Job family

Jobs in Job Families contain Individual Pay Structures within Broad Bands that reflect similar work or
jobs (engineers), functional or occupational work (sales, marketing, operations, and finance), or job
types (branch managers, customer relations) which are related by the activities performed and the
basic knowledge and skills required, however it get differ or vary in term of levels of responsibility,
training, and knowledge needed.

According to a job family structure, the successive levels in each job family are determined and set
according to the key activities performed and the knowledge, skills, and competencies required to
manage and carry out those activities effectively and efficiently.

This system significantly facilitates employers to automate and standardize the integration of jobs
within an organization with more systematic, effective, and consistent manner.

According to IDS (2012: 3), a well-designed job family structure promote equality in the reward
between employees performing comparable roles of similar value, while providing the flexibility and
scope for salary differentiation for certain groups of staff based on the market.

Each job family consist of different pay rages and has its own number of pay levels.

The use of such systems can also facilitate more lateral movement among job families, especially
when levels are similar and broadly comparable. The stronger the connections between job families,
the greater and wider the mobility between them, especially where levels are comparable.

A study by IDS (2012) found that using job families is a good way to ensure consistency of treatment
among employees doing similar roles, providing flexibility to set pay for each group based on
market, ensure clarity in career path, and to integrate reward with other HR functions.

However, according to Wright (2004), job families may prove divisive or troublesome in those
organizations that wish to increase greater coordination, teamwork, and collaboration between
different occupational groups, and may expose an organization to potential gender pay
discrimination if the job families are potentially dominated by one gender over other, especially
women workers.

The use of a job family approach calls for regular external benchmarking to support and justify
paying certain job higher than others, particularly in the context where, all jobs are substantially
similar in size and accountability

this method describes career paths - how people can progress and advance their career within a
family and how they can grow and develop into new opportunities outside their family.

Job families can be viewed as market groups where, pay levels differ based on level of market rates.

An organization's job family structure provides the basis and framework for personal development
planning by specifying and detailing the knowledge, skills, and competencies desired at higher levels
and in different functions. In addition, it defines what skills or competencies must be learner or
acquired from experience, education, or training (Armstrong, 2010).
A family structure can help the organisation to set defined levels of roles more accurately than a
conventional structure, because it focuses on roles within a family that share common
characteristics rather than trying to match a large variety of unconnected and unrelated set of skills
throughout entire organisation.

These structures however can prove to be more difficult and complex to develop, understand,
explain, and manage them in comparison with the single-grade structures.

The benefits of job families are that, once implemented, they are being versatile facilitate the
organization with freedom and control, while also promoting transparency and a culture of career
progression and advancement of the employee (CIPD, 2021).

When implementing these pay systems, businesses required to consider the different market rates
that exist and applicable for different job groups (Reilly, 2004).

As reported by Herts County Council, the introduction of job families can also promote and facilitate
employee mobility within and across different departments and can combat and reduce the
likelihood of establishing organizational silos (Personnel Today, 2002).

This system Assure internal pay consistency while aligning the salary with the external market and
avoid complicated approaches to pay structure design.

By virtue of this system, emphasis is placed on achievements and productivity over hierarchy. This
system promotes internal mobility by publicly announcing and keeping track of other families' roles
and payments; it enables the organization to recognize individual contribution on the basis of their
active involvement and responsibility.

reference :-

1. Wright, A (2004) Reward Management in Context, Chartered Institute of Personnel and

Development, London

2. IDS (2012) Job Families, HR Studies 972, August, Incomes Data Services, London

3. Reilly, P., (2004), Job families: an integrating approach to reward and development?; Brighton:
Institute for Employment Studies.

4. Personnel Today, (2002), Developing HR strategy: making money is the ultimate goal, December
10

5. CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT. (2021) Pay structures and pay

progression [online]. Factsheet. London: CIPD. Available at: Pay Structures and Pay Progression |
Factsheets | CIPD [Accessed 23 December 2021].

