Requisite Felt Fair Pay – Key Elements, Principles and Texts
By Michelle Malay Carter on June 18, 2009
The following is part thee of a three-part post on Felt Fair Compensation. ?See Part 1 and Part 2 here.
This Felt Fair Pay series was authored by my colleague, Barry Deane of PeopleFit Australasia.? My hat is off to him for addressing the topic so thoroughly and for backing it with historical data and research citations.
Key Features
Remunerations systems based on the Requisite Organization body of work have the following key features:
- Organizational levels are assigned to specific and objectively-defined ?levels of work?
- Specific remuneration limits are assigned to each organizational level.
- The spread of remuneration within a level (from ?entry level? to ?fully effective?) is set at 1:2 (i.e. a multiple of 2 from bottom to top)
- There is no crossing of the level boundaries in assigning remuneration i.e. a the top remuneration for a Level 2 role marks the bottom of remuneration for a Level 3 role
- Variation of remuneration for people in roles within a work level is focused on ?progression through the work of the role? i.e. from ?entry level? to ?fully capable?. Progression itself is determined through the judgement of the immediate manager in relation to the employee?s ?performance effectiveness?.
- Internal system parities and external (i.e. market) parities are dealt with through separate but linked processes
Key Behavioural Principles
These features reflect two behavioural principles of ?felt fairness?:
- People do/will acknowledge that it is fair that employees who do more complex work deserve to get paid significantly more than people doing less complex work. Note: I said, ?significantly? not excessively) ? and the significant difference is quantified in the RO body of work
- People acknowledge that those who work more effectively (i.e. in relation to doing work of the same complexity) should be ?differentially? rewarded. Perhaps this principle is better appreciated by the implication of this principle that those who do not work effectively should not be rewarded as much as those who do.
Key Texts
A few key texts which deal with felt-fair pay in some detail are:
- A General Theory of Bureaucracy, (noted above)
- Executive Leadership, Elliott Jaques and Stephen D Clement (1991 – 2002), Cason Hall & Co, USA
- Social Power and the CEO, Elliott Jaques (2002), Quorum Books, USA
- Requisite Organization, Elliott Jaques (1987 – 1998), Cason Hall & Co, USA
And RO in Australia (part story):
- The Line in the Sand, J.T.Ludeke QC (1996), Wilkinson Books, Australia
One Part of a Meta Requisite Organization Model
Having provided a few notes on the principle of ?felt fair pay?, I need to caution that this cannot be considered or deployed as a stand-alone principle.? There are a number of other precursor principles and practices relating to organizational design and managerial practice which must be understood and established.? I have alluded to some of these above (e.g. organizational stratification by ?levels of work?, managerial assessment of ?performance effectiveness?). Unfortunately, space does not permit me to delve into these matters here so I refer readers to the body of work that I have drawn attention to above (i.e. Requisite Organization) for further study.
This is the third in a series of three guest posts on Felt Fair Compensation by Barry Deane.
Filed Under Executive Leadership, Felt Fair Compensation, Requisite Organization, Strategy, Talent Management, Work Levels
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