Procedure for Establishing Point Method of Job Evaluation Select Job Cluster Identify Compensable Factors Determine Degrees and Define Each Compensable Factors Determine Factor Weights Determine Factor Point Values Validate Point System © 2008 by Prentice Hall

A Point Method Example Select Job Cluster - Assume we are going to develop point system for the administrative job cluster Identify Compensable Factors - Assume compensable factors identified are education, job knowledge, contacts, complexity of duties, and initiative © 2008 by Prentice Hall

A Point Method Example (Cont.) Determine Degrees and Define Each Compensable Factors - In administrative job cluster, Education, Job Knowledge, and Initiative have been determined to have five degrees; Contacts has four; and Complexity of Duties has three © 2008 by Prentice Hall

A Point Method Example (Cont.) FACTOR: CONTACTS Level (Degrees) Points IV Usual purposes of contacts are to discuss problems and possible 90 solutions, to secure cooperation or coordination of efforts, and to get agreement and action; more than ordinary tact and persuasiveness required. III Usual purposes of contacts are to exchange information and settle 66 specific problems encountered in course of daily work. II Contacts may be repetitive but usually are brief with little or no 42 continuity. I Contacts normally extend to persons in immediate work unit only. 18 © 2008 by Prentice Hall

A Point Method Example (Cont.) FACTOR: COMPLEXITY OF DUTIES III Performs work where only general methods are available. Independent 85 action and judgment are required regularly to analyze fact, evaluate situations, draw conclusions, make decision, and take or recommend action. II Performs duties working from standard procedures or generally 51 understood methods. Some independent action and judgment are required to decide what to do, determine permissible variations from standard procedures, review facts in situations, and determine action to be taken, within limits prescribed. I Little or no independent action or judgment. Duties are so standardized 17 and simple as to involve little choice as to how to do them. © 2008 by Prentice Hall

A Point Method Example (Cont.) Determine Factor Weights - Assume the committee believes that education is quite important for administrative job cluster and sets the weight for education at 35%. The weights of other four factors were determined by the committee to be: Job Knowledge—25 Contacts—18 Complexity of Duties—17 Initiative—5 The percent total is 100% © 2008 by Prentice Hall

A Point Method Example (Cont.) Determine Factor Point Values - Committee determines total number of points for the plan. Number may vary, but 500 or 1,000 points may work well. Committee has determined that a 500 point system will work. © 2008 by Prentice Hall

Job Evaluation Worksheet (500-Point System) Degree of Factor Job Factor Weight 1 2 3 4 5 Education 35% 35 70 105 140 175 Job Knowledge 25% 25 50 75 100 125 Contacts 18% 18 42 66 90 Complexity of Duties 17% 17 51 85 Initiative 5% 10 15 20 © 2008 by Prentice Hall

A Point Method Example (Cont.) Validate Point System - Each committee member should take a random sample of jobs within chosen job cluster and calculate weights for each job selected Point total for Administrative 2 job is determined to be 239 points © 2008 by Prentice Hall

Job Evaluation Worksheet for Administrative 2 Position Degree of Factor Job Factor Weight 1 2 3 4 5 Education 35% 35 70 105 140 175 Job Knowledge 25% 25 50 75 100 125 Contacts 18% 18 42 66 90 Complexity of Duties 17% 17 51 85 Initiative 5% 10 15 20 Total Job Value 239 © 2008 by Prentice Hall

Illustration of Arithmetic and Geometric Progression Degree of Factor Job Factor 1 2 3 4 Experience Required 1 year 3 years 5 years 7 years (-------------------- Arithmetic Progression---------------------) Degree of Factor Job Factor 1 2 3 4 Experience Required 1 year 2 years 4 years 8 years (-------------------- Geometric Progression---------------------) © 2008 by Prentice Hall

The Hay Guide Chart-Profile Method Refined version of the point method Know-how Problem Solving Accountability Additional compensable elements, such as working conditions © 2008 by Prentice Hall

Job Pricing Placing dollar value on worth of job Pay grades - Grouping of similar jobs to simplify pricing jobs Wage curve - Fitting of plotted points to create smooth progression between pay grades Pay ranges - Minimum and maximum pay rate with enough variance between to allow for significant pay difference © 2008 by Prentice Hall

Job Pricing (Cont.) Broadbanding - Collapses many pay grades into few wide bands to improve effectiveness Single rate system - Pay ranges not appropriate for some workplace conditions such as some assembly lines Adjusting pay rates - Overpaid and underpaid jobs © 2008 by Prentice Hall

Pay Ranges for Pay Grades Scatter Diagram of Evaluated Jobs Illustrating Wage Curve, Pay Grades, and Pay Ranges Average Pay per Hour (Current Rates or Market Rates) $19.80 5 18.50 4 17.20 3 15.90 Wage Curve Pay Ranges for Pay Grades 2 14.60 14.00 1 13.30 12.90 12.00 100 200 300 400 500 Evaluated Points 1 2 3 4 5 Pay Grades Summary Evaluated Points Pay Grade Minimum Midpoint Maximum 0- 99 1 $12.00 $13.30 $14.60 100-199 2 13.30 14.60 15.90 200-299 3 14.60 15.90 17.20 300-399 4 17.20 5 17.20 18.50 19.80 © 2008 by Prentice Hall