Evaluating Work:

Job Evaluation

Job-Based Structures: Job Evaluation Job evaluation – process of systematically determining the relative worth of jobs to create a job structure for the organization

The evaluation is based on a combination of: Job content Skills required Value to the organization Organizational culture External market

Assumptions Underlying Different Views of Job Evaluation

Defining Job Evaluation: Content, Value, and External Market Links (cont.)

“How-To”: Major decisions Establish the purpose

Supports organization strategySupports work flowIs fair to employeesMotivates behavior toward organization objectives

Determining an Internally-Aligned Job Structure

Defining Job Evaluation: Content, Value, and External Market Links (cont.)

“How-To”: Major decisions (cont.) Single versus multiple plans

Characteristics of a benchmark job:Contents are well-known and relatively stable

over time Job not unique to one employeeA reasonable number of employees are

involved in the jobDepth and breadth of job

Benchmark Jobs

Comparison of Job Evaluation Methods

Ranking

Orders job descriptions from highest to lowest based on a global definition of relative value or contribution to the organization’s successSimple, fast, and easy to understand and explain

Initially, the least expensive methodCan be misleading

– Two approaches Alternation ranking Paired comparison method

Paired Comparison Ranking

Classification

Uses class descriptions that serve as the standard for comparing job descriptions

Classes include benchmark jobs

Outcome: Series of classes with a number of jobs in each

Classifications for Engineering Work Used by Clark Consulting

Point Method

Three common characteristics of point methods:Compensable factorsFactor degrees numerically scaledWeights reflect relativeimportance of each factor

Most commonly used approach to establish pay structures in U.S.

Differ from other methods by making explicit the criteria for evaluating jobs – compensable factors

Designing a Point Plan: Six Steps

Conduct job analysis Determine compensable factors Scale the factors Weight the factors according to

importance Communicate the plan, train users;

prepare manual Apply to non-benchmark jobs

Job Evaluation:The Point Method Example: Software Engineer

Job Description The Software Engineer designs, develops, tests

and maintains one or more of our products or internal applications. The software engineer works as a member of an engineering team developing, designing, and maintaining one or more of our products or internal applications. This position reports to the appropriate Project Manager.

Job Specification Bachelor's or undergraduate degree in Computer

Science, Information Systems, Electrical Engineering or equivalent experience. Masters or graduate degree is desirable. Understand Intranet and Internet technologies: http, firewall.

Step 1: Conduct Job Analysis

Point plans begin with job analysis

A representative sample of jobs (benchmark jobs) is drawn for analysis

Content of these jobs is basis for:

Defining compensable factors

Scaling compensable factors

Weighting compensable factors

Step 2: Determine Compensable Factors

Compensable factors – characteristics in the work that the organization values, that help it pursue its strategy and achieve its objectives

Compensable factors play a pivotal role Reflect how work adds value to organization Decision making is three-dimensional:

Risk and complexity Impact of decision Time that must pass before evidence of impact

Step 2: Determine Compensable Factors (cont.)

To be effective, compensable factors should be: Based on strategy and values of organization Based on work performed

Documentation is important Acceptable to the stakeholders Adapting factors from existing plans

Skills, and effort required; responsibility, and working conditions

Compensable Factor Definition: Multinational Responsibilities

Factors in Hay Plan

Hay Guide Chart-Profile Method

The Hay Guide chart-profile method uses three universal factors, eight subfactors, and forty-three degrees and levels to evaluate jobs. They are as follows:

Know-How Practical procedures,

specialized knowledge, And scientific discipline.

(8 levels) Managerial (4 levels) Human relations (3 levels) Plus 3 degree choices per

grid.

