Evaluating Work: Job Evaluation

2. Chapter 5 Evaluating Work: Job Evaluation Screen graphics created by: Jana F. Kuzmicki, PhD Troy State University-Florida and Western Region

3. Learning ObjectivesAfter discussing Chapter 5, students should be able to: • Discuss the relationship between internal alignment, job analysis, job evaluation, and job structure. • Identify the major decisions involved in job evaluation. • Compare the advantages and disadvantages of the most common job evaluation methods. • Explain the six (6) steps in a point plan, the most commonly used job evaluation method. • Describe the key roles of managers, employees, and committees in the job evaluation process. • Understand the necessity of balancing tight control versus flexibility related to the use of techniques to achieve internal alignment.

4. 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.

5. Exhibit 5.1: Many Ways to Create Internal Structure

6. 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.

7. 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

8. 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 Exhibit 5.2: Assumptions UnderlyingDifferent Views of Job Evaluation

9. Internal alignment Job analysis Job description Job evaluation Job structure Exhibit 5.3: Determining an InternallyAligned Job Structure Work relationships within organization • 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

10. Major Decisions • Establish purpose • Supports organization strategy • Supports work flow • Fair to employees • Motivates behavior towardorganization objectives • Single vs. multiple plans • Choose among methods • Exhibit 5.4: Comparison of Job Evaluation Methods • Obtain involvement of relevant stakeholders • Evaluate plan’s usefulness

11. Exhibit 5.4: Benchmark Job

12. 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

13. 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. Exhibit 5.5: Comparison ofJob Evaluation Methods

14. 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

15. Exhibit 5.6: Paired Comparison Ranking

16. 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 • Examples • Exhibit 5.7: Classificationsfor Engineering Work • Exhibit 5.8: GeneralSchedule Descriptionsfor Federal Government

17. 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

18. 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.

19. 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

20. Step 2: Determine Compensable Factors • Compensable factors play a pivotal role • Reflect how work adds value to organization • Example - Exhibit 5.9 • Characteristics of compensable factors • Based on strategy and values of organization • Exhibit 5.10 • Based on work performed • Acceptable to stakeholders affected by resulting pay structure

21. Skill Effort Working conditions Responsibility Generic Compensable Factors

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

23. Generic Factor - Skill • Technical know-how • Specialized knowledge • Organizational awareness • Educational levels • Specialized training • Years of experience required • Interpersonal skills • Degree of supervisory skills

24. Generic Factor - Effort Effort: Measurement of the physical or mental exertion needed for performance of a job

25. Generic Factor - Effort • Diversity of tasks • Complexity of tasks • Creativity of thinking • Analytical problem solving • Physical application of skills • Degree of assistance available

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

27. 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

28. Generic Factor – Working Conditions Working Conditions: • Hazards • Physical surroundingsof job

29. Generic Factor – Working Conditions • 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

30. 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

31. 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

32. 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 todistinguish among jobs • Use understandable terminology • Anchor degree definitions with benchmark job titles • Make it apparent how degree applies to job

33. 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

34. Exhibit 5.14: Job Evaluation Form

35. 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

36. 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

37. 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

38. 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 . . .”

39. 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

40. Exhibit 5.15: Resulting Internal Structures --Job, Skill, and Competency Based Managerial Group Technical Group Manufacturing Group Administrative Group Assembler I Inspector I Vice Presidents Head / Chief Scientist Packer Administrative Assistant Division General Managers Senior Associate Scientist Materials Handler Inspector II Principal Adminis- trative Secretary Managers Associate Scientist Assembler II Administrative Secretary Project Leaders Scientist Drill Press Operator Rough Grinder Word Processor Supervisors Technician Machinist I Coremaker Clerk / Messenger Job Evaluation Competency- Based Skill– Based Job Evaluation

41. Control Chaos Balancing Chaos and Control