definition of reward management

SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION

DEFINITION OF REWARD MANAGEMENT

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Definition of JOB EVALUATION

Job evaluation is the process of systematically determining a relative internal value of a job in an organization. In all cases the idea is to evaluate the job, not the person doing it. Job evaluation is the process of determining the worth of one job in relation to that of the other jobs in a company so that a fair and equitable wage and salary system can be established.

Job evaluation is a systematic comparison done in order to determine the worth of one job relative to another.

Is a systematic of comparing different jobs to provide a basis for a grading and pay structure?

It establish the size (how big is the job) and value (the contribution a person has made) of jobs in organization.there for ,job evaluation is a proces of determining the worthj of each job to be performed,ranking and grading each job with respective requirement of skill,knowledge,responsibility..etc; for fixing wage or reward pable to the job holder.

The basic principle is: jobs that require greater qualifications, more responsibilities and more complex job duties should be paid more highly than jobs with lesser requirements.the basis procedure is to compare the jobs in relation to another – for example,in terms of required effort ,responsibility and skills,suppose you know(based on your salary servey) how to price key benchmark jobs,and then use job evaluation to determine the relative worth of all the other jobs in your firm relative to these key jobs.you are then well on your way to being able to price all the jobs in your organization.

Job evaluation is a practical technique, designed to enable trained and experienced staff to judge the size of one job relative to others. It does not directly determine pay levels, but will establish the basis for an internal ranking of jobs.

The two most common methods of job evaluation that have been used are first, whole job ranking, where jobs are taken as a whole and ranked against each other. The second method is one of awarding points for various aspects of the job. In the points system various aspects or parts of the job such as education and experience required to perform the job are assessed and a points value awarded - the higher the educational requirements of the job the higher the points scored. The most well known points scheme was introduced by Hay management consultants in 1951. This scheme evaluates job responsibilities in the light of three major factors - know how, problem solving and accountability.

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Objectives of the job evaluationI. To gather job information

II. To fix up respnosibilitiesIII. The hiarachy and place of various jobsIV. To determine the ranks or grades of various jobs.V. To establish relatives between jobs.

VI. To use these job grades for salary administration.to ensure fair and equitable wages on the basis of relative worth or value of jobs.in other words, equal wages are fixed to the jobs of equal worth or value.

VII. To provide a structure for better management planning.VIII. To provide a basis for career progression and for rotation progrms.

Some principles of job evaluation

Clearly defined and identifiable jobs must exist. These jobs will be accurately described in an agreed job description.

All jobs in an organisation will be evaluated using an agreed job evaluation scheme. Job evaluators will need to gain a thorough understanding of the job Job evaluation is concerned with jobs, not people. It is not the person that is being

evaluated. The job is assessed as if it were being carried out in a fully competent and acceptable

manner. Job evaluation is based on judgement and is not scientific. However if applied correctly it

can enable objective judgements to be made. It is possible to make a judgement about a job's contribution relative to other jobs in an

organisation. The real test of the evaluation results is their acceptability to all participants. Job evaluation can aid organisational problem solving as it highlights duplication of tasks

and gaps between jobs and functions.

Job Evaluation is concerned with measuring the demands the job places on its holder. Most factors that contribute to this job pressure, e.g. physical strength required, knowledge of mathematics required, are assessed and the result is a numerical estimate of the total job pressure. When evaluations are carried

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out on all hourly paid personnel the technique’s uses include establishing relative wage rates for different tasks. It is possible to use it for all grades of personnel, even senior management.

The Time Span of Discretion is an interesting and unusual method of job evaluation developed by Elliot Jaques for the Glacier Metal Company. In this method the job pressure is assessed according to the length of time over which managers decisions commit the company. A machine operative, for example, is at any moment committing the company only for the period needed to make one product unit or component. The manager who buys the machine is committing the company for ten years.

METHODS OF JOB EVALUATION

Non –Quantitative Techniques

Market pricing method

This method can be very misleading if is used alone.this method tries to understand the importance of a particular job to that particular industry and rank them accordingly.the highly important ones are placed high in the organization chart.the characteristics of this method:

Does not asses relative internal work Influenced by the pay levels set by other employess Dificult-jobs are not the same in all organization Does not consider economic condition,emplyer size and other variables.

Eg: food industry- the most importyant aspect is the quality assuarance

Hardware industry- the most important aspect is the strength of the steel

Service industrty- the most important aspect is the customer services

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Ranking Method

The simplest and administratively the easiest techniques.the evaluater compares the job with other jobs based on duties,respnosibilities and denads made by the jobs on the job incumbment and the degree of important of the job to the organization and rank all the jobs form the most important to the least important.the evaluater has to appraise and rank tha jobs but not the incumbments.

