Pay Equity Commission. The Space Toy Company

Transcription

1 Pay Equity Commission The Space Toy Company

2 An Electronic copy of this publication is found on the Pay Equity Commission s website at This publication is the copyrighted material of and owned by Her Majesty the Queen in right of Ontario, Queen's Printer for Ontario, Unauthorized reproduction of this material is strictly prohibited. Le present document est asussi disponible en français sous le titre «La Space Toy Company» [ (version imprimée) (version PDF). ISBN (PDF) ISBN (Print) ISBN (HTML) Disclaimer This workbook and attachments are for information only, and are not intended to restrict Review Officers or the Pay Equity Hearings Tribunal in their determination of matters. Refer to the Pay Equity Act for exact interpretation. Pay Equity Commission 2

3 Please Read Carefully On January 1, 1987 the Pay Equity Act came into effect. When the law was passed it was recognized that existing companies would have to modify their compensation practices to bring them into compliance with the Act. The process that these companies had to follow is laid out in Part II of the Act. Part II applies to: public sector employers who had employees as of July 1, 1993 private sector employers who had 100+ employees as of December 31, 1987 Part II sets out timeframes during which these companies were expected to implement pay equity in their establishments and companies were given a phase in period to make adjustments to job rates if required. The Pay Equity Office recommends that you consult the Act to determine the legal requirements for your organization. You may find our Guide to Interpreting Ontario s Pay Equity Act a useful tool in understanding the Act. The Space Toy Company (STC) is a fictitious, private sector company that was required to follow the process in Part II. This case study is written in the present tense and sets out the actions taken by the company to implement pay equity during the implementation period. Individuals using this case study today are cautioned that the implementation periods have now long passed and there is no phase in period for making adjustments. Any adjustments to job rates found to be owing are now retroactive to the date when your company should have implemented pay equity. If your company came into existence after January 1, 1988 or if your company had fewer than 100 Employees as of December 31, 1987, Part II does not apply to you and there is no requirement to do a pay equity plan. Please refer to other resources on our website to assist you in complying with the Act. The case study sets out several activities that are not required by the Act. These activities have been shown to be of value to employers, unions and employees as they work through the pay equity process in their establishments. Pay Equity Commission 3

4 A Learning Tool Save this document on your computer hard drive and use it to learn about pay equity. An Electronic Working File Use this electronic file to record your organization s pay equity decisions; the steps you took in your process; your pay equity history; and your maintenance policies. Pay Equity Commission 4

5 Purpose of this document This document illustrates how the Pay Equity Act was applied and continues to impact on the Space Toy Company (STC), a fictitious organization created for the purposes of this case study. The study explains how and why decisions are made at each step of the process and how pay equity is being maintained. You can save this document to your hard drive and use it as a learning tool, for note-taking, and to record your organization s pay equity history, decisions and maintenance requirements for your establishment(s). About the Space Toy Company (1987) The Space Toy Company manufactures miniature and mid-size space and galactic toys for the 4-12 year-old market. This small Ontario-based company has production facilities in Belleville, Kingston and Sarnia, as well as in Drummondville, Quebec. The Pay Equity Act covers all Ontario employees of this employer only employees in the province of Quebec are covered by that province s pay equity legislation. The Space Toy Company s Head Office is located on Dundas St. West in Toronto. The two small plants in Belleville and Kingston have been in operation for 15 years. There is also a separate 10- person office in downtown Kingston. Sarnia s state-of-the-art facility utilizes high-tech digital processes and has an active e-commerce department. Plans are underway to open a new plant in Windsor in Management at STC is aware that when the Windsor facility opens, pay equity has to be achieved immediately for those employees. The company has pay equity implementation and maintenance plans underway for the new Windsor plant. Benefits of this document Record-keeping Pay Equity workshop attendees often tell the Commission that they have not kept good records of initial pay equity decisions, a copy of the plan, or how pay equity has continued to be applied over the years subsequent to their first pay equity process. If record-keeping is a problem in your organization, this document may be of help as a learning tool copied permanently to your computer and as an electronic folder in which to keep your pay equity information. Pay Equity Commission 5

6 Liability: There is no statute of limitations on the Pay Equity Act. A complaint can be brought to the Pay Equity Commission at any time. Keeping good and accurate records will ensure that any concerns brought forward by employees can be dealt with promptly and with a minimum of conflict. Maintaining good pay equity records is simply good business for your organization. Pay Equity Commission 6

7 Please Read Carefully... 3 A Learning Tool... 4 An Electronic Working File... 4 Purpose of this document... 5 About the Space Toy Company (1987)... 5 Benefits of this document... 5 Quick Facts Who is the employer? a) What were the pay equity deadlines for STC? This is how STC counted employees How many establishments did STC have? How many pay equity plans per establishment did STC need? In Summary What were the female and male job classes? More about female and male job classes STC s gender-neutral job evaluation process and system a) Defining the system s subfactors b) Deciding on the number of levels for each subfactor c) The weighting formula d) The weighting formula breakdown between subfactors and levels e) Collecting job information f) The job evaluation results How STC determined comparable jobs - Banding of Points Adjusting job rates The Job-to-Job Pay Equity Plan for Establishment 1 Toronto Summary of Parts 1 and 2 The Basics and Job-to-Job Comparisons Pay Equity Commission 7

