Evaluating Work: Job Evaluation

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Chapter

5

Evaluating Work:

Job Evaluation

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Learning Objectives

After studying Chapter 5, students should be able to: After studying Chapter 5, students should be able to: 1.

1. Discuss the relationship between job analysis, job Discuss the relationship between job analysis, job

evaluation, internal alignment, and internal structure. evaluation, internal alignment, and internal structure.

2.

2. Know the basic steps in a point plan, the most Know the basic steps in a point plan, the most

commonly used job evaluation method. commonly used job evaluation method.

3.

3. Explain the advantages and disadvantages of using Explain the advantages and disadvantages of using

multiple job evaluation plans in an organization. multiple job evaluation plans in an organization.

4.

4. Understand the necessity of balancing tight control Understand the necessity of balancing tight control

versus absolute lack of control. versus absolute lack of control.

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Many Ways to Create Internal Structure

Business and Work Business and Work- -Related Internal Structure Related Internal Structure

Person-based Skill Competencies Job-based Job analysis Job descriptions Job evaluation: classes or compensable factors Factor degrees and weighting Job-based structure PURPOSE PURPOSE Collect, summarize work information Determine what to value Assess value Translate into (Chapter 5) (Chapter 5) (Chapter 5) (Chapter 5) (Chapter 5) (Chapter 5) (Chapter 6)

(Chapter 6) (Chapter 6)(Chapter 6)

(Chapter 4)

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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

_{The evaluation is based on a combination of job}

content, skills required, value to the organization,

organizational culture, and the external market.

!

This potential to blend internal forces and

_{This potential to blend internal forces and}

external market forces is both a strength and a

challenge to job evaluation.

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Determining an Internally Aligned Job Structure

Internal

alignment Job analysis Job description Job evaluation Job structure

Some Major Decisions in Job Evaluation

• Establish purpose of evaluation

• Decide whether to use single or multiple plans

• Choose among alternative approaches

• Obtain involvement of relevant stakeholders

• Evaluate plan’s usefulness

Some Major Decisions in Job Evaluation Some Major Decisions in Job Evaluation

•

• Establish purpose of evaluationEstablish purpose of evaluation

•

• Decide whether to use single or multiple plansDecide whether to use single or multiple plans

•

• Choose among alternative approachesChoose among alternative approaches

•

• Obtain involvement of relevant stakeholdersObtain involvement of relevant stakeholders

•

• Evaluate plan’s usefulnessEvaluate plan’s usefulness Work relationships within the

Work relationships within the organization

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Aspects of Job Evaluation

Job Evaluation is: Job Evaluation is: Job Evaluation is: Job Evaluation is: Job Evaluation is: Job Evaluation is: Job Evaluation is:

Job Evaluation is: AssumptionAssumptionAssumptionAssumptionAssumptionAssumptionAssumptionAssumption

A measure of job Content has an innate value outside of external market. content

A measure of relative Relevant groups can reach consensus on relative value value.

Link with external Job worth cannot be specified without external market market information.

Measurement device Honing instruments will provide objective measures.

Negotiation Puts face of rationality to a social / political process. Establishes rules of the game.

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Job Content Approach: Key Decisions

!

! _{Single Vs. Multiple Plans}_{Single Vs. Multiple Plans}

!

! _{Which Job Evaluation Method}_{Which Job Evaluation Method}

!

! _{Which Compensable Factors}_{Which Compensable Factors}

!

! _{How Many Factors}_{How Many Factors}

!

! _{Number and Definition of Degrees}_{Number and Definition of Degrees}

!

! _{How Many Points to Allow}_{How Many Points to Allow}

!

! _{Relative Weight of the Factors}_{Relative Weight of the Factors}

!

! _{How to Allocate Points Across Factors and Degrees}_{How to Allocate Points Across Factors and Degrees}

!

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Job Evaluation Methods

!

Job Ranking

_{Job Ranking}

!

!_{Raters examine job description and arrange jobs}_{Raters examine job description and arrange jobs}

according to value to company according to value to company

!

Job Classification

_{Job Classification}

!

!_{Classes or grades are defined to describe a group of}_{Classes or grades are defined to describe a group of}

jobs. jobs.

!

Point Method

_{Point Method}

!

!_{Numerical values are assigned to specific job}_{Numerical values are assigned to specific job}

components; sum of values provides quantitative components; sum of values provides quantitative

assessment of job’s worth (Hay Guide Chart

assessment of job’s worth (Hay Guide Chart--Profile Profile Method)

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Comparison of Job Evaluation Methods

Can become Can become

bureaucratic and rule bureaucratic and rule- -bound.

bound. Compensable factors call

Compensable factors call out basis for

out basis for comparisons. comparisons. Compensable factors Compensable factors communicate what is communicate what is valued. valued. Point Point

Descriptions may leave Descriptions may leave too much room for

too much room for manipulation.

manipulation. Can group a wide range

Can group a wide range of work together in one of work together in one system. system. Classification Classification Cumbersome as number Cumbersome as number of jobs increases. Basis of jobs increases. Basis for comparisons is not for comparisons is not called out.

called out. Fast, simple, easy to

Fast, simple, easy to explain. explain. Ranking Ranking Disadvantage Advantage

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The Point Plan Process

(1 of 2)(1 of 2)

Step One: Conduct Job Analysis

Step One: Conduct Job Analysis !

