Grading 2.0: next-generation job levelling in HR departments
Chris Charman, May 08, 2012
Job evaluation, grading or job levelling has been with us for a long time. Although its relative importance has waxed and waned, it remains a perennial feature of most HR functions.
It is a vital part of the reward function's toolkit and something which the rest of the HR function frequently, and gladly, leaves well alone. Such is the importance of job levelling, one reward professional at our recent European conference on job levelling in Brussels in February 2012 enquired: "Can you really be a reward function without a levelling structure?"
The benefits of job levelling for reward are enduring, bringing consistency and a hierarchy for the management of pay and benefits. Findings from our research in February 2012, and insights from some of our recent client assignments, suggest that we are might be starting to see change in how organisations view the purpose of job levelling. We are finding that job levelling is starting to become important for the wider HR function, not just reward. According to our recent pulse survey findings which explored job levelling practices in 150 organisations across the UK, pay and benefit management remains the most prevalent HR processes linked to job levelling, but 60% of organisations are now also linking career paths too. In the future their intention was also increasingly to use levelling for succession planning and competency applications.
We see the emerging trend is redefining levelling frameworks to better integrate talent and reward. We have seen leading organisations take this further into the emerging space of HR analytics and workforce planning. This creates a foundational framework for all of HR not just reward.
Changes to enable this broader usage has been three-fold. Firstly, a focus on roles rather than jobs. By defining positions in a broader accountability sense than task-based jobs, it leads to fewer roles than jobs, which are more sustainable being less likely to change. This in turn means clearer career paths, with role descriptions being a central place for role-specific performance, recruitment and competence requirements. Secondly, the grouping of roles into families based on skills, and within these sub-job family areas - what we call Career Architecture. This creates a series of manageable 'homes' for roles providing a focus for career pathing and development work. Critically, it classifies roles and people in the same way that accountancy classifies money. It enables meaningful analysis, analytics and ratios to be created that bring insight and a common language for describing the organisation in a three-dimensional way.
The final aspect has been a focus on accessibility and communication; this means being able to describe the levels in an organisation with words and not through traditional points. This is all about bringing structures to life for people helping them to navigate their careers and articulate what it takes to progress.
One of our clients, a leading financial services business, has focused exactly on this value adding approach and sees the development of a new career framework as key to bringing together its three centres of excellence in HR: reward, talent and analytics. For the head of reward, a learning so far has been the connection with their HRIS implementation: "It was the need to address the basics that drove us to focus on a new HRIS - a single 'point of truth' for headcount reporting and HR data.
It is only now having developed the career framework further do we recognise how powerful the connection is between the two projects we have running. We now see getting the career framework in shape is critical to the realising the business case in terms of quality and usability of data as well as presenting a modern and effective set of tools on which we can grow and develop as a function.
Similarly, Anglo American, one of the world's largest mining organisations, introduced a global career framework in 2011 - architecture built on top of an existing levelling structure. The roles were organised by skill areas, called discipline groups (e.g. engineering, mining, project management etc) with levels remaining unchanged.
This has given Anglo American a more useable framework with increased functionality. Their learning here is that the utility has evolved over time from a reward-led framework for role management and headcount reporting to a talent one, helping the planning of the future supply and demand of the scarce and critical skills they need to continue to operate and win in the global mining business.
As demonstrated by these two companies, the addition of job architecture to job levelling 'turbo-charges' its usefulness. What these and other leading organisations are realising is that by thinking about levelling as an HR tool not a reward tool relatively small changes can have liberating and dynamic effects. Provided that the traditional silos between reward and other HR functions can be overcome, this trend could potentially have a significant impact on both perceptions of levelling and also on how the HR function itself operates and presents itself to the rest of the business, especially with metrics in mind. Perhaps in the future you can't be a proper HR function without architecture?
Chris Charman is a director and Guy Blackwell a consultant in Towers Watson's Reward, Talent and Communication practice