ARTICLES

Best Practices Review Summary

Current Trends in Classification Approaches

Organizations are considering a number of classification approaches that include:

• Competency-based job classification that is often accompanied by broad banding that enables organizations to reward the acquisition and demonstration of the competencies required for job and/or organization success.

• More flexible, person-based pay systems which allow for salary range penetration that is linked to the value the organization derives from a specific grouping of skills that an individual brings to the organization.

• Generic job classification matrices that provide organizations with the ability to quickly assess the value of positions that are undergoing considerable evolution.

Job classification system features that emerging include:

• Focus on fewer customized factors that are linked to their strategy. E.g. wowing the customer, thinking outside the box and reflect the core competencies required for future success.

• Requisite organization models that are fairly generic and describe the nature of the work that is typically done at each level in the organization.

One of the key learnings from the literature review is that the type of classification system that an organization should reflect the structure of the organization and the current business environment. For example, a highly structured, multi-layered organization that needs to preserve its current structure, should choose a very different model than a company that has a flat structure and positions and/or roles that are in a constant state of change.

General Trends from Best Practices Interviews

Demographics

The sample consisted of 38 organizations from across Canada in the following industry sectors:

The size of organizations, by number of employees:

• 69% of the organizations have one or more unions.

Classification Approach

• The majority of respondents reported a fairly high level of satisfaction (averaging 7 out of 10) with their current classification system.

• Organizations primarily use job classification for classifying or placing jobs into pay bands, or maintaining internal equity.

• Other uses identified by organizations include:

  • Pay Equity compliance,

  • Reinforcing corporate values,

  • Performance management.

• 71% reported their classification system is linked to their business strategy through identifying and using factors that reflect the business strategies and the key competencies needed to achieve them.

• The most common approaches of Classification Systems include:

  • Traditional Point Factor or Factor Comparison

  • Generic Benchmarks by Job Family (often based upon point factor methodology)

  • Career Banding based on competencies descriptions

  • Market-Driven

• The evolving trend is towards more use of generic and broad band classification strategies, at least for administration. Many of the generic systems are derivatives of a point factor or factor comparison approach.

• Classification systems typically had one or more of the following :

• This supports the growing trend towards generic systems and away from detailed evaluation requiring on-going classification committees.

• 60% of organizations use more than one classification system, generally having separate systems for executive positions and often unionized positions. Consistency between the systems is typically a Human Resources and/or Management Role.

• The vast majority of organizations described some level of involvement and role for all groups (Executive, Senior Management, Team Leaders, Employees, Union, and Human Resources).

Factors Affecting the Success of the Classification System

• The single most important factor identified as critical to a successful job classification system is clear alignment of the classification system with the organization’s strategic directions.

• The other 3 key organizational factors which contributed to the successful introduction and administration of the classification system were:

  • Executive and Management support and involvement. Commitment at all levels of management, so that they own the system and their actions support it.

  • Involvement by employees. Input and feedback through the design, implementation, and ongoing use phases allows employees to share in ownership of the system, while limiting the direct control over the system design.

  • Communication. Open communication of system and values allows all levels of employees to understand how the system works and what the expected results are and what that means to them in their own terms.

Lessons Learned

Some organizations identified some "lessons learned" that are useful to consider:

• Communicate early and often, so that there is clear understanding of:

• what the process is,

• who is involved and what their role is,

• what outcomes are expected, and

• when specific phases will be completed

• The larger the movement in classification philosophy, e.g. from traditional point factor to career bands, the more time and effort that is necessary in communicating and educating employees at all levels.

• In a benchmark or career band system, the clustering of similar positions in the initial stages, can save a significant amount of time. This can also reduce the number of different positions that must be classified and provides a valuable focus for employee and team leader involvement.

• Allocate sufficient time and resources for educating and training employees at all levels about the new system and how it works. Be prepared for a lengthy learning curve.

Best Practices Observations

These goals support the migration path that many organizations are taking from the traditional point factor systems towards career bands. These are typically supported by competencies and often tied to market-based compensation.

The classification approaches identified in this study could be placed along a continuum, with traditional point factor at one end and market-driven strategies at the other. The 2 other distinct strategies identified were generic benchmarks and career bands, although many of the systems observed were variations and combinations that fell between these 2 strategies.

Table 1

CHANGING EXPECTATIONS/EVOLUTION OF WORK

Table 2

CLASSIFICATION SYSTEM CONTINUUM

For more information on innovative Classification Systems:

THE WYNFORD GROUP
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• Strategic Direction

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Our goal is to facilitate organizational effectiveness by developing innovative solutions to specifically fit client needs and provide continuing value.

We are well-known for conducting customized and broad-based surveys for many purposes including organizational assessments to compensation market comparisons.

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