July 2008

Introduction to
Mercers International Position
aniele Giugno, Geneva

www.mercer.com

Work Value Measurement measure, and value

differences in work
Less Complexity

Whole Job
Ranking

Mercer

Greater Complexity

Classification
(Roles)

Market Pricing
& Slotting

Standardized
Point Factor

Customized
Point Factor

Jobs ranked using

general criteria of worth
to organisation (e.g.,
importance or
complexity)

Classes/grades defined
using aspects of job
content; jobs assigned to
classes/grades

Market rates established

for benchmark jobs; nonbenchmark jobs slotted
in salary structure

Points assigned to jobs

based on factors,
degrees and points.
Universal factors and
weights

Points assigned to jobs

based on factors, levels
and factor weights
Customized factors and
weights to client

Simple
Easy to maintain

Easy to explain
Easy to modify
Adaptable to job families

Relationship to market
values
Credible

Can quickly compare

jobs across functions
and organisations.
Common links to market

Can compare jobs

across functions
Is perceived to be
objective and consistent

Potential for bias

May over emphasize a
single factor

Unusual jobs may be

forced
Potential for bias

Interpretation needed to
slot jobs
Difficult if poor data or
fast changing market
Volatile

May seem inflexible

Administration may
seem to be a barrier

Effort required to
develop factors
Much effort to administer
and implement

The Five Factors

Organisation

1.
Impact

Impact
Contribution

2.
Communication

Position

3.
Innovation

4.
Knowledge

5.
Risk

Mercer

Communication
Frame

Organisation size is determined by monetary scale such as sales and

assets, range of activity and number of employees.
Assess nature of impact a position has on the organisation.
Assess relative contribution that a position holder makes in the
context of Impact.
Assess the nature of the necessary communication ability required by
a position.
Determine both organisation frame and nature of interests of
communication contacts.

Innovation

Assess the requirements to identify, make improvements to, or

develop procedures, services or products

Complexity

Assess level of complexity that a position holder must deal with.

Knowledge

Measure the nature of knowledge required in the job to accomplish

objectives and create value.

Team

Assess the way the knowledge is applied.

Breadth

Assess the breadth (geographic context) in which the knowledge is to

be applied.

Risk
Environment

Assess the exposure to risk of mental or physical injury in the job. No

points are yielded if work conditions meet international standards.
Assess level of exposure from the working environment.

Communicati
on

Position

Organization
Impact

Impact

Communicat
ion

Contribution

Frame

Organisation Sizing

The Organisation Context

include at least one line function and two service functions.
is operational enough to produce added value.
Basic
R&D

Mercer

Applied
R&D

Engineer

Procure
Logistics

Produce

Apply
Assemble

Market

Sales

Distribution

Service

Impact
Level of Contribution
1
NATURE OF
IMPACT
1

Delivery

Operational

Limited

2
Some

3
Direct

4
Significant

5
Major

Marked contribution to defining the direction for new

products, processes, standards or operational plans
based upon business strategy, with a significant
mid-term impact on business unit overall results -21 to 30%

Tactical

Strategic

Visionary

Mercer

Communication
FRAME
1

3 4

COMMUNICATION Internal Shared External Shared Internal Divergent

1

Convey

External Divergent

Convince others within the organisation that are

skeptical or unwilling to accept new concepts,
practices, and approaches

2 Adapt & Exchange

Influence

Negotiate

Negotiate
Long term

Mercer

Innovation
COMPLEXITY
1
INNOVATION
1

Follow

Check

Modify

Improve

Difficult

3
Complex

4
Multi-Dimensional

Analyze complex issues and significantly

improve, change or adapt existing methods
and techniques.

Create /
Conceptualize

5
6

Defined

Scientific/Technical
Breakthrough

Mercer

Knowledge
TEAMS
1
KNOWLEDGE
1
2
3
4
5

Team Member

Limited
Job Knowledge
Basic
Job Knowledge
Broad Job Knowledge

Mercer

Team Leader

3
BREADTH
Domestic
Teams Manager

Regional

Global

Expertise
Professional
Standard

Organisational Generalist
/ Functional Specialist
Broad Practical Experience
7
/ Functional Preeminence
Broad and Deep
8
Practical Experience
6

Lead a team through application of

broad knowledge of one job area or
basic knowledge of several related job
areas

Risk
Environment
Risk
0

Normal

Mental

Injury

Disability

Mercer

1
Low
Exposure

2
3
Moderate
High
Exposure
Exposure

Normal working conditions. Physical

and/or mental work in an environment
where international standards of
safety apply.

Position Class Conversion Table

Total point range

Position
Class

Total point range

Position
Class

Total point range

Position
Class

26

50

40

426

450

56

826

850

72

51

75

41

451

475

57

851

875

73

76

100

42

476

500

58

876

900

74

101

125

43

501 -

525

59

901

925

75

126

150

44

526

550

60

926

950

76

151

175

45

551

575

61

951

975

77

176

200

46

576

600

62

976

1000

78

201

225

47

601

625

63

1001

1025

79

226

250

48

626

650

64

1026

1050

80

251

275

49

651

675

65

1051

1075

81

276

300

50

676

700

66

1076

1100

82

301

325

51

701

725

67

1101

1125

83

326

350

52

726

750

68

1126

1150

84

351

375

53

751

775

69

1151

1175

85

376

400

54

776

800

70

1176

1200

86

401

425

55

801

825

71

1201

1225

87

Mercer

Major IPE applications

IPE deliverables
A clear ranking of positions that is internally consistent
A first analysis of the organisational effectiveness
A global comparison of relations between positions
A starting point to establish position / competency

profiles
A database to support career planning and succession
An objective reference to solve title issues
A reliable base for an equitable salary structure

