NWMSU Chapter 5 Employee Rewards and Benefits

Know-how factor

sum total of all knowledge and skill that is acquired and required to do the job competently -Practical, technical, specialized knowledge and skill -Planning, Organizing, Coordinating, Integrating Knowledge -Communicating and influencing skills

What direction do both depth and breadth correlate with?

vertical-depth horizontal-breadth

Two methods of ranking

-Alternation ranking -Paired comparison ranking

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

Characteristics of Benchmark Jobs

-Contents are well known and relatively stable -Job is common across employers not unique to one employer -Reasonable proportion of the work force is employed in this job

Major decisions of job evaluation

-Establish purpose -Decide on single vs. multiple plans -Choose among alternative methods -Obtain the involvement of relevant stakeholders -Evaluate usefulness of results

When selecting compensable factors, why is work-related documentation helpful?

-Helps gain acceptance by employees and managers -Easier to understand -Can withstand a variety of challenges to the pay structure

Who should be involved in Job Evaluation?

-Managers and Employees -Common approach to use committees, task forces, or teams that include reps from each key operating functions

The internal structure is aligned if...(what factors help to establish the purpose of the job evaluation?)

-Supports organizational strategy -Fits workflow -Fair to employees -Motivates behavior toward organizational objectives

Steps to Job Evaluation

1. Collect and summarize work content information 2. Determine what to value 3. Assess the relative value 4. Translate into the structure

Point method 3 common characteristics

1. Compensable factors 2. Factor degrees 3. Factor weights reflecting relative importance of each factor

8 steps in design of a point plan

1. Job Analysis 2. Determine compensable factors 3. Scale factors 4. Weight factors according to the importance 5. Select criteria for pay structure 6. Communicate the plan and train users 7. Apply to non benchmark jobs 8. Develop online software support

What order is internal alignment determined?

1. Job Analysis 2. Job Description 3. Job Evaluation 4. Job Structure

4 generic groups of existing standardized plans for compensable factors?

1. Skills required 2. Effort required 3. Responsibility 4. Working conditions

Most factor scales consist of how many degrees?

4-8

Advantages and Disadvantages of Classification Method

Adv: -Can group a wide range of work together in one system Disadv: -Descriptions can leave too much room for manipulation

Advantages and Disadvantages of Point Method

Adv: -Compensable factors call out basis for comparisons -Compensable factors communicate what is valued Disadv: -Can be bureaucratic and rule-bound

Advantages and Disadvantages of Ranking Method

Adv: -Fast, simple, easy to explain -Least expensive method initially Disadv: -Difficult as number of jobs increases -Doesn't tell employees and managers what is it about their jobs that is important -Basis for comparison is not called out

What is a factor definition?

Amount and type of direction received, the complexity of work, and nature of the work within the job I.e. education levels, experience, responsibilities, complexity of duties

What process can be included so employees who feel their jobs are unfairly evaluated have some recourse?

Appeals process

What happens if the purpose of a job evaluation is not established?

Becomes too easy to get lost in complex procedures, negotiations, and bureaucracy

Paired Comparison ranking

Compares each individual job to one another (we did this in our case study by using numbers to evaluate each job directly next to another job and determining each individual job's total score

What is assumed about job content in job evaluation?

Content has intrinsic value outside external market

What is CRUCIAL in establishing if pay is fair?

Employee acceptance

Classification method

Job evaluation method in which classes or grades are defined to describe a group of jobs

Benchmark Jobs

Jobs used as reference points when setting up a job classification system and when designing or modifying a pay structure, many levels and groups of jobs that are as related as possible

What was chosen as the primary method of job evaluation?

Market pricing (67%-73%)

Hay Group Guide Chart-Profile Method and its 3 factors

Most widely used 1. Know-how 2. Problem Solving 3. Accountability

NCS

National Compensation Survey

NEMA Plan

National Electrical Manufacturers Association

NMTA

National Metal Trades Association

Alternation ranking

Orders job descriptions alternately at each extreme -Best and Worst, then 2nd Best and 2nd Worst, etc.

What is the Ranking job evaluation method?

Orders the job descriptions from highest to lowest based on a relative value or contribution to organization's success

What job evaluation is most commonly used in the US and Europe?

Point method

3 Job Evaluation Methods

Ranking Classification Point Method

What is assumed about the assessment of relative value in job evaluation?

Stakeholders can reach consensus on value

Compensable factors

The characteristics of jobs that an organization values and chooses to pay for, based on strategic direction of business and how the work contributes to these objectives and strategy

What is assumed about the external market link in job evaluation?

Value cannot be determined without external market

Illusion of validity

We want to believe that the factors are capturing different aspects of the job and that both are important

What must an organization ask itself to select compensable factors?

What is it about the work that adds value?

Freedom to Act

delegated authority vested in the job to act, approve, or make decisions

Jobs that require riskier decisions with greater impact have a...

higher relative worth than jobs that require fewer decisions with less consequence

Impact

magnitude and nature of the impact that the job has on the organization's ability to achieve its mandate

Interval scaling

making each degree equidistant from the adjacent degrees

Problem-solving factor and its 2 dimensions

measure nature and complexity of issues and challenges the job has to face 1. Environment 2. Challenge

Accountability factor and its 2 dimensions

measured impact the job is designed to have on the success of the enterprise 1. Freedom to Act 2. Impact

job evaluation

process for determining relative value to create a job structure for the organization