Merits-

a. This method is very simple ,quick and cheaper in terms of terms of time and money.b. This method is very suitable for small units.c. It is also usefull for evaluating top executives in big organizationd. It is powerfull instruments for the job evaluation.

Job classification(job grading) methods.

Class and grade are used differently in this method.a grade is a group of different jobs of similar difficulty or requiring similar knowledge and skills t perform.

Example- assistant accountant,senior accountant and chief accountant are the jobs in the occupation (grade) of accountant.the group are called classes if they contain similar jobs.

Under this method,jobs at different levels in the organizational hierachy are divided in to various grades,with a clear-cut definition of each grade.grades are formulated on the basis of nature of tasks,requirements of skills,knowledge, and responsibilities and authority of variopus jobs.there are several steps in the mechanism of this method.

a. Decide initially the numbers of pay grades to be set upb. Identity those jobs which everyones can agree as most representative of each grade.c. Define class or grade descriptions for each grade in terms of amount or leaves of jobs

factors in the jobs.d. Prepare job descriptions for all other jobs,taking these benchmarks jobs in to

consideration.e. Compare all job with bencmarks jobs and on the basis of the comparison,slot each in to

the grade,which they seem most, clearly belong to.

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QUANTATIVE TECHNIQUES OR METHODS

Point Method A set of compensable factors are identified as determining the worth of jobs. Typically the compensable factors include the major categories of:

1. Skill 2. Responsibilities 3. Effort 4. Working Conditions

These factors can then be further defined.

1. Skill 1. Experience 2. Education 3. Ability

2. Responsibilities 1. Fiscal 2. Supervisory

3. Effort 1. Mental 2. Physical

4. Working Conditions 1. Location 2. Hazards 3. Extremes in Environment

The point method is an extension of the factor comparison method.

Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job.

Jobs are then grouped by total point score and assigned to wage/salary grades so that similarly rated jobs would be placed in the same wage/salary grade.

Advantages

The value of the job is expressed in monetary terms. Can be applied to a wide range of jobs. Can be applied to newly created jobs

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Disadvanteges

The pay for each factor is based on judgments that are subjective. The standard used for determining the pay for each factor may have built-in biases that

would affect certain groups of employees (females or minorities).

Factor Comparisn Method

A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are:

1. Skill 2. Responsibilities 3. Effort 4. Working Conditions

Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics.

1. equitable pay (not overpaid or underpaid) 2. range of the factors (for each factor, some jobs would be at the low end of the factor

while others would be at the high end of the factor).

the jobs are then priced and the total pay for each job is divided into pay for each factor. See example matrix below:

Job Evaluation: Factor Comparison

The hourly rate is divided into pay for each of the following factors:

JobHourly Rate

.Pay for Skill

Pay for Effort

Pay for Responsibility

Pay for Working Conditions

Secretary 9.00 4.50 2.00 2.00 0.50Admin Assistant

11.00 5.50 2.50 2.50 0.50

Supervisor 15.00 6.00 3.50 4.00 1.50Manager 21.00 9.00 3.50 7.00 1.50

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This process establishes the rate of pay for each factor for each benchmark job. Slight adjustments may need o be made to the matrix to ensure equitable dollar weighting of the factors.

The other jobs in the organization are then compared with the benchmark jobs and rates of pay for each factor are summed to determine the rates of pay for each of the other jobs.

Advantages

The value of the job is expressed in monetary terms. Can be applied to a wide range of jobs. Can be applied to newly created jobs.

Disadvantages

The pay for each factor is based on judgements that are subjective. The standard used for determining the pay for each factor may have build in biases that

would affect certain groups of employees (females or minorities).

Ranking Method

Ranking This method is one of the simplest to administer. Jobs are compared to each other based on the overall worth of the job to the organization. The 'worth' of a job is usually based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal), and working conditions.

Advantages

Simple.

Very effective when there are relatively few jobs to be evaluated (less than 30).

Disadvantages

Difficult to administer as the number of jobs increases. Rank judgements are subjective. Since there is no standard used for comparison, new jobs would have to be compared

with the existing jobs to determine its appropriate rank. In essence, the ranking process would have to be repeated each time a new job is added to the organization.

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Classification Method

Classification Jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. The classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used. Because of differences in duties, skills and knowledge, and other aspects of trades and labor jobs, job grading standards are developed mainly along occupational lines.

The standards do not attempt to describe every work assignment of each position in the occupation covered. The standards identify and describe those key characteristics of occupations which are significant for distinguishing different levels of work. They define these key characteristics in such a way as to provide a basis for assigning the appropriate grade level to all positions in the occupation to which the standards apply.

