As evidenced by the ongoing strikes on platinum mines by AMCO union members, remuneration is always going to be an area which can easily lead to conflict.
An underlying factor and often a cause of dissatisfaction is the expectation that employers must be fair and reasonable when making decisions about salaries. When it comes to remuneration, equal opportunities, appointments and promotions, employees want to believe that the organisation’s procedures, processes and interactions are conducted fairly.
Perceptions that employees have regarding the fairness of these decisions can impact their performance and the overall success of the organisation. Research indicates that these perceptions can influence trust relationships, work satisfaction, commitment to the organisations and cause counter-productive behaviour, absenteeism, staff turnover and emotional exhaustion. These are all factors which directly impact on an organisation’s success.
In the early sixties, organisational psychiatrist John Stacey Adams developed the Equity Theory as an attempt to determine employees’ perceptions of the fair/unfair distribution of resources and the impact of the satisfaction rate experienced.
According to Adams’s theory, employees try to maintain a balance between the value they add to the workplace (i.e. expertise, skill, training, etc.), the compensation that they receive for it in return (i.e. remuneration, added benefits, flexi time, etc.) and the perception they have of what the ratio of the inputs and outputs must be.
This theory is generally used by occupational psychiatrists to determine the connection between employees’ motivation and their perception of what is fair or unfair.
Job evaluation is used to pro-actively, and in a fair and reasonable way, differentiate the remuneration with regards to positions based on its content.
This is a systematic process where the value of the position is determined according to certain rules and/or values in the organisation. It entails a comprehensive analysis of each position’s tasks, responsibility, knowledge and skill requirements to determine the position’s content and to supply an internal grading system which each position will be linked to. Positions with the same grade or level will have the same remuneration scale. Obviously, job positions with complex tasks and responsibilities and high skill sets will have a higher value than positions where the tasks are simple and a low responsibility and skill set requirement.
It’s very important to note that the position gets evaluated, not the specific person in that position.
Other practices such as performance appraisals and incentive schemes which are directly linked to the performance of the employee could also influence other employees’ perceptions of how fair or unfair the organisation operates.
The following pitfalls can cause a job evaluation to be perceived as not being remunerated fairly:
- The job evaluation method or grading system is too complicated or timeous to maintain.
- A lack of commitment or dedication from management to adhere to the rules or values of the job evaluation.
- Intentional manipulation of the job evaluation process to justify salary increases.
- Confusion about what is evaluated – the position or the person in the position itself.
- A lack of transparency which has a negative impact on how the legitimacy of the job evaluation process.
The commitment to implement the best and most thorough job evaluation process will undoubtedly result in a fair and reasonable remuneration, ensuring positive employees and a thriving environment.