job evaluation

PERFORMANCE AND COMPENSATION MANAGEMENT(HRM 751)

JOB EVALUATION

NUR ATIQAH BINTI A. RAHMAN(2012889288)

Prepared for: Assoc. Prof. Dr Roshidi Hassan

1. STEPS IN DEVELOPING TOTAL COMPENSATION STRATEGY Assess total compensation implications Map a total compensation strategy Implement strategy Reassess2. MAP A TOTAL COMPENSATION STRATEGY Objectives Internal alignment External competitiveness Employee contributions Management3. INTERNAL ALIGNMENT Job Analysis Job Description Job Evaluation

OUTLINE

4. JOB ANALYSIS What is Job Analysis Why performing Job Analysis? What information do we need? How should we collect it? Who should be involved? How useful are the results?5. JOB DESCRIPTION What is Job Evaluation? General Guidelines? Job Descriptions Form Basic Considerations Common Misconceptions6. JOB EVALUATION What is Job Evaluation Objectives of JE Job Evaluation vs Performance Appraisal Benefits of JE Job Evaluation Methods

7. JOB EVALUATION METHODS Ranking Method Classification Method Factor Comparison Method Point Method

8. POINT METHOD Steps in Point Method conduct Job Analysis Determine Compensable Factor Scale the factors Weight the factors according importance Communicate the plan and train users Apply to non-benchmark jobs

STEPS IN DEVELOPING A TOTAL COMPENSATION STRATEGY

STEP 1: ASSESS TOTAL COMPENSATION IMPLICATIONS

• Competitive Dynamics – Understand the Business– Changing customer needs– Competitors’ actions– Changing labor market conditions– Changing Laws– Globalization

• Culture/values– A pay system reflects the values that guide an

employer's behavior and underlie its treatment of employees

Cont..

• Employee preferences– How to better satisfy individual needs and

preferences• E.g., text notes that 75% of employees report

satisfaction with compensation, yet over 40% say they would change mix of cash or benefits if given chance

• Choice – Examples: Flexible benefits and choices

• Union preferences– Compensation deals with unions can be costly to

change

STEP 2: MAP A TOTAL COMPENSATION STRATEGY

• Mapping is used in marketing to clarify and communicate a product's identity

• Offers picture of a company’s compensation strategy based on the five choices in the pay model

• Clarifies the message the company is trying to establish with its compensation system

• Maps do not tell which strategy is the “best,” providing rather framework and guidance

Exhibit 2.8: Contrasting Maps Of Microsoft And SAS

Microsoft’s ‘pay brand’:Total

compensationprominent; strong

emphasis on market

competitiveness, individual

accomplishments,performance-

basedstrategy

SAS’s ‘pay brand’:

total compensation

supports work/lifebalance;

competitivemarket

position, co-wide success-sharing,

egalitarianism

STEPS 3 AND 4: IMPLEMENT AND REASSESS

• Step 3 – Involves implementing strategy through the

design and execution of compensation system

• Step 4– Reassess and realign, closes the loop and

recognizes that the strategy must be changing to fit changing conditions

– Involves periodic reassessment

COMPENSATION PAY MODEL

POLICIES TECHNIQUES OBJECTIVES

INTERNAL ALIGNMENT

INTERNAL STRUCTURE(JA, JD, JE,JS)

•EFFICIENY

• FAIRNESS

•COMPLIANCE

•ETHICS

COMPETITIVENESS PAY STRUCTURE

CONTRIBUTIONS PAY FOR PERFORMANCE

MANAGEMENT EVALUATIONS

(Milkovich, Newman & Gerhart (2011)

POLICIES: INTERNAL ALIGNMENT

Refers to comparisons among jobs or skill levels inside a single organization

(Milkovich, Newman, Gerhart. 2011)

DEFINITION

Internal alignment, often called internal equity, refers to the pay relationships among different jobs, skills, competencies within a

single organization (Vandae. 2010)

Structures vary among organizations, internal pay structure can be defined:

