Using Job Evaluation in Your Organization

OTHER USES OF JOB EVALUATION

Now you know how job evaluation can be used to make pay decisions, but what are its other uses?

Job evaluation:

• establishes a fair and equitable distribution of the budget allocated to labor costs
• ensures new hires are hired at appropriate starting rates within an organization
• supports the succession planning process
• aids in the development of career ladders
• provides the basis for determining eligibility for other Total Reward programs (e.g., short- and long-term incentives, benefits, etc.)
• provides the structure for determining fair and equitable job titling
• provides a methodology for classifying new or changed jobs
• reduces pay grievances by establishing agreed-upon pay determinants that can be used to resolve disputes

We will spend the remainder of the course focusing on this last point — how job evaluation can be used to solve pay grievances due to discrimination.

Pay Discrimination

Selecting the right job evaluation program and managing the program fairly and equitably will go a long way towards preventing and resolving discrimination issues.

Legislation

The right of employees to be free from discrimination in their compensation is protected under several federal laws, including the following enforced by the U.S. Equal Employment Opportunity Commission: Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and Title I of the Americans with Disabilities Act of 1990.

If it gets passed by Congress, the Paycheck Fairness Act will increase the protection of equal pay rights. The California Fair Pay Act implemented January 1, 2016, may well become a model for other states and the nation to follow. It strengthens California’s existing equal pay laws by eliminating loopholes that prevent effective enforcement and empowers employees to discuss their pay. A few of the key provisions include:

• Requires equal pay for employees who perform “substantially” similar work (rather than comparable work), when viewed as a composite of skill, effort, and responsibility.
• Eliminates the requirement that the employees being compared work at the "same establishment."
• Ensures that any legitimate factors relied upon by the employer are applied reasonably and account for the entire pay difference.
• Explicitly states that retaliation against employees who seek to enforce the law is illegal and makes it illegal for employers to prohibit employees from discussing or inquiring about their co-workers’ wages.

Identifying Discrimination

Administration of a compensation plan deals with cross-functional decisions made by many stakeholders in the organization. Discrimination in pay within the organization is more often unintentional than it is overt and purposeful. As with access discrimination and valuation discrimination, it is necessary to develop policies and procedures to guide this decision making.

Resolving Discrimination

In order to prevent and eliminate any discrimination in your organization, a comparable worth study will assist you in determining which jobs have equal value for your organization. A high-quality job evaluation plan will help to accomplish this goal. Then you need to establish a new pay-policy line based upon competitive market rates for the male-dominated jobs. After this, you can set the pay of both male- and female-dominated jobs, based upon the comparable male jobs’ pay. It would be appropriate to review all protected classes to ensure non-discrimination practices as well.

Keep in mind that a single job evaluation plan will go a long way toward preventing pay discrimination issues.

Preventing Discrimination

All in all, organizations must be compliant with the laws regulating equal pay. Effective and up-to-date job analysis, job documentation, job evaluation, hiring and promotional practices, training and development, and fair and equitable pay practices all work together toward the reduction of and elimination of discriminatory pay practices.

Human Resources strategies, policies, practices, and proactive management of these important decisions by line management and Human Resources are critical in preventing discriminatory pay practices.