Application in Human
Resources Management
Organisational analysis
Remuneration
management
Recruitment
Promotion and succession
planning
HR information
HR controlling
HR audits

A tool that facilitates market benchmarking

Mercer

10

Mapping of Position Evaluation Results

Unit 1

550

Unit 2

IPE
Class

Unit 3

Unit 4

532PLANT MANAGER
Van Gogh

538PLANT MANAGER
Rubens

536DEVELOPMENT MANAGER 546QUALITY DIRECTOR

Rembrandt
Pinturicchio

522PLANT MANAGER A
Magritte
517ADMINISTRATION
MANAGER
512 De Vlaeminck
PLANT MANAGER B
507 Kandinsky
MAINTENANCE MANAGER
Klee
497PROJECT MANAGER
Klimt
497SALES MANAGER
Raffaello
492PERSONNEL MANAGER
Michelangelo
481EDP MANAGER
Leonardo

511LABORATORY MANAGER
Chagall
507PRODUCTION MANAGER
Matisse
501TECHNICAL MANAGER
Czanne

516PERSONNEL MANAGER
Miro
506SECTION MANAGER
Picasso

60
526
525

59
501

500

58
476
475

57

472PROMOTION MANAGER
Frangelico
461PRODUCTION MANAGER
Hobbema

497SERVICE MANAGER
476FINANCE MANAGER
Borromini
Schiele
491PERSONNEL MANAGER
Pozzo
486 SALES MANAGER
Goya
481ADMINISTRATION
MANAGER
Velasquez
465ORGANISATION MANAGER 466COORDINATOR
Lippi
Van Eyck
455MARKETING MANAGER
451PROMOTION MANAGER
Giotto
Canaletto

516FINANCE DIRECTOR
Gheduzzi

471SERVICE MANAGER
Dali

451

Mercer

11

Problems with title comparisons

TYPE OF COMPANY

Turnover

COMPANY A

COMPANY B

Sales company

Manufacturing and
Sales company

2 million

2 million

Organisation level

MD

MD

Admin

Responsible for

Accounting
Office Service

Group Treasury
Group Controller
Group Audit
Information Systems

Mercer

12

Structure Analysis
Position
Class
L
L-1
L-2
L-1

L-1

L-2

L-2

L-2
L-3

L-1
L-3

L-2
L-2

L-2
L-2

Mercer

13

The Position and the Person

Position
Class

Mercer

14

Promotion and consequences

Internal Reference
Grading
Salary

290

X
Utopia

IV

220

X
Risk

III

170

X
Challenge

II

130

100

X
Recognition
X

Promotion steps following the internal grading

Promotion is based on competencies, not on performance
Mercer

15

Market Pay Position

Euro

75

INTERNAL
REFERENCE
50

25

Position class

Mercer

16

Benchmarking

Benchmark
positions

Six levels
L

Visionary

Typical
Organization
headcount benchmarks

100%

Strategic

L-1

70%

20

15

Tactical

L-2

50%

75

40

Operational

L-3

30%

250

75

Delivery

L-4

10%

650

65

25%

1000

200

Total

Mercer

17

Position Evaluation process

Executive Interviews
with focus on
direct reports

Focus Groups to evaluate

Positions
at Operational and Delivery levels
Mercer

18

Project Management

Know-how
transfer and
guidance

Organisation / Area
representatives
+ HR department

HR department
+ project team member

Mercer

Mercer

Executive committee
Approve evaluations

Project team
Assure internal equity

Focus groups
Prepare benchmark evaluations
Define internal terminology

Mercer
Quality review

Mercer

Quality review

19

Communication
Not aimed at cutting manpower /salaries
Looking at Position; not Position-holder
Need to know market position
Using well tested evaluation methodology
- Fairly and consistently evaluates jobs
- Can compare all types of jobs
Evaluations carried out by those who are knowledgeable of jobs
Position Description not the only source of job data

Mercer

20

Position Evaluation should focus on the Position not on the Person

Mercer

21

Mercer Global Offering

IPE3 Tool Kit

Provide IPE License
eIPE Unlimited
IPE3 System Manual
& Consulting
Handbook
Internal IPE3 Guide
Develop and conduct
Internal training
Provide data
collection and
other support tools
Briefing of Mercer
Consultants

Consulting
Project Planning

Size of organisations
Migrate existing IPE2
evaluations to IPE3

Role Clarification

Executive Position
evaluations
Establish new Global
Benchmarks
Consolidate and peer
review evaluations
Redefine relationship
between position class
and grade level

Communication

Information
Services

Technology

Understand

Analyse Technology
needs and current tools
behavioural
Outline possible
objectives

Assess the audience

Technology options
Create communication Support decision process
strategy and means
towards new Technology
Roll out the
Provide IT platform
communications
and process specific tools
strategy
- Mercer ePRISM
- Mercer MerritNET
- Mercer HR Suite

Total Remuneration
Surveys
Bespoke Surveys

Benefits and valuation

methodology
LTI methodology
Market Pricing
PayMonitor
Global HR Monitor
Mercer Membership

Project Management

Mercer

22

www.mercer.com