TECHNIQUE: INTERNAL JOB STRUCTURE

JOB ANALYSISJOB ANALYSIS

JOB SPECIFICATIONSJOB SPECIFICATIONSJOB DESCRIPTIONJOB DESCRIPTIONJOB EVALUATIONJOB EVALUATION

COMPENSATION SELECTIONPLACEMENT• CRITERION

DEVELOPMENT• PERFORMANCE

APPRAISAL• JOB DESIGN/REDESIGN

• TRAINING

INTERNAL WORK RELATIONSHIPS WITHIN THE ORGANIZATION

JOB ANALYSIS

JOB ANALYSIS

WHY performing JA?WHY performing JA?

WHO should be involved?WHO should be involved?

HOW should we collect it?HOW should we collect it?

OVERVIEW

WHAT information do we need?WHAT information do we need?

WHAT is job analysis?WHAT is job analysis?

HOW useful are the results?HOW useful are the results?

JOB ANALYSIS

WHAT is job analysis?WHAT is job analysis?

• Process of defining a job in terms of its component tasks or duties and the knowledge or skills required to perform them.

• Job analysis produces information used for writing job descriptions (a list of what the job entails) and job specifications (what kind of people to hire for the job).

WHY performing Job Analysis?WHY performing Job Analysis?

Two critical uses of JOB ANALYSIS:•It establishes similarities and differences in the work contents of the job•It helps establish an internally fair and aligned job structure

WHAT information do we need?WHAT information do we need?

DATA RELATED TO JOB

JOB IDENTIFICATION JOB CONTENT

Title Tasks

Department in which job is located Activities

Number of people who hold job Constraints on actions

Performance criteria

Critical incidents

Conflicting demands

Working conditions

Roles (e.g., negotiator, monitor, leader)

DATA RELATED TO EMPLOYEE

EMPLOYEE CHARACTERISTICS INTERNAL RELATIONSHIPS EXTERNAL RELATIONSHIPS

Professional/Technical knowledge Boss and other Suppliers

Manual skills Superiors Customers

Verbal skills Peers Regulatory

Written skills Subordinates Professional industry

Quantitative skills community

Mechanical skills Union/employee groups

Conceptual skills

Managerial skills

Leadership skills

Interpersonal skills

HOW should we collect the information?HOW should we collect the information?

QUANTITATIVE METHODS•Questionnaire via web-site

CONVENTIONAL METHODS•Interview•Questionnaire

WHO should be involved?WHO should be involved?

JOBHOLDERS SUPERVISORS ANALYSTS

The supervisor or HR specialist normally collects one or more of the followingtypes of information via the job analysis:

HOW useful are the results?HOW useful are the results?

DISCREPANCIES

3M had an interesting problem when it

collected job information from a group of engineers

CASE IN 3M COMPANY

The engineers listed a number of responsibilities that they might viewed as

part of their jobs.(using other ways to do job

efficiently)

However, the manager realized

that those responsibilities

actually belonged to a higher level of

work. The engineers had enlarged their jobs beyond what

they were being paid to do. So, no one

wanted to tell these highly productive

engineers to slack off. Therefore, 3M looked for additional ways to reward these

engineers rather than bureaucratize them.

USES OF JOB ANALYSIS INFORMATION

JOB DESCRIPTIONS

JOB DESCRIPTION

General guidelinesGeneral guidelines

Common MisconceptionsCommon Misconceptions

Job Description FormJob Description Form

OVERVIEW

Basic considerationsBasic considerations

WHAT is job description?WHAT is job description?

WHAT is job description?WHAT is job description?

• Job Description is necessarily based on the information obtain through the job analysis interview.

• It is prepared primarily for defining duties and responsibilities and for job evaluation.

• It also useful for such purposes as organization analysis, recruitment, employee placement, performance appraisal, and training development.

General guidelinesGeneral guidelines

JOB TITLE: Computer Programmer DEPARTMENT: IT REPORTS TO: Director of Computer Services POSITION SUMMARY: Responsible for the application of basic knowledge of programming, logic, and mathematics in the preparation of computer programs.