8 Introduction to Parts3-4: Proportional Value, Maintenance, and Addendum Tools Introduction to Proportional Value (PV) a) The start of the proportional value process Answers to basic questions b) What was STC s pay equity deadline for Proportional Value? c) The Steps to Proportional Value (PV) d) Method 1 Free-Hand e) Method 2 Regression Analysis f) The amended Pay Equity Plan using Proportional Value Why maintain pay equity and how can STC do it? a) What is pay equity maintenance? b) Changed Circumstances c) Sale of a business Pay Equity Committee Terms Of Reference/Administrative Arrangements The tasks and responsibilities of the pay equity committee Guide to Gathering Job Information Guide to the Classification or Re-evaluation Process Sample Job Description Maintenance Journal Sample Pay Equity Commission 8

9 Quick Facts What is the effective date of the Pay Equity Act? The Pay Equity Act came into effect on January 1, Who does the Pay Equity Act cover? Ontario employees of public sector employers Ontario employees of private sector employers with 10 or more employees Who does the Act not cover? Employees of the federal government Employees regulated by the federal government such as: banks, airlines, post offices, television and radio stations, telecommunications, transportation Employees who work in provinces other than Ontario (these employees are covered by those provinces legislation) Private sector companies with fewer than 10 employees in Ontario as of January 1, 1988 (Note: companies which grow to more than 10 employees must achieve pay equity immediately). Who is an employee? All full-time and part-time workers Seasonal workers in the same position for the same employer Students working regularly at any time during the year apart from their vacation period Who is not an employee? Students working during their vacation periods only Casual workers a position is not casual if: the work is performed for at least one-third of the normal work period, or the work is performed on a regular and continuous basis, although for less than onethird of a normal work period. Pay Equity Commission 9

10 What is a Pay Equity Plan? A pay equity plan is a document that outlines the process undertaken by the employer and/or union to implement pay equity and provides information to employees about the required elements of pay equity. Pay equity plans are required under Part II of the Pay Equity Act. Part II applies only to all public sector Employers in existence as of July 1, 1993 and to all private sector Employers with 100+ Employees as of December 31, What is the role of the bargaining agent? In a unionized workplace, the employer and the bargaining agent, at the time of implementation, negotiate: the female and male job classes the method used to compare job classes the rate and timetable for wage adjustments the pay equity plan itself How is pay equity different from equal pay for equal work? Pay equity, equal pay for work of equal value, compares jobs usually done by women with different jobs usually done by men. When the value of the work is about the same, the female job classes must be paid at least as much as the male job classes. Equal pay for equal work means that if a man and a woman are doing substantially the same work, they must receive the same pay (see the Employment Standards Act). What communication does the Pay Equity Commission recommend? Communication should happen at each step of your process or plan and especially after you have completed your plan. Keeping the lines of communication open will: help inform your employees about pay equity and their rights, increase credibility for the pay equity process with your employees, allow your employees to buy in to the plan you are developing, dispel rumours or false information, and help you to create a plan that is useful to your workplace. Pay Equity Commission 10

11 How do you achieve Pay Equity? a) Identify female and male job classes Job information is needed to identify the jobs or positions that should be grouped into job classes. b) Assess the value of female and male job classes Female and male job classes must be described completely and accurately. The type of demands involved in both female and male jobs must be included in the job information and evaluated. c) Compare the value of female and male job classes and adjust the job rates of female job classes if required Female job classes that are equal or comparable in value to male job classes must be paid at least the same job rate. What makes a good committee? A committee 1 can help minimize gender bias when comprised of diverse individuals who: do different jobs, come from different levels of the organization, have different kinds of backgrounds, have different lengths of service, represent a balance of men and women, and are not committed to the current job structure. What is gender bias? Gender bias is where the work performed by one gender is understated/undervalued/underpaid. Usually, women s work (i.e., nursing, clerical, etc.) is understated/undervalued/underpaid in relation to men s work (i.e., construction, policing). To assess how the value of female job classes compares to male job classes, employers must look at the total value of each job class based on skill, effort, responsibility and working conditions. This evaluation must include all jobs and capture previously overlooked aspects of work done by women. 1 A Pay Equity Committee is not required under the Pay Equity Act, but workplace parties have consistently indicated their value Pay Equity Commission 11

