OD for Sustainable Organizations through Self-Service Classification and Compensation

Classification and Compensation is a fundamental part of organizational development. When it is done well, the four premises of Sustainable Organizations are organically integrated. Without the Human Patterns classification and compensation management system, organizations are in a situation where they restrict or skew their classification and compensation process to traditional systems like the "Hay System" with its focus on tasks and duties; or to innovative systems like "Work Value" systems offered by Sibson; or to Competency based systems that include "Scope of Work". None of these systems in isolation is adequate to meet the true job analysis needs of an organization.

These restricted frames of reference for doing classification and compensation are a result of the consultant driven models most organizations were forced to rely upon before Self-Service Software became available. Consulting contracts tend to need clear boundaries for consultant contact internal to the organization and definable schedules of services by which fees can be justified and calculated. Consultants also need time constricted into projects rather than the ongoing process that classification and compensation really is.

Consultants are not easily folded into continuous and integrated organizational learning systems where the output is a consequence of:

· Input done when identification of changes in the current configuration or requirements of a position emerges
· Input done when pricing or other economic factors associated with a job emerge
· Input done when organizational growth or contraction require reconfiguration of roles and assignments
· Input done by requisite and informed levels and layers of incumbents, supervisors, managers and other sources of information about jobs - each having their own window onto the requirements of the job.
· Organic and natural emergence of a dataset for organizational redesign (if necessary) and succession planning

It is not sufficient to say that the quality of the services an organization provides can be significantly improved through accurate and fair job classification and compensation. Rather, the purpose of job classification and compensation is to provide a rich source of data for organizational development. From this dataset an organization can develop, plan, and evaluate:

· training and development
· recruitment and selection processes activities
· succession planning and career paths
· staff expansion or contraction
· work unit or organizational functional reconfiguration.

Automation makes the classification and compensation process fast, effective, and to the point. The system encourages and supports ongoing feedback. Reports pulled from Human Patterns Software are based on accurate, multiple source input and requisite documentation of classification information. Through a high quality job classification and compensation processes, an organization can, at minimum, enhance the following processes:

Communication: To create and maintain an atmosphere for open and frank communication between supervisors and employees concerning job classification and expectations; and to ensure that all employees have the opportunity to discuss and understand their jobs.
Organizational Learning: To facilitate regular discussions based on job-related criteria; and to identify during these discussions specific plans for those areas in which organizational improvements can be made.
Job Development: To provide information that can be used jointly by supervisors and employees to determine appropriate training needs and resources. To discuss and identify how employees can prepare for potential advancement opportunities where appropriate. To encourage outstanding performance and enhance employee motivation.
Personnel Actions: To provide background information and documentation for consideration in conjunction with any personnel actions that may occur, such as promotions, reductions in force, discipline, raises, transfers, etc.
Compensation: To provide all the supporting information needed for Compensation Staff to calculate the correct compensation level for a job.

Sustainability Valuation Versus the Limited Forced Choice Models for Valuing Work

The story of the "blind men and the elephant" where each blind man describes a different animal depending on where he is when he assesses the beast, holds for the problem of valuing individual actors in relation to their work.

· For the incumbent in a job, it is his duties and tasks and assignments that are how he typically thinks about and arranges his work and relationship to the job and assesses the worth of his contribution. These are the items he puts on his vita to prove his potential worth to a prospective employer. This is commonly call the "job description".
· For the direct supervisor of the job, it is the functional gaps in the work unit or team that the incumbent is filling out. This is how he justifies his need for a new employee when he justifies a new position in his work group. This is commonly called the "scope" of the work.
· For the recruiting and hiring official and the training staff, it is the competencies and knowledge, skills, and abilities the incumbent possesses and contributes. This correlates with the direct supervisor's point of view to some degree as well as the job incumbent's point of view. This is commonly called the "job requisition".
· For the upline supervisor, it is the current added value and the potential short to medium term value to the work unit that the job incumbent is providing. He thinks about the role the incumbent can play in the fulfillment of his department's mission; larger than the current function. This has recently been labeled as "strategic impact" by Heneman and LeBlanc.
· For the organizational leader focused on succession and organizational longevity, it is the long term potential the incumbent offers as an organizational leader and steward of the organization's future. It is the "time horizon" the incumbent brings to the organization... what Elliott Jaques called "capacity".
· For the compensation manager, it is the market price for the experience, educational, and skills and competency sets of the incumbent.

All of these are valid and viable methods for determining value of work. Consultants and consulting firms will advocate one or another or a blend of these methods of valuation. Heneman and Leblanc's blend, for instance, lists strategic vision, competencies, and talent market value as their pivots for valuation. Human Patterns offers an additional frame of reference for valuation based upon the premises of Sustainable Organization developed by Smith, Nyberg, and others.

