Grading structures

1
Grading structures
Base pay structures and relationships

• Core building-blocks of an organisations HRM
  system
• Not just about pay but also about conditions and
  career development
• Grading closely linked to the desired shape of
  the organisation
• Grading normally reflects the value of jobs in
  terms of skill, difficulty or responsibility

2
Types of organisational structure
3
Criteria for grading structures

• Equity, fairness and consistency
• Internal structure versus external market
• Degree of operational flexibility and continuous
  development
• Capacity for individual growth within the
  structure
• The clarity of reward and career paths
• Ease of communication
• Degree of control over pay growth given to
  management
• (Armstrong, 2002)

4
Types of pay structure

• Individual spot rate or rate for the job
• Individual pay ranges
• Narrow-graded structures
• Pay spines
• Broad-banded structures
• Job or career families

5
Narrow-graded structures
A typical narrow-graded structure
6
Higher education pay spine and model grading
structure
Source Joint Negotiating Committee for Higher
Education Staffs
7
Broad bands
Traditional graded structure 40 grade width
Source IPD (1997)
Broadbanded structure 100 band width
Source IPD (1997)
8
Broad bands
A broad band with zones for individual roles
Source IPD (1997)
9
Job families

• The objectives of job families
• to map out career paths
• to achieve more flexibility in grading
• to identify market groups
• to provide for rewards to be based on personal
  contribution and progress
• IPD (2000)

10
Job evaluation

• A major mechanism for apportioning value to jobs
  or roles
• Four basic assumptions (Hills 1989)
• Jobs differ in terms of the required contribution
  from employees (eg skill, responsibility, effort,
  etc)
• Employees will accept the criteria used to assess
  a jobs worth
• Equity perceptions lie in the eyes of the
  beholders
• Equity criteria remain stable over time

11
Types of job evaluation

• Non-analytical schemes
• Job ranking
• Paired comparison ranking
• Job classification
• Internal benchmarking
• Analytical schemes
• Factor comparison
• Point-factor rating
• Competence-based job evaluation

12
Job or role analysis

• A job description typically provides an overview
  of the job and its place in the organisational
  structure, a detailed description of the duties
  and responsibilities, and a commentary matching
  the various job evaluation factors.
• A role profile is more flexible, describes the
  type of personality required for the task, and is
  more focused on inputs and outputs, knowledge and
  skills required, and expected behaviours.

13
Aligning pay with the market

• The immediate local labour market surrounding the
  workplace (the town or suburb)
• The regional labour market (the geographical or
  travel-to-work zone)
• The national (or international) market

14
Differentiating between groups

• Interim ad hoc payments for specific groups
• Market supplements
• Separate pay structures for different groups of
  staff
• Job or career family structures
• Skills-based approaches (internal development)
• Using grading structures and/or actively
  encouraging grade drift
• IDS (2006)