12 What is gender neutrality? Gender neutrality is the absence of bias in the job evaluation/comparison process, so that it accurately captures the skill, effort, responsibility and working conditions of women s and men s jobs. Gender neutrality specifically uncovers and values the work of female job classes. Gender neutrality is required in: The collection of job information the job information used must be accurate, complete, up-to-date and consistent in detail for both genders. The comparison system the system used must value aspects of women s work that may have been overlooked and undervalued. The use of the system to compare jobs the value of the factors of skill, effort, responsibility and working conditions must be determined using a process free of gender bias. Making the comparisons employers must show that female jobs were compared to male jobs as required by the Pay Equity Act, and, where appropriate, make pay equity adjustments. Pay Equity Commission 12

13 Part I At The Start Pay Equity Commission 13

14 1. Who is the employer? The first question for Space Toy Company (STC) to answer was Who is the employer? The term employer is not defined in the Act. In STC s case, as in the majority of cases where there is only one potential employer which all employees recognize, the answer is easy STC is the employer. However, not all situations are this straightforward. In some instances, corporate ownership, organizational structure and financial interrelationships make the employer more difficult to identify for instance, with franchises. In these unclear situations, the Tribunal has outlined the following four tests in determining the employer: Who has overall financial responsibility? Who has responsibility for compensation practices? What is the nature of the business, service or enterprise? What is most consistent with achieving the purpose of the Pay Equity Act? The answers to the following questions may also help: who hires, who fires, who disciplines, who issuest-4 slips, who sets policy, is there an employer-employee relationship from the employees point of view or was there an intention to create one? Organizations also examine the following: Who has responsibility for the budget? Who bears the financial burden of compensation practices and wage adjustments under the Pay Equity Act? Who is responsible for the financial administration of the budget? What is the investment or ownership of shareholders? Who bears the responsibility of picking up the deficit or benefiting from the surplus? What are the employees perceptions of who is the employer? Who has responsibility for compensation practices? Who sets the overall policy for compensation practices? Who attaches the value of a job to its skill, effort, responsibility and working conditions? What is the labour relations situation? Who negotiates the wages and benefits with the union or sets the job rate in a non-union setting? Pay Equity Commission 14

15 What is the nature of the business, service or enterprise? What is the core activity of the business, service or enterprise? Is the work in dispute integral to the organization or is it severable or dispensable? Who decides what labour is to be undertaken and attaches that responsibility to a particular job? What is most consistent with achieving the purpose of the Pay Equity Act? If there is more than one possible employer, refer to the purpose and objectives of the Pay Equity Act. Pay Equity Commission 15

16 1a) What were the pay equity deadlines for STC? The Pay Equity Act considers and/or requires: The Act requires employers to implement pay equity according to the following schedule: Employer Size Public Sector Table 1: Job to Job Comparison Method Posting Date of First Adjustment Pay Equity Plan Achievement Date All sizes January 1, 1990 January 1, 1990 No later than January 1, 1998 Private Sector (based on the average number of employees in 1987) 500 or more January 1, 1990 January 1, 1990 n/a 100 to 499 January 1, 1991 January 1, 1992 n/a 50 to 99 January 1, 1993 January 1, to 49 January 1, 1994 January 1, 1993 Note: Employers with fewer than 10 employees are not required to do pay equity. However, when their employees increase to 10 or more, they must achieve pay equity immediately. The Act requires employers to determine the posting, implementation, and adjustment dates on the basis of the average number of employees covered by the Act, who were working in Ontario between January 1 and December 31, The Act also specifies which employees are or are not covered. Pay Equity Commission 16

17 This is how STC counted employees Employees to be included in the count: Full-time Part-time Seasonal Students working while going to school 2 Casual employees 3 Contract employees Employees NOT to be included in the count: Workers from temporary agencies Students working during their vacation STC employees who were part of the pay equity process: Full-time Part-time Seasonal Students working while going to school Contract employees 4 2 Casual employees examples: Someone brought in for a few days to do the inventory or for a number of months to work on a research project - after these tasks are done, the persons are gone and so are the jobs. Such casual jobs are not usually or continuously required to help run the business or fulfill the mission of the organization. The persons performing these jobs are not included in your pay equity process. 3 Contract employees: Sometimes employees perform work necessary to your business (not casual) but are paid on a contract basis. These employees are covered by the Act. 4 Contract employees: Sometimes employees perform work necessary to your business (not casual) but are paid on a contract basis. These employees are covered by the Act. Pay Equity Commission 17

18 Based on the above requirements, the 1987 Ontario employee count for STC was as follows: Ontario Locations Table 2: 1987 Employee Count Number of employees Toronto Head Office 34 Belleville 111 Kingston 159 Sarnia 137 Total number of employees 441 STC s decision Table 3: All Ontario locations followed the implementation schedule below The Space Toy Company Posting date all plans First pay equity adjustment all plans Private sector employer with employees January 1, 1992 January 1, 1992 Pay Equity Commission 18

