Tag Archives: job evaluation

Consultation Launched On Gender Pay Gap Reporting

The government equalities office has just launched a consultation on gender pay gap reporting which will close on 6 September 2015. The reason for this is that the government is committed to introducing regulations that will require companies to publish their gender pay gaps clearly identifying the differences between average pay for males and females.

Research has shown that the UK falls way behind in the league table of worldwide equal pay. Iceland, Finland, Norway and Sweden are the top ranking countries for equality. Four decades on from the Equal Pay Act working women in the UK continue to lose out.

The regulations will only apply to companies in the UK with at least 250 employees so small and medium sized businesses will not be affected. Furthermore public authorities will not be included as they already have broad equality obligations compared to the private sector.

The regulations will be in place by March 2016 but will not take place immediately so that employers have time to prepare for implementation.

The Government appears to be considering the following options in terms of what will be reported:

1. Reporting one overall gender pay gap figure that captures the difference between the average earnings of men and women across the organisation as a percentage of men’s earnings.

2. Reporting separate gender pay gap figures for full-time and part-time employees.

3. Showing the difference in average earnings of men and women by grade or job type.

Highlighting pay differences could expose companies to equal pay claims. There will therefore be the need to put pay decisions in context as there may be fair reasons for these.

A failure to comply with the rules could, ultimately, be treated as an offence, attracting a fine.

In anticipation of the regulations being implement employers should consider the following actions:

• Be proactive – doing nothing is not an option. Understanding your pay arrangements will help you manage and present information meaningfully and in context.

• Review all current pay practices across your organisation in order to understand the differentials which may exist.

• Consider gender pay gaps which exist on a departmental/geographical/functional level and compare these with the composition of your workforce.

• Analyse the rationale behind your current arrangements to identify potential risk areas.

• Consider implementing a job evaluation scheme which will help provide defence for pay gaps

A link to consultation paper can be found at https://www.gov.uk/government/consultations/closing-the-gender-pay-gap

Employers will ultimately have to address gender pay gap issues.

Employee Reward On The Up

Courtesy: Free Digital Images

After the dearth of the recession years, employee reward is on the up and compensation and benefit issues are in the spotlight.

For many years salaries have stagnated with few companies being able to offer a pay increase and many making many job cuts. But along with the current buzz of increasing recruitment, pay seems to be top of the agenda with pay awards of around 2.5% being anticipated this year and reward structures being assessed for fit for purpose reasons.

As I blogged about recently there is a skills shortage in the UK so it is important the companies hold onto their talent and make sure they are incentivised. Pay can be a big incentiviser for some, but employee total reward encompasses financial reward with motivational aspects such as career development, job satisfaction and recognition. To retain and recruit talent companies may have to consider paying above the market rate.

Employee reward specialists have always been thin on the ground, but now, more than ever, they are needed to help organisations develop reward solutions to support business strategy. Employee reward professionals can help with employee reward strategy, analytics to assist with pay and benefit reviews, job evaluation which links job size to pay and defends equal pay claims, flexible benefits, salary sacrifice schemes, bonuses, commission schemes and pensions particularly pension auto enrolment.

Total reward statements can help employees to see the full effect of the benefits they receive. So many employees do not understand the benefits a company provides to them. All benefits can be included such as maternity pay, health insurance, employee assistance programmes. Seeing financial employee reward on paper as a simple pie chart or graph can add to employee retention.

It makes sense for employers to reward their staff well to encourage motivation that will impact on the bottom line.

What Is Job Evaluation?

Job evaluation is the systematic evaluation of the size of a job in relation to other jobs in an organisation and is used to help determine pay and establish a rational pay structure placing jobs into a hierarchy. Basically it is job analysis that that is then linked to pay. External data can be collected to determine the going rate for a job which is called market pricing. It allows organisations to remain competitive with their pay and benefits. It is therefore important to obtain up to date data through paid for published surveys, which can be expensive or job clubs where organisations share data amongst themselves. Market pricing also allows for job pricing of a role that may be difficult to recruit to therefore possibly applying a more attractive salary.

The starting point for job evaluation is to break down the parts of a role eg duties, skills and experience needed so that these can be analysed.

There are various types of job evaluation – non-analytical or analytical.

Non-analytical job evaluation is a simpler and cheaper process compared to analytical job evaluation and there are various schemes, however, they are highly subjective. This means that personal opinion can creep in and distort the final decision. It must always be remembered that it is the job that is being evaluated and not the person. Job titles too can over-inflate the picture.

Non-analytical methods include job ranking, paired comparisons and job classification.

Job ranking

This is the simplest form of job evaluation. It is undertaken by putting the jobs in an organisation in order of their importance, or the level of difficulty involved in performing them or their value to the organisation.

Paired comparisons

A technique used to compare each job in turn with another in an organisation, the use of paired comparisons takes longer than job ranking as each job is considered separately.

Job classification

This method is also known as job grading. Before classification, an agreed number of grades are determined, usually between four and eight, based on tasks performed, skills, competencies, experience, initiative and responsibility. Clear distinctions are made between grades. The jobs in the organisation are then allocated to the determined grades.

There are several types of analytical job evaluation schemes:

Points Rating

Each element of the job is broken down into factors which are assessed separately and points allocated according to the level. The more demanding the job the higher the score. This type of scheme is highly objective with little room for personal opinion and discrimination. Therefore, t is highly effective as a defence for an equal value claim. However it is time consuming, can be complex and costly to introduce. In house staff will need to be trained on operating the system or external consultants brought in.

However, it is time consuming to introduce and can be complex and costly to undertake. In addition it can be seen to be an inflexible form of job evaluation in times of rapid change and can imply an arithmetical precision which is not justified.

Schemes include NJC, GLPC and Hay.

Factor Comparison

A points rating job evaluation scheme is based on an assessment of factors, though no points are allocated.