Advantages

Simple. The grade/category structure exists independent of the jobs. Therefore, new jobs can be

classified more easily than the Ranking Method.

Disadvantages

Classification judgments are subjective. The standard used for comparison (the grade/category structure) may have built in biases

that would affect certain groups of employees (females or minorities). Some jobs may appear to fit within more than one grade/category.

IMPORTANCE OF JOB EVALUATION

Employers do not enjoy high turnover rates, unproductive employees or other issues that weaken the company. A job evaluation can help an employer avoid these issues--if the evaluation is used effectively. Although a job evaluation does not determine pay--at least not directly--it establishes a basis for internal job rankings.

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http://www.ehow.com/careers/

http://www.hr-guide.com/data/G411.htm


Job Evaluation Your Way……………

Do your salary structures generate salaries consistent with the real value of work to the company? Moreover, are you valuing work in a manner that is consistent with company values and culture?

The Job Evaluation module of CompXpert can help you ensure that your job classification system supports company equity goals. It enables you to produce a totally transparent, legally defensible system in compliance with any regulatory or statutory job classification requirement.CompXpert easily adapts to any organizational structure and can manage multiple pay structures.

Customize the workflow to your situation Rate both benchmark and non-benchmark jobs Flexible to provide direct factor comparison or questionnaire approach Retains all current and inactive evaluations Incorporates an evaluation calculator that displays component factor scores, grades, and

user-specified measures while evaluating a job Create custom queries and save them for future Reports Cross-check data for consistency and validity

With CompXpert from NPKtools, you are not tied to any particular methodology. Out of the box, CompXpert supports any point/factor job evaluation method. Essentially, any evaluation methodology that can be implemented with a spreadsheet can be implemented with CompXpert.

Feels like Excel…

For those accustomed to working with Excel, CompXpert will feel very comfortable. All the analytical tools you are accustomed to are there at your fingertips: Filter, sort, lookup, and the rest. What’s missing is the “oops” factor that ever-present danger when working with spreadsheets that you could lose your work or worse, your data.

…but so much more

In CompXpert, your company data is stored in an industrial strength database. Multiple users can be using data at the same time. Get info from people who know the jobs best. Control access by dept or function. Compare evals across business units or any organizational function to ensure hierarchy and consistency. This might be an analyst preparing a survey submission, an HR manager creating a custom report, and a line manager contributing factor ratings. All access is governed by highly granular, rules-based security that you control.

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Job evaluation process…………. How are jobs evaluated?

The job evaluation process established the relative value of jobs throughout the university. There are two steps involved in this process:

1. Job Analysis and Job Description - Using a "job profile," the content of each job is analyzed to identify key duties, responsibilities, and qualification necessary to perform the job. Written job descriptions are then prepared to contain this information.

2. Job Evaluation - A computer assisted job evaluation plan, measuring 17 dimensions of nonexempt work and 28 dimensions of exempt work, is used to evaluate the relative worth of staff positions. This evaluation process focuses on valuing the content of each position in terms of a series of well defined compensable factors.

The factors for clerical, service, technical, and administrative support positions include: a. Knowledge: Minimum required level of specialized training, education, and

previous related work experience.b. Skill: The manual and physical skills required to perform the duties of the

position.c. Work Complexity: The degree and amount of judgment, initiative and ingenuity

involved in accomplishing work.d. Contact with Others: The extent to which the work entails dealing with others in

the course of one's regular duties, including the frequency and nature of contacts and the likely results of such contacts.

e. Property Protection and Use: The extent to which the position has responsibility for university property, including funds, vehicles and confidential information.

f. Work Leadership: The responsibility for directing, instructing and training personnel; and for planning controlling and assigning work.

g. Working Environment: The physical conditions encountered during a typical work day. Conditions such as heat, cold, dirt, fumes, hazards, etc. are considered.

h. Student Relations: The responsibility for dealing with students, including the nature and frequency of contacts.

The factors for professional, administrative, and managerial positions include responsibility for:

i. Programs, Projects or Operations: The level in the organization, scope of activities performed, parameters of authority, complexity or nature of responsibilities, and the minimum credentials required to perform the job upon hire.

j. Supervision: The number and variety of employees supervised.k. Employee Relations: Promoting and maintaining satisfactory human relations,

morale and effectiveness or subordinates.

