Compensation and Benefits Chapter 5

Determining an internally-aligned job structure

Internal Alignment: work relationships within the organization --- job analysis --- job description --- job evaluation ---job structure A structure is aligned if it: supports organization strategy, supports work flow, is fair to employees, and motivates behavior toward organization objectives

Compensable factors

are those characteristics in the work that the organization values, that help it pursue its strategy and achieve its objectives

Linking content with the external market

-value of job content is based on what it can command in the external market -higher skill levels or working closely with customers commands higher wages -skill level and nature of customer contacts become useful criteria for establishing differences among jobs

Point method

1. Compensable factors based on: the strategic direction of the business, and how the work contributes to the objectives and strategy. 2. Factor degrees numerically scaled. 3. weights reflect the relative importance of each factor

Classification method

A series of classes covers the range of jobs. Job descriptions are compared to class descriptions to determine class level. Greater specificity of the class definition improves the reliability of the evaluation. It also limits the number of jobs easily classified. Jobs within each class are considered equal and will be paid equally.

Benchmark jobs

Firms may start with a sample of benchmark jobs. Characteristics include: Its contents are well known and relatively stable. The job is common across employers, not unique to one employer. A reasonable proportion of the work force is employed in this job

Alternation ranking

Orders job descriptions alternately at each extreme. Evaluators agree on which jobs are the most and least valuable, then the next, etc.

Ranking method

Orders job descriptions from highest to lowest based on relative value. Advantages: simple, fast, and easy to understand and explain to employees; least expensive, initially. Disadvantages: ranking criteria becomes subjective as evaluators must be knowledgeable on every job. Results are difficult to defend and costly solutions may be required

Job content

Structures based on job content orders jobs by: skill, duties, and responsibilities

Paired Comparison

Uses a matrix to compare all possible pairs of jobs. When all comparisons are completed, the job judged "more valuable" becomes the highest ranked job, and so on.

Job Evaluation

is the process of systematically determining the relative worth of jobs to create a job structure for the organization. It is based on a combination of job content, skills, required, value to the organization, organizational culture, and the external market. This potential to blend organizational forces and external market forces is both a strength and a challenge of job evaluation

Job value

structures based on job value orders jobs: on the basis of the relative contribution of the skills, duties, and responsibilities