19 2. How many establishments did STC have? The Pay Equity Act considers and/or requires: The Act states that the establishment is all the employees of an employer who work in a geographic division. A geographic division can be a county, territorial district, or regional municipality, as described in the Territorial Divisions Act. An employer can decide to expand the definition of establishment to include two or more geographic divisions. If the workplace has a union, this must be negotiated with the bargaining agent. All employees of an employer in a given geographic division must be included in one establishment. STC s rationale: STC s geographic divisions were: Toronto Belleville Kingston Sarnia Head Office One location only within the Greater Toronto Area Plant One location only within the City of Belleville Plant and separate 10-person office Two locations within the City of Kingston These two locations are within the same geographic division therefore cannot be subdivided. The two locations must be included in the same establishment. Plant One location only within the City of Sarnia Pay Equity Commission 19

20 STC s decision 3 establishments Establishment 1: Toronto STC chose to divide their establishments in accordance with the definition of geographic divisions Toronto Head Office was deemed to be one establishment. Establishment 2: Belleville and Kingston As Belleville and Kingston plants were located in the same area, and as the plants shared the same Human Resources director and staff, STC felt it made sense to combine these two plants into one establishment. Establishment 3: Sarnia Sarnia s plant, a unique high tech work environment, had enough male job classes to serve as comparators for the female job classes at that location. Therefore, Sarnia became the third establishment. Pay Equity Commission 20

21 3. How many pay equity plans per establishment did STC need? The Pay Equity Act considers and/or requires: As required by the Act, each of the three establishments at STC must have: one pay equity plan for each bargaining unit one pay equity plan for all non-represented employees. This is the number of plans STC needed at each establishment: Table 4: Number of Plans Establishments Toronto Number of plans One plan (non-union) There was no bargaining unit at the Toronto Head Office so only one plan was required to cover ALL non-union employees Belleville/Kingston One plan (for ALL non-union employees in Belleville & Kingston) A second plan (for Bargaining Unit 1 at Kingston Plant) A third plan (for Bargaining Unit 2 at Kingston Plant) A fourth plan (for Bargaining Unit 3 at Belleville Plant) Sarnia One plan (non-union) A second plan (for Bargaining Unit 1) A third plan (for Bargaining Unit 2) Pay Equity Commission 21

22 In Summary 1. Initial questions and answers: The Quick Facts section of this document gives the answers to the initial questions that applied commonly to all of STC s Ontario locations. Files: Establishment 1 Toronto (this working document) Establishment 2 Belleville/Kingston (separate document) Establishment 3 Sarnia (separate document) 2. Pay Equity Committees The Space Toy Company decided that each establishment should have its own Pay Equity Committee. Each establishment had joint employer/employee or employer/bargaining agent committees. 3. Legal considerations, rationale and decision-making The following pages show what decisions were taken to establish pay equity for the female job classes in the Toronto establishment only. No mention will be made of any other Ontario location or their jobs, as they were not part of the Toronto pay equity process. A similar pay equity process was followed for Establishments 2 and 3. Where unions were present at the time of implementation, bargaining agents and STC negotiated and agreed on a pay equity plan. 4. Electronic record-keeping Users of this document can add pages at each appropriate step to record decisions and/or actions the organization took to achieve and maintain pay equity. A full set of notes can be attached as well and kept as an electronic file on your computers. The remainder of this document details the Toronto non-union pay equity process and plan only. Pay Equity Commission 22

23 Part II Achieving Pay Equity using the Job-to-Job Comparison Method Pay Equity Commission 23

24 4. What were the female and male job classes? The Pay Equity Act considers and/or requires: The Act requires that positions be grouped into job classes. Job classes are one or more positions which: have similar duties and responsibilities, and require similar qualifications, and are filled by similar recruiting procedures, and have the same compensation schedule, salary range or range of salary rates. You determine female and male job classes by considering the following: The current percentage of men or women doing the job if 60% or more are female female job class If 70% or more are male male job class The historical incumbency In the past, have more men or more women been in this job class? The gender stereotype attached to the work Do men or women usually do this job according to what most people believe? Positions can also be grouped in a Group of Jobs. (STC referred to the Commission s A Guide to Interpreting Ontario s Pay Equity Act: Determining Job Classes for more information on groups of jobs). A group of jobs is a series of jobs where: the nature of the work performed is related there is already an established progression of job classes representing successive levels of work in terms of skill, effort, responsibility and working conditions. Examples: Secretary 1, Secretary 2, Secretary 3, or File Clerk 1, File Clerk 2, File Clerk 3, File Clerk 4. Pay Equity Commission 24

25 Table 5: STC s decision Job Class Composition Gender Number of Positions General Manager 1/M M 1 Marketing Director 1/M M 1 Controller 1/M M 1 Sales Manager 1/M M 1 Administration Manager 1/F F 1 Accounting Manager 1/F F 1 Accountant 1/M M 1 Global Markets Specialist 1/F F 1 Digital Markets Specialist 1F F 1 Sales Representative 7M/1F M 8 Customer Service Supervisor 1/F F 1 Financial Analyst 1/M M 1 Service/Systems Technician 1/M M 1 Administrative Assistant 2/F F 2 Secretary 3/F F 3 Customer Service Clerk 6/F F 6 Accounting Clerk 2/F F 2 Receptionist/Typist 1/F F 1 Total positions 34 Total job classes 18 Pay Equity Commission 25

