Job Grading - Getting Equal work for Equal pay right

  • Posted on: 26 January 2018
  • By: Cindy Jordaan

Amendments to the EEA which came into effect in 2014 include the equal work for equal pay clause.  This clause has caused some interesting debates in the Labour market and proved not to be a simple matter whatsoever.  Section 6(4) of the EEA provides for three causes of action in respect of equal pay. They are as follows: (a) equal pay for the same work; (b) equal pay for substantially the same work; and (c) equal pay for work of equal value. 

Determining the value of work as opposed to other work is no small feat and this was an arena entered only by seasoned HR professionals.  All employers are now expected, as per the amendments to the EEA, to implement a remuneration policy and practice that – in effect – formally or informally grades jobs.  There is simply no other way to determine the value of work objectively but by grading individual jobs.  The Department of Labour gently nudges us toward the Paterson job grading model which they have superficially worked into their reporting systems. 

Employers are guided in their job grading efforts in that the Department supplies the following occupational levels that jobs may be grouped as follows:

·         Top Management

·         Senior Management

·         Professionally qualified and mid-management

·         Skilled Technical and junior management

·         Semi-skilled

·         Unskilled

These are the broad grades that are used in the Paterson job grading methodology. 

Unfortunately, these grades are dangerously broad, too broad to assist employers in managing the equal work for equal pay requirement of the EEA.  It also becomes very difficult for employers to show year on year transformation since employees typically would not move from one broad grade to the next in the span of one year.  3-year moves are much more typical and realistic within the training and development plans and systems for most companies. 

The Department of Labour has also published a Code of Good Practice to assist employers to comply with the EEA in terms of equal work for equal pay:

http://www.labour.gov.za/DOL/downloads/legislation/notices/employment-equity/codeofgoodpractice2015.pdf

The Code gives four criteria that should be considered when determining the value of a job. 

These are:

·         Responsibility;

·         Skills, qualifications, and experience;

·         Physical, mental and emotional effort; and

·         Working conditions, location or environment.

The Code also provides the following criteria which may be considered as justification for income differentials:

·         Seniority or length of service;

·         Qualifications, ability or competence;

·         Performance, quality or quantity of work;

·         Demotion;

·         Temporary appointment; and

·         The scarcity of a relevant skill.

Job grading:

The only logical way to manage this and to remain compliant to the EEA is to embark on a job grading project and to intrench the Paterson job grading methodology in its entirety. 

The final output of Paterson job grading is 5 additional levels of jobs within each broad level as well as upper and lower grading.  By grading jobs in this way employers are empowered to justify their benefits and remuneration in relation to matters like the complexity of jobs, diversity, preciseness, and physical effort.

The following table illustrates the steps involved to grade various jobs within an organization:

Step 1 – banding

Step 2 – sub-banding

Step 3 – Sub-grading

Type of decision or judgment required

Supervisory element or authority

Complexity, variety, physical effort, preciseness

F (Top Management)

F Upper

F Lower

F4, F5

F1, F2, F3

E (Senior Management)

E Upper

E Lower

E4, E5

E1, E2, E3

D (Mid-Management or Professionally Qualified)

D Upper

D Lower

D4, D5

D1, D2, D3

C (Junior Management and Skilled Technical)

C Upper

C Lower

C4, C5

C1, C2, C3

B (Semi-Skilled)

B Upper

B Lower

B4, B5

B1, B2, B3

An (Unskilled)

A

A1, A2, A3

 

Using the full methodology allows for 28 various grades within an organization as opposed to 6.  Clearly, this makes growth paths and transformation much more manageable.  Employers can show every transformation step as employees move within the Paterson job levels.  Employees who want to be considered for increases know exactly what they need to do to obtain these increases by either moving to another job level or by diversifying their current jobs and requesting a regrade. 

The process is transparent and exchanges equal value for equal value.  This leads to improved morale, increased motivation, and a climate of fairness.

 

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