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Evaluating Work: Job Evaluation

Chapter

5

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1. Discuss the relationship between internal alignment, job analysis, job evaluation, and job structure.

2. Identify the major decisions involved in job evaluation.

3. Compare the advantages and disadvantages of the most common job evaluation methods.

4. Explain the six (6) steps in a point plan, the most commonly used job evaluation method.

5. Describe the key roles of managers, employees, and committees in the job evaluation process.

6. Understand the necessity of balancing tight control versus flexibility related to the use of techniques to achieve internal alignment.

Learning ObjectivesAfter discussing Chapter 5, students

should be able to:

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Chapter Topics

Job-Based Structures: Job Evaluation Defining Job Evaluation: Content,

Value, and External Market Links Ranking Classification Point Method Who Should be Involved? The Final Result: Structure Balancing Chaos and Control.

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Exhibit 5.1: Many Ways to Create Internal Structure

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Process of systematically determining the relative worth of jobs to create a job structure for the organization. Evaluation is based on a combination of job content, skills required, value to the organization, organizational culture and the external market.

What Is Job Evaluation?

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Defining Job Evaluation

Content and value

Linking content with the external market

“Measure for measure” vs. “Much ado about nothing”

Exhibit 5.2: Assumptions Underlying Different Views of Job Evaluation

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5-7Exhibit 5.2: Assumptions Underlying

Different Views of Job Evaluation

Aspect of Job Evaluation Assumption

Content has intrinsic value outside external market.

Stakeholders can reach consensus on relative value.

Value cannot be specified without external market.

Honing instruments will provide objective measures.

Puts face of rationality to a social / political process; establishes rules of the game and invites participation.

Assessment of job content

Assessment of relative value

External market link

Measurement

Negotiation

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5-8Exhibit 5.3: 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• 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

Work relationships within organization

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Major Decisions

Establish purposeSupports organization strategySupports work flowFair to employeesMotivates behavior toward

organization objectivesSingle vs. multiple plansChoose among methods

Exhibit 5.4: Comparison of Job Evaluation Methods

Obtain involvement of relevant stakeholdersEvaluate plan’s usefulness

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Exhibit 5.4: Benchmark Job

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Characteristics of Benchmark Job

Contents are well-known andrelatively stable over time

Job is common across severaldifferent employers

Sizable proportion of workforce employed in job

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Exhibit 5.5: Comparison ofJob Evaluation Methods

Advantage Disadvantage

Ranking Fast, simple, easy to explain.Cumbersome as number of jobs increases. Basis for comparisons is not called out.

Classification Can group a wide range of work together in one system.

Descriptions may leave too much room for manipulation.

Point

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

Can become bureaucratic and rule-bound.

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Ranking Method

Orders job descriptions from highest to lowest based on a global definition of relative value or contribution to the organization’s success

Two approaches

Alternation ranking

Paired comparison method

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Exhibit 5.6: Paired Comparison Ranking

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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

ExamplesExhibit 5.7: Classifications

for Engineering Work

Exhibit 5.8: GeneralSchedule Descriptionsfor Federal Government

Classification Method

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Point Method

Three common characteristics of point methodsCompensable factorsFactor degrees numerically scaledWeights reflect relative

importance of each factorMost commonly used approach

to establish pay structures in U.S.Differ from other methods by making

explicit the criteria for evaluating jobs -- compensable factors

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1. Conduct job analysis

2. Determine compensable factors.

3. Scale the factors.

4. Weight the factors according to importance.

5. Communicate the plan, train users, prepare manual.

6. Apply to nonbenchmark jobs.

Designing a Point Plan:Six Steps

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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

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Step 2: Determine Compensable Factors

Compensable factors play a pivotal roleReflect how work adds value to organization

Example - Exhibit 5.9

Characteristics of compensable factorsBased on strategy and values of

organizationExhibit 5.10

Based on work performed

Acceptable to stakeholders affected by resulting pay structure

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Skill Effort

Responsibility

Working conditions

Generic Compensable Factors

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Generic Factor - Skill

Skill: Experience, training, ability, and education required to perform a job under consideration - not with skills an employee may possess

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Generic Factor - Skill

Technical know-how

Specialized knowledge

Organizational awareness

Educational levels

Specialized training

Years of experience required

Interpersonal skills

Degree of supervisory skills

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Generic Factor - Effort

Effort:

