Increasing pay equity and pay transparency legislation, as well as changing requirements for reporting on equitable pay practices, prove that, now, more than ever, job architecture is fast-becoming the most critical tool for organisations to implement, monitor and govern pay equity strategies.
A job architecture provides a framework for defining and aligning jobs within your organisation based on the type of work performed.
In its simplest form, it provides you with a mechanism to consolidate all your job titles into a consistent framework that provides clarity and transparency on career levels and pay.
Jobs (job titles) that have common features are consolidated into job groups, sometimes called job families, or where more sophisticated management of skills and careers is in place, they might be called guilds or professional groups.
As these groups are created, each will contain a number of job titles and levels reflecting different job outputs, skills, knowledge and experience. This structure then provides the foundation for job levelling and salary structures and other equitable compensation programmes based on job value.
Pay equity is the concept of compensating employees who have similar job functions with comparably equal pay, regardless of factors such as their gender, race, and ethnicity.
Pay equity is not only essential from a legal compliance perspective, but also helps manage budgets (ensuring no-one is overpaid), attract and retain employees and supports organisations in fulfilling their D, E, and I strategy. There is also increasing pressure from external stakeholders, such as investors and regulators, to make sure that pay equity is being analysed, along with plans in place to address any issues.
There has been some debate around how rigid your job architecture needs to be. Not having one can lead to significant challenges around pay inequities and compliance complexity
As Tom McMullen, Total Rewards Expert, Korn Ferry, stated in a recent Pay Equity panel; ‘a wobbly job foundation is the enemy of pay equity management’.
In many organisations, it is frequently the case that job titles are a mess, job levels are all over the place and there are inconsistencies in salary ranges across roles, business areas and regions. As a result, most organisations see a lot of management discretion around jobs and pay - decentralised governance, inconsistencies, grandfathering old structures – resulting in job title chaos and a very weak foundation.
Payscale found that over 40% of companies do not have an organised pay structure that is aligned to job ranges, but it is important to remember that your organisation is responsible for all existing pay disparities, even if they are unknown.
The absence of a solid job foundation or a clearly defined job and pay structure, combined with frequent management discretion in job creation and pay allocation, can make dealing with possible pay inequity much more difficult and can expose organisations to risk around non-compliance.
As organisations start to focus on pay equity, they are looking at their job architecture to support this. Many high-performing organisations are trying to get a better understanding of how jobs are placed within the organisation and mapping comparability of positions and titles.
A job architecture helps organisations consider and justify the relative importance and impact of job roles on the organisation. Roles are organised in the structure according to the nature of the work and skills required. This, in turn, influences the seniority and compensation level for the role.
With new business models requiring greater workplace flexibility, there has been some debate around how rigid your job architecture needs to be. However, not having one can lead to significant challenges around pay inequities and compliance complexity.
Leading employers are finding that, even if it’s just creating consistent titles or mapping levels to job titles, a basic job architecture sets the foundation for pay strategies, the pricing of jobs, salary decisions, and equitable pay practices.
With a job structure in place, pay equity analysis is made significantly easier - it is easier to look across the organisation and compare different roles to each other to see if there are any pay disparities. These can then be examined further, and actions taken to address any areas of concern.
With a job framework in place, organisations have a structure to share with leaders, managers, and employees that provides clarity on pay decisions and career levels. The job architecture gives more structure to decision-making around promotions and any associated salary rises. It removes the management discretion around jobs and pay and the resulting chaos that ensues.
Our key takeaways…
If you are getting pressure from your board to do something about pay equity, there are two questions to ask yourself:
How firm is your job architecture and job levelling foundation?
If it’s not in a good place then this is where you need to start. Focus on getting your jobs appropriately grouped, by titles and by level, then it becomes a lot easier to do your pay equity assessment after this initial work.
If your job architecture is in a good place, what mechanism do you have in place to govern this?
Proactive organisations are putting in place regular reviews to make sure their job framework and job families are still fit for purpose. This is particularly important with the unprecedented pace of change that organisations are now experiencing. McKinsey found that most organisations undertake a restructure on average every 3 years. Couple this with the day-to-day changes to how roles are executed, and the need for new jobs to be created in line with changing needs, job family structures will never and shouldn't ever remain static.
Utilise software to create a job architecture and help ensure pay equity
Many organisations are using technologies like RoleMapper to fast-track the process of job architecture creation and help analyse and maintain pay equity.
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