Unit-II

Wage
Disparities
Determining an Internally Aligned Job Structure

Internal
alignment Job Job Job Job
analysis descriptio evaluatio structure
n n

Work
relationships
within the Some Major Decisions in Job Evaluation
• Establish purpose of evaluation
organization
• Decide whether to use single or multiple plans
• Choose among alternative approaches
• Obtain involvement of relevant stakeholders
• Evaluate plan’s usefulness
 Labor market participation and welfare

Distribution of
skills Labor market Firms

Outcomes
•Employment/unemployment Poverty
•Wage inequality
 Differences in wages
• Differences in skills
• Differences in firm size
• Flexibility of the labor
– Rules on compensation/hiring
– Minimum wages
– Strength of unions, etc.
• Discrimination.
 Fundamental instruments
on equality ILO
• The Discrimination (Employment and
Occupation) Convention, 1958 (No.111) and
the Discrimination (Employment and
Occupation) Recommendation, 1958 (No.111)

• The Equal Remuneration Convention, 1951

(No.100) and the Equal Remuneration
Recommendation, 1951 (No. 90).
 Objectives

To ensure that men and women workers

receive equal remuneration for work of equal
value, establishing rates of remuneration
without discrimination based on sex.

The State has to ensure equal remuneration

between men and women in the public sector
and to promote the principle in the private
sector.
 Ratifications
Ratified by 159 Member States.

A number of states have adopted equal pay

legislation or have included equal pay provisions in
their labour laws or labour codes or anti-
discrimination legislation. Member States continue to
express their intention to ratify the Convention.
 Causes of the pay gap
• Productivity related differences
• Job availability
• Job selection
• Pay structure
• Perceived labour costs
• Lack of awareness.
 Other causes
Biases based on non-objective
perceptions of women’s work, such as:
– Lower physical strength
– Mental orientation
– Biological and social reproduction
– Socio-cultural perceptions
– Pre-existing inequalities.
 Scope of application

• Applies to all workers and all sectors

• Applies to all elements of remuneration
• Implies a comparison between jobs.
 Work of equal value
• Includes equal or identical work or
work in equal or identical conditions
AND
• Includes different kinds of work which
based on objective criteria are of equal
value
• Comparison between jobs is not limited
to the same job, the same employer or
the same sector.
 Scope of remuneration
basic, ordinary or minimum wage or
salary
and any other additional emoluments
paid directly or indirectly by the employer
in cash or in kind
out of the workers’ employment.
Scope of remuneration (2)

Overtime pay, bonuses, grants

Uniforms, tools, equipment
Allowances, employer-paid social
security benefits
Housing
Fringe benefits
Permissable pay differences
• Based on objective differences in the
work performed but not based on sex
• Based on non-sex-based factors such as:
– Seniority
– Education
– Qualifications
– Experience
– Productivity.
 Methods of wage determination

• Legislation
• Public service wage classifications
• Collective agreements
• Wage directives from wage boards
• Custom and practice
• Individual contracts.
 Job evaluation to determine
equal value
• Wages rates based on job content
• Rating of job content is based on criteria
related to
responsibility
skill
effort
working conditions
• Analytical method of job evaluation.
Job evaluation systems

Job evaluation systems do not

automatically promote equal
remuneration for work of equal value

Effort must be made to avoid gender

bias and to measure aspects of work
done by women as well as that
typically done by men.
 How to avoid gender bias?

• Make gender equality an objective of the

process
• Use objective criteria
• Avoid stereotypes
• Avoid under-valuing tasks related to care-
giving
• Avoid over-valuing formal credentials
• Consider formal as well as informal
experience.
 Most common forms of
discrimination

• Jobs or occupations with a female

denomination
• Underevaluation of certain jobs or
occupations
• Invisibility of the qualities, tasks,
skills and efforts
• Vertical and horizontal occupational
segregation.
 Strategies for effective
implementation
• Review methods of wage determination to
eliminate direct wage discrimination
• Review laws and practices that result in salary
discrimination
• Use or promote the use of analytical job
evaluation methods
• Collect and analyse comprehensive statistics
• Establish pay equity councils.
 Strategies for effective
implementation
• Include equal pay guarantees in legislation,
collective agreements and wage directives

• Undertake studies of earnings differentials

• Require employers to prepare pay equity action

plans

• Provide labour inspectors with specialized training

and adequate resources.
 Link between wage inequality
and poverty
• Interaction of sources of differences in wages,
and
• Share of income from labor market
• If most of the population depends on labor income and wages
are highly unequal, then poverty rates are likely to be high.
• Redistribution through transfers (non-contributory pensions,
unemployment benefits, etc.) can reduce inequality and
poverty.
• Main point: it is an empirical issue, and will
depend on country context.
Reorganizing
Wage Structure
 Develop a Pay Policy

• Above market: Lead

– Increases ability to attract & retain
employees
– Can be more selective in hiring
• Market
– Reduces ability to select
– Reduces labor expenses.
 Pay Ranges
• Productivity differences
• Employee performance differences
• Recognizes impreciseness of job
evaluation
• Allows for seniority pay differentials.
 Construct Grades