Sustainability Valuation
1. Degree to which the job offers cascading context to the organization. What role does the position play in determining the meaning, values, mission, vision, direction, and intention of the organization? What is the highest level of the organization where this contribution is to be made?
2. Degree to which the job offers requisite competencies to the organization. What skills, competencies, specialized knowledge, native abilities, are to be exercised by the incumbent in this position.
3. Degree to which the job requires vested engagement in the organization. What degree of emotional, physical, intellectual commitment of time, energy, effort, stress (interpersonal as well as physical and emotional), and caring is expected of an incumbent in the position.
4. Degree to which the job requires adaptive alignment, or the exercise of judgement upon disparate, sporadic, and sparse information so the organization can adjust to changes in the environment. This includes, but goes beyond continuous learning and continuous improvement into arenas of knowledge management and (forgive the value laden quality of this term) wisdom.

Because the Human Patterns Classification and Compensation System is real time and can accept input from multiple sources, we do not forego the ability to also collect job classification data from each source according to its cascaded context. This means we collect from the:

Incumbent(s) in the Job
Duties, functions, tasks, and assignments.
Direct Supervisor(s) of the Job
Scope and decision parameters of functions to be performed.
Competencies to be demonstrated
Upline Supervisor(s) and Direct Supervisor(s)
Configuration and time span of the most complex assignment given to the job.
Two Tiers Upline and/or Peers or Clients
Sustainability Valuation
Compensation Manager
Scarcity estimates of skill and KSA sets
Comparable pricing of similar jobs

The Four Premises for Sustainable Organizations

Sustainability

Adaptive Alignment

Continuous exchange of relevant information between;
· Organizational Units
· Roles
· Functions or Processes
· Layers – including external competition

Such that the knowledge is;
· Captured
· Attributed – Accountable
· Vetted
· Collated
· Qualified-Weighted
· Given Context

Reported out in real time in versions appropriate to the recipient’s role and function with options for re-configuration;

Retained in a database which tracks versions and variants of data collection formats, factors, and variables for iterative research;

Collected from the actual source of the information in the course of routine work activity;

Exportable into advanced statistical and analytic systems;

Formatted so as to facilitate transparency for stakeholders and rationalize advocacy or inquiry by stakeholders and/or regulators and/or risk managers.


Cascaded Context

Development of an evolving set of clearly stated and commonly understood purposes, meaning, and values for the
· Enterprise in Relation to the Community
· Enterprise in Relation to Competitors
· Enterprise in Relation to Partners and Collaborators
· Enterprise in Relation to Market Cycles and Resource Cycles
· Enterprise in Relation to Internal and External Stakeholders
· Roles Within the Enterprise
· Organizational Structures Utilized by the Enterprise
· Processes and Systems Used by the Enterprise

Such that each participant and unit of the enterprise can state how their

· Functions
· Duties
· Activities
· Goals and Objectives
· Tools and KSA’s

fold into the purpose of the enterprise

So they can define, quantify, or qualify achievement of the purposes or objectives of the enterprise and contribute context and/or weighted information to the Knowledge Management system.

Vested Engagement

The creation of a sense of inclusion and commitment by participants in the enterprise through

· Sufficient transparency of roles and relationship so trust is enabled and enhanced
· Orientation and training about the organizational context
· Mutual consent on assignment of roles and responsibilities
· Appropriate solicitation of input from members of the organization, especially regarding
change to their assignments, work activities, or roles
· Fair pay for work performed
· Appropriate rituals and rewards for recognition of members and their contributions
· Clear contracts for performance deliverables and about performance standards
· Facilitation of positive and friendly exchanges between individuals and groups
· Facilitation of role clarification within groups
· Appropriate assignment of roles based on KSA’s and Interests

Requisite Competency

Accurate assignment of individual actors to perform enterprise roles and responsibilities based on the fit or suitability of their individual

· KSA’s
· Interests
· Talents and Goals

with organizational objectives, systems, and processes.

Accurate assignment of individual actors to supervisors and managers who can appropriately direct their work

Provision of human resources, tools, and materials that are appropriate and effective for the business processes of the enterprise

Development of appropriate and effective systems, procedures, policies, and other operational systems to enable the organization to perform its business processes

Sufficient capacity at each level of the organization to understand and interpret input from Knowledge Management systems to calibrate the organization’s response to changes in the internal and/or external environment

Sufficient flexibility in systems and business processes to enable it to respond to changes in the internal and/or external environment

For the Learning Oganization Community

How Argyris’ Model I and Model II Are Related to Sustainable Organizations

It is unfair to characterize Argyris and Schon as being insufficient in their coverage of Sustainable Organizations because, unlike Jaques, they do not attempt to cover organizational life per se. Rather, they address the Adaptive Alignment processes we consider to be an element of Sustainable Organizations through the values underlying the actions of decision makers and other organizational participants. When their models and approaches are applied well, it is to executive coaching and team development.

