Differentiation of remuneration within a salary band: An endeavour to establish fairness, transparency and equitable remuneration using a 270° approach by a single-rater group

Abstract

To ensure fairness, transparency and equitable remuneration at senior management level, a differentiated remuneration system for executives had to be developed and evaluated. The objectives of this study were to determine the reliability, utility and validity of a 270o job evaluation process and to differentiate between senior management positions within the same salary band. The 270o job evaluation methodology was used in this study, which consisted of a rating by the senior managers’ supervisors (executive managers) and peers and a self-rating. The evaluation method was validated against a rating by external consultants who made use of a methodology which was based on the Paterson job evaluation system. The raw score of this external rating was used, together with the conversion grade to the Peromnes system (the system used by the organisation). Significant positive correlations were reported between the ratings of the supervisors (executive managers), the external job evaluation system and peer ratings. There was a negative correlation with the self-ratings. Three distinct categories of senior management positions were determined. The methodology used (except in the self-ratings) yielded consistent results and could be used for differentiation purposes by a single rater group. The 270° approach was found to differentiate fairly and transparently in relation to the inherent demands and consequently the relative worth and value of the senior management positions. This study was done in accordance with the requirements set out in the senior manager’s psychological/employment contract, an essential aspect of good employment relations.