New Era Job Evaluation and Remuneration

Pieter Marais

Kontextit’s delivery-based on-, or offsite work job evaluation system (KDAX) focusing on end-state value delivery. Equalising value and remuneration on vertical and horizontal levels. Moving organisations into a new value delivery based paradigm.    

  

 

Current organisation vertical hierarchy effectively dates from the Middle Ages. Current activity-based grading systems, that support these antiquated vertical hierarchical systems are largely based on science stemming from the 1920's of the previous century and millennium. The world of work has changed significantly since then.

The current organisational hierarchy has a very long history, dating back to the pre-industrial and even middle ages. It was in this era that kings, lords and noble-man and later-on landlords were the people with the power, the money and the owners of underlings.

Most current grading systems fail to differentiate on any new grounds, and continue the tradition of hierarchy, power, size and performed activities. They are based on activity definitions and language semantics, without clear differentiation regarding the nature of work, the context of work or generated value delivery.

The world has been shifting away from traditional power and activity based hierarchies for decades now. The questions that now get asked more often are focused around the value you generate and the value you add, and not the activity or tasks you perform or get involved in.

Very few organisations have embraced the challenges of the new world of work or become more flexible in their approach to grading, pay and supportive systems. The vertical-hierarchical activity and power based mind-set has effectively maintained the traditional power and activity based hierarchical status quo.

A new challenge

The world around us poses significantly different challenges, and roles at lowest levels of the vertical hierarchy can potentially generate much more value, in terms of its horizontal content depth value (difficulty).

Lack of recognition by organisations, academia and other traditional institutions that the world operates on different parameters, causes immense frustration amongst people working in and for these entities, and will continue to plague organisational effectiveness and value generation.

Companies are far from ready to consider alternatives to the traditional, but the comfort zone is under siege from various angles.

The challenge to the non-value adding vertical hierarchical view is increasing in society, organisations and amongst individuals, with deep level experts on "low complexity" challenges being sought after for expertise and value generation. Real contextually appropriate value adding managers are also a key sought after commodity – that is managers that adds organisational value and whose positions do not merely exist for the purpose of overseeing and managing people

Futhermore, there is a constant fluctuating demand value on skills. For certain periods certain skills may be in high demand but may also become less valued again, requiring a more flexible approach. This is something that many large corporations and other entities either fail to, or are slow to realize and slow or unable to manage appropriately.

In this "new world of work" environment, vertically higher and bigger does not necessarily equate value. And should not be the basic principle for allocating reward.  Horizontal depth can create even more value. Not dealing with this appropriately can derail organisational strategy, impede growth, efficiency and effectiveness, and result in discontented and disconnected employees and deteriorating organisational sustainability.

A new Alternative

Global change is moving away from non-value adding, activity based power hierarchies. Pay at lower levels can be similar to pay at higher levels based on the differentiation of value as measured by systems measurements directly related to value generation at all organisational levels.

This new framework recognizes that work and value should at least be recognized on two primary axes: contextual value add and content depth value add.

Kontextit’s framework:

Does away with the need to justify everything in vertical-hierarchical terms and recognises the spread of value generation across the organisational spectrum.  It also focuses on the need for equal treatment on both horizontal depth and vertical contextual delivery axes.

Conclusion

The time has arrived to think differently about grading and pay, as the nature of work and people has changed. The outdated hierarchical systems no longer provide appropriate answers, and actually actively destroy value in companies.

Make sure that grading and pay systems serve the purpose of the organisation and not the organisation serving the grading and pay systems.

Visit our website:  www.kontextit.com

Contact us directly:   kontextit@kontextit.com