1. Job Evaluation

2. Job Evaluation
The process of determining how much a job should be paid, balancing two goals
Internal Equity: Paying different jobs differently, based on what the job entails
External Competitiveness: Paying satisfactory performers what the market is paying
ORG434: Advanced HRM

3. Job Evaluation: The Point Method
Job Analysis to determine…
The tasks performed in a job
The Job Description
The knowledge, skills, and abilities needed to perform the job
The Job Specification
ORG434: Advanced HRM

4. 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.
ORG434: Advanced HRM

5. Job Evaluation: The Point Method
Develop a list of compensable factors…
A set of standards the organization uses to distinguish among jobs for pay purposes
Examples of commonly used compensable factors:
Degree of responsibility, supervision
Knowledge needed to perform the job
Discretion in performing the job, independent judgment
Job conditions
Effort
Hazard
Consequence of error
ORG434: Advanced HRM

6. Job Evaluation: The Point Method
Define the degrees of each factor
Judgment and Decision Making: This factor identifies the extent to which the job requires judgment and responsibility in the making of decisions.The importance of the decisions and the extent to which standard policies and procedures provide guidance in decision making will be considered.
1st Degree: Work requires decision making involving the analysis of the facts of a situation and the determination of what actions should be taken within the limits of standard procedures; only unusual or seldom recurring situations require referral. Judgment could affect the work of others or cause minor inconvenience. Typical errors are generally confined to a single team or phase of operations.
University of Wisconsin-Oshkosh
ORG434: Advanced HRM

7. Job Evaluation: The Point Method
3rd Degree: In consultation with team members decide specific work projects to perform, and proceed to plan, coordinate, and commit resources required to accomplish work; associates develop or establish procedures or policies. Judgment requires accuracy because errors could potentially result in inaccurate reports, incomplete or misleading information, unsound recommendations, or incorrect decisions. Consequences could adversely affect operations or services causing significant losses of time, resources and potentially have a long term impact on a team.
6th Degree: Assists board in the development of policies, general procedures and corporate goals. Errors in judgment could jeopardize the viability of the company.
ORG434: Advanced HRM

8. Job Evaluation: The Point Method
Create a matrix of points for the degrees of each factor…
Judgment and Decision Making:
1st degree = 50 points
2nd degree = 100 points
3rd degree = 225 points
4th degree = 350 points
5th degree = 500 points
6th degree = 700 points
Communication, Work Environment, Coaching, Innovation, Knowledge – Education - Experience
ORG434: Advanced HRM

9. Job Evaluation: The Point Method
Factors - Degrees
1st
2nd
3rd
4th
5th
6th
Job Knowledge 25
100
175
250
Judgment & Decision Making 10 33 55 78
Independent judgment
Accountability 20 65
110
155
200
Working conditions 5 35 50
Mental 15 42 69 96
123
150
ORG434: Advanced HRM

10. Job Evaluation: The Point Method
Evaluate benchmark jobs to determine Job Evaluation Point Totals…
Benefits supervisor = 700
Training material development specialist = 650
Job evaluation specialist = 460
Compensation manager = 920
ORG434: Advanced HRM

11. Job Evaluation: The Point Method
Collect salary survey data on benchmark jobs…
Benefits supervisor = $60,393
Training material development specialist = $58,403
Job evaluation specialist = $43,155
Compensation manager = $79,958
ORG434: Advanced HRM

12. Job Evaluation: The Point Method
Do a regression analysis to find the pay line for the benchmark jobs…
Dependent variable is salary survey data
Independent variable is job evaluation point total
Calculate salaries for benchmark and other jobs using the regression equation…
Salary = 79.67*JETotal
Example: Compensation Director = 79.67* = $95,333
ORG434: Advanced HRM