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

“How-To”: Major decisions Defining Job Evaluation: Content, Value, and External Market Links (cont.) “How-To”: Major decisions Establish the purpose Supports organization strategy Supports work flow Is fair to employees Motivates behavior toward organization objectives

Determining an Internally-Aligned Job Structure

“How-To”: Major decisions (cont.) 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 employee A reasonable number of employees are involved in the job Depth 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 success Simple, fast, and easy to understand and explain Initially, the least expensive method Can 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

Three common characteristics of point methods: Compensable factors Factor degrees numerically scaled Weights reflect relative importance 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. Respon s- ibility 30% 75 150 225 3. Physical effort 12% 24 48 72 96 120 4. Working conditions 8% 25 51 80 Degree of Factor

AAIM National Position Evaluation Plan Points Assigned to Factor Degrees 1st Degree 2nd Degree 3rd Degree 4th Degree 5th Degree Factor Skill 1. Knowledge 2. Experience 3. Initiative and Ingenuity Effort 4. Physical Demand 5. Mental or Visual Demand Responsibility 6. Equipment or Process 7. Material or Product 8. Safety of Others 9. Work of Others Job Conditions 10. Working Conditions 11. Hazards 14 22 10 5 28 44 20 10 42 66 30 15 56 88 40 20 70 110 50 25 The point factor system uses compensable factors to evaluate jobs. Compensable factors are work-related criteria that the organization considers most important in assessing the relative value of different jobs. The MAA plan has three separate units: Unit 1 for hourly blue-collar jobs; Unit 2 for nonexempt clerical, technical, and service positions; and Unit 3 for exempt supervisory, professional, and management-level positions. The MAA plan includes 11 factors divided into four broad categories. The Unit 1 plan is shown here, with the points assigned to factor degrees.

Job Evaluation Example Job Points Reference Wage A Clerk 45 $12/hour B Acct Clerk 55 $16 C Accountant 75 $22 D HR Mgr 85 $25 E Ass’t Adm 80 $26 F 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 See Exhibit 5.15 on page 144

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