Hay Guide Chart-Profile Method

Problem-Solving

Thinking environment(8 levels)

Thinking challenge (5 levels)

Accountability

Freedom to act(7 levels)

Job impact on end results (4 levels)

Magnitude (4 levels)

Step 3: Scale the Factors

Construct scales reflecting different degrees within each factor

Most factor scales consist of four to eight degrees

Issue Whether to make each degree equidistant from

adjacent degrees (interval scaling)

Step 3: Scale the Factors (cont.) Criteria for scaling factors

Ensure number of degrees is necessary to distinguish among jobs

Use understandable terminology

Anchor degree definitions with benchmark-job titles and/or work behaviors

Make it apparent how degree applies to job

Factor Scaling – National Metal Trades Association

Step 4: Weigh the Factors According to Importance

– Different weights reflect differences in importance attached to each factor by the employer

– Determination of factor weights Advisory committee allocates 100 percent of the

value among factors

Step 4: Weigh the Factors According to Importance (cont.)

Select criterion pay structure Committee members recommend the criterion pay

structure Statistical approach is termed policy capturing to

differentiate it from the committee a priori judgment approach

Weights also influence pay structure

Job Evaluation Form

Overview of the Point System

Job Factor Weight

1

2

3

4

5

1. Education 50% 100 200 300 400 500

2. Respons-ibility

30% 75 150 225 300

3. Physical effort

12% 24 48 72 96 120

4. Working conditions

8% 25 51 80

Degree of Factor

AAIM National Position Evaluation Plan

1st Degree

Skill1. Knowledge2. Experience3. Initiative and IngenuityEffort4. Physical Demand5. Mental or Visual DemandResponsibility6. Equipment or Process7. Material or Product8. Safety of Others9. Work of OthersJob Conditions10. Working Conditions11. Hazards

142214

105

5555

105

Factor2nd

Degree

284428

2010

10101010

2010

3rd Degree

426642

3015

15151515

3015

4thDegree

568856

4020

20202020

4020

5thDegree

70110

70

5025

25252525

5025

Points Assigned to Factor Degrees

Job Evaluation ExampleJob Points Reference

WageA Clerk 45 $12/hourB Acct Clerk 55 $16C Accountant 75 $22D HR Mgr 85 $25E Ass’t Adm 80 $26F Office Mgr 85 $28

Step 5: Communicate the Plan and Train Users Involves development of manual containing

information to allow users to apply plan Describes job evaluation method Defines compensable factors Provides information to permit users to distinguish

varying degrees of each factor Involves training users on total pay system Includes appeals process for employees

Employee acceptance is imperative Communication

Step 6: Apply to Nonbenchmark Jobs

Final step involves applying plan to remaining jobs Could involve both designers and/or employees

trained in applying the plan Tool for managers and HR specialists once plan

is developed and accepted Trained evaluators will evaluate new jobs or

reevaluate jobs whose work content has changed May also be part of appeals process

Step 7: Develop Online Software Support

Online job evaluation is widely used in larger organizations

Becomes part of a Total Compensation Service Center for managers and HR generalists to use

Who Should be Involved? Managers and employees with a stake in the

results should be involved Can include representatives from key operating

functions, including nonmanagerial employees Organizations with unions find including union

representatives helps gain acceptance Extent of union participation varies

Who Should be Involved? (cont.) Design process matters

Attending to fairness of design process and approach chosen likely to achieve employee and management commitment, trust, and acceptance of results

Appeals/review procedures Inevitable that some jobs are incorrectly evaluated Requires review procedures for handling such

cases and helping to ensure procedural fairness

Who Should be Involved? (cont.) “I know I speak for all of us when I say I speak

for all of us” Procedures should be judged for their

susceptibility to political influences

The Final Result: Structure

The final result of the job analysis – job description – job evaluation process is a structure, a hierarchy of work

Managerial, technical, manufacturing, and administrative

Resulting Internal Structures – Job, Skill, and Competency Based

Balancing Chaos and Control Job evaluation changed the legacy of

decentralization and uncoordinated wage-setting practices left from the 1930s and ’40s

It must afford flexibility to adapt to changing conditions Avoids bureaucracy and increases freedom to

manage Reduces control and guidelines, making

enforcement of fairness difficult