! _{A representative sample of benchmark jobs}_{A representative sample of benchmark jobs}

!

! _{The content of these jobs is basis for compensable}_{The content of these jobs is basis for compensable}

factors factors

Step Two: Determine Compensable Factors

Step Two: Determine Compensable Factors !

! _{Based on the work performed (what is done)}_{Based on the work performed (what is done)}

!

! _{Based on strategy and values of the organization (what is}_{Based on strategy and values of the organization (what is}

valued) valued)

!

! _{Acceptable to those affected by resulting pay structure}_{Acceptable to those affected by resulting pay structure}

(what is acceptable) (what is acceptable)

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The Point Plan Process

(2 of 2)(2 of 2)

Step Three: Scale the Factors

Step Three: Scale the Factors !

! _{Use examples to anchor}_{Use examples to anchor}

Step Four: Weight the Factors

Step Four: Weight the Factors !

! _{Can reflect judgment of organization leaders, committee}_{Can reflect judgment of organization leaders, committee}

!

! _{Can reflect a negotiated structure}_{Can reflect a negotiated structure}

!

! _{Can reflect a market}_{Can reflect a market}_-_-_{based structure}_{based structure} Step Five: Apply to Non

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Characteristics of Benchmark Jobs

!

_{The contents are well}

_-

_{known, relatively stable,}

and agreed upon by the employees involved

!

The supply and demand for these jobs are

_{The supply and demand for these jobs are}

relatively stable and not subject to recent shifts

!

_{They represent the entire job structure under}

study

!

A majority of the work force is employed in these

_{A majority of the work force is employed in these}

jobs

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A Definition

(1 of 2)(1 of 2)

!

_{Compensable factors}

_{are paid}

_-

_{for, measurable}

qualities, features, requirements, or constructs

that are common to many different kinds of jobs.

!

_{These factors are qualities intrinsic to the job and}

must be addressed in an acceptable manner if the

job is to be performed satisfactorily.

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Compensable Factors

-

-A Definition

A Definition

(2 of 2)(2 of 2)

!

_{In addition to being quantifiable,}

_compensable

factors

should be relatively easy to describe and

document.

!

_{Those involved in using}

_{compensable factors}

_to

measure job worth should consistently arrive at

similar results.

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Universal Compensable Factors

!

_Skill:

_{the experience, training, ability, and education}

required to perform a job under consideration

-

not

with the skills an employee may possess

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Universal Factor

-

Skill

!

Technical Know

_{Technical Know}

-

how

!

_{Specialized Knowledge}

!

_{Organizational Awareness}

!

_{Educational Levels}

!

_{Specialized Training}

!

_{Years of Experience Required}

!

_{Interpersonal Skills}

!

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Universal Compensable Factors

!

_Effort:

_the

measurement of the

physical or mental

exertion needed for

performance of a job

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Universal Factor

-

Effort

!

Diversity of Tasks

_{Diversity of Tasks}

!

Complexity of Tasks

_{Complexity of Tasks}

!

Creativity of Thinking

_{Creativity of Thinking}

!

Analytical Problem Solving

_{Analytical Problem Solving}

!

_{Physical Application of Skills}

!

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Universal Compensable Factors

!

_{Responsibility:}

_{the extent to which an employer}

depends on the employee to perform the job as

expected, with emphasis on the importance of job

obligation.

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Universal Factor

-

Responsibility

!

Decision

_Decision

-

making Authority

!

Scope of the organization under control

_{Scope of the organization under control}

!

Scope of the organization impacted

_{Scope of the organization impacted}

!

Degree of integration of work with others

_{Degree of integration of work with others}

!

_{Impact of failure or risk of job}

!

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Universal Compensable Factors

Working Conditions:

!

hazards

_hazards

!

physical surroundings

_{physical surroundings}

of the job.

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Universal Factor

-

Working Conditions

!

_{Potential Hazards Inherent in Job}

!

_{Degree of Danger Which Can be Exposed to}

Others

!

Impact of Specialized Motor or Concentration

_{Impact of Specialized Motor or Concentration}

Skills

!

Degree of Discomfort, Exposure, or Dirtiness in

_{Degree of Discomfort, Exposure, or Dirtiness in}

Doing Job

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From the Abstract to the Specific

!

_{To facilitate the use of compensable factors}

within a job evaluation method it is common

practice to classify the factors into three major

categories:

1. Universal Factors 2. Sub-Factors

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Example: The Hay System

!

