Is your job architecture holding you back?

Published by Ian Dawson and Jennifer Kwech on September 15, 2017.

Structured job hierarchies with defined roles, responsibilities, reward systems and career paths may have supported business and HR needs in the past. But with a focus on "employee experience," the modern workforce requires more mobility and flexibility in its career, with more focus on the company. 39, team learning and a greater diversity of opportunities within the organization. High performing companies have been able to respond to these changing demands of employees by reviewing and restructuring the job titles, reward programs and career paths of their company. The result is often a flatter and more dynamic organization.

Traditional structured job hierarchies were developed on the basis of rigid frameworks, with narrow pay ranges and distinct roles / responsibilities for each job, and as such are generally inflexible and discouraging mobility. Employees in these structures often perceive lateral movement or shifts between teams as having a negative impact on their career progression, which can inhibit learning and growth. Moreover, it is often difficult to differentiate and reward the best performers significantly (aside from the general rise in merit / inflation). Employees tend to perceive promotion to the next "level" of the career path defined as "differentiation", which further impedes lateral mobility and may have the unintended consequence of distorting the performance management process.

While the hierarchical approach may continue to be appropriate in industries where the need for specialization outweighs the need for mobility, these legacy practices may prevent organizations from pushing for a more flexible and focused business model. # 39; team. successful companies.

Exceeding a Rigid Hierarchy
Implement a flatter and more team-oriented work architecture by reducing the number of levels, titles, and levels of pay in the organization and introducing fewer broadband bands ("Broadbands") can benefit businesses and completely transform the employees' experience. Companies can gain the flexibility to deploy people around the organization for projects or special assignments without dramatic impact on wages, and employees can gain more experience and better opportunities. learning without the negative connotations often associated with lateral movements.

What does a flatter pay structure look like?
Uniform wage structures are characterized by a relatively small number of wage bands. This approach is inherently flatter than a more traditional hierarchical pay structure since it typically encompasses only 8 to 10 bands, compared to 20+ according to the more traditional approach.

Wide bands provide a less formal structure and typically have gaps of 80 to 200% with no defined midpoint. The Broadbands reduce distinctions between positions, which broadens the skills of the workforce, facilitates travel between assignments and develops the career of employees, as they narrow the distinctions between posts. In addition, the need to distinguish between normative uses and job descriptions and pay administration, such as job evaluations, salary structure and salary increases, is reduced, creating a greater great flexibility for the employee and the employer. ]
However, if a company is not quite ready to move from a traditional pay structure to broadband, it might consider a broader "modified" market-based structure (usually with ranges between 40 and 80%). increases of 10 to 20%), which lie somewhere between traditional and broadband structures. Market-based structures are often characterized by sufficiently wide spreads to encompass the 25th, 50th and 75th percentiles of the market, while providing a level of control over unreasonable wage rates.

Flexible Rewards
A flatter work structure with fewer and larger pay bands provides greater flexibility to reward employees. The removal of the hierarchy from the traditional task architecture implies the replacement of often heavy, restrictive and job-specific or level-specific pay categories, with narrower bands encompassing market rates and critical skills. all the jobs of the band. This additional flexibility helps companies advocate a true pay-for-performance philosophy by differentiating and rewarding top performers based solely on their performance, rather than the narrow range associated with a given job title.

What about performance management?
To make the most of this flatter structure, leaders should not only strengthen and empower employees to move sideways, take risks and expand their skills. but they should also support it with robust performance management.

Rather than annual reviews based on goals closely related to specific positions, identifying the best performers involves regular contact points between employees and managers, including quality conversations focused on actual performance and needs of development. assessments) and defining what a great performance looks like.

Employees should be evaluated and rewarded based on the impact and extent of their contributions to the company, as well as the predefined basic skills associated with each level / band. The focus is on rewarding employees for their skills, abilities and contributions, and on their job title and the corresponding "market rate".

It can be expected that time and salary administration expenses will decrease significantly (since there will be less concentration on job evaluations and ranking of grades). ). But the use of fewer and larger bands requires strong governance to control compensation costs, and greater discipline among managers to ensure that differentiation within the band reflects performance, contribution and impact.

Is a flat structure suitable for your organization?
Broadbands may not be suitable for all organizations, and the more traditional and hierarchical organizational structure still has significant benefits, especially in companies favoring flexibility control.

Faster structures generally attract organizations in a dynamic and rapidly changing environment, and can help meet the growing demand of employers and employees for a more mobile workplace. Companies must be able to respond to these demands in order to compete in the global competitive talent market. By shifting the HR focus from control and structure to more creative and entrepreneurial work methods, companies can promote a flexible, team-oriented culture aligned with the organization of the future. , which seems more and more flat.

Ian Dawson and Jennifer Kwech are senior managers in the Actuarial, Rewards & Analytics practice of Deloitte Consulting LLP. They work with the management and boards of private and publicly traded companies on a broad range of issues related to executive compensation, broader company compensation, sales and advisory services. # 39; administration.

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