Compensation Chapter 5

Compensable factors and weights were derived using a sample of benchmark jobs. A) True B) False

A) True

Compensable factors are scaled to reflect the degree to which they are present in each job and weighted to reflect their overall importance to the organization. A) True B) False

A) True

People who work in hospitals, nursing homes, and child care centers feel that responsibility for people should be used less often as a compensable factor. A) True B) False

A) True

Hay factor know-how is first measured on two dimensions: _____ and _____. A) scope; depth B) intensity; cross-functionality C) speed; versatility D) turnaround time; error ratio

A) scope; depth

Point Method Job Evaluation - Apply to nonbenchmark jobs

Applying plan to remaining jobs. Used as a tool for managers and HR specialist once plan is developed and accepted. Trained evaluators will evaluate new jobs or re-done jobs with work content.

What are the assumptions underlying job evaluation?

Assumptions should only meet to a degree. Assessment of job market: sit down as a committee, content has intrinsic value. Assessment of relative value: jobs worth more than others (value), stakeholders agree on value. External market link: value can't be determined without external competitors. Measurement: scaling process of evaluation. Negotiation: bring consensus through process.

Most factor scales consist of six to twelve degrees. A) True B) False

B) False

The final result of the job analysis-job description-job evaluation process is an internal pay structure. A) True B) False

B) False

Cons of point method

Can be bureaucratic and rule bound.

Cons ranking

Can be misleading. Often based on subjective criteria. Needs to be familiar with all jobs being ranked

Pros of point method

Compensable factors call out basis for comparison and communicate what is value.

Research suggests that focusing on all of the following except _____ is likely to achieve employee and management commitment, trust, and acceptance of the results. A) the fairness of the design process B) job evaluation and skill/competency-based plan C) market pricing D) the internal pay structure

D) the internal pay structure

Should we use single or multiple plans? Why?

Depends how diverse the jobs are within the company. There are different plans for different jobs. Depend on required making decision and cost constraints (simplified job structure making it less hierarchy. Single job evaluation plan with common set of core factors and some additional factors for functional areas.)

Why not just go "external" or totally market-based?

Every company will choose depending on business strategies and whether they want to be.

Problems with Job Evaluation: Recruitment and Retention of High Performers

Goal of Job evaluation is to increase fairness. Job Evaluation pays for the job not performance.

External based

If you only focus on being externally aligned then you will not focus on what is unique and valuable to your company.

Determining Internal Alignment

Job Analysis->Job Description-> Job Evaluation-> Job Structure

Final Results

Job Structure

What are the steps involved in conducting a Point Method Job Evaluation?

Job analysis Determine compensable factors Scale the factors Weight the factors according to importance Communicate the plan, train users Apply to nonbenchmark jobs

Problems with Job Evaluation: Consistency with External Market

Job evaluation usually combined with market data. Market may not always be consistent. Decide to be internal or external or blend.

Who should be involved in the Job Evaluation

Managers and employees, organizations with unions and union representatives. Design Process should be fair and allow for appeals and review procedures.

Define ranking

Orders job descriptions from highest to lowest based on a global definition of relative value or contribution to the organizations success. Very clear of value and description and different jobs. Two types: Alternation ranking and Paired comparison method (compare every job to the other then count favorable comparison) Ranking usually not used.

What is job evaluation - and what information is it based on?

Relative worth of jobs to create a job structure for the organization. Based on: job content, skills require, value to the organization, organizational culture and external market.

Point Method Job Evaluation Conduct- job analysis

Sample of benchmark jobs is taken

Pros ranking

Simple, fast and easy to understand and explain

What is the purpose?

Supports organization strategy:how does it add value. Supports work flow: help set pay for new/unique jobs. Fair to employees: agreed upon structure, reduces role of chance, bias. Motivates behavior toward organization objectives.

Totally market based

Then there would be no point on having a job evaluation.

How many factors should we use and why?

Usually explains content and not value. Depends on Strategy and how diverse the jobs are. There is no specific number.

Point Method Job Evaluation -Determine compensable factors

based on content and value and strategy. Characteristics in the work that the organization values that help it pursue its strategy. Based on work performance. Acceptable to the stakeholders.

Benchmark Jobs

contents are well known and relatively stable over time. Jobs are not unique and reasonable amount of employees are involved in the job. They capture the depth and breadth of work.

Which of the following best represents the correct sequence of the job evaluation process? a) job description > job evaluation > pay structure b) job evaluation > job description > job structure c) job analysis > job description > pay structure d) job description > job evaluation > job structure e) none of the above are good representations

d) job description > job evaluation > job structure

Point Method Job Evaluation - Scale the factors

ensure number of degrees is necessary 4-8 and is understandable

Define point method

most commonly used in USA and other countries. Three common characteristics of point methods: compensable factors, factor degrees numerically scaled, weights reflect relative importance of each factor.

The statistical approach is often labeled:

policy capturing

Point Method Job Evaluation - Communicate the plan, train users

prepare manual that describes job evaluation method, defines compensable factors and provides information to permit user to distinguish varying degree to each factor. Train users on total pay system and includes appeal process for employees.

Point Method Job Evaluation -Weight the factors according to importance

weights reflect difference in importance. Determined by an advisory committee using a pay structure.

A benchmark job has all the following characteristics except: A) A reasonable proportion of the work force is employed in this job. B) It is usually the entry-level job in the job hierarchy. C) The job is common across a number of different employers. D) Its contents are well known and relatively stable over time.

B) It is usually the entry-level job in the job hierarchy.

Once a criterion structure is agreed on, statistical modeling techniques are used to determine the weight for each factor and the factor scales that will reproduce, as closely as possible, the chosen structure. The statistical approach is often labeled: A) benchmarking. B) policy capturing. C) committee a priori approach. D) weighted average approach.

B) policy capturing.