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http://www.case.edu/finadmin/humres/compensation/spgloss.html#factor

http://www.case.edu/finadmin/humres/compensation/spgloss.html#exempt

http://www.case.edu/finadmin/humres/compensation/spgloss.html#exempt

http://www.case.edu/finadmin/humres/compensation/spgloss.html#evaluation

http://www.case.edu/finadmin/humres/compensation/spgloss.html#description

http://www.case.edu/finadmin/humres/compensation/spgloss.html#analysis

http://www.case.edu/finadmin/humres/compensation/spgloss.html#evaluation


l. External Contacts: Personally dealing with individuals or organizations outside the university.

m. Internal Contacts: Personally dealing with individuals within the university, but outside the direct line of authority of the position, to coordinate activities and task accomplishment.

n. Investigation or Fact Finding: Activities undertaken to identify facts, and develop ideas, designs or processes.

o. Scheduling, Planning and Forecasting: The complexity, variety and nature of the activities involved in determining and carrying out plans and reports.

p. Establishing Objectives, Policies, Standards, Procedures, and Practices: The degree of authority to establish standards, and the scope, nature and complexity or these standards.

q. Effects of Decisions: Making decisions and commitments which impact the university's resources.

r. Student Relations: Personally dealing with students from routine exchanges of information to more complex activities such as counseling.

At the conclusion of the job evaluation process, the compensable factors are weighted. A numerical total is then derived and each position is assigned a salary grade which has a salary range A salary range consists of a:

MINIMUM:The lowest wage paid to a new employee with limited or no experience in this specific position.

MIDPOINT: The "market" (or average) wage paid to one who is fully qualified.

MAXIMUM:

The highest wage paid for jobs in the salary grade.

Each salary range has different jobs, e.g. Clerk and Grounds Worker, because they have the same relative value as determined by job evaluation.

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http://www.case.edu/finadmin/humres/compensation/spgloss.html#range

http://www.case.edu/finadmin/humres/compensation/spgloss.html#range


Salary ranges - intentionally overlap from one grade to another. Fully qualified incumbents in a lower salary grade may be at the high end of their salary range, while the salary of a less experienced employee in a higher salary grade may be near the minimum of the range. It is thus thesameormore than the salary of an inexperienced incumbent in a higher rates position possible that the salary of an experienced incumbent in a lower rated position will be.

B. How do we establish competitive salaries?

Salary surveys are conducted annually and analyzed to establish and maintain competitive pay levels with all the markets in which the university competes and recruits, as summarized in the following exhibit.

SURVEY SOURCES

Employee Group Market Salary Surveys

A. Exempt

1. Department Head and Above

National Customized surveys with data form selected private research universities

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2. Below Department Head

Regional Customized surveys with data from selected private research universities

3. Entry Level Local Local surveys for service employees and salary data from the College Placement Association

B. Nonexempt

All Jobs Local Local surveys of selected manufacturing and service employers (banks, insurance, health care, etc.)

Specialized surveys as needed for specific jobs, e.g. plumbers, radiation technicians, etc.

This market data is correlated with the job evaluation results and salary ranges are established. These ranges are then periodically reviewed and adjusted to reflect changes in the marketplace.

C. How are salaries determined?

Starting salaries of new hires are normally placed within the first quartile of the salary range but occasionally may go up to the range midpoint to accommodate special recruiting needs. Salary progression in the range occurs over time, based on the salary budget and employee performance.

Subsequent to employment, salaries normally change as a result of a promotion, an annual merit increase or an adjustment to maintain equity.

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Job evaluation form

Assesor:

Max Notes points

Mental effort:(20)Dealing with situation 10 05cocentration 10 07

Skills:(45)

Training time 15 10Dexterity 10 08Complexity 10 08Basic knowledge 10 06

Respnsibility:(18)For crash 04 01Intermediate and finish product 04 03Control over cost 04 03

For tools 03 03For recrds ets: 03 01

Physical requirements:(05) 05 04

Working conditions:(12)Working environment 08 06Hazards 04 02

Maximum grand total 100 67

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Job description-

Job title-

Sex-

Department-

Date-


JOB CLASSIFICATION

Grade A B C D E F

Points possible Up to 50 51 to 60 61 to70 71 to 80 81 to 90 91 to 100

Points awarded

PROCESS OF JOB EVALUATION

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The process of obtaining job factors


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Job analysis

The process of obtaining job factors


Job Evaluation Base Compensation Programs

Adequate compensation for work performed is one of the most critical aspects of managing organizational human and financial resources. The development, implementation and continuity of a base pay system, to provide employees with pay that is both competitive and equitable, is essential to organizational success.

Advantages

A base pay system provides an employer with a systematic approach to balance human resource costs with the ability to attract and keep employees. It assures that the following criteria are addressed:

Legal compliance with all laws and regulations regarding compensation Cost effectiveness for the organization Establishment of pay grades and ranges to provide consistency throughout the organization Implementation of a pay system that is internally equitable and externally competitive

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definition of reward management

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