MGMT Overview of Job Evaluation Job Evaluation Overview Background –There is a Need for a Systematic Approach to develop company pay structures. –Based on Job Analysis Purpose of JE –Provides internal consistency in the pay system, e.g., internal pay equity –Rational system - can be explained to employees –Pay decisions can be defended from DOL audits under the Equal Pay Act or Title 7 and EEO.

MGMT Overview of Job Evaluation Job Evalution Overview (Cont’d) JE Methods –Whole Job Approach: (1) Ranking; (2) Classification Ranking - most basic; used for small firms Classification - mainly used for Government jobs. –Quantitative Job Approach: Point Factor Point Factor - more complex - uses points assigned to compensable factors, and subfactors. –Skill/Competency-based Approach: Skill-based pay Skill-based pay - uses skill/compentency levels. The person, not the job is the source of value.

MGMT Overview of Job Evaluation Job Evaluation Overview (cont’d) Compensable Factors –Used with Point Factor JE plans –Are generic factors common to most jobs. –Ex. Skill, Effort, Responsibility, Working Condition –Represent unique dimensions of job - no overlap –Company must be willing to pay for the factor. –Factors have weights that translate into different amounts of worth points. –Factors may be divided into smaller subfactors –Ex. Hay method of Job Evaluation