M AXI M I SING THE VALUE O F JO B EVALUATI O N · PDF fileM AXI M I SING THE VALUE O F JO B...

H E A L T H W E A L T H C A R E E R

M E R C E R W E B C A S T

M A X I M I S I N G T H E VA L U E

O F J O B E VA L U AT I O N

SEPTEMBER 8TH, 2015

David Wreford, Mercer, London

Principal

Mark Bonsels, Mercer, Frankfurt

Principal

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T O D A Y ’ S S P E A K E R S

David Wreford

Principal, London

Mark Bonsels

Principal, Frankfurt

European Workforce Rewards

Practice Leader

Senior Workforce Rewards

Consultant and Grading Expert

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A G E N D A

W H A T W E ’ L L C O V E R T O D A Y

• Market context: Is job evaluation being re-defined?

• Survey findings: What are they telling us?

• The benefits of job evaluation: How can they be leveraged further?

• Tips for maximising its value: What can you do?

• Q&A

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MARKET CONTEXT

IS JOB EVALUATION BEING

RE-DEF INED ?

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J O B E V A L U A T I O N R E - D E F I N E D ?

T H E D R I V E F O R C L A R I T Y , C O N S I S T E N C Y,

C O N T R O L , … A N D M O R E ?

• Global moves to strengthen HR governance

• Increasing role for HR/Reward to influence business outcomes

• Simplification of reward programmes and the harmonisation of global plans

…….applied consistently

• Well managed and transparent reward structures, and line managers who are

consistent advocates of rewards result in better employee perception of internal equity

• Emergence of analytics to inform the investment in HR programmes and measure ROI

• The need for greater integration of HR programmes, on a common foundation

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(C) MERCER 2015 5

SURVEY F INDINGS:

WHAT ARE THEY TELL ING US?

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W H Y A J O B E V A L U A T I O N S U R V E Y ?

O B J E C T I V E & S C O P E

What are the benefits and return on

investment (ROI) from job evaluation ?

• Can job evaluation help to position HR

as a strategic advisor, supporting

business decisions that need to be

based, not just on Finance and

Operations, but also on people?

• Does job evaluation really promote

fairness, ensure consistency and help

to control labour costs in a globalised

environment?

• What are the key benefits of

implementing job evaluation, for the

business as well as the HR function?

Survey sections:

• Relevant employee group(s)

• Main benefits for an organisation

• Areas which derive most value add from job

evaluation

• How job evaluation supports the overall

business strategy

• Return on investment (ROI), grading

efficiency and cost savings

• Quality and consistency of job evaluation

results

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Other includes: Other Non-Manufacturing (3%), Retail &

Wholesale (3%), Other Non-Durable Goods Manufacturing

(3%), Mining & Metals (2%).

D R A W I N G F R O M 1 3 0 R E S P O N S E S I N E U R O P E

B R O A D I N D U S T R Y P A R T I C I P A T I O N

Companies of all sizes participated in the

survey ….

… of which more than half of the

organisations report revenue above EUR1

billion.

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E M P L O Y E E S E G M E N T S

J O B E V A L U A T I O N S U I T A B L E F O R A L L

• Job evaluation is mostly

considered suitable for all

employee segments.

• No company reported that it

uses job evaluation solely for

employees usually covered by

a collective bargaining

agreement.

Based on 130 responses.

*Covered by collective bargaining agreement

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M A I N B E N E F I T S F O R O R G A N I S A T I O N S

S U P P O R T B R O A D R A N G E O F B U S I N E S S T H E M E S

A N D H R P R O G R A M M E S

• Nine out of ten respondents

believe that job evaluation is

fundamental for enabling

positions to be compared both

internally and externally.

• Three-quarters (72%) of

respondents rank organisational

alignment in the top five

objectives of job evaluation,

followed by transparency (65%),

standardised and lean grading

process (65%), and global

application (54%).

• Participants rank the goal of

controlling cost as important but

with a lower degree.