26 More about female and male job classes Notes: The term similar (used in the job class definition) is used instead of the term identical or the same. This broad definition may enable several positions to be included in a particular job class, which may reduce the number of comparisons that need to be made. The qualifications considered should be those currently needed to do the job, not those qualifications which an employee may happen to have or which are merely desirable. Recruiting procedures are often associated with qualifications. The qualifications sought affect the site where employees are recruited; for example, union hiring halls or a college campus. The scope of recruiting does not affect the determination of job class. For example, some job classes are recruited locally, while others are recruited provincially or even nationally. The regions may differ but the qualifications stay the same. Usually, the kind of recruiting - internal or external, newspaper or radio ads - is not important when determining job class. A job class can be made up of one position that is unique in the organization. Full-time and part-time work: Job rate is defined in the Act as the highest level of compensation, which includes wages, salaries and benefits. Positions in which employees work full-time and part-time can belong to the same job class if they have the same compensation schedule, salary grade or range of salary rates and meet the other tests for job class. However, in many cases, part-time employees have different job rates than full-time employees because they do not have the same benefit schedule. In these cases, part-time and full-time employees are in separate job classes. Gender-Neutral job classes identify these and put them aside: Job classes can be gender-neutral if the 60% and 70% rule doesn t apply; if you can t identify a stereotype; and if historically, you can t make a case that this job class has been dominated by women or men. An example could be a Conveyor Belt line job which has been filled historically by both men and women, more or less in equal numbers, over a long period of time. This is a gender-neutral job class and is not included in the pay equity process. A gender-neutral job cannot be used as a comparator nor can it receive pay equity adjustments. Pay Equity Commission 26

27 5. STC s gender-neutral job evaluation process and system The Pay Equity Act considers and/or requires: The Act requires that STC compare the value of skill, effort, responsibility and working conditions of female and male job classes using a gender-neutral comparison system. STC s rationale: STC modified the Pay Equity Commission s 10-factor job comparison system. STC considered the company s goals, products, services and the work done in all job classes. They paid particular attention to aspects of work done by women that could have been overlooked in the past. This newly-adapted system fit the nature of the jobs at Toronto s Head Office. Its subfactors captured the aspects of work present in men s and women s jobs and provided the yardstick by which to compare the total value of female and male job classes. This new system also offered flexibility if future modification ever became necessary. STC s decision: Setting up a committee was not required by the Act. However, STC decided that four staff members and one management representative would work with a job evaluation consultant to modify the system s subfactors and develop a weighting formula. The first step for the Committee was to identify those aspects of work present in female and male jobs. These elements of work are compiled in the Table 6. Pay Equity Commission 27

28 The data in Table 6 is organized this way: Column 1: Aspects of work present in the jobs at Toronto s Head Office. This list is not exhaustive. Column 2: From these elements, a shorter list of 10 subfactors was created. These 10 subfactors are listed in Column 2. The list of 10 subfactors for the job comparison system. Column 3: Example: In column 1, Budget responsibilities, Accuracy and Accountability are elements of work that can be grouped under the subfactor Responsibility for Financial Resources, which in turn falls under the main factor of Responsibility. The factors of skill, effort, responsibility and working conditions are required by the Pay Equity Act. Table 6: Female and Male Jobs Column 1 Column 2 Column 3 Aspects of work present in the jobs at Toronto Head Office (This list is not exhaustive) Education; Additional self-study; Training Programs; Licenses or Certificates; On-the-job or off-the-job experience; Theoretical and/or technical knowledge. Communication (verbal, written), Interpersonal Skills; Contacts with public/clients/staff; Explaining information or ideas with varied levels of complexity or difficulty; Counseling, advising or negotiating. Ability to do detailed or routine work; Judgement; 10 Subfactors (Derived from Column 1) Knowledge Interpersonal Skills/Contacts Problem-solving/Judgement Factors (Required by the Act) Skill Pay Equity Commission 28

29 Column 1 Column 2 Column 3 Resourcefulness/creativity; Analytical ability; Problem-solving; Decision-making; Impact of decisions. Listening; Concentration using sight, touch, hearing, taste or smell; Attention demand; Watching a computer screen; Visual application, including frequency and duration of efforts; Verifying columns of numbers; Handling emergencies. Mental Effort Effort Manual effort; Keyboarding; Pushing or pulling; Speed; volume of work; Physical strain, including frequency and duration; Sitting for long periods of time. Physical Effort Coordination of workflow/tasks; Policy development; Training and evaluation of staff; Supervision of others; Quality of work; Records. Personal \ Policies \ Practices Responsibility Collection, location, retrieval and maintenance of information; Complexity of information; Consequence of errors; Details; Confidentiality; Accuracy in recording information; Information Resources Pay Equity Commission 29

