Global Job Leveling -- Yes or No?

Global job leveling is the process of establishing the same relative value of jobs worldwide.  It provides a consistent framework for global companies in implemening career planning and compensation management effectively worldwide.

We’re not talking about pay and salary structures, we’re talking about job leveling/grading --- which means job titling as well.

Let’s look at the pros and cons of this.

Pros:

1) Consistency worldwide for the purpose of career progression and development
2) Simple for corporate management to understand and make global comparisons --- i.e. how many entry versus senior level engineers across the globe
3) Ease of administration for Corporate Compensation as well as global HRIS systems

Cons:

1) Evaluation factors worldwide may not reflect job value locally
2) Job levels/grades may not be a cultural “fit”  locally --- i.e. hierarchical structures
3) Job titling structure may not be in sync with local competitors and the local market in general

Sometimes the "cons" get lost in the shuffle when we talk about globalizing Compensation practices, plans, etc. --- so let's probe the “cons a little bit more.

1) Headquarter job values may not reflect local country job values.  Examples:

* Bi-lingual Administrative Assistants are valued more highly than Engineers in Japan. If job evaluation was based on Japanese headquartered company values, bi-lingual Administrative Assistants would trump Engineers.

Why?  Because most Japanese can read English much better than they can speak it.  Having an Administrative Assistant that speaks fluent English is of great help to top management when conversing with Americans.  It’s not a matter of paying more --- it’s a matter of actual value to the local operation.

* Managing Director (MD) of a plant in Thailand versus a Manufacturing Manager for a plant in the U.S.   The Manufacturing Manager in the U.S. communicates almost totally with people inside the company.   The MD in Thailand spends maybe half of his time communicating outside the company with government officials, customers, trade groups, etc.  If U.S. job values were used, the two jobs might be lumped together in the same job grade when the MD job would clearly have more value.  Representing the company with the government would be viewed as being a more critical and risky type of communication than communicating internally.

2) Companies in developed countries tend to have flatter organizations than is typical in emerging countries.   This might work fine in the U.S. but in countries like India there are more job levels in the market as employees expect to be promoted every two years at most.  (I remember when the same used to be true in the U.S. for Engineers.)

3) Having only four job levels for Engineer in every country, for example, could make Engineers very confused and unhappy in countries where the accepted number of job levels in the market is greater than four.   Local Engineers would not understand how to equate their Engineer title with Engineer titles in other companies locally.  They might feel embarrassed to tell others they are a Sr. Engineer when that same job locally is a Consulting Engineer (a higher level).

I am well aware that some of the large consulting companies provide compensation surveys with global grading and titling structures.  One set of evaluation factors and values is used.  That means that Corporate Compensation can use a single provider for all countries.  Doing so makes Corporate Compensation's job much simpler.  I would argue that while simplicity as a goal is admirable, it sends the wrong message to locals.

So given all that, how do we accommodate both Corporate and local needs?  I suggest using a technique called “mapping”.   For example, Corporate Compensation can take the six levels of Engineer in India and  “map” them to the four used in the U.S.  The same can be done for other jobs.  Local titles and grades remain the same.  The only use for mapping is to allow Corporate Compensation and management to have a way to equate local job titles/levels to Corporate.  If done correctly, local titles/grades become virtually invisible to Corporate management.   They will continue to be able to look across the company globally and correctly see the number of employees in each job title and level.

Rather than make global job leveling simple for Corporate and complex for locals, I would opt to make it easy for locals and a wee bit more complex for Corporate Compensation.  Local management will have a structure they can understand, is culturally acceptable and is in sync with the local market.   And if done correctly, Corporate management will get the simplicity they want.

What's your opinion?

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 been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications. 

Comments

[E. James (Jim) Brennan]

Even the comparisons between the US and Canada where we (sort of) share a common language and have very many organizational parallels would be problematic. Despite the maximum amount of similarities between these "sister" countries, occupational level relationships are quite different. Labor laws, health care practices, social conventions and other cultural variations are only a few factors that complicate attempts to formulate a global status methodology in any but the broadest form. Considering the different educational and technical environments in other overseas nations would make it even tougher. Yes, something can be done, but it will be very rough and dirty rather than consistent and precise.

[Paul Pittman]

We tend to think of grades as being synonymous with pay ranges and while the latter stems from the former and very useful in this endeavour they are most valuable for assisting with the process of talent management and career pathing of individuals across borders.

When used by international companies they often primarily reflect the value of work (to the organization) with step rates reflecting increases in value contribution (i.e size of role) to enable individual postings to roles with appropriate stretch. In a global organization this can become more important than their use for pay.

They are also useful when uniform in this way for developing global scales for certain skill sets and mobile employees

[Jacque Vilet]

Thank you for your comment Paul. I agree that pay ranges have nothing to do with pay ranges the point is that job values sometimes vary as well. If you reread my #1-3 points under "Con" above there are times when global job leveling doesn't work. That's why I say that I believe ---again in my opinion --- it is best to use the job value locally for local employees and then map the job levels to corporate for purposes of stock/bonus, etc.