Based on responses from 130 entities.

Note: Organisations were asked to indicate top five answers; therefore, the total exceeds 100%.

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M O S T V A L U E A D D E D A R E A S I N H R

B R O A D U S E A N D V A L U E A D D I N D I C A T E T H E

E M E R G E O F M O R E I N T E G R A T E D P R O G R A M M E S

• Traditionally, job evaluation

adds value in the salary

benchmarking process and

compensation management,

forming the foundation for

comparisons across

geographies and industries.

• But its relevance and use for

other key HR processes and

services such as recruitment,

development and succession

planning are recognised.


Note: Organisations were asked to indicate top three answers; therefore, the total exceeds 100%.

Other includes: internal equity; global consistency; international transfers; critical perspective on internal organisations;

recruitment and development; objective comparison across functions and operating companies; annual performance interview,

and, consequently, development and talent management.

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J O B E V A L U A T I O N A N D B U S I N E S S S T R A T E G Y

M E A S U R E M E N T S Y S T E M E N A B L E S B E T T E R

A N A L Y S I S , I N S I G H T S A N D D E C I S I O N S

• Job evaluation is a key HR

management tool, helps in

many ways to support the

overall business strategy and

decision making:

– According to 81% of

participants, job evaluation

supports business strategy

by supporting uniformity

and consistency

– Strategic workforce

planning ranks second

(65%), followed closely by

aligned resource planning

(62%)


Note: Organisations were asked to indicate top three answers; therefore, the total exceeds 100%.

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C O N S I S T E N C Y W I T H I N T H E O R G A N I S A T I O N

C O M M O N L A N G U A G E A C R O S S C O U N T R I E S ,

B U S I N E S S E S , F U N C T I O N S , A N D J O B F A M I L I E S

• Global consistency is one of

the key objectives of

implementing job evaluation

– Our survey results

demonstrate that job

evaluation helps to a great

extent in creating a

common language for

defining jobs across

businesses and

geographies, and

maintaining consistency in

job and title structures.


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R E T U R N O N I N V E S T M E N T

R E S O U R C E M A N A G E M E N T

• The majority of respondents

either strongly agree or agree

that implementing job

evaluation has paid off in

reducing the risk of

misallocating resources and

ensuring an ensuring an

optimal ROI in people.

• This result provide hard

evidence for good reasoning

and a strong business case.


Percentage of Organisations

Strongly Agree or Agree 67%

Neither Agree nor Disagree 26%

Disagree or Strongly Disagree 7%

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T I M E T O R E A L I S E B E N E F I T S

• The majority of respondents (80%)

report that it takes up to three years to

realise a job evaluation project’s ROI.


Note: The total does not equal 100% due to rounding.

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L E N G T H O F G R A D I N G P R O C E S S

• The length of the grading

process is significantly

reduced by using a job

evaluation system.

• The process is improved

significantly due to a

robust and consistent

approach and tools with

less resources involved.

• The proportion of

organisation who complete

the process in less than

three days has more than

doubled. The proportion of

organisations who need

more than four weeks has

reduced by two-thirds.

Based on 97 responses. Based on 114 responses.

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C O S T S S A V E D P E R Y E A R

• Job evaluation allows for job

grading process costs primarily

due to a defined global

governance that includes an

improved grading process,

technology, and tools. It also

provides a clear definition of

roles and responsibilities, which

leads to less resources involved

in job evaluation and grading.

• Companies that achieved cost

savings after implementing job

evaluation, close to one-third

achieved cost savings of over

10%.



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R E L I A B L E C O M P E N S A T I O N A N D B E N E F I T S

D E C I S I O N S

• Job evaluation plays a crucial

role in supporting the design

of reward packages

• Nearly all (96%) respondents

either strongly agree or agree

that job evaluation supports

reliable compensation and

benefits decisions

• Only 3% are neutral, and 1%

disagree

Strongly Agree or Agree 96%

Neither Agree nor Disagree 3%

Disagree or Strongly Disagree 1%

Percentage of Organisations


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A N N U A L C O M P E N S A T I O N A N D B E N E F I T S S A V I N G S

• For eight out of 10 respondents,

effective job evaluation has helped

achieve labour cost savings.