30 Column 1 Column 2 Column 3 Cost of errors; Public relations; Interpreting, presenting, recording information accurately; Reporting. Budget responsibilities; Accountability; Accuracy; Cash; Cost accounting; Financial decisions Storage, usage, maintenance and repair of goods and products; Equipment and machinery; Product; Resources; Property. Financial Resources Material Resources Physical environment/surroundings; Exposure to health hazard; Eyestrain; Exposure to accident hazard; Open office; Time pressure; Travel, local or out-of-town; Crowded conditions; Stress of multiple demands; Interruptions; Monotony; Risk of injury; Ventilation or temperature; Noise; Exposure to chemicals. Environment Working Conditions Pay Equity Commission 30

31 5a) Defining the system s subfactors The Committee then defined each subfactor listed in column 2 of Table 6. These are the definitions for the 10 subfactors: Knowledge: This subfactor measures the level of experience, formal education and basic skills necessary to meet the requirements of the job. Skills and knowledge may be learned from both on-the-job or offthe-job experiences and/or education. Interpersonal Skills/Contacts: This subfactor measures the job requirement to deal effectively with people both within and outside the organization. This subfactor considers the type, importance and purpose of contacts and the degree of interpersonal skills required. Problem-Solving/Judgement: This subfactor measures the problem-solving/judgement required on the job. It assesses the difficulty in identifying various available choices of action and in exercising judgement to select the most appropriate action. It also considers mental processes such as analysis, reasoning or evaluation. Mental Effort: This subfactor measures the duration and intensity of mental effort required to perform the job. Mental effort is related to the amount of concentration and attentiveness required, both in terms of thinking, watching and listening. All types of tasks requiring concentration should be considered. Physical Effort: This subfactor measures the duration and intensity required to perform the job. Physical effort is related to the amount of physical demand on the body or the energy required to do all kinds of tasks like standing, walking, lifting, keyboarding or holding the body in one position for long periods of time. Pay Equity Commission 31

32 Responsibility for Personnel, Policies and Practices: Table of Contents This subfactor measures the extent to which key activities and responsibilities are achieved through the direction, management, education, training, evaluation, motivation and control of the work and of others. It does not measure the interpersonal skills required in other types of contacts. Policies can be health and safety rules or special programs. Responsibility for Information Resources: This subfactor measures the degree of responsibility for the collection, storage, retrieval, interpretation and maintenance of information/data/files required to perform the job. It also measures the nature of involvement with the information. Responsibility for Financial Resources: This subfactor measures the degree of accountability for money, financial data, financial records and related decisions, and the acquisition and/or expenditure of funds. Responsibility for Material Resources: This subfactor measures the degree of responsibility for the collection, storage, retrieval, safe usage and maintenance of material resources including office equipment, supplies, products and machinery required to perform the job. It also measures the value and nature of the involvement with the resources. Environment: This subfactor measures the nature and severity of the working conditions and hazards that have an impact on the job. Pay Equity Commission 32

33 5b) Deciding on the number of levels for each subfactor Once the subfactor definitions were written, the number of levels for each subfactor was determined. A level measures the degree to which a subfactor is present in a given job. For example, an Administration Manager has more responsibility for personnel, policies and practices than a Customer Service Clerk. Therefore, the Manager s job would be assigned a higher level on that subfactor. Another example is that a welder would have a higher level of disagreeable or hazardous working conditions than a mail clerk. Most subfactors are divided into five levels, but in some cases, four or six were necessary. The Committee was prepared to add or remove levels as the system was developed and tested. Once the number of levels for each subfactor was determined and finalized, definitions for each level were written. For example, all agreed that Problem-Solving/Judgement needed 5 full levels as this subfactor was present to some degree in all Toronto jobs. The example below shows how subfactor levels were written for Problem-Solving/Judgement. (The other 9 subfactors were similarly defined, but are not shown here.) Problem-Solving/Judgement This subfactor measures the problem-solving/judgement required to do the job. It assesses the difficulty in identifying various available choices of action and in exercising judgement to select the most appropriate action. It also considers mental processes such as analysis, reasoning or evaluation. Level 1: A measure at this lowest level means the subfactor s contribution to the overall value of the job is very small. Problems faced on the job tend to be routine and standard. Solutions or required responses are set. Decisions are obvious with few alternatives, or the problem can almost always be referred to someone else. Little choice of independent action or judgement. Level 2: A measure at this level means the subfactor contributes to the overall job value but not significantly. Pay Equity Commission 33

34 Problems faced on the job tend to be somewhat standardized with infrequent new problem situations. Decisions are made from a number of known alternatives, or unusual problems are usually referred to someone else. Some choice of independent action or judgement. Level 3: A measure at this level means the subfactor is a more significant and regular component of the job. Problems faced on the job tend to be variable. Decisions are made by weighing alternative approaches within a framework of customary practice. Occasionally, unique problems are referred to someone else; sometimes refers recommendations for approval. Typically involves a choice of independent action or judgement. Level 4: A measure at this level means a high degree of the subfactor is needed to perform the job. Problems faced on the job are most often variable, non-standardized. Decisions involve interpreting and analyzing different factors, and guides and precedents are limited. Seldom are problems referred to someone else; frequently refers recommendations for approval. Frequent opportunity for independent action or judgement. Level 5: A measure at this level means the highest requirement of the subfactor within the organization is needed to perform the job. Problems faced on the job are complex and unique. Decisions involve interpretation of many different factors; often requires generating novel solutions from which decisions will be made. Ultimately responsible for resolving problems or refers recommendations for approval. Develops policy. Pay Equity Commission 34

