Remuneration Strategy by Derek Hendrikz

2nd Annual Remuneration & Reward Summit

24-26 June - Premier Hotel OR Tambo

Hosted by Smart Linkwww.smart-link.co.za

Presented by

derek hendrikz

Derek Hendrikz Consulting

www.derekhendrikz.com

RemunerationStrategy

Define

Remunerate

Assess

Grade Work

Defining Work

process vs. projects

the paradox of strategy…

do what you did yesterday perfectly today…

• process induces repetition• repetition induces perfection• perfection induces performance

boldly do what has never been done before…

• projects bring about change• change brings about transformation• transformation brings about relevance

process math…

results action = 1

project math…

results action > 1

Process vs. Projects

Process Projects• Cyclic in nature

• Evolutionary

• Performance-based

• Driven by managers

• Results divided by action = 1

• Puts bread on the table

• Clear beginning and definite end

• Revolutionary

• Relevance-based

• Inspired by leaders

• Results divided by action > 1

• Puts possibility of bread on the table

Process Environment

Team Opportunities

Customers

Relationships

Suppliers

Competitors

Stakeholders

PESTLE

Inputs Outputs

Process

Team Job Description

Process Inputs

Task Activity People

Assets

Authority

Behaviour

Task Functionality

Location

Process Outputs

Quality

QuantityProfit

Creating the Strategic Frame…

• Develop mission as a process• Analyse the environment• Develop projects• Create process structure• Develop a strategic scorecard• Create a behavioural frame

Grading Work

the Context / Problem PMS Ratio

Context

Complexity

(Project-

based)

Problem Complexity

(Process-based)

Project-based

Perception-based

Process-based

Integrative

2500 BC Agricultural Age

1800 Industrial Age

1980 Information Age

1990 Machine Intelligence Age

20?? Nanotech Age

The velocity of change

The Point of Irrelevance

Point of Irrelevance

Mind-Set

Timewww.derekhendrikz.com

Pace of Irrelevance

Mind-Set

Timewww.derekhendrikz.com

Job Evaluation is a methodology of appraising the value or worth of one job in relation to others within organisational context.

Steps for carrying out Job Grading....

• Train departmental representatives in the use of the method.

• Extract job descriptions from processes.

• Create Job Evaluation Committee – mix of line management, HR and experts to decide on plotting of jobs.

• Organization map and banding proposal – HR & senior management puts together a proposal for banding (scales expressed in points) or grading staff and describes the benefits that each band attracts.

• Board Review – once jobs are rated and the organization map completed, the relevant authority will review the summary, the banding proposals and cost if any.

• Assuming the above are approved, the overall project manager will then move to implementation.

A job is evaluated by looking at the knowledge required to do the job, the experience needed for the job, the problem complexity inherent to the job, the context complexity in which the work is performed and the accountability assigned.

Knowledge

Context Complexity

AccountabilityExperience

Problem Complexity 5 Factors

for Job Grading....

Job Content

Job Context

Hay Evaluation....

Job Content

Know How(knowledge & experience)

Inputs

Problem complexity

Process

Accountability

Output

Context Complexity

Environment

Opportunities

Know How....

• Knowledge Level• Experience Level

A. Basic

B. Elementary

C. Intermediate Knowledge

D. Extended Knowledge

E. Diverse or Specialized

F. Diverse or Specialized

G. Broad or Specialized Mastery

H. Externally recognized expertise

Knowledge

Level Explanation

I Performance of a task(s) highly specific as to objective and content, and not involving the leadership of others.

IIPerformance or direction of activities, which are similar as to content and objectives with appropriate awareness of other activities.

IIIDirection of an important unit with varied activities and objectives OR guidance of an important sub function(s) or several important elements across several units.

IVDirection of a major unit with noticeable functional diversity OR guidance of a function(s) which significantly affects all or most of the organization.

V Management of all units and functions within the organization.

Experience

Applying the Grades....

• Combining selected codes will then give a

know-how grading.

• E.g. a seasoned supervisor to whom

interpersonal skills are important will be

graded FI2

Problem Complexity....

• Thinking

Environment

• Thinking Challenge

A. Highly Structured

B. Routine

C. Semi-Routine

D. Standardized

E. Clearly Defined

F. Generally Defined

G. Broadly Defined

H. Abstract

Thinking Environment

1. Repetitive

2. Patterned

3. Varied

4. Adaptive

5. Unchartered

Thinking Challenge

know-how grading.

• E.g. a hotel bell-boy who applies routine

thinking and does repetitive process-

based work will be graded B1

Accountability....

• Freedom to Act

• Magnitude

• Impact

Level Explanation

R These jobs are subject to explicit, detailed instructions AND/OR constant personal or procedural supervision.

A These jobs are subject to direct and detailed instructions AND/OR very close supervision.

B These jobs are subject to instruction and established work routines AND/OR close supervision.

C These jobs are subject, wholly or in part, to standardized practices and procedures, general work instructions and supervision or progress and results.

D These jobs are subject, wholly or in part, to practices and procedures covered by precedents or well-defined policies, and supervisory review.

E These jobs, by their nature and size, are subject to broad practices and procedures covered by functional precedents and policies, achievement of a circumscribed operational activity, and to managerial direction.

F These jobs, by their nature or size, are broadly subject to functional policies and goals and to managerial direction of a general nature.

G Subject to the guidance of broad organization policies, community or legislative limits, and the mandate of the organization.

Freedom to Act