In this newsletter our focus will be on the use of Paterson Job Grading in the personal injury context.
I will cover the following topics:
1. The application of Paterson Job Grading in the personal injury context.
2. Data smoothing within Corporate Surveys.
2. The use of Total Package versus Basic Guaranteed Package earnings.
1. JOB GRADING IN THE PERSONAL INJURY CONTEXT
I have of recent been in various discussions with Chartered Rewards Specialists, registered with the professional body known as the South African Rewards Association, to gain greater insight into the application of Paterson Job Grading within the personal injury context. I have assumed that all Industrial Psychologists have exposure to the Paterson Job Grading systems, however since many readers may be novices, I will provide a brief overview of Paterson Job Grading.
1.1 Overview of Paterson Job Grading
The Paterson Decision Band approach is a job classification method. The classification consists of six bands of decision-making ranging from Band A (defined decision-making) to Band F (undefined decision-making/policy making decisions). Bands would also consist of various sub grades providing a greater range of decision-making classification. When this job grading system is applied, jobs are first classified under the specific band (A to F) with the definition that agrees most closely with the job requirements. Jobs would then be sorted into the lower and upper grades in terms of the coordinating principles i.e. jobs that include coordination of other jobs in the same band will be placed on a higher grade. Further sub-grading would then be applied following the same approach.
1.2 Job Grading by Industrial Psychologists
In the most recent newsletter by Dr R.J. Koch it has come to my attention that Industrial Psychologists ascertain job grades by equating the claimant’s earnings to a job grade. This is a incorrect approach to follow. Upon my research and discussions with remuneration consultants and salary survey companies, the only approach to accurately grade a job is as follows:
a) Review the job description and specifications of the job.
b) Evaluate the job at the place of work.
c) Assess the reporting structure in the organisation.
In some cases, salary survey companies will be provided with pay slips (or reported salaries) for specific occupational levels to include in their database. Sometimes the occupation would not be graded and the organisation may not be willing to pay to have the jobs graded by external consultants. In such cases, remuneration consultants would not necessarily evaluate the job within the workplace, but would rely on the job description, specification, reporting structure and the modal grades (this requires remuneration expertise and judgement) for similar occupations.
I would therefore advocate that Industrial Psychologist use the same approach in plotting claimants on a Paterson grade or level.
1.3 Disadvantages of the Paterson System
The Paterson Job Evaluation method is commonly used around the globe and has the benefit of simplicity. Considering the array of occupations dealt with in the personal injury sector, Industrial Psychologists should take note of its disadvantages as expressed by academics. These disadvantages include:
a) Evaluation is done on a single factor (decision-making).
b) There is a lack of uniformity of procedures for interpreting and applying sub-grades and requires subjectivity.
c) Problems are experienced in grading complex management hierarchies.
2. DATA SMOOTHING OF CORPORATE SALARY SURVEYS
I have been informed that a prominent corporate salary survey, used frequently by Industrial Psychologists, uses a technique referred to as data smoothing when reporting salary benchmarks. Data smoothing is a technique used to limit the influence of outliers and illustrate trends within the data set. This approach has the major disadvantage of reducing the representative nature of the data captured. This is a nonsensical approach for salary bench-marking since they report percentiles (and not trends or projections) of a specific job or decision-making universe. This makes me suspicious of the approach followed in data capturing and the integrity thereof.
Considering the above, Industrial Psychologists should be vigilant to refer to corporate salary surveys as representative of the entire working population. Multiple sources and experts would confirm that the profile of companies that firstly, grades jobs and secondly, partake in salary surveys are generally only a small portion of South African companies. It is therefore imperative that Industrial Psychologists assess the claimant in isolation and determine which salary research is most applicable on a case by case basis.
3. TOTAL PACKAGE VERSUS BASIC GUARANTEED PACKAGE
Should Industrial Psychologists need to project a claimant’s earnings without confirmation that the claimant receives medical aid or pension fund contributions, it is recommended that the basic guaranteed package is used for earnings postulations. An analysis conducted on the Quarterly Labour Force Survey could guide Industrial Psychologists on the use of Total Package versus Basic
46% of the sample from the QLFS received pension fund contributions with a significant decrease in employer contributions towards medical aid of only 28.1%. The above tables shows that the higher the level of education the more likely one is to obtain employment in the formal sector where the employer is willing to contribute to pension/retirement fund and medical aid contribution.
We are looking forward to contributing towards further research and development in the legal sphere. We believe that even the most basic use of data and statistics can guide the court and experts to form informed decisions.
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