35 5c) The weighting formula The Committee s next step was to determine how important each factor (skill, effort, responsibility and working conditions) and subfactor was to the workplace by developing a weighting formula that would reflect the values of all Toronto jobs. Weights were assigned to factors and subfactors and point values for each level were calculated. STC s rationale and decision: To assure gender neutrality in weighting, the Committee considered the goals, products and services at the Toronto Head Office and the work done in female and male job classes. This was helpful in determining the weight (or value) of each of the four factors in relation to each other. Factors were not given equal weight/value. Table 7: Shows the Weighting Formula Skill 35% Effort 20% Responsibility 35% Working Conditions 10% Total value for the systems 100% Table 8: Reflects the breakdown of this weighting formula between the 10 Subfactors Skill 35% Knowledge 15% Interpersonal skills/contacts 12% Problem-solving/Judgement 8% Effort 20% Mental effort 12% Physical effort 8% Responsibility 35% Pay Equity Commission 35

36 Personnel, policies and practices 12% Information resources 10% Financial resources 8% Material resources 5% Working Conditions 10% Environment 10% Total Value for the Systems 100% Pay Equity Commission 36

37 5d) The weighting formula breakdown between subfactors and levels The Committee assigned four to six levels to all 10 subfactors in the system. The basic weighting formula for all levels for all subfactors is shown in table 9 below. The Committee determined the total points for each level by dividing the total number of points assigned to each subfactor by the number of its levels. I.e., Mental Effort at 120 points, was divided by its number of levels (5). Each level was then assigned 24 points. 24 points x 5 = 120 points for level 5. The result of the calculation, from Level 1 to 5 is: 24, 48, 72, 96, and 120 points, as shown in table 9. The Committee also opted to shade up or down for more flexibility that is, using the + or - factor to rate job classes that did not comfortably fit a subfactor s level. This was done by dividing the number of points allotted to each level by 3, then adding or subtracting that amount i.e., if each level of Mental Effort had 24 points, then 24 was divided by 3. The + or - factor is 8 (round off if needed). That amount (8) was added or subtracted from the appropriate level. Point breakdown showing levels, + and - considerations are tallied in table 10 on page 37. Table 9: Weighting Formula Breakdown for each Factor, Subfactor and Level Weight Points Points for levels Skills (35% divided between three subfactors) Knowledge 15% Interpersonal skills/contacts 12% Problem-solving/Judgement 8% Effort (20% applied to two subfactors) Mental effort 12% Physical effort 8% Responsibility (35% divided between four subfactors) Personnel, policies and practices 12% Information resources 10% Financial resources 8% Material resources 5% Working Conditions (10% applied to one subfactor) Environment 10% Total 100% 1000 Pay Equity Commission 37

38 Knowledge (K) Interpersonal Skills/Contacts (ISC) Problem Solving/Judgement (PSJ) Mental Effort (MF) Physical Effort (PE) Personnel, Policies and Practices (PPP) Information Resources (IR) Financial Resources (FR) Material Resources (MR) Environment (E) Table 10: Point Values for each Subfactor level K ISC PSJ MF PE PPP IR FR MR E Pay Equity Commission 38

39 5e) Collecting job information The system is now ready to use: the subfactors and number of levels have been decided, the necessary definitions written, and the weighting formula calculated and tabulated. Now, it is time to collect job information. To prepare job information for the job evaluation and comparison process, the STC Committee, consultant and management: 1. Reviewed existing job descriptions for accuracy, content, current information and gender neutrality. They decided new job information was required for all jobs, as data on file was outdated and inaccurate. They discussed the various alternatives available to collect job information; (i.e., questionnaires, interviews or desk audits). They decided to develop a questionnaire to mirror the system, pilot test it on a mixture of four or five male and female jobs, review the questionnaire again and modify it if necessary. They also opted to prepare new job descriptions using the questionnaire information, and to use these updated job descriptions to evaluate jobs. 2. Set a timetable, and assigned roles for all those involved in the pay equity process. They agreed on Terms of Reference that set out the responsibilities and tasks of the Committee, under the leadership of the consultant. The Committee was involved in each of the following steps: designing the questionnaire; supervising, testing and modifying the questionnaire; distributing, collecting, and reviewing information; employee interviewing and desk auditing, when necessary; evaluating jobs and helping finalize results. 3. Prepared a communication plan (not required by the Act). The Committee agreed on a communication strategy to send pay equity updates to employees every two months until the posting of the plan. These updates outlined: the pay equity concept and process to employees; the Pay Equity Committee's tasks and responsibilities; the expected timelines to complete the job evaluations; the Committee s progress and contact information for employee questions; what was expected of employees during the process. Pay Equity Commission 39

