Job Evaluation Chapter 6

Major decisions in job evaluation Job evaluation methods – Ranking – Classification- Point method- Who should be involved?

Job evaluation ??? It is the process of systematically determining the relative worth of jobs to create a job structure for the organization. It is based on a combination of job content, skills required, value to the organization, organizational culture, and the external market. The potential to blend organizational forces and external market forces is both a strength and a challenge of job evaluation.

Major decisions in Job evaluation Establish the purpose Decide on single versus multiple plans Choose among alternative methods Obtain involvement of relevant stakeholders Evaluate the usefulness of results

Establish the purpose Supports organization strategy Answers --- How does this job add value? Supports work flow Integrates each job’s pay with its relative contributions to the organization, and it helps set pay for new, unique or changing jobs Is fair to employees Reduces disputes and grievances over pay differences among jobs by establishing a workable, agreed upon structure Motivates behavior towards organization objectives What does the organization value? What supports the organization strategy and its success?

Single versus Multiple plans Benchmark jobs To be sure that all relevant aspects of work are included in the evaluation, an organization may start with a sample of benchmark jobs. Benchmark jobs would be identified for the levels in the structure and groups of related jobs Characteristics of benchmark jobs: Its contents are well known and relatively stable over time Job is common across a number of different employers A reasonable proportion of the workforce is employee in this job.

Benchmark jobs Managerial group Technical group Manufacturing group Administrative group Assembler I Inspector I Packer Material handler Inspector II Assembler II Drill Press Operator Rough Grinder Machinist I Coremaker Administrative Assistant Principal Administrative Secretary Administrative Secretary Word Processor Clerk/Messenger Vice President Division General managers Managers Project Leaders Supervisors Head chief scientist Senior Associate Scientist Associate Scientist Scientist Technician White shaded jobs are benchmark jobs

Methods of job evaluation Ranking method Classification method Point method

Ranking method Orders the job description from highest to lowest based on a global definition of relative value or contribution to the organization’s success. Methods: Alternation ranking method and Job descriptions are ordered alternately at each extreme. Agreement is reached among evaluators on which jobs are the most valuable and least valuable (10…….1), (9…….2), (8……3) etc. Paired comparison method Compares all possible pairs of jobs When all comparisons have been completed, the job most frequently judged “more valuable” becomes the highest-ranked job

PAIRED COMPARISON RANKING Press operator Master welder Receiving clerk Electrician Total Favorable comparisons: Shear Operator: 3 Electrician: 4 Press Operator: 2 Master Welder: 5 Grinder: 1 Receiving clerk: 0 Resulting rank: Master Welder Electrician Shear Operator Press Operator Grinder Receiving clerk Grinder Shear operator E S M S S Electrician E M E E Press operator M P P Master Welder M M Grinder G

Classification method (job grading) Compares the whole job with a pre-determined grade/class Government services 18 grades Grade I-Grade IV – clerical and non-supervisory personnel Grade V-Grade X – Management Trainees and lower level managers Grade XI-Grade XV- General management – highly specialized jobs Grade XVI-Grade XVIII – Senior Executives Job descriptions are not only compared to the class descriptions and benchmark jobs but also can be compared to each other to be sure that jobs within each class are more similar to each other than to jobs in adjacent classes.

Point method Common characteristics Compensable factors Factor degrees numerically scaled Weights reflecting the relative importance of each factor

Steps in designing point plan Conduct job analysis Determine compensable factors Scale the factors Weight the factors according to the importance Communicate the plan and train users Apply to non-benchmark jobs

Compensable factors Compensable factors are those characteristics in the work that the organization values, that help it pursue its strategy and achieve its objectives It 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.

Indicate the percentage of time spent on multinational issues This factor concerns the multinational scope of the job. Multinational responsibilities are defined as line or functional managerial activities in one or several countries. The multinational responsibilities of the job can be best described as: Approving major policy and strategic plans Formulating, proposing and monitoring implementation of policy and plans Acting as a consultant in project design and implementation phases Not applicable Indicate the percentage of time spent on multinational issues >50% 25-49% 10-24% <10% Compensable factors definition-----Multinational responsibilities

Compensable factors Compensable Factors are based on the strategic direction of the business and how the work contributes to the objectives and strategy 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. Points are then attached to each factor weight. Total points for each job determine its position in the job structure

Adapting factors National Electrical Manufacturers Association (NEMA), Equal Pay Act (1963), National Metal Trades Association (NMTA), uses four general groups of factors Skills required Effort required Responsibility Working conditions

Know – how ( the sum total of what a person must have the capability to do to be effective) Technical, specialized depth and breadth Managerial requirements to plan, organize, staff, direct and control resources for results Human relations skills to influence, motivate, change behavior and build relationships Hay Plan Problem solving (the requirement for and ability to use know-how effectively to develop solutions that improve effectiveness) Environment – the context of the job and its focus Challenge – the availability of guides and complexity of analysis required Accountability (the requirement for and ability to achieve desired results) Freedom to act – focus on decision making authority vested in the position to achieve results Scope – focus on the magnitude of the results expected relative to the enterprise Impact – focus on the impact the position has on the relevant scope measure for the position

Scale the factors After determining the factors, scales reflecting the degrees within each factor are constructed Each degree may be anchored by the typical skills, tasks and behaviors taken from the benchmark jobs that illustrate each factor degree Most factor scales consist of 4-8 degrees Many evaluators use extra undefined degrees such as plus and minus around a scale number (-1, 1, 1+) Whether each degree should be equidistant from the adjacent degrees?

Criteria for scaling factors Ensure that the number of degrees is necessary to distinguish among jobs Use understandable terminology Anchor degree definitions with benchmark job titles or work behaviors Make it apparent how the degree applies to the job.

Weight factors according to importance Factor weights reflect the relative importance of each factor to the overall value of the job, Different weights reflect differences in importance attached to each factor by the employer. NEMA plans weighs education at 17.5 %, employers association weighs it at 10.4 %, consultants weighs it at 15% ……

Communicate the plan and train users Apply to non-benchmark jobs Develop on-line software support

Comparison of job evaluation methods Advantages Disadvantages Ranking Classification Point Fast, simple, easy to explain. Can group a wide range of work together in one system. Compensable factors communicate what is valued. Cumbersome as number of jobs increases. Basis for comparison is not called out. Descriptions may leave too much room for manipulation. Can become bureaucratic and rule-bound.

Who should be involved? The design process matters Appeals / review procedures

The structure Administrative group Managerial group Technical group Manufacturing group Assembler I Inspector I Packer Material handler Inspector II Assembler II Drill Press Operator Rough Grinder Machinist I Coremaker Administrative Assistant Principal Administrative Secretary Administrative Secretary Word Processor Clerk/Messenger Vice President Division General managers Managers Project Leaders Supervisors Head chief scientist Senior Associate Scientist Associate Scientist Scientist Technician Point Job evaluation Competency based Skill based Point Job evaluation