• Three-quarters (75%) of participants

claim savings of up to 3% of labour

costs when designing reward packages

by using job evaluation.

• Eleven percent of respondents achieved

cost savings of more than 5%.



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I N I T I A L L A B O U R C O S T S A V I N G S O B S E R V E D

( W I T H I N T H E F I R S T Y E A R )

• 7% of participants claim they

achieve savings in the first year of

implementing a job evaluation

system.

• For the majority (88%) of

respondents, the implementation

of job evaluation did not increase

or decrease labour costs within

the first year.

• Labour cost savings become

substantial in the subsequent

years due to provision of a

structured and consistent

approach to the annual

compensation review.


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H O W J O B E V A L U A T I O N C A N I M P R O V E D A Y - T O -

D A Y B U S I N E S S A N D O P E R A T I O N S ( 1 / 2 )

• Job evaluation is at the core of all HR processes and allows an open and transparent

communication process with employees:

– It gives a clear benchmark for global and regional reporting to accurately assess the

size/strength of the organisation.

– Job evaluation improves common global understanding of “relative” job levels across

countries and regions.

– Job evaluation supports a persuasive argument when discussing organisational structures

and job levels, and involves managers, letting them understand how jobs can be made

comparable.

– It allows us to build systems on common tools and policies due to common agreement.

– With job evaluation, it is possible to have a strategic discussion within management on

workforce investment and competence gaps.

– For a global organisation, job evaluation has become a common language. Managers, as

well as HR, require benchmark analysis for their decision making process when recruiting

and performing compensation reviews. It is very important and appreciated in the recruiting

process.

– It improves HR’s reputation (more influential).

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IPE Job Evaluation

Development / Succession

Planning

• Consistent approach in

succession plans analysis

Organisational Design

• Better understanding of

existing organisational

models at the company

Resourcing

• Increased visibility on jobs that

are in the process of

resourcing

Mobility / Job Rotation

• Framework for international

employee mobility providing

clarity across businesses,

functions as well as regions

Recruitment

• Framework to launch a recruitment process on job and position levels in the organisation

Compensation

• Structured approach and

relationship between job

content and pay, as well as

better insight on external pay

practices

H O W J O B E V A L U A T I O N C A N I M P R O V E D A Y - T O -

D A Y B U S I N E S S A N D O P E R A T I O N S ( 2 / 2 )

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T I P S F O R M A X I M I S I N G J O B E V A L U A T I O N V A L U E

A R E A S F O R I M P R O V E M E N T • The following have been identified as areas where companies state they are sub-optimal in

relation to job evaluation:

– Communication: Gain awareness, understanding and acceptance of all stakeholders involved

– Governance: Understand that governance is more than just a process. It should include a detailed

description of

- Job evaluation / grading principles and rules

- Process

- Roles and responsibilities

- Methodology and tools

– Job evaluation / grading expert: Keep the ‘big picture’ in mind and talk ‘business’ to justify results

– Training / certification: Establish one common training and certification process globally

– Job architecture and reference jobs: Leverage evaluation results and/or define standards, if

reasonable

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Q & A

QUESTIONS Please type your questions in the Q&A section of the toolbar

and we will do our best to answer as many questions as we

have time for.

To submit a question while in full screen mode, use the Q&A

button, on the floating panel, on the top of your screen.

CLICK HERE TO ASK A QUESTION

TO “ALL PANELISTS”

FEEDBACK Please take the time to fill out the

feedback form at the end of this webcast

so we can continue to improve. The

feedback form will pop-up in a new

window when the session ends.

David Wreford [email protected]

Mark Bonsels [email protected]

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