40 The Committee needed extra time: The company retained the Consultant for an extra month, as the committee s work took longer than anticipated. There were delays in turning in the questionnaires for review and/or modification. Due to new time constraints, the Committee elected to use the questionnaires themselves to evaluate jobs instead of immediately developing new job descriptions. The Committee also decided, with management s support, that the Administration Manager, the Customer Service Supervisor and two committee members would oversee the writing of new job descriptions no later than one month after the conclusion of the pay equity job evaluation process. The Committee compiled information, rating sheets and notes during the job evaluation process: The Committee completed the work in six months instead of the four months forecasted. Records were kept of all evaluation reasons and decisions. Pay Equity Commission 40

41 5f) The job evaluation results The Pay Equity Act considers and/or requires: The Pay Equity Act states that pay equity is achieved when a female job class is paid at least as much as a male job class of equal or comparable value. Equal or comparable value means similar, not necessarily identical value. STC s rationale: The Committee discussed various ways of comparing jobs of equal or comparable value, and decided to use a common tool called the Fixed Point Band method. This method is where bands of points are developed, such as 0 to 50 points, 51 to 100 points, 101 to 150 points, etc. Job classes that fall within the same band are of equal or comparable value. There is no set formula for the number of points that can be set within each band organizations usually set bands within 5-10% of a system s total value. Several calculations were tried in order to find the fairest result. The Committee concluded that bands of 75 points gave reasonable results. STC opted to set bands within 7.5% of the total system. The system had a total value of 1000 points bands were set every 75 points (7.5% x 1000 = 75). A worksheet was prepared showing 75-point bands (see table 12). The female and male job classes were listed within the bands on this worksheet according to the number of points each received. The final evaluation results for female and male job classes are listed below. Pay Equity Commission 41

42 STC s decision: Table 11: Final Evaluation Results for Female and Male Job Classes Job Class Gender Number of Points positions General Manager M Marketing Director M Controller M Sales Manager M Administration Manager F Accounting Manager F Accountant M Global Markets Specialist F Digital Markets Specialist F Sales Representative M Customer Service Supervisor F Financial Analyst M Service/Systems Technician M Administrative Assistant F Secretary F Customer Service Clerk F Accounting Clerk F Receptionist/Typist F Pay Equity Commission 42

43 6. How STC determined comparable jobs - Banding of Points Table 12 shows 75-point bands with female and male job classes of equal or comparable value. The Act also specifies a search sequence to identify the appropriate male comparator for a female job class if more than one male comparator is available, or if there is no male comparator in a band. Search sequence information is shown at the bottom of this page. Table 12: Point Bands Female Job Classes Job Rate Male Job Classes Job Rate General Manager (865) Marketing Director (762) Controller (755) Administration Manager (630) Accounting Manager (625) Sales Manager (647) Global Markets Specialist (575) Digital Markets Specialist (575) Accountant (592) Sales Representative (561) Financial Analyst (540) Customer Service Supervisor(542) Service/Systems Technician (458) Administrative Assistant (456) Secretary (430) Customer Service Clerk (391) Accounting Clerk(330) Receptionist/Typist (282) Pay Equity Commission 43

44 Search sequence 1: Look for a male job class of equal or comparable value INSIDE the same pay equity plan. If more than one is found, the one with the lowest job rate is the appropriate * Comparator. Search sequence 2: If there is no male job class of equal or comparable value inside the pay equity plan, look OUTSIDE to other plans in the establishment. Again, if there is more than one possible comparator, use the one with the lowest job rate. Search sequence 3: If there are no male job classes of equal or comparable value, look THROUGHOUT the establishment for male job classes that are of lower value but higher paid than the female job classes considered. If more than one is found, use the one with the highest job rate as the appropriate comparator. Pay Equity Commission 44

45 7. Adjusting job rates The Pay Equity Act considers and/or requires: The Act defines job rate as the highest level of compensation, which includes wages, salaries and benefits. Job rates of female job classes are compared to job rates of male job classes of equal or comparable value. When required, adjustments must be paid to each position in the female job class (each step in the range). STC s rationale and decision: For STC s purposes, job rate was the highest rate of pay, including bonuses, commissions, and all payments, which an employee could normally reach. Since the Toronto office used a formal seniority system, the job rate was the rate at the top of the range. The benefits available to employees in all job classes were the same. The rate of pay was calculated on an hourly basis. Most employees were on a 35-hour workweek with a few employees on a 40-hour workweek. STC compared the difference in job rates between each female job class requiring an adjustment and its male comparator. The difference in the job rate (calculated at the top of the range) was applied to all levels of the range for the female jobs. See Table 13 for results and breakdown. Pay Equity Commission 45