The panic over EU pay transparency continues. Several advisors have run updates and webinars designed to scare clients into taking their advice. Big Bad Boss went to one and has engaged Smarmy Consulting to review our global job architecture as the new EU regulation requires pay gap reporting by category.
The thing is, as far as I can gather, none of the advisers can tell us exactly what we need to do. All we do know is that unlike the current pay gap reporting based on a whole legal entity, the reporting will be split into categories. However, what a category looks like remains a well-kept secret, and worse, each country in Europe could make up their own definition in due course.
That said, the assumption our advisors are making is that organisations are likely to be able to use their existing job levels, providing those levels are set up properly with no inherent gender bias. My thought is that their review just a good excuse for generating a nice new income stream for consultants.
Evaluation measures
We do have a job architecture of sorts, certainly job levels, loosely based on the methodology marketed to us some years ago by Smarmy Consulting. At the time, we went to some lengths to evaluate jobs using Smarmy’s four measures of knowledge and so on. It will be quite funny if it now says its own system is not fit for purpose. Mind you, over time, we have got a bit sloppy, and any new jobs have been slotted into the framework rather than being properly evaluated from scratch.
You might wonder why I am being dragged into all this and well you might. My role is to look after global benefits, and it is my colleague, Lazy Susan, who is responsible for all things compensation. However, Big Bad Boss asked me to get involved ostensibly because Susan was not here when the job framework was set up. I suspect it is really because she cannot be trusted when it comes to numbers, or indeed when it comes to words come to that. We let her complete salary surveys and input the annual pay increase budgets, that is about it. Nice work if you can get it. Anything requiring active thought tends to come to me. Sigh.
Smarmy has sent a new consultant, Nigel, to talk to me about jobs. He asks for copies of our job evaluation handbook and job descriptions. I try not to laugh. I explain that the only handbook is the one Smarmy provided years ago, though it no longer fully represents what we do in practice. As for job descriptions, well, let’s just say it is complicated. These days local HR manage the job descriptions, and they are supposed to upload them on our intranet. When we first set up the framework, descriptions were all written up consistently and filed by job family. Since the generalists took over, however, some of them are filed randomly. They are also no longer written very well. Both managers and the talent team tend to emphasis the criteria used for selection which is not necessarily the same as required for job levelling.
Pay gap reporting
I explain to Nigel that, over time, we merged a few grades in a move towards broad bands especially for management levls. It simplified things and gave more flexibility typically demanded by the Higher Beings, our executive management team. We felt we only needed to delineate where there was a difference on bonus target, shares or benefits. Nigel and his colleague make copious notes. I can see where this is going. It does not take much intellect to work out that if pay gaps are reported by category, it is better to have narrow bands rather than broad ones. Also, with increased transparency, employees will be able to see how they sit against others in their grade, so again it makes sense to move to narrow pay ranges to limit pay disparities.
The other thing we need to do is think about the amount of discretion in our pay process. I already suggested to Big Bad Boss that we get rid of the performance element on pay increases in favour of fixing inequities. I will not be directly managing the salary review, but I still like to keep an eye on things. Leaving Lazy Susan to review the salary budgets is like leaving it in the hands of a slightly dim toddler. Of course, budgets are reviewed by the Higher Beings, but that is like asking a bunch of slightly dim toddlers who have had too much sugar. Someone must inject some reason into the process, and I try to prompt Big Bad Boss to take that role.
It takes Smarmy Consulting a couple of weeks to review our jobs and come up with a report. Sure enough, its main findings are that, in the context of the EU pay transparency directive, we have too few grade levels and that our pay ranges are too wide. It also recommends that over the next two years, we allocate our salary review budget to fix any major pay differences particularly between men and women in EU countries. No kidding.
I am curious what this outstanding insight cost and I sneak a look at the invoice from Smarmy Consulting. All I can say is I am in the wrong business. It has racked up as much cost in one week as I command in two months. Not only that, but I discover that it has been contracted to do even more work including initial pay gap analysis in advance of the annual pay review. Luckily, I can direct it to collect data from payroll and anything else from Lazy Susan, so at least it will not involve any more of my time. Money well spent, I say.
Next time…Candid tests the pension education.
