Chapter 5
Why does the design process matter?
- Attend to the fairness of the design rather than the results - review procedures help ensure procedural fairness - powerful member of the job evaluation committee may sway results
To be useful, compensable factors should be:
- Based on the strategy and values of the organization. - Based on the work performed. - Acceptable to the stakeholders affected by the resulting pay structure.
Communicate and Train Users
- a manual allows others to apply the plan - users will require training on how to apply the plan
Classification consists of:
- a series of classes that cover the range of jobs - class descriptions as labels - compare job descriptions to class descriptions to find the best fit - the label captures work detail yet is general enough to cover jobs - describe classes further with titles of benchmark jobs
Acceptable to the stakeholders
- acceptance of compensable factors may depend on tradition - so the question is, acceptable to whom?
Employee acceptance of the process is crucial to build this:
- communicate to all employees whose jobs are part of the process used to build the structure - communicate through informational meetings, websites, or other methods
Point Method three common characteristics
- compensable factors - factor degrees are numerically scaled - weights reflect the relative importance of each factor
What are the eight steps in the design of a point plan?
- conduct job analysis - determine compensable factors - scale the factors - weight the factors according to importance - select criterion pay structure - communicate the plan and train users - apply to nonbenchmark jobs - develop online software support
Criteria for scaling factors
- ensure the number of degrees is necessary to distinguish jobs - use understandable terminology - anchor definitions with benchmark job titles and work behaviors - make it apparent how the degree applies to the job
Job evaluation helps establish an aligned pay structure which
- supports organization strategy — answers the question: how does the job add value? - supports work flow — integrates the job's pay with its relative contribution to the organization, helps set pay for new, unique, or changing jobs - is fair to employees — reduces disputes and grievances over pay differences - motivates behavior toward organization objectives — shows ees what about their work is valued, helps ees adapt to organization changes, helps create the network of rewards
What is job evaluation based on?
A combo of job content, skills required, value to the organization, organizational culture, and the external market
Job evaluation
A process for determining relative value, its the process of systematically determining the relative worth of jobs to create a job structure for the organization
What is the final result of this entire process?
A structure, a hierarchy of work that translates an internal alignment policy into practice
Compensable factors
Are based on the strategic direction of the business and how the work contributes to these objectives and strategy
Most factor scales
Consist of four to eight degrees - in practice, evaluators use undefined degrees - another issue is whether to make each degree equidistant from adjacent degrees
Statistical modeling (Select criterion pay structure)
Determines the weight for each factor and the factor scales that will reproduce the chosen structure
What to do if some aspect of job content is not related to wages?
Eliminate that aspect from the job evaluation
What is content?
It refers to what work is performed and how it gets done
Alternation ranking
Orders job descriptions alternately at each extreme
Structure based on content
Orders jobs by skills, duties, and responsibilities
Structure based on job value
Orders jobs by the relative contribution of the skills, duties, and responsibilities to the organization's goals
Apply and support
The final step is to apply the plan to remaining jobs - once its developed it becomes a tool for managers and HR - the last step is to develop online software support
Hay Group Guide Chart-Profile Method
The hay factors are know-how, problem solving, and accountability
benchmark jobs
They capture all aspects of the work - its contents are well known and relatively stable over time - the job is common across employers - a reasonable proportion of the work force holds this job
Some say if job evaluation can be rigorous and systematic, then it can be judged according to technical standards T/F?
True
Some see job evaluation as a way to link job content and internal value with external market rates T/F?
True
Paired comparison
Uses a matrix to compare all possible pairs of jobs
Based on the work itself
Work related documentation helps gain acceptance by employees, is easier to understand, and withstands challenges to the pay structure
Who are primarily responsible for job evaluation of most jobs?
compensation professionals
Ranking
simply orders the job descriptions from highest to lowest based on relative value or contribution to the organization's success
Some major decisions in job evaluation when determining an internally aligned job structure
- establish purpose of evaluation - decide whether to use single or multiple plans - choose among alternative approaches - obtain involvement of relevant stakeholders - evaluate plan's usefulness
What are the major decisions in the job evaluation process include?
- establishing the purpose - deciding on single versus multiple plans - choosing among alternative methods - Obtaining involvement of relevant stakeholders - evaluating the usefulness of the results
What are the drawbacks to ranking?
- if ranking criteria is poorly defined, evaluations become only opinions - evaluators must be knowledgeable about every single job under study - results are difficult to defend and costly solutions may be required
Based on the strategy and values of the organization
- if the direction changes, then compensable factors may also change - factors may be eliminated if they no longer support business strategy
Who should be involved?
- managers and employees with a stake in the results should be involved in the design process
Factor weights
- reflect the relative importance of each factor - advisory committees often determine weights
Factors tend to fall into four generic groups and are included in the equal pay act as well as the National Electric Manufacturers Association plan (NEMA)
- skills required - effort required - responsibility - working conditions
What are some things about evaluation?
- some say evaluation uncovers job content with intrinsic value, and other say the only fair measure of job value is in the external market - some say contemporary job evaluation practices are just and fair, and others say they are just fair
Why is it important when choosing a job evaluation method?
Research consistently finds that different job evaluation plans generate different pay structures