Chapt. 8 – Job Evaluation

1. Chapt. 8 – Job Evaluation • Primary Goal of Job Evaluation: • To develop the relative worth of all jobs to ensure fair and equitable pay treatment for all employees

2. The Systematic Process for Job Evaluation • Identifying a hierarchy of jobs by worth, using job evaluation methodology • Investigating the marketplace to find out what other organizations are paying for comparable jobs • Combining job-worth data and market data in a manner that results in an organizational pay structure

3. Why Do We Need a Job Evaluation Program? • To establish an orderly, rational, systematic structure of jobs based on their net worth to company • To justify an existing pay rate structure or to develop one that provides for internal equity • To help set pay rates comparable to other organizations – external equity

4. To provide a rational basis for negotiation of pay rates when bargaining with a union • To identify career ladders and direction for employees interested in “moving up” • To comply with equal pay legislation • To develop a basis for merit or pay-for-performance programs

5. Common Methods of Job Evaluation • 1. Intraoccupational and interoccupational method of job classification • Steps: • Identify major occupations/families of occupations in the organization • Place each class of jobs within its respective occupation • Rank all classes within the occupation, producing a vertical array of classes with highest-ranked class at top of array

6. Select classes within each vertical array to become known as “benchmark” jobs • Array benchmark or key classes in different occupations • Place benchmark or key classes from different occupations that can be considered “comparable” on same horizontal level

7. 2. Whole Job Ranking • Using a ranking method that allows comparison of one job to every other job • Deck-of-cards procedure • Paired-comparison ranking table • Alternate ranking procedure

8. Problems with Ranking • 1. No real substantiation of how or why one job is ranked higher/lower than another one --- difficult for employees to accept • 2. No real way to tell relative value of jobs to each other • 3. Does not easily recognize changes in job content • 4. Easy for rater to actually be rating individual in jobs, instead of the job itself

9. 3. Position (Job) Classification Method • Identify benchmark jobs at highest and lowest levels of pay, then fill in other jobs between these two points • Broadbanding --- tries to reduce the need to so narrowly define the job so that a number of progressively higher-paying jobs can be placed into a broader pay grade band

10. 3. Market Pricing Approach • Using information from labor markets to determine appropriate pay rates for jobs • Generally, information is collected by contacting other employers and asking for pay rates for matching jobs

11. Problems with Market Pricing • 1. Difficult to define identical jobs in other organizations • 2. Total reward and compensation packages may be very different, thus misleading • 3. Pay survey data prone to many errors • 4. If labor market is broad, difficult to get representative sample data

12. 5. Many competitors reluctant to provide compensation data • 6. If jobs are nonmarket-priced jobs, then slotting technique will not work and would be hard to explain/defend

13. Compensable Factors • Compensable factors are paid-for, measurable qualities, features, requirements or constructs that are common to many different kinds of jobs

14. Universal Compensable Factors • Skill – the experience, training, education, and ability required to perform a job under consideration • Effort – the measurement of the physical or mental exertion needed for job performance • Responsibility – extent to which employer depends on employee to perform job as expected • Working Conditions – physical surroundings and hazards of a job

15. Subfactors • Example – page 226 (Bass definition) • Factor – Skill • Subfactors: • Intelligence or mental requirements • Knowledge required • Motor or manual skill • Learning time

16. Degrees (Levels) • Degrees are used to identify quantitative differences for the subfactors • Examples of degrees • Minimal • Slight • Moderate • Average • Considerable • Broad • Extensive

17. Weighting of Compensable Factors • Normalizing Procedure – page 229 • Other methods