Question

1. ABC Inc., a mid-sized company in Toronto, Ontario, wants to ensure that its pay systems are internally equitable, gender-neutral, and externally competitive. The CEO, who believes the organization’s compensation system can help it achieve its goals, has hired you to re-design the base pay for the jobs in the organization. The company has about seventy jobs (Marketing, Sales, Finance, HR, and other administrative jobs), some of which are predominantly male and female jobs. Currently, all base pays of the employees were established based on what the candidate asked for and the CEO’s/HR Manager’s limited understanding of the market. Using a point-method job evaluation system and guidelines of Ontario Pay Equity Legislation, discuss in detail how you would go about establishing a base pay for XYZ Inc. which is internally equitable, gender-neutral, and externally competitive.

Answer 1

Ans.

Job evaluation is a systematic process in which the value of job is determined while comparing it with other jobs in the organisation. It assesses the worth of the job with a purpose as it establishes a rational pay structure. There are four types of job evaluation techniques such as job ranking, factor comparison, point evaluation and job comparison methods.

ABC is a mid-sized company in Toronto, Ontario, that would like to update its pay system. It wants to ensure that the system is internally equitable, gender-neutral and externally competitive. In current situation the base pay is as per the demand of the candidate and manager’s understanding of the market. The management would like to opt for point-method job evaluation to set the pay scale in the organisation.

Point-method is a technique to evaluate job in which jobs are assessed based on the factors such as qualification required, skillsets and knowledge required, complexity, interaction with other functions of the organisation, problem solving, judgement, working conditions, difficulty level, supervisions required and the like. Points are allotted to these factors and summed to form a total point score for the job. The number of points each position is worth equals an assigned monetary value. The method is less biased as the points are assigned before the compensable factors.

As the organization has about seventy positions including marketing, HR, finance, sales and other administrative departments a numerical scale can be designed to determine the value of each profile in each department. For example, a scale from 1 to 5 can be designed for rating sales executive at 1, senior sales executive at 2, area sales manager at 3, branch manager at 4 and country head sales at 5. A rating from 1 to 10 can be classified making the CEO position as the most important designation in the company and scaling it at 10.

To create equitability in the system, no profile should be tagged to a specific gender. For example, a male employee can perform a role of HR manager and a female employee can be the CEO of the organisation. The organization can be divided into main and supporting department. For example, Operations and marketing can be main and HR and administration can be supporting department. In order to create competitive, qualification and skills should be rated. For example, an HR manager should be qualified and have knowledge about the policies and guidelines, while a salesperson should have convincing and negotiating skills. An HR would require specialised training while salesperson will require corporate training. When comparing a human resource profile would not fetch business to the firm but a salesperson will, but HR will help the system in hiring the right salesperson and rescue the legal problems. So, salesperson can be 2 in qualification and HR can be 3 while salesperson can be 3 in functioning and HR can be 2. This would create an equal rating for both the positions and would make the organization internally equitable and competitive in externally.