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COMP DOCTOR™: Job Classification and Compensation Restructuring

COMP DOCTOR™: Job Classification and Compensation Restructuring

Our organization would be considered larger (more than 10,000 employees) and will be starting a complete restructuring of our job classification system this year. One of the issues that we are trying to assess is whether we want to require that all of our employees complete a detailed position description questionnaire or whether we could just have a representative sample of employees do the questionnaire.

 

Can you offer any insight as to the pros and cons of the options to help us determine the best approach for our organization?  

 


 

This question has come up in most of the large-scale projects that we have been involved with over the past 30 years. You are smart to begin thinking about this now rather than after the project is already underway. First of all, the following factors need to be considered as you make your decision:

 

  1. Degree of employee and manager involvement desired in the project;
     
  2. Amount of time th organization is willing to commit to investing in the project;
     
  3. Project budget; and
     
  4. Your overall objectives for the project. 
     

Let’s take these in reverse order keeping in mind that each one has a bearing on the others. To begin, what is your overall goal for the project? If all you are trying to do is come up with a new job classification structure, there is probably no need to have every employee complete a detailed (and often time-consuming) questionnaire. All you really need is to get information about the various types and levels of work performed, so that you can develop a new classification system that covers the full spectrum of work being performed by employees in your organization. This approach will work if you are comfortable that all employees are currently classified appropriately so that you can simply move all incumbents in a given classification into the new classification that encompasses the old job classification. However, if you have concerns that individual positions are currently misclassified (either over or under), then this approach will not address those issues.

 

Budget can be a big issue for many organizations. If you are trying to undertake a project of this magnitude on a shoestring budget, you will need to make compromises as to the overall goal of the project, as well as what you can tactically accomplish. Designing a new structure will cost substantially less than having to assess the duties and responsibilities of thousands of employees (or even hundreds of employees, for that matter).

 

Project completion target is another big issue that has to be addressed. We often see RFP’s where the client organization wants an entire system restructured, requires individual employee involvement, expects multiple levels of internal review, and then they want the entire project completed in 30-60-90 days from the date of contract execution. In our judgment, these organizations are at a minimum delusional, and at worst, incapable of understanding what is involved in such a major initiative. If you absolutely must have a new structure in place in a very short period of time, the only viable trade-off is to minimize the degree of employee involvement. That means that you won’t be able to have all employees participate but the trade-offs outlined above will have to be accepted. In addition, expect significant employee push-back if you don’t involve them in the process of describing their job.

 

We believe that for projects such as these to be successfully completed and implemented, employee, supervisor and manager involvement is critical. That does not mean that you strive for 100 percent employee and manager concurrence and approval, but there needs to be sufficient involvement to ensure that the various perspectives are understood and that all parties understand what you are doing and why you are doing it.

 

The major concern we have with organizations that want to have only limited input in terms of a sample of employees relates to the ultimate implementation of the new system. A number of years ago, we were involved with a very large urban school district that wanted no more than a 10 percent sample of employees involved in the position description questionnaire process. We pointed out to them that the other 90 percent were not likely to be very supportive of the outcome since their “unique” positions were not included. The organization said they had it covered, so that is what we did. Unfortunately, once the new structure was developed and rolled out, that’s when things got messy. After all of the hew and cry, the District had to back-track and get the other 90 percent included, resulting in the project taking substantially longer and at a much higher cost than if they had done the project correctly from the beginning.

 

Change does not come easy. You are taking on a subject on which everyone has an opinion. Clearly, my job is much more important, complicated, and/or sensitive than yours, and everyone else’s, or the labor market for my job is such that the work I do is substantially more valuable, therefore I should get paid more than everyone else. As we have often said, this topic affects the two most delicate parts of the human anatomy – our egos and our wallets. It doesn’t take much for people to turn a straightforward issue into a full-blown turf battle. Consequently, figuring out the scope of what you are trying to do ahead of time, and being realistic about what it involves, will go a long way in ensuring a successful project.

 

In our experience, we have found that the most successful and longer lasting systems take plenty of employee involvement and thus take plenty of time. It is probably better to do it right than to do it quick. Your employees and your board will ultimately be better served.

 


 

The Comp Doctor™ is the team of Jim Fox and Bruce Lawson, Managing Directors in the Human Resources & Compensation Consulting practice of Arthur J. Gallagher & Co. They specialize in assisting governments in fixing their compensation and classification systems.

This article originally appeared in the IPMA-HR News in October 2015. It was revised and updated in February 2017.

If you have a question you would like to have them answer, please write to them at jim_fox@ajg.com or bruce_lawson@ajg.com. They will try to include it in a future issue of Comp Doctor™.

 

 

Jim Fox

Dr. Fox is a Managing Director of the public sector and higher education compensation part of the Gallagher Human Resources & Compensation Consulting practice. In this capacity, Dr. Fox serves as project director and/or technical advisor, providing technical direction and quality assurance. He is responsible for all consulting activities in the areas of job evaluation and compensation, organization analysis, personnel systems and policy development.

Dr. Fox has been directing classification and compensation studies for more than ...

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Bruce Lawson

Mr. Lawson is a Managing Director of the public sector and higher education compensation service line of the Gallagher Human Resources & Compensation Consulting practice. In this capacity, Mr. Lawson serves as project director and/or technical advisor, providing technical direction and quality assurance. He is responsible for all consulting activities in the areas of job evaluation and compensation, organization analysis, personnel systems and policy development.

Mr. Lawson has been directing classification and compensation studies for more ...

Read Full Bio