Measurement of

the physical or

mental exertion

needed for

performance of a

job

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Generic Factor - Effort

Diversity of tasks

Complexity of tasks

Creativity of thinking

Analytical problem solving

Physical application of skills

Degree of assistance available

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Generic Factor - Responsibility

Responsibility: Extent to which an employer depends on employee to perform job as expected, with emphasis on importance of job obligation

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Generic Factor - Responsibility

Decision-making authority

Scope of organization under control

Scope of organization impacted

Degree of integration of work with others

Impact of failure or risk of job

Ability to perform tasks without supervision

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Working Conditions:

Hazards

Physical surroundingsof job

Generic Factor – Working Conditions

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Potential hazards inherent in job

Degree of danger which can be exposed to others

Impact of specialized motor or concentration skills

Degree of discomfort, exposure, or dirtiness in doing job

Generic Factor – Working Conditions

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Exhibit 5.11: The Hay System

Know-How Scope Depth Human relations

skills Exhibit 5.12: Hay

Guide Chart for Know-how

Problem Solving Environment Challenge

Accountability Freedom to Act Scope Impact

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Compensable Factors - How Many?

“Illusion of validity” - Belief that factors are capturing divergent aspects of a job

“Small numbers” - If even one job has it, it must be a compensable factor

“Accepted and doing the job” - 21, 7, 3

Research results

Skills explain 90% or more of variance

Three factors account for 98 - 99% of variance

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Step 3: Scale the Factors

Construct scales reflecting different degrees within each factor Most factor scales consist of 4 to 8 degrees Exhibit 5.13: Factor Scaling - NMTA

Issue - Whether to make each degree equidistant from adjacent degrees (interval scaling)

Criteria for scaling factors Limit to number necessary to

distinguish among jobs Use understandable terminology Anchor degree definitions with benchmark job

titles Make it apparent how degree applies to job

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Step 4: Weight the Factors

Different weights reflect differences in importance attached to each factor

Determination of factor weights

Advisory/JE committee

Statistical analysis

Criterion pay structure

Exhibit 5.14: Job Evaluation Form

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Exhibit 5.14: Job Evaluation Form

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Overview of the Point System

Job Factor Weight

1

2

3

4

5

1. Education 50% 100 200 300 400 500

2. Respons-ibility

30% 75 150 225 300

3. Physical effort

12% 24 48 72 96 120

4. Working conditions

8% 25 51 80

Degree of Factor

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Step 5: Communicate Plan and Train Users

Involves development of manual containing information to allow users to apply planDescribes job evaluation methodDefines compensable factorsProvides information to permit users to

distinguish varying degrees of each factor

Involves training users on total pay system

Include appeals process for employees

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Step 6: Apply to Nonbenchmark Jobs

Final step involves applying plan to remaining jobs

Benchmark jobs were usedto develop compensablefactors and weights

Trained evaluators will evaluatenew jobs or reevaluate jobswhose work content has changed

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Who Should be Involved?

Committees, task forces, or teams of key representations

Design process matters

Appeals/review procedures

“I know I speak forall of us when . . .”

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Final Result: Structure

OutcomeOrdered list of jobs based on

their value to organizationHierarchy of workStructure supporting a

policy of internal alignmentInformation provided by hierarchy

Which jobs are mostand least valued

Relative amount ofdifference between jobs

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5-39Exhibit 5.15: Resulting Internal Structures --

Job, Skill, and Competency Based

SupervisorsSupervisors

Project LeadersProject Leaders

ManagersManagers

Division GeneralManagers

Division GeneralManagers

Vice PresidentsVice Presidents

Job Evaluation

TechnicianTechnician Machinist ICoremakerMachinist ICoremaker Clerk / MessengerClerk / Messenger

ScientistScientist

Associate ScientistAssociate Scientist

Senior AssociateScientist

Senior AssociateScientist

Head / ChiefScientist

Head / ChiefScientist

Drill Press OperatorRough Grinder

Drill Press OperatorRough Grinder

Assembler IIAssembler II

Materials HandlerInspector II

Materials HandlerInspector II

PackerPacker

Assembler IInspector I

Assembler IInspector I

Word ProcessorWord Processor

AdministrativeSecretary

AdministrativeSecretary

Principal Adminis-trative Secretary

Principal Adminis-trative Secretary

AdministrativeAssistant

AdministrativeAssistant

Job Evaluation

Competency- Based

Skill– Based

Manufacturing Group

Administrative Group

Technical Group

Managerial Group

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Balancing Chaos and Control

Control Chaos