Effective Classification Strategies NCIPMA Fall Workshop The MAPS Group

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Effective Classification StrategiesNCIPMA Fall
WorkshopThe MAPS Group
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Classification PlanA grouping of positions by
the classification factors to create internal
equity among jobs of similar difficulty and
responsibility.
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Why have a classification and pay plan?1.
Recruit and retain employees 2. Internal
Equity3. Equal pay for equal work4. Effective
utilization of resources5. Basis for effective
pay system 6. Defensible system
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Key TermsClass a group of positions that
are similar gtIn Nature Level of work
gtRequires similar KSAs
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Position Collection of duties to be performed
by one employee.Class Specification general
description gtBroad Responsibilities gtExamples
of duties gtRequirements-KSAs, licensing, etc
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Job Description Written description of the
duties and requirements of a single
position.Employee Person appointed to a
specific position
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Classification Factors

• 1. Variety and Complexity-Difficulty
• 2. Work Relationships
• 3. Decision-Making
• 4. KSAs
• 5. Work Environment Hazards
• 6. Physical Effort
• 7. Supervision Given and Received

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Not Classification Factors1. Volume of work2.
Length of service3. Employee qualifications4.
Employees performance
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Classification Pay Review Process

1. Identify Need
2. Develop Plan Process for Review
3. Conduct Employee Orientations
4. Employees Complete Job Questionnaires
5. Conduct Interviews
6. Conduct Market Salary Survey
7. Complete Analysis
8. Write Classification Specifications and Report
9. Present Report
10. Implementation

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Periodically update classifications 1.
Jobs change 2. Market changes - different
rates for different jobs.
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Effective Classification Strategies

• What methodology will be used?
• Who will conduct the classification study?
• How will classification study be conducted?
• When and how will classification results be
  implemented?

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Methodology(Ways to Evaluate Process)

• Simple Ranking
• Position Classification
• Point Factor

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Methodology(Ways to Evaluate Process)

• Simple Ranking
• Relatively quick simple to use
• Works best in small occupational groups with wide
  differences in jobs

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Methodology(Ways to Evaluate Process)

• Position Classification
• Evaluates positions as a whole using
  classification factors to analyze position
  components
• Compares jobs to each other based on the factors
• The more positions in the occupational group, the
  more difficult to use
• Requires experienced analyst to do well

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Methodology(Ways to Evaluate Process)

• Point Factor
• Assigns points to factors (i.e. low/medium/high
  on complexity)
• Evaluates positions on all factors against the
  standard rather than other positions
• Useful for evaluating many positions across
  department and occupational group lines
• Easier for new analyst to use
• Lends itself to group evaluations
• Appears to be objective but only applies numbers
  to judgments
• Overkill for small organizations and groups
  especially when market sets most of
  classification parameters

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Who Will Conduct the Study?

• Internal Staff
• Consultants
• Combination

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Who Will Conduct the Study?

• Internal Staff
• Knowledge of the organization
• May not have expertise
• May not have the time
• May not be viewed as objective

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Who Will Conduct the Study?

• Consultants
• Knowledge and expertise in classification pay
• Can probably complete sooner
• Organization may not have resources to use
• Probably viewed as more objective
• Consultant freer to make tough recommendations

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Who Will Conduct the Study?

• Combination
• Gain the knowledge and expertise where needed
• May save some costs
• Organization may not have expertise
• Organization may not want to use staff time

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How Will Study Be Conducted

• Study Entire Organization
• Study a Portion of the Organization
• Study the Organization in Cycles (ex. 1/3 or 1/4
  per year)

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How Will Study Be Conducted

• Study Entire Organization
• Best able to ensure appropriate relative
  relationships at same time
• Organization may not be able to afford the cost
  of consultant and time for employee participation
• Potential for large implementation costs

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How Will Study Be Conducted

• Study a Portion of the Organization
• Use when turnover or other issues indicate that
  classifications in one segment of the
  organization are more out of line than the whole
• May cause morale issues with others in the
  organization

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How Will Study Be Conducted

• Study a Portion in Recurring Cycles (ex. 1/3 or
  1/4 every year)
• Select occupational groups or departments
• Costs spread over several years
• Employees know when to expect a study of their
  jobs
• Positions with rapidly changing market values may
  not be studied often enough
• Danger that commitment to implement may change
  mid-cycle

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Implementation

• No Implementation
• Full Implementation
• Staged Implementation

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Implementation

• No Implementation
• Dont do it!
• Commitment to implement in some way should be
  obtained before study is done
• Creates morale issues if expectations are created
  and not fulfilled

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Implementation

• Full Implementation
• Ideal
• May be more than the organization anticipated or
  can afford
• Planning to incorporate with budget important

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Implementation

• Staged Implementation
• Partial implementation may be more affordable to
  the organization
• Can implement over two years rather than all at
  once
• Allows for advance budget planning

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• Compensation System
• and
• How to Conduct and Interpret Salary Surveys

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Compensation System Components

1. Classification and Pay Plan
2. Market Adjustment (Cola)
3. Range Movement Method
4. Longevity

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Market Adjustment (Cola)

• Includes Consumer Price Index (CPI)
• Local Market
• Important to
• retain competitive position
• attract qualified employees
• retain experienced employees
• avoid cost of turnover

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Range Movement

• Probationary increase
• Merit/performance pay
• Length of service
• Skill based pay
• Some combination of above

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Performance/Merit Pay Trends

• Shift resources into performance pay
• Employee involvement
• Supervisory training
• Overall emphasis on improvement

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Longevity Pay

• Rewards and recognizes
• Fourth Priority
• Clarifies difference with performance pay
• Trend toward specific dollar amounts

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Definition of Pay Plan

• A listing of jobs by salary grade with minimum
  and maximums of each range with salary chart.

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Identifying Your Market

• Criteria
• Core Market
• Cover all important jobs
• Floor and ceiling
• Credibility
• Special circumstances
• Importance of consistency from year to year and
  from job to job

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Choosing Jobs to Survey

• Benchmark jobs
• Entry level
• Mid Level
• Management level

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• Practice Session