6. Armstrong, M., 2010. Armstrong's handbook of reward management practice. 3rd ed. London
[etc.]: Kogan Page, pp.167-178.
Broadband: -

Essentially, this process simplifies pay structures by reducing the number of grades within a pay
structure, while increasing or enlarging the width of each grade, thereby, it can be said that this
simplifies pay structures, and provide flexibility in pay (Armstrong, 2010, Jones and Perkins, 2020 ).

Under this method, salary increases are entirely determined by managers who have full autonomy.

Therefore, employers are exposed to the serious risks of managers' decisions being biased and more
generally to the risk of frequent salary drifts.

Additionally, in this approach, Organizations may also be exposed to the risk of equal pay
discrimination claims

On the one hand, it increases emphasis on market pricing or market rate, or it is exclusively driven
by market and no limits are defined for advancement or progression. While, on the other hand, it
appears to decrease the importance on job evaluation, where internal fairness and equity is not
considered or given very limited or less attention (WorldatWork, 2004).

Typically, broad-banding is effective for those organizations whose corporate culture encourages
performance improvement and enhancement by recognizing and rewarding the individuals rather
than the job role (Arnold and Scott 2002).

The progression and advancement through the bands is determined by competency and the
assumption of wider job role responsibilities.

The descriptions of bands were based on verbal descriptions and not on analytical result of job
evaluations.

Line managers were given greater authority to make pay decisions within a looser framework.

It was determined that this approach provide greater flexibility by focusing on broad set of roles
rather than tight-knit jobs or narrowly defined job, by allowing more flexibility in how roles are
allocated to bands and how people progress within them, and it is being more responsive to market
rate pressures, thus providing more freedom to the organisation to react quickly to the external
change environment (CIPD, 2021).

This system has fewer grades, which decreased the need to upgrade, lessened the possibility of
grade drift, and made it easier to manage and control grades.

A broad band is regarded as more flexible in the sense that employees rewarded continuously for
growth and better performance within their current job role without necessarily having to be
promoted to a next higher-level grade or position (Jones and Perkins, 2020).

An employer can more easily adjust the pay or salary of an employee through such structures
without frequently promoting the employees to higher position.

Such Structures also facilitate the company to reward lateral career movement more easily,
continuous learning and accomplishment of high-quality levels of competence and contribution (IPD,
1997).
Broad bands can reduce, limit, or provide fewer promotion opportunities for employees, resulting in
negative effects on their morale and motivation.

The wide pay spans may lead to rise in the employee expectations that are unrealistic and that are
not possibly realised in practice.

Employees may also be concerned due to the perceived lack of clarity in the structure, as there are
no clear 'career signs.'

In the absence of clearly defined advancement or progression criteria, may expose the organization
to discrimination and equity risks.

The path to the employee’s next or future pay increase is clearly mapped out, which is highly
motivating tool and allows them advance laterally within the organization.

reference:-

1. Arnold, E. W. and Scott, C. J., (2002), Does broad banding improve pay system effectiveness?,
Southern Business Review, Spring 2002.

2. WorldatWork, (2004), Broadbanding – White paper; Scottsdale, AZ: WorldatWork.

3. IPD (1997) The IPD Guide on Broadbanding, IPD, London.

4. CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT. (2021) Pay structures and pay

progression [online]. Factsheet. London: CIPD. Available at: Pay Structures and Pay Progression |
Factsheets | CIPD [Accessed 23 December 2021].

5. Armstrong, M., 2010. Armstrong's handbook of reward management practice. 3rd ed. London
[etc.]: Kogan Page, pp.167-178.

6. Jones, S. and Perkins, S., 2020. Reward management. 4th ed. CIPD - Kogan Page, pp.133-154.
 pay spin

A pay spine is a set of incremental points linked to service length that determines
employee’s pay progression and advancement (CIPD,2021).

In reality, rewarding people and increasing their pay and salary simply because they are loyal to the
organization, regardless of their positive contributions and efforts towards organisational success,
does not appear to be the most effective method of achieving effective organizational performance
(Longo, 2014).

This approach is less complicated, that required fewer efforts to accomplish and is very unlikely or
less likely to give rise to an equal pay claim, if any

Under this approach, Management and line managers are not required to make any decisions on pay
progression, and if additional increments are planned for, they do so within an explicit defined
framework (Armstrong, 2010, Jones and Perkins, 2020 ).

