PROCEDURES FOR GRADING JOBS AND FIXING RATES OF PAY

Job Grading

The procedures for grading new jobs or regrading existing ones should lay down that grading or regrading can only take place after a proper job evaluation study conducted by a member of the personnel department or a job evaluation panel advised and assisted by a specialist. An appeal system should be built into the procedure.

The steps which can be taken to control grade drift are discussed later in this chapter.

Fixing Rates of Pay on Appointment

Managers should have a major say in pay offers and some freedom to negotiate when necessary but they have to take account of relevant pay policies, and the amounts should normally be confirmed by a member of the personnel function and/or a higher authority.

Policy guidelines should set out the circumstances in which pay offers above the minimum of the range can be made. It is customary to allow a reasonable degree of freedom to make offers up to a certain point, eg the 90 per cent level in an 80–120 per cent pay range. Most pay systems allow offers to be made up to the reference point depending on the extent to which the recruit has the necessary experience, skills and competences. Offers above the reference point should be exceptional because this would leave relatively little room for expansion. They are sometimes made because of market pressures, but they need to be very carefully considered because of the inevitability of grade drift unless the individual is promoted fairly soon.

Promotion Increases

Promotion increases should be meaningful, say a minimum of 5 per cent but often 10 per cent or more. They should not normally take the promoted employee above the reference point in the pay range for his or her new job so that there is adequate scope for performance-related increases. One good reason for having reasonably wide differentials is to provide space for promotions.