The Best-Practices Guide to Job Leveling

1. The Best-Practices Guide to Job Leveling About Jennifer Peacock SRA Director of Compensation • 20 years of experience in Human Resources • 12 years in a government contracting environment • 9 years in a consulting capacity – Compensation, Benefits, Recruitment • 3 major compensation plan redesigns & implementations • 4 large-scale, significant benefit change implementations Headshot

2. The Best Practices Guide to Job Levelingwith Jennifer Peacock, Compensation Director at SRA International

3. Agenda • Definition • Benefits • Reasons for Undergoing a Job Leveling Exercise • SRA Rationale • SRA Process • Value • Tips • Questions

4. What is Job Leveling? • Analytical process to determine the value of jobs in an organization • Foundation for reward and talent management programs • Means of communicating career paths, facilitating talent mobility, and delivering competitive rewards • Addresses business needs: • attraction, engagement, and retention of key talent • cost and risk management • governance

5. Benefits of Job Leveling • Alignment with business needs and strategy • Common language for career paths, job requirements, and performance expectations • Linkages to organizational competencies • Consistent mapping of jobs to external market data • Contributes to cost-efficient talent and reward programs and delivery • Ensure internal equity • Compliance – government contractors

6. Reasons for Job Leveling • Aligns jobs located in multiple regions or across different business areas • Creates a framework that integrates employees after a merger, acquisition, or other structural change • Drives consistency, competitiveness, and efficiency among Compensation policies and practices • Clarifies levels to support career development

7. SRA Rationale • Foundation for our new compensation structure • Alignment across the organization • Clear career paths • Compliance

8. The Evolution of Job Codes at SRA: Past, Present, & Future • 2013 & Forward • 500-700 job codes, linked to market data • Comprehensive database of all descriptions • Standardized, comprehensive with leveling competency content • 24/7 online access with extensive search and comparability capabilities • Prior to 2010 • 700 job codes • Created as needed • Variable and limited content • Limited accessibility • Limited search capabilities • 2011 - 2012 • 1,596 job codes • Leveling Tool created, ad hoc for other jobs • Limited differentiation between levels • Enhanced accessibility on portal and Brass Ring • Improved search capabilities

9. Process • Create job descriptions – job titles • Evaluate jobs - grades • Develop job families/job tracks • Engage your managers in the process • Create salary ranges • Communicate the program Job Evaluation Implementation Salary Structures Grade Assignments Job Documentation Project Planning Benchmarking

10. Job Descriptions • Best job descriptions are living, breathing documents that are updated as responsibilities change. They do not limit employees, but rather, cause them to stretch their experience, grow their skills, and develop their ability to contribute within their organization. • SRA Job descriptions include: • Grade • FLSA classification • Job summary • Responsibilities/duties • Qualifications • Experience • Education • Working conditions

11. HRTMS: Manager/Employee View

12. HRTMS: Job Description

13. HRTMS: Jobs Under Review

14. Grades • Determined by the level a position is at in the organization • Software applications • Salary surveys • Internal equity • Employees in the same grade are considered peers in the organization – at the same level • Employees in the same grade are compensated in the same pay range

15. Grades - GGS • GGS = Global Grading System • A job hierarchy structure • The methodology to assess jobs against it • Software to facilitate the process • Globally acceptable, yet culturally neutral • 3 basic steps • Business scope (revenue, # employees, geographical scope, diversity/complexity of products & services • Job banding (dual career ladder, reflect banding rationale) • Job grading (functional knowledge, business expertise, leadership, problem solving, nature of impact, area of impact, interpersonal skills)

16. GGS Structure

17. GGS: Determine Grade • Factor definition levels – concentration on nature of contribution and complexity of tasks • Functional knowledge – knowledge of work and activities • Business expertise – knowledge and expertise about the business • Leadership – guidance to others • Problem solving – mental skills required and complexity • Nature of impact – how the job impacts the business • Area of impact – where the impact will be felt • Interpersonal skills – people skills • Grade the ROLE, not the INCUMBENT • Assess worth of role based on positive aspects • Assumes tasks and responsibilities being performed at optimum level

18. GGS: Job Banding Evaluation

19. GGS: Job Grade Evaluation

20. GGS – HRTMS – Job Descriptions • New job descriptions have the factor (job level) information built-in • When creating new job descriptions, a series of responses to determine the level of the factor are required • Those answers are entered into GGS to assist in determining the SRA grade

21. Compensation Structure

22. Compensation Program Refinement Update Job Family Sample: Engineering - Core Job Track Job Family Grade Job Title Peers Salary Range (associated with each Grade)

23. HRTMS: Job Description Matrix Explorer

24. Salary Ranges • Salary Range: the range of pay, which has a minimum, midpoint, and a maximum, paid for working at a certain job and at a certain level within a grade at an organization; the salary paid to the employee will change according to performance, time spent at the job, etc., but any changes will fall within the allocated salary range. • Market Rate: the usual salary a company is willing to pay for a job in the market.