• Pay grades are jobs that are similar in

their worth to the organization
• Grouping of jobs
• Each grade will have its own pay
range: minimum, maximum &
midpoint
• Midpoint represents a fully trained
employee, performing satisfactorily.
 Salary Compensation
Annual salary increases may comprise
two components:
- a salary scale revision, as determined by
the University;
- a pay for performance (merit) increase,
determined on a discretionary basis by the
department head within guidelines
established by an annual policy statement.
 Annual Salary Adjustment
Components
• Scale
- Scale adjustments represent the movement of the entire salary range.
- Salary scale adjustments are generally provided for the purpose of external
equity; that is, ensuring that the salary scale for the respective role profiles
and grades are reflective of the competitive market.
• Merit
- a pay increase granted through a pay-for-performance system.
- represents movement through a pay range that is determined principally, if
not solely, on the basis of job performance.
- can also determine how far employees are allowed to progress in their pay
ranges.
 Elements of Merit Pay
• Individual differences in job performance should be measurable
• Individual differences in job performance must be significant
enough to warrant the time and effort required to measure them
and relate pay to them
• The pay range should be sufficiently broad to allow for adequate
differentiation in pay based on performance and/or level of
experience and skill
• Supervisors and managers must be trained in employee
performance planning and appraisal
• Management must be committed, and employees must be
receptive to making distinctions in pay based on performance
• Managers must be adequately skilled in managing pay
• Sufficient control systems must be implemented to ensure that
merit increase guidelines are followed.
 Evaluating a Merit Pay Plan*
- Employee satisfaction with the pay program
- Employee job satisfaction
- Employee perception that pay is based on performance
- Employee acceptance of and trust in the performance
appraisal process
- Employee trust in management
- Employee and organizational performance
- Employee commitment to the organization as demonstrated
through reduced turnover and absenteeism
- Correlation between actual performance ratings and actual
merit increases.

*World at Work Compensation, Benefits and Total Awards (2007, p.326)

 Across-the-Board
• What is it?
- Across the Board increases are general
increases provided to all employees, given as a
fixed dollar amount or a percentage increase; can
also be considered as a cost of living increase
- Such increases in salary are generally intended
to protect employees’ purchasing power against
erosion caused by inflation.
 Job Evaluation of
Engineering Personnel -
Technical and
Professional Personnel
 Competency-Based Approach
• Definition – Competency
– Combination of knowledge, skills and characteristics
needed to effectively perform a role in an organization.
• Importance of Competencies
– Primary tool for improving productivity
– Primary step in creating “a workforce that integrates
career planning and succession management”1

• Integrated approach for hiring, job evaluation and

performance management.
 Career Management Process

STEP 1 Who am I? (Career Stage, Path

INDIVIDUAL ASSESSMENT Preference, Political Style)

STEP 2
INTERPERSONAL ASSESSMENT How do other see me? (Self-insight,
image, political style, personality)

STEP 3 What are my options within the

organization? (Knowledge of the
ORGANIZATIONAL ASSESSMENT organization, future trends, options,
opportunities)
STEP 4
How do I achieve my goals?
ACTION PLANNING (Motivation, confidence, goal
setting, action planning)
 Career Management Programs

 Career Counseling
 Executive/Management Coaching
 Supervisory Training
 Management Development
 Career Resource Centers
 Assessment Centers
 Outplacement
 Special Challenges in Career Management

Socialization
Dealing With and Orientation
Older
Workers

Coping With Dual-Career

Job Loss Paths

Balancing Work Plateauing

and Life

Skills
Obsolescence
Work and Non-
work Policies
Balancing Organizational Needs with
Institutional Demands and Requirements
 Building a Human Capital Culture

• Hold managers accountable for talent management

including tying retention and developmental coaching to
performance reviews
• Train leaders on retention and development strategies so
they can build a retention culture in their own units
• Implement strategic talent development programs including
coaching, 360 degree feedback and assessment centers to
identify high potential leadership talent
• Institute formalized mentoring and career assessment and
development programs
 Look Beyond ERP

Supplier
Supplier
Collaboratio
Collaboratio
n
n

Supply
Supply
Chain
Chain
Managemen
Managemen
tt

Key
Key Process
Process
Integration
Integration
via
Product via ERP
ERP Customer
Product Customer
Lifecycle Managemen
Lifecycle Managemen
Managemen tt
Managemen
tt
Design
Design Consumers
Consumers
Partners
Partners and
and
Channels
Channels
 Critical Success Factors

 Management Organizational & Optimistic Approach

- on adapting the IT product driven methodologies
?
Tailor-Made IT solutions

- on customization
- on monetary commitments

The Dedicated Team

 Good Training

 Strict Adherence to the Project Management Standards

 Right Technical Infra-Structure

 Change Management

40
 IT Product Selection Criteria

Goal: Functionality
To select the 5 Strategic
Most Suitable Software Requirement
Package Solution Levels Technology

Vendor

Support

Costs
Balancing Organizational and
Individual Needs