require substantial changes over time (Charman and Blackwell, 2012).

 

Job levelling is unquestionably an approach which deserves particular attention. In addition to potentially offering the benefits typical of job evaluation and market pricing, it can enable employers to attain further and far reaching objectives; the benefits range from reward to metrics and analytics management. This type of programmes is hence likely to progressively attract the interest and attention of a growing number of employers, HR professionals and reward professionals as well.

 

 

The job evaluation exercise can be conducted by employers having recourse to either home-grown or proprietary brands, ready-made solutions. It is indeed very likely that whenever employers opt for ready-made solutions these may require some customization and adaptation to fit the different specific needs; circumstance which essentially accounts for these tools becoming thus hybrid. 

Longo, R., (2013), Job Evaluation + Market Pricing = Job levelling, Milan: HR Professionals [online].



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