Thers is a interpersonal view of organization life. They pose a polar model of fundamental beliefs and assumptions thay label as Model I and Model II. Both Models posit a set of governing values at their root drive primary strategies, which are operationalized or manifested in the organization by its members and result in positive or negative consequences. The belief system or set of values is the starting point. The Model I framework sets a negative context and leads to negative and counterproductive relationships because it is based on poor interpersonal processes and modes of inquiry, while a Model II framework sets a positive context and leads to learning and evolution and improvement in organizational viability. In effect, Models I and II are related to the setting of and communication about Context in Sustainable Orgnizations.

In a circular and seductive argument, the bad model (Model I) leads to more bad and the good model leads to more good. When the good Model (Model II) is functioning at its best, the organization or individual shifts into second order learning or change (they call this double loop learning); reorganizing itself to adapt to feedback; instead of simply adjusting without reorganization (what they call “single loop” learning, and we would call “first order” change). The mechanism to induce the switch into a change response is “appreciative inquiry” or non-punitive analysis.

Issues of Competency are not directly included in an an Argyris based discussion. There is an equalitarian impulse (value) underneath much of Argyris which may inhibit inclusion of anything that smacks of Social Darwinism. There is also a belief that inclusivity and teamwork are inherently good for organizations, perhaps inhibiting discussion of hierarchy and other forms of organizational stratification. The central implied Competency is the social sensitivity and interpersonal awareness of each actor as each actor is involved in group relations. Other competencies do not receive much focus.

A part of what Sustainable Organizations label as Ownership is directly addressed by Argyris. Ownership by members of the organization of the Context is consequent upon the practice of Model II assumptions. Another approach to the problem of ownership is addressed through Argyris’ terms of “theory in use” versus the “espoused theory.” His concern with congruence reflects the degree a member of an organization reflects espoused Ownership of the Context through behavior. When internal congruence is low; extenal behavior is incongruent. When behavior is incongruent; trust is low. Jaques addressed this more directly as an organizational issue by positing that that all behavior in an organization be trust enhancing. Argyris enriches the determination of the degree of congruence or trust enhancing behavior for the individual actor and groups or actors, by inquiring into the assumptions that drive or justify it.

For the Requisite Community

Why a Requisite Organization is Not Necessarily a Sustainable Organization

Jaques himself wrote about what he called a “T” factor that may interfere with CIP to such an extent that it overcomes the expected synergy between role, time span, and CIP.

Glenn Mehltretter has long believed that KSA’s and Values are two other “legs” of the stool that a person to role fit rests upon. This is in line with the thinking and design criteria of most of the classification and compensation community. Some focus on Competencies. Others focus on occupational interests. Yet others focus on Emotional Quotient (a counter “T” factor). The Human Patterns instrument is one of many psychometric tools to get at these other variables. In short, CIP is necessary, but not sufficient to determine a role to person fit.

Using the framework of Sustainable Organizations, Jaques’ CIP is solidly in the vector of competency for the individual. Jaques’ organizational constraints about “real boss” and organizational structure are solidly in the vector of context. Jaques makes an interesting, but not compelling case that the vector of ownership results from person to role fit. If I fit the role I own it. But notice that the interpersonal world and the realm of values get short shrift. Adaptive Alignment in an organization that is congruent with Jaques way of thinking is, I think he would maintain, a byproduct of time horizon. The owner of the time horizon inherits a way to interpret signals from the internal and external environment.

I think addressing values directly may have been seen by Jaques as muddying the waters of organizational life. However, his emphasis on trust enhancing behavior and the relationship of trust to requisite structure is value laden. I don’t think there is a way we can think of organizations without dealing with the value components of context. Context is the “why” of an organization, but it is also the structural skeleton of it – the why becoming rationalized and alive in the structure itself. This is one reason many systems of social organization have survived over long periods of time, even though they were significantly counter to principles of person to role fit. A Communal society distributes roles and rewards according to a value structure that overrides person to role fit. Monarchy with the value structure of heritability overrode person to role fit and yet thrived as an institution for many generations despite multiple crises. In some sense, the Catholic Church is an example of the sustainability of role to person fit and values. The gradual accumulation of wealth and power in the hands of the church can be attributed in large part to its consistent provision of context through principles of the faith and the rationalized hierarchy even as many individual Popes were short on competency.

An Individual Sustainability Graph

An Individual Sustainability Preference Graph derived from the Human Patterns instrument.