ESSENTIAL FUNCTIONS: 1) Analyses, reviews, and rewrites programs, using workflow chart and diagram, applying knowledge of computer capabilities, subject matter, and symbolic logic. (10%) 2) Converts detailed logical flow chart to language processible by computer. (10%) 3) Resolves symbolic formulations, prepares flow charts and block diagrams, and encodes resultant equations for processing. (10%) 4) Develops programs from workflow charts or diagrams, considering computer storage capacity, speed, and intended use of output data. (10%) 5) Assists computer operators or system analysts to resolve problems. (10%) 6) Assigns, coordinates, and reviews work and activities of programming personnel. (10%) 7) Compiles and writes documentation of program development and revisions. (8%) 8) Prepares or receives detailed workflow chart and diagram to illustrate sequence of steps to describe input, output, and logical operation. (7%) 9) Revises or directs revision of existing programs to increase operating efficiency or adapt to new requirements. (7%) 10) Collaborates with computer manufacturers and other users to develop new programming methods. (5%) 11) Trains subordinates in programming and program coding. (5%) 12) Consults with managerial and engineering and technical personnel to clarify program intent, identify problems, and suggest changes. (4%) 13) Writes instructions to guide operating personnel during production runs. (4%)

EXAMPLE JOB DESCRIPTION FORM

Basic considerationsBasic considerations

Common MisconceptionsCommon Misconceptions

JOB EVALUATION

JOB EVALUATION

What is Job evaluation?What is Job evaluation?

OVERVIEW

Objectives Job EvaluationObjectives Job Evaluation

Job Evaluation vs Performance AppraisalJob Evaluation vs Performance Appraisal

Job Evaluation ProcessJob Evaluation Process

Benefit Job EvaluationBenefit Job Evaluation

Job Evaluation MethodsJob Evaluation Methods

“Job evaluation is a systematic way of determining the

value/worth of a job in relation to other

jobs in organization”

What is job evaluation?What is job evaluation?

(Mehta, 2013)

It is a systematic process of analysing

and evaluating jobs to determine the relative worth of each job in an organization. It forms the basis for designing

the compensation management system in

an organization.

•Tries to assess jobs ,not people

•The standards of job evaluation are relative not absolute

•The basic information is obtained from job analysis

•Carried out by groups, not by individuals

•Provides a basis for a rational wage-structure

Features

SOME MAJOR DECISIONS IN JOB EVALUATION

• Establish the purpose of evaluation• Decide whether to use single or multiple plans• Choose among alternative approaches• Obtain involvement of relevant stakeholders• Evaluate plan’s usefulness

OBJECTIVES IN SETTING COMPENSATION RATES

JOB EVALUATION PERFORMANCE APPRAISAL

DEFINE Find the selective worth of a job Find the worth of a job holder

AIM Determine wage rates for different jobs

Determine incentives and rewards for superior

performance

SHOWS How much a job is worth How well an individual is doing on assigned jobs

COMPULSION Not compulsory Compulsory

BASIS OF RATING Responsibility, qualification, experience, working condition, etc.

Performance

TIME Before employee is hired After the employee is hired

PURPOSE To establish satisfactory wage differentials

To effect promotions, offers, awards, punishments, assess training needs resorts to lay

offs, transfers, etc.

JOB EVALUATION VS PERFORMANCE APPRAISAL

JOB EVALUATION PROCESS STEPS

JOB EVALUATION FLOWS

BENEFITS OF JOB EVALUATION

•Compensable factors should represent all the major aspects of job content

•Operating manager must be convinced about the techniques and programs of job evaluation

•Al employees should be provided with complete information about the evaluation techniques and program

•All groups and grades of employees should be covered by the job evaluation program

• Program and technique of job evaluation should be understood by all employees

•The union’s acceptance and support to the program should be obtained

ESSENTIALS FOR SUCCESS OF A JOB EVALUATION PROGRAM

JOB EVALUATION METHODS

STANDARD METHODS FOR CONDUCTING JOB EVALUATION

JOB RANKING

FACTOR COMPARISON

JOB CLASSIFICATION

POINT SYSTEM

WholeJob

JobComponents

Unit of Comparison

Other Jobs

Common Standard

Targ

et o

f Com

paris

on

JOB EVALUATION QUALITITATIVE APPROACHES

1 2

3 4

RANKING METHOD 1

• As per this method, jobs are arranged form highest to lowest, in order of their values or merit to the organization

• Jobs can also be arranged according to the relative difficulty in performing them.

