The concepts of Equal Pay for Work of Equal Value can seem overly simplistic and in my engagements with organisations on the subject, many of them believe that their current policies and procedures “cover them”. However, in the process of conducting Equal Pay analysis, we regularly find holes in the systems that have resulted in pay anomalies and areas of potential risk. At the recent Emergence Growth Power of HR conference held in Johannesburg on 8 June 2017, I had the privilege of presenting, sharing some of the insights I’ve gathered over the past two years assisting organisations – both large and small – to get to grips with equal pay.
If you’re interested in viewing the slide deck from the presentation, please click here. I have highlighted the first of the common Pitfalls that companies experience when considering their compliance with equal pay legislation.
Job Evaluation is not the Pancea
Although the Code of Good Practice speaks of the need to have an “objective assessment of jobs”, simply having a job evaluation or grading system in place, does not mean that you’re free from problems pertaining to potential unfair discrimination in pay. Some of the primary sticking points include:
Over-simplification of naming conventions
In many cases, HR (payroll) departments have attempted to redress the problems associated with having too many job titles within an organisation, choosing to simplify into broader job categories. Think “clerk”, “administrator”, “assistant” or “manager” / “supervisor”. Whilst this may simplify the organogram and possibly the payroll data records, it does not sufficiently differentiate between roles that would enable a clear understanding – by employees, their representatives or even Department of Labour – of how these roles compare to one another in context of defining “same, substantially the same, or similar” as per the regulations.
Of course, simply calling two jobs something different does not mean that they cannot be compared for the purposes of equal pay. However, I would recommend reviewing your naming conventions to ensure that you give sufficient definition to the roles to clearly differentiate the scope of the jobs so that the first point of reference (usually job title) for employees is clearer.
Incorrect assessment of jobs
Job evaluation begins with a job profile. When did you last review yours? Have you accurately captured the scope, complexity and detail of the role? Would you be able to defend the pay differentials between two employees who may do the same job but at vastly different levels? Think “Project Manager”, “Debtors Clerk” or even “Accountant”.
Once a job profile has been updated it should be evaluated against a grading system to provide context and assign a grade. This provides a uniform framework to compare different jobs within the organisation. There are a range of grading systems and my experience would be to choose the simplest one for your organisation to enable effective application and an understanding by all stakeholders as to how it works.
Same grade, totally different job!
Although job grading provides a framework to quantify different jobs within an organisation, pay ranges assigned to grades can (and most often do) differ vastly depending on the job. Consider your own organisation. You might have two jobs carrying the same grade, let’s say D1 where one is an Actuary and the other an Ops Manager. These jobs are graded the same but are likely to be paid differently, in fact perhaps even as much as 200 or 300% differently. Could you explain this if required to defend pay differentiation? Although not yet tested, there is some speculation that a simplistic view of the Equal Pay for Work of Equal Value code implies that the grading system provides the definition of “same, substantially the same, and similar” meaning that you might be expected to pay all D1 within the same range.
Have you considered the process of analysing which roles within your business are core/critical? And which, by virtue of their importance to the sustainability of your business and/or delivery of your product/service, are more valuable and therefore likely to be paid higher?
Difficulty in defining complex, multi-disciplinary roles
The world of work is changing daily and in a knowledge economy there is a dramatic shift with new jobs being created on an almost weekly basis. As jobs expand, change and develop, the skills needed to fill these will too. Traditional job evaluation methodologies and organisational design can have challenges in defining these within tight frameworks and as a result, there may be problems in determining value and more importantly, comparison to other, more traditional jobs.
It is also important to remember that whilst a job may be defined, individuals fulfilling the job could be complex, bringing additional and unique skills, experience and value. It is critical to separate the evaluation of the job and then consider why the individual currently holding the role might be paid differently within the realms of the justifiable reasons.
Look out for future editions where we will unpack some of the other Pitfalls and how you can take care to mitigate your risk.
If you are considering a grading system or reviewing your existing one, we’d be delighted to assist you. Through our strategic partnership with Emergence Growth, we can link you to experts in this space.
Please remember that we welcome any questions you have and can assist you in understanding your potential risk when it comes to Equal Pay for Work of Equal Value.
For more information, or to discuss your unique needs, please contact [email protected]