25. Sample Grade/ Salary Range Structure

26. Utilization of Salary Ranges • An employee just beginning a new job would start near the minimum and move towards the maximum as he/she becomes fully functioning in the job • Salary ranges overlap to allow for equity between an inexperienced employee in a higher grade to be paid at the same level as an experienced employee in a lower grade

27. Communication • Develop a communication plan • Engage senior leadership • Take time to develop your message(s) • Use a tiered approach to communication

28. Gameboard • Deliver on our commitment to provide fair and competitive compensation • Strengthen our ability to deliver competitive bids well into the future • Reduce risk of non-compliance with DCAA regulations regarding fair compensation • Respond to concerns raised in the Employee Engagement survey CASEFOR CHANGE—Why should we change? • Inconsistent approach to compensation, job codes, promotion, and titling • Base compensation decisions on individual circumstances vs. external factors • Do not consistently consider longer term and broader implications of individual salary decisions • Need to strengthen our ability to defend in an audit • Inconsistent process means managers must spend too much time on HR related transactions • Employees are confused about our compensation system …and in some cases question the fairness • Managers make decisions and look to HR to process the transaction • HR is not consistently viewed as a partner with business on compensation related decisions • The Comp project has encountered resistance, but then evolved to acceptance • SRA has a competitive, comprehensive program for compensation • Improved confidence and conviction of market rates for both employee compensation and for bidding new work • Improved data accuracy for strategic analysis of compensation pay practices • Reduced turnaround time for job postings and offers of employment • Efficiencies in the merit process and drive a stronger correlation to performance and market • Managers are equipped with the information to make good compensation decisions in partnership with HR • Employees are clear on their job tracks, level, titles, responsibilities ,and the associated compensation • Greater understanding around the whole comp philosophy and how rewards and recognition play a role, in addition to base salary increases • Compliant with both state and federal regulations (in coordination with Legal) • HR partners with business supports managers in providing outstanding people management CURRENT STATE—Where are we now? FUTURE STATE—Where do we want to be? • Implement an education campaign on what a mature compensation program looks like and its importance to growing, competing for talent, and staying compliant with gov’t regulations • Generate significant buy-in through a series of meetings with leadership on jobs and people • Lack of broad understanding of the importance of having a more robust compensation program • Resistance from managers • A weak partnership between business and HR • Perception that cutting costs is a driver of this project STRATEGIC INITIATIVES—How will we get there? BARRIERS—What could make this hard?

29. Communication Plan KEY MESSAGES SRA has a competitive, comprehensive program for compensation Improved confidence and conviction of market rates for both employee compensation and for bidding new work Improved data accuracy for strategic analysis of compensation pay practices Reduced turnaround time for job postings and offers of employment Efficiencies in the merit process and drive a stronger correlation to performance and market Managers are equipped with the information to make good compensation decisions in partnership with HR Employees are clear on their job tracks, level, titles, responsibilities ,and the associated compensation Greater understanding around the whole comp philosophy and how rewards and recognition play a role, in addition to base salary increases Compliant with both state and federal regulations (in coordination with Legal) HR partners with business and supports managers in providing outstanding people management APPROACH Use a tiered approach at communications Senior Leadership → Group Leadership → Management → Employees Gain active support from managers Provide tools that help managers understand the new compensation program Prepare managers to answer questions from their employees Provide clear instructions Keep communications simple, straightforward and direct Educate management and employees on the new program and structure Use different forms of media Portal Email Web Meetings Newsletter Manager calls Listen and respond to feedback Capture ongoing feedback from managers and employees Maintain flexibility and respond quickly to communication needs as they arise SITUATION ANALYSIS • Inconsistent approach to compensation, job codes, promotion, and titling • Base compensation decisions on individual circumstances vs. external factors • Do not consistently consider longer term and broader implications of individual salary decisions • Need to strengthen our ability to defend in an audit • Inconsistent process means managers must spend too much time on HR related transactions • Employees are confused about our compensation system …and in some cases question the fairness • Managers make decisions and look to HR to process the transaction • HR is not consistently viewed as a partner with business on compensation related decisions • The Compensation Project has encountered resistance, but then evolved to acceptance COMMUNICATION OBJECTIVES • Implement an education campaign on what a mature compensation program looks like and its importance to growing, competing for talent, and staying compliant with government regulations • Generate significant buy-in through a series of meetings with leadership on jobs and people • Spend time educating the organization on what a compensation structure program looks like OPPORTUNITIES AND CHALLENGES • Opportunities: • Deliver on our commitment to provide fair and competitive compensation • Strengthen our ability to deliver competitive bids well into the future • Reduce risk of non-compliance with DCAA regulations regarding fair compensation • Respond to concerns raised in the Employee Engagement survey • Challenges: • Lack of broad understanding of the importance of having a more robust compensation program • Resistance from managers • A weak partnership between business and HR • Perception that cutting costs is a driver of this project

30. Communication Timeline

31. The SRA Solution • Created more detailed job descriptions that were reviewed and edited by managers • Evaluated all SRA jobs against the market • Created a logical compensation structure that was reviewed and “tweaked” by leadership • Mapped employees to the new structure utilizing the management team • Educated leadership, management, and employees on the new structure and program to ensure that it is understood • Outlined career development paths in a visual way that managers can utilize and employees can access

32. What is the Value of Job Leveling? • Compliance • Fair compensation practices • Career development

33. Compliance • Compensation plays a large role in ensuring SRA is compliant with EEOC, OFCCP, and the DCAA • Fair pay practices are a focus • Compensation’s role in audits • Provide employee data • Provide policies/practices documentation • Defend practices • Be available for interviews

34. Job Qualifications vs. Employee Skillset • SRA pays for the job duties, not the skills and expertise of the employee/candidate • Example • Senior Software Engineer with 20 years experience and an MBA making $105,000 • McDonald’s has an opening for a cashier requiring a HS diploma and no experience • SSE applies for cashier job at McDonald’s • McDonald’s offers SSE $8/hour • McDonald’s job does not require 20 years of engineering experience and an MBA

35. Benefits to Employees

36. Tips • Senior management support • Manager engagement and support throughout the process • Clearly defined process • Well thought out communication plan • Education for the entire organization • Don’t cut corners • Build extra time into the schedule

37. Questions

38. How To Contact Us Ashley Robinson ashley@hrtms.com Don Berman don@hrtms.com 919.351.JOBS (5627) www.hrtms.com