Grading is Planning and personnel management

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The labor market and its payment systems are constantly changing. This is due to the development of technology, the redistribution of resources, economic instability and unprofitability of budgetary organizations. During the financial crisis, an objective need develops to optimize the functioning of commercial, profitable organizations and enterprises of budget financing (non-profit sector). Non-profit organizations, even in a stable economy, are an expense item in the state budget. In this regard, an innovative wage system is relevant - grading (grading system), widely used in the West.

The essence of grading

By definition, grading is a way to optimize an organization's resource allocation by:

• link the system of distribution of benefits and bonuses;
• calculate the correspondence between salary expectations and labor market dynamics;
• regulate wages using the principle of internalfairness, which is the basis of the system and avoids the dispersion of salaries within the enterprise;
• increase the level of responsibility of employees and human resources management (each employee of the organization understands that his profit directly depends on the job evaluation);
• increase the level of transparency of the organization for investors due to management standards and, accordingly, increase its value.

Let's take a closer look at what grading is. This is the level, rank, degree, class, rank (from English). The essence of grading is the division of all positions into grades according to the complexity and intensity of work, skill levels, working conditions, the value of the employee for the organization. In other words, grading is the distribution of positions in the hierarchical structure of the organization according to the value, size and salary structure.

When dividing into grades, an assessment is made of the activities performed at each position. For this, the factors that are considered the most significant are taken as a basis:

• knowledge;
• experience;
• skills needed to solve problem situations;
• level of responsibility.

Grading system

The application of the grading system affects the optimization of the payroll and needs resources to maintain. The main problem is the assessment of the ratio of implementation costs and the expected return in financial terms. Today, the use of the grading system is relevant when accruing rewards based onpoints (taking into account the factorial method) and the matrix-mathematical model. What is the basis of the system that uses grading? This is Hay's guide table technique. Today it is the most common. It is used to rank and evaluate managerial positions, professionalism and technical level of specialists. It has been successfully applied in most countries of the world (more than 30).

The system that allows grading positions is familiar to Russia and the entire post-Soviet space. This is an analogue of the well-known system of discharges. Now it has undergone modernization and adaptation to modern market conditions. The project requires significant investment and is not the only option for a personnel management system.

Prerequisites for grading company personnel

• Lack of internally fair wage system in the organization.
• The salary system in the company does not reflect its specifics.
• Lack of a clear and precise system of remuneration and career growth.
• Low cost manageability (PF).
• The importance of positioning and creating a positive image of the organization in the labor market, among customers and partners.

Main management factors

According to Hay's tables, a top manager can determine the pay levels for the company's employees. All positions are evaluated according to several parameters, divided into three groups:

• Knowledge and skills requiredto fulfill official obligations. It evaluates the uniformity of the function performed, the presence of contradictions in the functions and the ability to manage them, communication skills. The result depends on the level of communication traits of the employee, as well as whether he has a need to motivate other people. It is worth noting that the level of requirements for the position is assessed, and not the abilities of a particular person.
• Problem solving. Here the complexity and scale of tasks are measured (whether restrictions are needed, which ones, standard and variable characteristics, the presence or absence of ready-made solutions, the need for fundamental research).
• Responsibility is a complex parameter that shows the ability to freely make decisions in a particular position. It is important to find out to what extent the powers allow decision-making. When this factor is taken into account, the degree of direct or indirect impact on financial results and their scale is measured. When it is difficult to single out the financial component, the relative complexity of the work is estimated.

These factors provide versatility for any field of activity. Depending on the structure of the organization, number and scope of activities, the list of factors can be much wider. For example, the level of intellectual activity, professional risk, etc. Factors may vary slightly for different levels of positions.

Basic approaches. Where the grading system pays off

Depending on the field of activity, they are distinguished:

• evaluation of the positionor competencies of a particular employee;
• assessment of jobs (in enterprises with productive capital);
• competence of specific specialists (in companies dominated by intellectual capital).

Where the grading system is used:

• when revising the structure of the organization;
• to determine the salary of new employees;
• when revising wages;
• to determine the level of career growth of employees;
• when comparing the wage system with the market.

Grading pays for itself in medium and large firms where the personnel structure is not always clear and its optimization is likely to lead to significant benefits in the future. After such a system is implemented, the permanent part of the remuneration of employees will include the official salary, allowances and additional payments in accordance with labor legislation.

Motivation tool, advantages and disadvantages of grades

Grading is an excellent modern tool for motivating staff. When such a system is introduced at the enterprise, the positions are distributed in such a way that at the first level there are managers, then a grade of income-generating positions, and then employees (lawyers, managers, etc.). A person who is a thought leader in a business, its owner or hired manager (professional) is a top manager of the company. He is a perpetual motion machine and has no right to poor he alth, mood and other reasons that reduce the effectiveness of the organization. It is logical that the systemgrades puts this position on the highest level of pay. At the same time, it must have in its hands a system that makes it possible to harmonize salaries and arrange them according to the classification. This is the grading approach.

The advantages of the system include:

• transparency;
• justice;
• a way to attract and retain employees;
• good budget management;
• open career prospects;
• increased efficiency of material motivation.

The main disadvantage is the high cost of implementing and maintaining the system, as well as the difficulty of determining the financial return that is expected. As a tribute to fashion, it is irrational to implement the system.

HR management and grading steps

Personnel management is a systematic and systematic impact on the formation and distribution of the workforce of an organization with the help of interrelated organizational, economic and social measures to obtain the maximum effect from the work of the enterprise.

The control system includes a linear management subsystem and specialized functional subsystems of homogeneous functions. The key link in personnel management is the line manager of the organization, who is personally responsible for making and implementing management decisions.

Grading stages:

• Evaluation of strategy, current state, internal fairness and external competitiveness of wages, benchmarking and analysis of labormarket.
• Development of regulations, methodology of the grading system, their parameters, salaries, bonuses and benefits, key factors for assessing positions; description and evaluation of positions; an implementation plan and a communication plan are being formed.
• Introduction, control and maintenance of developments, recommendations, information materials, corrective actions, training of managers and employees.

What can be expected by introducing planning and management through grading?

Proper formation of salaries will increase the efficiency of payroll use from 10 to 50 percent. This is especially important in times of crisis. The introduction of an innovative grading system will allow any company to feel competitive both in the domestic and foreign markets.

This comes at the expense of being transparent to investors and positioning itself as a serious organization. Such an enterprise will be able to attract high-class top managers and specialists from all over the world. Such a system is an alternative for payment in municipal areas, local governments, etc. It motivates employees and increases the efficiency of the result.