Staff Writer 
HR Perspective with MEMORY NGUWI
I HAVE seen many organisations develop pay structures without first carrying out a proper job evaluation exercise. They collect salary information from the market, look at what employees are currently earning and then try to arrange the figures into grades. On paper, the result may look like a pay structure. In practice, it’s usually a collection of salaries with no clear relationship between one job and another. The problems start when employees and managers ask why a particular job is in a certain grade. No one can give a convincing answer because there was no proper basis for placing it there.
Job evaluation deals with this problem by establishing the relative value of jobs within the organisation. It looks at the job itself, including the decisions made, the level of responsibility carried, the knowledge required and the effect of the job on the organisation. It doesn’t assess whether the person currently doing the job is a good performer. That person may be outstanding or may be struggling, but the grade should still reflect the demands of the job. Performance can be dealt with through salary progression, incentives and performance management. Mixing performance with job size causes unnecessary confusion.
This distinction sounds simple, but it’s one of the issues that causes the most trouble during job evaluation. Managers often argue for a higher grade because they want to retain a valued employee or because the employee has been with the organisation for many years. Some employees also assume that a higher qualification must lead to a higher grade, even when the qualification isn’t required for the job. These are employee considerations. They shouldn’t be used to inflate the value of the job.
A sustainable pay structure needs a clear internal order. Employees should be able to see that jobs carrying similar levels of responsibility are grouped together. They may not agree with every decision, but the organisation should be able to explain how each decision was reached. When grades are based mainly on negotiation, influence or history, the structure becomes difficult to maintain. A new executive arrives and changes a few grades. A manager pushes for an exception. A difficult recruitment leads to another special salary. After several years, the organisation has many exceptions and very little structure left.
Job evaluation gives management a way to control this drift. Every new or changed job can be assessed against the same standards used for existing jobs. If the responsibilities have genuinely increased, the evaluation should show it. If the employee only has more work of the same level, that doesn’t normally make the job bigger. Volume and complexity aren’t the same thing. This is an area where managers need honest advice because employees often present an increase in workload as an increase in job value.
The quality of the outcome depends heavily on the quality of the job of the description. A vague or inflated job description will create problems before the evaluation even begins. I have reviewed job descriptions that list every possible activity carried out by a department and then assign all of it to one position. Others describe routine responsibilities in language that makes the job sound far more senior than it’s. Job descriptions should state what the job is accountable for in clear language. They should also show the decisions the job can make without passing the matter to someone else.
A defensible pay structure is one that management can explain using facts about the work. This doesn’t mean every evaluation decision will be perfect. Job evaluation still involves judgment, and different people may initially see the same job differently. That is why the evaluation committee must discuss the evidence and apply the rules consistently. The committee should record the reasons for its decisions. When an appeal is made, the organisation can then review the facts instead of repeating the whole argument from memory.
Market salary data has an important place in pay structure design, but it can’t replace job evaluation. Market data tells you what other organizations are paying for jobs that appear comparable. It doesn’t tell you how a job fits into your own organisation. The same job title can cover very different levels of responsibility. A human resources manager in a small business may not carry the same accountability as a human resources manager in a large mining company. Using job titles alone is one of the quickest ways to make poor salary comparisons.
I prefer to establish the internal job hierarchy first and then use market data to attach salary ranges to the grades. This allows the organisation to consider internal fairness and external competitiveness separately. Where a particular skill attracts a market premium, management can deal with that openly instead of changing the grade to force a higher salary. A market premium can be reviewed when conditions change. An inflated grade is much harder to correct because it affects reporting relationships, career paths and the salaries of other jobs.
Affordability should be considered before the new structure is approved. Organisations sometimes complete job evaluation, announce the grades and only later calculate what implementation will cost. That is poor planning. Management should know how many employees fall below the proposed minimum, how many are already above the maximum and what it will cost to correct the most serious gaps. The full cost may not be affordable at once. Corrections can be phased, but the organisation must be honest about the plan and apply it consistently.
Affordability doesn’t mean paying as little as possible. Underpaying key jobs can lead to vacancies, turnover and repeated counteroffers. Overpaying jobs also creates a long term cost that is difficult to reverse. The purpose of the structure is to help management pay at a level the organisation can sustain while still attracting the people it needs. That balance will differ from one organisation to another. It should be decided deliberately, not through a series of individual salary negotiations.
Employees should be told how the process works. They don’t need access to confidential committee discussions, but they should understand what was evaluated and what wasn’t. They should know that job evaluation doesn’t automatically produce a salary increase. The exercise establishes the grade of the job. Salary adjustments depend on the approved pay structure, the employee’s current position in the range and what the organisation can afford. Managing this expectation early prevents many avoidable disputes.
In my experience, the most difficult part of job evaluation isn’t choosing a system or calculating a score. It’s getting managers to accept one standard across the organisation. Most managers support consistency until the rules produce an outcome they don’t like for a job in their own department. Senior leadership must protect the process at that point. Once exceptions are approved without a sound reason, other managers will expect the same treatment and the structure will quickly lose credibility.
A pay structure built on proper job evaluation gives management a reliable basis for salary decisions. It makes it easier to explain grades, compare jobs, use market data sensibly and control payroll costs. It also reduces the influence of job titles, personalities and private negotiations. The work doesn’t end when the grades are announced. Management has to keep job information current, review genuine changes and resist unsupported exceptions. When that discipline is present, the pay structure remains useful and affordable. When it’s absent, even the best job evaluation system will eventually be undermined.
l Nguwi is the managing consultant of Industrial Psychology Consultants and a registered occupational psychologist.