Furthermore, because this scheme offers no or little scope for flexibility, it does not support biased
pay progressions and advancement, thereby preventing pay drifts and unfair or unjustified pay
increases.

Since managers cannot make potentially biased judgements about pay increases, so those structures
appear more transparent and fair than structures that depend on managerial decisions about
performance or contribution. For these reasons, trade unions favour pay spin and enable
organisation to gain greater support and acceptance rather than opposition from the trade unions.

However, pay spines have a number of disadvantages, including the following:

Under this approach, the Pay progression is based on service. This means that employees are
rewarded for simply being there or for their presence and not for what they contributed, or for the
contribution or value they have made at work (Longo, 2014) .

Secondly, pay spines can prove costly in organizations with low turnover, where all employees tend
to drift and rises to the top of the scale.

In situations when there are many incremental points involved on the scale, there can be equal
value issues and complications can occur as men often advance and climb the ladder to the top
while women’s progress is slowed down due to career breaks and interruption.

The spine of a pay structure typically covers all pay levels within the company, starting from entry-
level or lower-level salaries to senior management or even executive level salaries. The spine
composed of specific and distinct individual pay points, each linked to a predefined salary and
incremental raises. Then each employee job role and function are linked to a range of pay points
that can be attained by employees within that job role or position based on loyalty and serving the
company for a long time (Armstrong, 2010, Jones and Perkins, 2020 ).
Under pay spin, the path to pay increases is clearly defined and understandable to
the employees, which helps them to stay on track , allowing them to exactly
visualize where they are going and how they will get there.
reference:-

1. Longo, R., 2014. Rhetoric and Practice of Strategic Reward Management. [ebook] Available at:
http://Rhetoric_and_Practice_of_Strategic_Reward_Management [Accessed 8 January 2022].

2. Armstrong, M., 2010. Armstrong's handbook of reward management practice. 3rd ed. London
[etc.]: Kogan Page, pp.167-178.

3. Jones, S. and Perkins, S., 2020. Reward management. 4th ed. CIPD - Kogan Page, pp.133-154.

4. CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT. (2021) Pay structures and pay

progression [online]. Factsheet. London: CIPD. Available at: Pay Structures and Pay Progression |
Factsheets | CIPD [Accessed 23 December 2021].
Spot rate

In a spot rate, each individual employee receives a separate wage rate or salary according to their
job description, without any formal grading system and structure for progress or advancement. It
Does not outline and specify any scope for advancing or progressing base pay or pay scale. yet, there
may still be room or opportunities to move to a higher spot or position or there may be scope for
career advancement. While there are no pay ranges or salary brackets, However, bonuses or other
forms of incentive payments may be paid in addition to the base rate. Spot rates should be increased
and need to be adjusted to keep pace with inflation and market rates. This is appropriate and ideal
for smaller organizations that have no formal grading system and structure. Increasing level of skills,
competencies, or contributions can result in higher spot rates. The spot rate may be raised to ensure
that the jobs are competitive and competent in the market. These payments may be attached to an
individual rather than a job (person-based pay), reflecting the importance of that particular
individual within the organization or indicating individual value and worthiness to the organisation.
Rates of pay and therefore its relativities are driven and determined according to managers’
judgment and the market rate. The spot rates are often adopted by companies that do not wish to
be confined or constrained by formal grade structures as well as the organisations that seek
maximum scope for freedom and flexibility in the base pay also to pay what they want and what
they like. This method provides higher degree of flexibility in pay where scope to pay below or at or
above spot rate based on qualifications, skills, experience is possible (Jones and Perkins, 2020).

Using this approach for pay management will definitely prove to be more challenging in companies
with complex organizational structures and where jobs are relatively large variety diverse.

These type of pay arrangements are more commonly found in organizations (retail and
manufacturing) which have simpler and more clearly defined hierarchies of jobs. (Armstrong, 2010).
It can, however, result in serious inequities and injustices that might be hard to justify.

The opportunity for progressive advancement through higher spot rate or spot salary can be offered
to 1. ensure employees are rewarded for contributing for improving performance of the organisation
2. To maintain internal pay rates at a level competitive with the external market, 3. Preserve and
maintain individuals' purchasing power despite/ in the face of rising inflation (Armstrong, 2010,
CIPD, 2013a).