_Know

_-

_How

!

!_{Practical, Specialized, & Technical Breadth}_{Practical, Specialized, & Technical Breadth}

!

!_{Breadth of Management}_{Breadth of Management}

!

!_{Human Relations}_{Human Relations}

!

Problem Solving

_{Problem Solving}

!

!_{Thinking Environment}_{Thinking Environment}

!

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Example: The Hay System

!

_{Accountability}

!

Freedom to Act

_{Freedom to Act}

! !

Magnitude

_Magnitude

! !

_Impact

a) a) RemoteRemote b) b) ContributoryContributory c) c) SharedShared d) d) PrimaryPrimary

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How Many Points to Allow?

!

_{Relative Weight of the}

Factors

!

_{How to Allocate Points}

Across Factors and

Degrees

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Job Factor Weight 1 2 3 4 5 1. Education 50% 100 200 300 400 500 2. Respon-sibility 30% 75 150 225 300 3. Physical effort 12% 24 48 72 96 120 4. Working conditions 8% 25 51 80 Degree of Factor Degree of Factor

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Who Should Be Involved?

!

! _{The Design Process}_{The Design Process}

Matters Matters

!

! _{Appeals / Review}_{Appeals / Review}

Procedures Procedures

!

! _{“I Know I Speak for All}_{“I Know I Speak for All}

of Us When I Say I Speak of Us When I Say I Speak

for All of Us” for All of Us”

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Product: A Job Hierarchy

!

_{The key product is an ordered listing of jobs}

based on their

value

to the organization.

!

The hierarchy not only provides information

_{The hierarchy not only provides information}

about which jobs are most and least valued, but it

also provides information about the relative

amount of difference between jobs.

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Job, Skill, and Competency Based

Supervisors Supervisors Supervisors Project Leaders Project Leaders Project Leaders Managers Managers Managers Division General Managers Division General Division General Managers Managers Vice Presidents Vice Presidents Vice Presidents Technician Technician Technician Machinist I Coremaker Machinist I Machinist I Coremaker

Coremaker Clerk / MessengerClerk / MessengerClerk / Messenger

Scientist Scientist Scientist Associate Scientist Associate Scientist Associate Scientist Senior Associate Scientist Senior Associate Senior Associate Scientist Scientist Head / Chief Scientist Head / Chief Head / Chief Scientist Scientist

Drill Press Operator Rough Grinder

Drill Press Operator

Rough Grinder Rough Grinder Assembler II Assembler II Assembler II Materials Handler Inspector II Materials Handler Materials Handler Inspector II Inspector II Packer Packer Packer Assembler I Inspector I Assembler I Assembler I Inspector I Inspector I Word Processor Word Processor Word Processor Administrative Secretary Administrative Administrative Secretary Secretary Principal Adminis-trative Secretary Principal Adminis Principal Adminis- -trative Secretary trative Secretary Administrative Assistant Administrative Administrative Assistant Assistant Manufacturing Manufacturing Group Group Administrative Administrative Group Group Technical Technical Group Group Managerial Managerial Group Group

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Summary

!

_{The differences in the rates paid for different jobs}

and skills affect the ability of managers to achieve

their business objectives.

!

_{Differences in pay matter.}

!

_{They matter to employees, because their willingness}

to take on more responsibility and training, to focus

on adding value for customers and improving quality

of products, and to be flexible enough to adapt to

change all depend at least in part on how pay is

structured for different levels of work.

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Summary

(continued)(continued)

!

_{Differences in the rates paid for different jobs and}

skills also influences how fairly employees believe

they are being treated. Unfair treatment is ultimately

counterproductive.

!

_{Job evaluation has evolved into many different forms}

and methods. Consequently, wide variations exist in

its use and how it is perceived.

!

No matter how job evaluation is designed, its

_{No matter how job evaluation is designed, its}

ultimate use is to help design and manage work

-

-related, business

related, business

-

focused, and agreed

-

upon pay

structure.

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Review Questions

1. How does job evaluation translate internal alignment

policies in practice? What does (a) flow of work, (b) fairness, and (c) directing people’s behaviors toward organization objectives have to do with job evaluation?

2. Why are there different approaches to job evaluation?

Think of several employers in your area. What approach would you expect them to use? Why?

3. What are the advantages and disadvantages of using

more than one job evaluation plan in any single organization?

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Review Questions

(continued)(continued)

4. Why bother with job evaluation? Why not simply

market price? How can job evaluation link internal alignment and external market pressure?

5. Consider your college or school. What are the

compensable factors required for your college to

evaluate jobs? How would you go about identifying these factors? Should the school’s educational mission be reflected in your factors? Or are generic factors

okay? Discuss.

6. As the manager of a 10 person workgroup, how do you

reassure the group when they learn their jobs are going to be evaluated?