Organizational design issues can muddle pay

If you want your compensation programs to fire on all cylinders, you first need to establish which jobs are peers, or at the same organizational level.

Some organizations experience muddled pay because they miss this foundational step. 

Jobs should align with organizational levels – and related pay bands – in a well-considered and consistent manner. And this should be the case both within and across departments or functions.  

Without a clear framework for aligning jobs to levels, an organization may find itself paying individual employees quite differently, even when they are doing comparable work. This can open the door to a variety of risks, including:

But you can readily get your house back in order by implementing some form of job evaluation process. A common approach is to implement a point factor job evaluation system, which enables you to assess jobs using a consistent set of factors. Using this approach, you determine which jobs are at the same organizational level based on their emerging point values.

This is the recommended approach to job evaluation for organizations covered by pay equity legislation, although it can be valuable in any jurisdiction. For example, if your organization operates in multiple geographies or has a strategy to grow through mergers and acquisitions, it can be helpful to have a ready process for comparing the relative internal value of jobs and defining which jobs are peers.

It is also possible to create frameworks for defining job requirements by level that are more descriptive or qualitative in nature. Organizations compare job requirements to the various level descriptions and then assign jobs to the most appropriate level.

These frameworks are popular because of their more conversational nature. That makes them good management tools that can support both organizational design efforts and career development discussions with employees.

Some organizations may opt to use both a point factor job evaluation tool and a job level framework. In such cases, the point factor tool is used to address pay equity compliance, while an integrated job level framework is used as the more user-friendly way to explain how jobs build or grow from level to level.

Talk to us about how to better integrate jobs, levels and pay in your organization. Contact Us