Critical Jobs: A New Type of Differentiation in the Workplace

I've been reading articles lately that talk about the need for a new type of differentiation in the workplace. 

Companies have been “differentiating” among employees for a long time.  Here are some examples.  

• giving high performers a greater percentage of salary increase than low performers                 
• giving high potentials more career development, training, succession planning than low potentials 
• giving higher pay for more job responsibility and experience than people in jobs with lower responsibility/experience (as in job families)
• paying more to people with hard to find skills in the marketplace than people with skills that are plentiful (more demand than supply).

Now we have another type of differentiation.  This new type is called “critical jobs”.   These are jobs that are truly critical to a company’s business strategy.   They can literally make or break a company. Notice I say “critical jobs” not “critical employees”.  This is different from talking about high performers and high potentials who are employees, no matter what job they are in --- Accounting Clerk, Engineer, Director of Sales, etc.

And it should not be assumed that the jobs that are paid highly because of low supply in the market are the critical ones.   They may be, they may not be.  I.e. accountants may be scarce in the market and command higher salaries but a company may not designate "accountant" as a critical job.   On the other hand, if technical sales is designated as critical, and they are scarce, they will be paid higher.

But Vilet, you say . . . it is skilled employees that are IN those jobs that make them critical.  No, it is the jobs themselves that are critical.  There can be both high and low performers in these critical jobs.   There can also be high potentials as well as low potentials.  It doesn’t matter.  Regardless of performance or potential, they are in critical jobs.  (Performance and potential – separate discussion, but work to get them either up or out).

And here’s a shocker!   A critical job is one that is not determined by hierarchy!  Listen up you job evaluation “junkies”!   We may need to take a second look at the "sacred cow" of job evaluation.   Whether we "toss it" or not --- we'll need to be more flexible in using it.  This will likely give Hay a headache!

Here’s an example:  UPS has designated its truck driver as a “mission-critical” job.   The first words that pop into customers’ heads when they think of UPS are “truck drivers”.   Many of these drivers have been driving the same routes for UPS for years and have relationships with their customers.  For a customer driven company like UPS --- these jobs that have customer interface every day are crucial.  Some of the largest opportunities to improve on-time performance and customer satisfaction lie with this job.

Here’s another example:   Disney  must maximize the number of “delightful” minutes each visitor is at its parks.    Most people would say that Mickey Mouse would be the most critical job because of his history and brand.  But it’s the cleaner/sweeper on the grounds that is the most critical.  Disney doesn't have many signs directing visitors to various attractions so these cleaner/sweepers perform an important task.    Helping guests navigate, even delighting them as they navigate, defines Disney.  The impression these sweepers create is very important.

I am  not saying that critical jobs should be the highest paid in the company.   It would be absurd to pay a truck driver or a sweeper more than the CEO.   They continue to be paid at the market rate.   BUT they should be VERY competitively paid.   They should also get a disproportionate amount of recognition, training, guidance, etc. than other jobs.

In their book The Differentiated Workforce, Brian E. Becker, Mark A. Huselid, and Richard W. Beatty refer to the importance of critical jobs.   They suggest companies need to manage the workforce as a portfolio of investments, some of which will pay a much higher return than others. Instead of spending an equal amount of time, attention and resources on everyone, companies should make disproportionate investments in the most critical jobs.  All jobs in a company are important, but not all are strategic and have maximum impact on the economic value of the business.  Honestly this makes sense with companies having to monitor costs much more closely than ever before.  And this trend will not likely stop even when/if we return to the economy of "the good old days".

John Boudreau says, “If you’re doing segmentation (of jobs), you’re trying to optimize your workforce.” This approach allows executives to determine where investments will have the biggest impact, while also giving them the courage to pare investment in areas that will become less critical.

Treating critical jobs differently is a trend likely to make HR very nervous.  Many HR professionals have never learned that strategy is about differentiating products/services on the outside and resources (including people) on the inside.

Differentiation challenges the notion of how fairness is defined.  Employees will certainly have differing opinions on what constitutes a critical job.   But this is actually no different from employees’ opinions about differences in performance, job responsibility and jobs in high demand.

HR can help companies become more successful by tailoring total rewards’ offerings to better appeal to employees in the most critical jobs.   Companies continue to provide one-size-fits-all total rewards packages for the most part.   Maybe the idea of creating different rewards’ strategies for different jobs needs to be seriously considered.  

What do you think?

Jacque Vilet, President of Vilet International, has over 20 years’ experience in Global Human Resources with major multinationals such as Intel, National Semiconductor and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expat twice during her career.   Her true love is working with local national issues.  Jacque has the following certifications:  CCP, GPHR, HCS and SWP as well as a B.S. and M.S in Psychology and an MBA.    She belongs to SHRM, Human Capital Institute and World at Work.   Jacque has also been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications.  She lives in Dallas and has two 4-legged children and a Chinese daughter and granddaughter… sort of.  

Image courtesy:  http://the-awesome-blossom.blogspot.com

 

 

 

 

 

Comments

[E. James (Jim) Brennan]

Agree completely that the most critical jobs are those essential to the making or the selling of the product or service. All else is secondary.

Also concur about the future trend towards the customization of total reward options, not just at the "job" level but at the individual level, too. After all, we permit different payroll deductions and tend to personalize performance output expectations, so why not similarly craft compensation in its broadest sense to best meet the personal preferences of the employee? We don't wear the same clothes for every activity, so why should we use the same fixed identical rewards for every worker?

[Damien Cvetanovski]

Hi,

I am currently looking for advertising partnerships on sites like yours compensationcafe.com. I believe you will be interested in the offer we have as we have many happy publishers and it is a great way to earn recurring income for your site.

Please email me back expressing your interest in this offer and I will send you through further emails.

I look forward to hearing back from you soon,

[Alex Hagan]

Thanks for the article. I've got some experience with coaching organizations through this process, and it's part of the Strategic Workforce Planning methodologies I'm familiar with - so much of what you say rings true:
1. "Treating critical jobs differently is a trend likely to make HR very nervous." - It makes senior exectives nervous too. Particularly when they realise that even though they set the strategy, they aren't generally "critical" to its' execution.

2. "A critical job is one that is not determined by hierarchy" - generally, it works in reverse - not all lower-level jobs are critical, but a great proportion of critical jobs will be low-level.

I'd add another observation - Critical Roles sometimes take a long time to competence, so turnover in these roles is incredibly expensive. This became blindingly obvious to me when I realised during a consulting assignment that there are 12 people, who take 6 YEARS to competence (yes, years in the organization, after a very specialised engineering degree), that are critical to keeping a major piece of infrastructure running for one of the Australian states. Fortunately the organization I was working with was well aware of this and great at supporting and remunerating these workers.

[Jacque Vilet]

Thanks for your comments Alex. It is very important that execs define critical jobs as part of their business strategy. I.e. if the strategy is to break into new markets (like a new country) then critical jobs will be sales/marketing. If strategy is to create a new product line then it might be a specific type of designer. It becomes complicated because strategies change over time.

It's not a matter of simply paying more, but ---given global competitiveness today ---- it is about going above/beyond to keep people in these jobs happy, productive and engaged.

The difficult part for HR is understanding and becoming comfortable with this.

Exciting times we live in!