The problem is that these schemes cannot be used to manage the basic pay of all employees.
Rather, they tend to be used to reward employees who are paid at the lower end of the formal
salary structure, for example workers in manual or low-skilled jobs, as well as in more senior
positions as managers and directors with a remuneration package that is designed with a aim of
retaining, attracting and motivating top performer. The rate Can be negotiated with a trade-union or
based on market data (Longo, 2014).

There is a single hourly, weekly or annual pay rate for each job or person.

This approach enhances the employer with more flexibility and simplicity in its reward approach.
This approach is valuable and simple to adopt (CIPD,2021).
However, spot rates and salaries, as well as pay rates, need to be managed with extreme care by
employers. Since these methods are not actually based on any scientific evaluation exercise, they
manifestly leave room for equal pay claims, which could eventually hardly be sustained and justified
before a court. In the Council's opinion, spot rates are considered "one of the least discriminatory"
pay strategy.

reference

1. CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT. (2021) Pay structures and pay

progression [online]. Factsheet. London: CIPD. Available at: Pay Structures and Pay Progression |
Factsheets | CIPD [Accessed 23 December 2021].

2. Armstrong, M., 2010. Armstrong's handbook of reward management practice. 3rd ed. London
[etc.]: Kogan Page, pp.167-178.

3. Jones, S. and Perkins, S., 2020. Reward management. 4th ed. CIPD - Kogan Page, pp.133-154.

4. Longo, R., 2014. Rhetoric and Practice of Strategic Reward Management. [ebook] Available at:
http://Rhetoric_and_Practice_of_Strategic_Reward_Management [Accessed 8 January 2022].

5. Chartered Institute for Personnel and development, (2013a), Pay structures – Factsheet; London:
2013.

Narrow structure:-

Taking a step beyond informal, individualised pay structures, organisations

are free to introduce varying levels of flexibility and has freedom to choose
what level of flexibility they wish to introduce towards employee pay
structure.

In 'narrow-graded' pay systems, employees are grouped according to their

skills, competencies, and responsibilities.

A narrow-grade system involves a “career ladder” of grades with each grade

having its own grading pay scale typically with some amount of pay
‘increments for each grade’.

Narrow grades do not necessarily overlap, but sometime these narrow grade
may overlap.

in case of overlap of narrow grade, It enables employees to continue their

upward progression or climbing up the pay scale without being required to be
promoted to higher grade.

In a narrow-banded structure, the number of grades or bands can be varied

and accommodate the complete or wide variety of job positions and levels
within an organization.

Scale increments can also vary within each level (Jones and Perkins, 2020).
It has several advantages such as indicating clearly pay relativities, providing
a framework for managing pay relativities, making sure work of equal value is
paid equally, enabling better control over the pay rates and pay progression,
and make it easier for explaining pay to the employees.

Pay structures with narrow grading are comprised of many grades, where related jobs of equal value
and worth are grouped together into each grade progression.

Due to the narrow range of grades, many employees tend to reach the top of the scale instantly,
causing employee demands for upgrades and 'grade drift' (rating jobs more highly than they actually
worth or deserve (CIPD,2021).

Using this system, jobs of equal value are sorted into the same grade of a pay structure based on the
results of job evaluations.

While this kind of pay structure is composed of 10 or more grades, makes it easier for employers to
clearly identify and determine where certain levels of accountability are located between the various
grades. It gives clear indication for the employer about existence of different level of accountability
between different grades (Longo, 2014).

reference:-

1. 3. Jones, S. and Perkins, S., 2020. Reward management. 4th ed. CIPD - Kogan Page, pp.133-154.

2. Longo, R., 2014. Rhetoric and Practice of Strategic Reward Management. [ebook] Available at:
http://Rhetoric_and_Practice_of_Strategic_Reward_Management [Accessed 8 January 2022].

3. CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT. (2021) Pay structures and pay

progression [online]. Factsheet. London: CIPD. Available at: Pay Structures and Pay Progression |
Factsheets | CIPD [Accessed 23 December 2021].