About six months ago a colleague from a prominent management consulting firm mentioned an innovative job evaluation platform that he was using out of Germany. At the time, I was looking for a new point factor solution to assist my multinational clientele. Other providers were either, overly complicated or too expensive to be a viable solution. I traveled to Europe to review and train with the gradar system and was elated to discover the careful design and simplicity of the interface. I was convinced that this was the tool my clients could easily use globally with minimal training. Since then, I have been working with Philipp to introduce this solution more prominently in the American market.
Meet Philipp Schuch
Philipp is founder and CEO of QPM, the vendor of gradar.com
His professional interests are compensation & benefits and evidence-based HR management.
When I was in Europe, we had many opportunities to talk to each other and had the pleasure of joining Philipp in an interview.
Below are the results of the discussion.
Philipp, what was the idea behind the creation of gradar and what was your personal motivation with which you founded the company?
With gradar we have created a modern and easy-to-use, web-based job evaluation system that is affordable and can be used by HR managers and independent compensation consultants such as CompTeam and other similar boutique consultancies.
After dealing with established job grading systems in previous years, my partners and I wanted to create our own system for job evaluation that would be easy to apply and compatible with today's working environments. Tasked with this mission, I built a small team and developed and extensively tested the gradar algorithm for the evaluation of jobs in three distinct career paths:
Individual Contributors such as un-skilled and semi-skilled laborers, skilled specialists, professionals and strategic experts
Leadership roles such as team leader, middle management and top management functions
Project Management roles with the core objective of coordinating, planning and distributing personnel, resources and budgets.
With a Basic Edition, we offer free access to the system, which is currently used by about 100, often smaller companies. The Professional or Enterprise Edition can be obtained through a small annual license fee.
Together with our partners, we developed a reseller option where our partner would be in charge of a client’s account against the one-time-payment of a fee. This fee includes unlimited access by the consultant but limits the number of jobs that can be stored in the system and also limits the available features.
From the idea to the start, what were the biggest challenges so far and how did you fund the company?
We are fully bootstrapped and have dispensed with external funds. We subsequently financed the company entirely from our own resources. Thus we have learned from the outset to operate economically and effectively. It is great to not feel any investor in the neck, who would like to see a certain business development. This saves an incredible amount of time that would otherwise have been wasted on the 10th iteration of the business plan, participation in half-baked pitch events, and so on. We can therefore focus on developing an independent business with the best product and most convenient customer service out there.
During the development of the software, we consistently focused on working with excellent designers and developers and proved a great deal of skill in product development through the early involvement of friendly users and first customers.
My main concerns are always whether we are doing enough marketing, whether we are well positioned in sales and whether we could grow faster with more investments. In 2015, for example, we burned about $ 10,000 for participating in a trade fair and spent several times this amount on traditional press work. The effect was zero.
Finding the right marketing mix was a challenge. Furthermore, it is also challenging to identify and qualify excellent implementation partners such as Sam at CompTeam. With their help we are nowadays successfully expanding internationally.
As the vendor of the application we have developed a "Technical Sales" approach. When an interested party calls us or one of our partners they will immediately talk to someone who knows our product and the practice of job evaluation. If someone wants to check out the system themselves, they can do so by accessing gradar and signing up for an only time-limited evaluation account.
Which concrete "need" of your clients do you address and which strategic and/or operational added value do you offer to your users?
With gradar jobs/roles are systematically analyzed and evaluated.
Job evaluation clarifies the requirements an organization places on its employees using a structured analysis of their jobs. This is important to enable equal pay and to implement a structured approach for compensation management, career planning and talent development.
There are up to 25 grades available across the above mentioned three career paths.
gradar translates the combination of career path, grade and one of more than 100 global job families into job codes from several compensation surveys. This makes the life of any compensation and benefits professional much easier and their work much more productive. The basis for this is our renowned Compensation Survey Rosetta Stone.
A classic use case of job evaluation is strategic rewards management with the results being the foundation for elements such as pay scales, bonus structures, and so on. In addition, our users often base title structures and career ladders on the outcomes.
Pay Equity Acts across the globe make it essential for many companies to demonstrate the equivalence of work to meet employees' and public authorities’ requests for information. Here our system fulfils a very specific purpose and also has the advantages as mentioned earlier.
What exactly distinguishes you from other vendors on the market?
Other vendors have been on the market since the 1950s, and their systems are correspondingly dusty and complicated, and often evaluate jobs with a strong management bias. Our open and modern approach stands out in this respect and also pays tribute to current work concepts such as project managers and knowledge workers.
We see ourselves as a software vendor and intend to deliver a product that comes with practitioner inspired features and delivers a intuative solution for job evaluation, compensation survey job matching and competency management. To support the later aspect we have implemented TMA’s renowned competency library allowing for a job family specific translation of grading results into up to seven requirements based competencies.
By applying and customizing standards we and our partners focus on the empowerment of our clients and do not make them dependent on expensive consultants with projects that are excessively complicated and lack transparency.
What are concrete applications/use cases for your product in practice? Can you describe a short success story?
Almost every one of our clients has introduced a wage and salary structure based on the results. Some even go so far as to base their collective agreements, especially in Europe, on the gradar algorithm.
Often career paths and job architectures are also based on the results, aligning with corresponding job titles.
The analysis of remuneration structures with regard to a possible gender pay gap is also quite frequent, as the equivalence of work can be reliably determined by gradar.
In recruitment, we also see a significant acceleration in the recruiting process through a clear analysis of the requirements for the position in question and the introduction of salary bands, as this clearly defines which profile is sought and how much the organization is willing and able to pay.
“Many of my clients find that jobs with the same title have a significantly different scope and responsibilities at various locations. The gradar tool helps identify these differences and places them appropriately in the pay structure. The application of this tool has repaid itself tenfold by simply putting jobs in their proper alignment.”
In your experience, what pitfalls lurk in practice and how can they be solved?
Similar to aptitude diagnostics, there is also the potential for evaluation errors, e.g. a confirmation bias, in job evaluation. The perceived importance of the position might guide the evaluation and the factors are selected accordingly in order to achieve the desired result. Alternatively, the person or the performance of the person is evaluated instead of the requirements for the job. One solution is to evaluate with a team to minimize the subjectivity of individuals, ideally with a neutral moderator such as Sam or a member of his team who is not emotionally involved.
Finally, there is also the good practice of doing regular quality assurance rounds / cross-comparisons in which all results generated so far are reviewed once again across business units and/or the entire company.
How much time does job evaluation take?
The effort for conducting the job evaluation exercise depends on various factors:
Our experience shows that in most companies 20 to 30 jobs per day (8 hours) can be evaluated and documented. In most cases, the positions are analyzed jointly by the managers responsible and HR representatives.
Traditionally, organization charts are used to get a first idea of the job’s context. Also, job descriptions and old job advertisements are often used to get a more detailed idea of the job’s requirements. Otherwise, one is dependent on the input of the managers in charge and, if necessary, the employees themselves.
Depending on the experience and knowledge of the users I recommend an introductory workshop by CompTeam to get to know the handling of the system. If required, CompTeam can also support projects from moderating the workshops to consulting on strategic rewards management issues.
As the vendor, we are of course also available for answering technical questions and to discuss individual grading within the scope of our general support offering.
The interview was a great experience and I felt honored that Philipp and his team gained confidence in my ability to perform as a U.S. partner for the gradar product.
If you would like to learn more about gradar, please contact me at any time.