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Thinking Outside the Job-Based Classification Box

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Professional staff are the core of the engineering, IT, financial, HR, legal and administrative functions. They typically have invested significantly in formal education and learning the body of knowledge in their field. This often results in them being more focused on their standing in their field than on their current employer. Their willingness to change employers to further their professional knowledge is a reality that organizations must cope with. As with all employees, professionals must view their classification and compensation as fair, competitive and appropriate to be satisfied with the organization’s policies and systems.

The prevalent method for classifying and compensating employees is to base everything on the employee’s job. Duties and responsibilities are analyzed and both an internal and an external value are used to place their jobs into a pay structure. But job descriptions define what an employee is doing, rather than what that worker is capable of doing. Professional employees often are in a response mode, prepared to do what needs to be done at the time, rather than following defined routines (i.e., when a computer system crashes, the IT medics are called in to restore functionality). Professionals often work on multiple projects at the same time, with different roles on different projects. They might be the project manager on one, the lead technical person on another and serve as a support person on another. This raises the question, “How relevant is a job description for someone functioning in different roles and who changes roles continuously?”

The Competence Criterion
A person-based career management system is an alternative approach to a job-based classification system. Employees are classified based on their level of competence in their field.

Occupational ladders most often are the way of measuring an employee’s level of competence and of classifying the person. Table 1 is an example of a ladder developed for engineers. Engineers are classified into the ladder based on their knowledge, skills and abilities and progress through the levels as their expertise increases.

The advantage of this approach is that the employee is classified in a level that reflects capabilities rather than current duties. If the organization does not classify an employee based on what the person is capable of doing, it opens the door for that employee to leave for an organization that will fully utilize his or her capabilities.

Aligning Work and Workforce
A possible disadvantage to using this approach is that eventually the mix of staff can outgrow the level of work available. But it is the responsibility of management to ensure that the mix of work and the mix of the workforce are aligned. If 50% of engineers are capable of doing work at the principal level but only 25% of the work requires that level of skill and knowledge, there is a mismatch and several undesirable realities manifest. Those performing work below their level of capability are too expensive, they are underutilized and they are likely to be dissatisfied. Maintaining an alignment of workforce and work mix requires workforce planning as well as intelligent staffing.

All too often management wants to replace a retiring principal with another person at the same level to avoid disruption. But if the knowledge/skill level of the current incumbents exceeds that required by the work, this type of replacement exacerbates the mismatch. It is difficult to convince managers to select recruits who are in the developing stage of their careers and will need guidance and be limited in what they can do. But bringing people in at the levels that help to better align the work-workforce mix is the right decision in the long run. It is important to monitor the progression of incumbents through the levels, so employees feel they have career opportunities and that their efforts to develop are acknowledged and valued. It also is necessary to remind managers that it is their responsibility to develop staff and ensure capabilities do not substantially exceed requirements.

IT is an example of a field that has been changing dramatically, due to the infusion of new technology. For this reason, the IT career ladders must be maintained to ensure they reflect the current requirements. New skills and certifications become a requirement following the adoption of new programming languages, software and/ or hardware. Although employees may believe they are in treadmill mode (running at top speed to stay in the same place), the fact that the bar is being raised for everyone must be accepted. Maintaining job descriptions related to a rapidly evolving field such as IT can be a nightmare. So, some organizations choose not to use descriptions, having the ladders act as the basis for classification. But other organizations still feel there needs to be a current and accurate description of what employees are actually doing, as opposed to what they are capable of doing. However, these descriptions tend to be more general than traditional multipage descriptions. And they are used in addition to, rather than a replacement for, classification according to capabilities.

When career ladders are used for some roles, it is possible to integrate them with a more conventional job-based system being used for the rest of the employee population. For example, each level in a ladder can be assigned a relative value using the same evaluation system that establishes the grade level in the pay structure for other jobs. This fits a culture that places great weight on internal equity. But separate structures also might be used. In a field such as IT, prevailing pay levels in the labor markets may change at different rates than they do for different occupations. For example, if survey data show jobs in an operations discipline increasing at a 3% rate, jobs in IT at 5% and jobs at some administrative functions at 1%, how should the organization adjust a unified pay structure? A 3% overall adjustment results in excessive adjustments for some and noncompetitive adjustments for others.

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The use of separate pay structures for different occupations has become widespread in the private sector because of the variance in market movement for different fields. Public-sector entities often adjust structures by a single percentage point, but this will in time create significant misalignments between the ranges for occupations and their true market rate. The general schedule (GS) system used for federal employees uses a single adjustment rate and also progresses pay rates using a time-based step system. This has resulted in an inability to attract and retain high performers (who get the same pay adjustments as lesser performers) and those in occupations experiencing rapid escalation in market pay levels. This flawed system has resulted in the exodus of around half of the workforce through “excepted service” plans, which attempt to remedy these two design defects by using open ranges and performance-based pay progression.

A danger associated with using career ladders is that managers lacking training and/or discipline will promote employees through levels in the ladders based on longevity rather than competence. It requires backbone and support by senior management if a manager is expected to tell an employee a colleague was promoted and that person wasn’t because the employee has not developed the knowledge and skills required at the higher level, irrespective of how long the person has been in their current classification. It also is necessary to avoid creating competence levels not required by the work being done.

Another potential problem with the use of career management systems for professionals exists when organizations require that employees must go into management to reach the higher-grade levels and the associated higher-pay ranges. But forcing the best engineer, accountant or IT specialist into a managerial role may result in the loss of the best contributor and the creation of a poor manager. Many technical professionals are not best suited for a supervisory role and it is prudent, under the right circumstances, to progress them to a pay range equivalent to that of a manager while still acting as an individual technical contributor. Too many times a professional makes the move into management for the money, regrets it and then leaves to do what he or she is best at and enjoys the most … for another employer. The creation of a “dual ladder” (one for technical progression and one for managerial roles) enables the organization to place people where they will be most effective.

Figure 1 illustrates a multipath career management framework. In this case, a third path is created for those who specialize in project management. Project management has become an occupation in recent years, with professional certifications available (see pmi.org). A shortage of engineers and IT specialists is an increasingly common occurrence in the U.S. labor market. I often recommend to organizations facing this crisis that they offload project administration activities to specialists trained to perform these activities, thereby reducing the number of engineers/IT specialists required.

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Opportunities to Retain Talent
Branding the organization as a desirable employer can help attract and retain the required professional talent. Talent shortages in fields requiring extensive knowledge gained through formal education are becoming more pronounced. It is therefore incumbent on organizations to do extensive workforce planning, so they can anticipate shortages and devise strategies to cope with them. And making effective career management a part of the organization’s brand can enhance its image.

Providing career opportunities is increasingly important for attracting talent. Traditional approaches that base classification on current responsibilities and use time-based step progression can impede attraction and retention. The private sector has embraced these strategies and if public-sector entities are to effectively compete, they should consider new approaches.

Robert Greene Bio Image

Robert J. Greene, Ph.D., CCP, CBP, GRP, SPHR, CPHRC, SHRM-SCP is CEO of Reward Systems Inc. and a DePaul University faculty member.

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