Exhibit 5.1: Many Ways to Create Internal Structure

1. Exhibit 5.1: Many Ways to Create Internal Structure

2. What Is Job Evaluation? 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.

3. Aspect of Job Evaluation Assumption Assessment of job content Content has intrinsic value outside external market. Assessment of relative value Stakeholders can reach consensus on relative value. Value cannot be specified without external market. External market link Honing instruments will provide objective measures. Measurement Puts face of rationality to a social / political process; establishes rules of the game and invites participation. Negotiation Assumptions UnderlyingDifferent Views of Job Evaluation

4. Major Decisions • Establish purpose • Single vs. multiple plans • Choose among methods • Obtain involvement of relevant stakeholders • Evaluate plan’s usefulness

5. 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

6. 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

7. Classification Method • 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

8. Point Method • Three common characteristics of point methods • Compensable factors • Factor degrees numerically scaled • Weights reflect relativeimportance of each factor • Most commonly used approachto establish pay structures in U.S. • Differ from other methods by making explicit the criteria for evaluating jobs -- compensable factors

9. Designing a Point Plan:Six Steps • Conduct job analysis • Determine compensable factors. • Scale the factors. • Weight the factors according to importance. • Communicate the plan, train users, prepare manual. • Apply to nonbenchmark jobs.

10. Skill Effort Working conditions Responsibility Generic Compensable Factors

11. 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

12. Step 3: Scale the Factors • Construct scales reflecting different degrees within each factor • Most factor scales consist of 4 to 8 degrees • Issue - Whether to make each degree equidistant from adjacent degrees (interval scaling) • Criteria for scaling factors • Limit to number necessary todistinguish among jobs • Use understandable terminology • Anchor degree definitions with benchmark job titles • Make it apparent how degree applies to job

13. Step 4: Weigh the Factors • Different weights reflect differences in importance attached to each factor • Determination of factor weights • Advisory/JE committee • Statistical analysis • Criterion pay structure

14. Job Evaluation Form

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

16. Job Evaluation Methods Method Comparison

17. Step 5: Communicate Plan and Train Users • Involves development of manual containing information to allow users to apply plan • Describes job evaluation method • Defines compensable factors • Provides information to permit users to distinguish varying degrees of each factor • Involves training users on total pay system • Include appeals process for employees

18. 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

19. 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 . . .”

20. Final Result: Structure • Outcome • Ordered list of jobs based ontheir value to organization • Hierarchy of work • Structure supporting apolicy of internal alignment • Information provided by hierarchy • Which jobs are mostand least valued • Relative amount ofdifference between jobs