Job Evaluation
Common strategy is to pick some "______" positions and use these to "anchor" the internally-equitable pay structure to the external marktet
benchmark
What is job evaluation and what is it based on?
- process of systematically determining the relative worth/value of jobs - combination of job content, skills required, value to the org, org. culture, external market
Points Method - Step 3 Scale the Factors
- scales reflecting different degrees within each factor -most scales consist of 4 - 8 degrees , interval scaling = assumes each degree equidistant from adjacent degrees
Points Method - Step 2 Determine compensable factors
- should be based on the strategy and values of the org, the work performed, and acceptable to the stakeholders -how many factors? no single answer.
What is job value?
- structure based on job value orders jobs on the basis of the relative contribution of the skills, duties, and responsibilities to the orgs goals
Classification
-holistic judgement of job's value -first define and determine # of classes -then jobs are compared to the class descriptions, and sorted into classes -greater specificity of class definitions, greater reliability of class assignments, but limits variety of jobs -jobs within each class are considered to be equal work, and paid equally
Point Methods - Step 1 Conduct Job Analysis
-job analysis = representative sample of benchmark jobs is drawn for analysis -content of these jobs is basis for: 1) defining compensable factors 2) scaling compensable factors 3) weighting compensable factors
Points Method - Step 6 Communicate the plan and train users
-manual is developed to describe job eval method, define compensable factors, provide info to distinguish varying degrees of each factor -provide training and background info -appeal process may be included -communication required to build employee acceptance
What are some advantages of Ranking?
-simple & fast -easy to understand and explain to employees -least expensive method (at least initially)
What are some disadvantages of ranking?
-simplicity decreases as number of jobs to rank increases (paired comparisons n(n-1)/2, so if you have 50 jobs that is 50(50-1)/2 = 1,225 comparisons!) -requires evaluators who are knowledgeable about every job under study -criteria often poorly defined, subjective -ordinal data - distances b/w jobs are not quantitatively meaningful
Examples of compensable factors?
-skill, effort, responsibility, and working conditions -Hay group method
What is the PCPF method?
-weights derived statistically, via regression analysis -must select desired criterion pay data : -> current pay rates for benchmark jobs in the company (e.g., if primarily concerned with internal equity) -> external/market pay rates for benchmark jobs (e.g., external equity concerns) -> other examples - union negotiated rates, etc. -> results in equation, that can be applied to non benchmark jobs
Step 3: Choose Job Evaluation Method 3 things, what are the advantages and disadvantages of each?
1) Ranking - fast, simple, easy to explain but it is cumbersome as # of jobs increases, basis for comparisons is not called out 2) Classification - can group a wide range of work together in one system, but descriptions may leave too much room for manipulation 3) Point - compensable factors call out basis for comparisons and communicate what is valued, but can be bureaucratic and rule-bound
Compensable Factors - Point Methods: common characteristics
1) compensable factors 2) factor degrees numerically scaled 3) weights reflecting relative importance of each factor
Steps in the point plan:
1) conduct job analysis 2) determine compensable factors 3) scale the factors 4) weight the factors (2 basic approaches) 5) apply to non benchmark jobs 6) communicate the plan and train users
Characteristics of ideal benchmark jobs:
1) contents are well known and relatively stable over time 2) job is common across a number of diff employers 3) reasonable proportion of the work force
What is the criteria for scaling factors?
1) determine number of degrees necessary to distinguish among jobs 2) use understandable terminology 3) anchor degree definitions which benchmark-job titles or work behaviors
Design process matters because....
1) fairness of the design process helps achieve employee and management commitment, trust, and acceptance of results 2) appeals.review procedures - ensure procedural fairness, procedures should be judged for the susceptibility to political influences
The Final Result:
1) final result of the job analysis - job description - job evaluation process (structure, a hierarchy of work) 2) orgs commonly have multiple structures derived through multiple approaches
Part of the process of establishing an internally aligned pay structure is that it:
1) supports org strategy 2) supports work flow 3) is fair to employees 4) motivates behavior toward org objectives
Who should be involved?
- managers and employees -committees, task forces, or teams -union reps -compensation professionals
Ranking and the variants
- order jobs from highest to lowest based on a global definition of relative value -Simple Ranking -Alternative Ranking (orders job alternatively at each extreme, evaluators agree on which jobs are most and least valuable then the nest most and least valuable, and son on) -Paired comparison - compare all possible pairs of jobs
Compensable Factors
- characteristics of the work that the org values, that help it pursue its strategy and achieve its objectives -makes the criteria for evaluating jobs explicit
Compensable Factor Methods
- decomposed-judgment strategy that involves first quantifying jobs in terms of a profile of characteristics relevant for compensation (i.e., compensable factors), and then combining or comparing the compensable factor scores to reach an overall decision regarding each job's value to the org. e.g., traditional point factor and policy capturing point factor
Plans applied across a wide variety of work:
- hay plan -positive analysis questionnaire (PAQ)
Points Methods - Step 4 Weight the factors and the 2 approaches
-different weights reflect differences in importance attached to each compensable factor 1) traditional point factor method (weights derived rationally) 2) Policy capturing point factor (PCPF) method
Can the content/value structure translate into pay without regard to the external market?
most say "no"
With the point methods of compensable factors, each job's relative value and location in the pay structure is determine by what?
the total points assigned
Few organizations use only internal equity, most...
use some kind of blend b/w internal and external equity
Step 2: Single vs. Multiple Plans Many employers design different evaluation plans for different types of work, when....
work content is too diverse to be usefully evaluated by one plan e.g., separate plans for executive leadership jobs, managerial jobs
What is content?
work performed and how it gets done
Number of job evaluation plans used often hinges on:
- how detailed an evaluation is required to make pay decision -how much it will cost
Points Methods - Step 5: Apply to non benchmark jobs
- if policy capturing method used, easy to plug in scaled values for compensable factors into regression equation to derive pay rates
Step 1: Establish the Purpose
- job evaluation process should not become the end in itself, but a way to achieve an objective
Whole-Job Method
- make compensation decisions by considering each job as a holistic, undifferentiated entity - e.g., ranking and classification