• The job at the top has the highest value and job at the lowest has the lowest value.

• Jobs are arranged in each department and then department ranking are combined to develop an organization ranking

RANK MONTHLY SALARIES (RM)

ACCOUNTANT 6000

ACCOUNT CLARK 3600

PURCHASE ASSISTANT 3400

MACHINE OPERATOR 2800

TYPIST 1800

OFFICE BOY 1200

Eg; ranking of jobs in any department can be done as follows:

CLASSIFICATION METHOD2

CLASS RANK EMPLOYEES

Class 1 Executives Office manager, Deputy Office manager, Office Superintendent, etc.

Class 2 Skilled workers Purchasing Assistant, Cashier, Receipts Clerk, etc.

Class 3 Semi-skilled workers Steno typists, Machine-operators, etc.

Class 4 Less-skilled workers File Clerks, Office boys, etc.

• Job classification method general purpose is to create and maintain pay grades for comparable work across your organization.

• It uses job classes or job groups to provide more customization in the evaluation

• This method also uses scales to measure performance rather than comparing and ranking employees

FACTOR COMPARISON METHOD3

• Job evaluators rank jobs that have similar responsibilities and tasks.

• The evaluators then analyse jobs in the external labour market.• Jobs across the organization are then compared to the

benchmark jobs according to the market rate of each job’s compensable factors to determine job salaries.

• Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors.

• These factors include mental effort, physical effort, skill needed, responsibility, working conditions, etc.

• Pay will be assigned in this method by comparing the weights of factors required for each job.

• Wages are assigned to the job in comparison to its ranking on each job factor.

AN EXAMPLE OF FACTOR COMPARISON METHOD

Suppose the job of a painter is found to be similar to electrician in skill (15), filter in mental effort (10), welder in

physical effort (12), cleaner in responsibility (6), and labourer in working conditions (4). The wage rate for this

job would be (15+10+12+6+4) is 47.

POINT METHOD4

• This is a commonly used job evaluation technique. It is an analytical method which breaks down each job into a number of factors; for example, skill, responsibility and effort, with the factors sometimes being further broken down into sub-factors, for example, education, decision making and dexterity.

• These sub-factors will be further divided into degrees or levels. Points are awarded for each factor according to a predetermined scale and the total points decide a job's place in the ranking order.

• The factors should reflect the varying degrees of importance attached to them.

• Care must be taken to ensure that the weightings do not result in a sex-biased scheme - for example, by attaching an unjustified weighting to the physical strength factor at the expense of manual dexterity.

CONDUCT JOB ANALYSIS

DETERMINE COMPENSABLE

FACTORS

SCALE THE FACTORS

WEIGHT THE FACTORS

ACCORDING THE IMPORTANCE

COMMUNICATE THE PLAN &

TRAIN USERS

APPLY TO NON BENCHMARK

JOBS

POINT METHOD STEPS

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

STEP 2: DETERMINE COMPENSABLE FACTORS

• Compensable factors – characteristics in the work that the organization values, that help it pursue its strategy and achieve its objectives

• Compensable factors play a pivotal role– Reflect how work adds value to organization– Decision making is three-dimensional:

• Risk and complexity• Impact of decision• Time that must pass before evidence of impact

UNIVERSAL COMPENSABLE FACTORS

SKILLSSKILLS

EFFORTSEFFORTS

RESPONSIBILITYRESPONSIBILITY

WORKING CONDITIONSWORKING CONDITIONS

COMPENSABLE FACTORS

Can be defined as those characteristics in the

work that the organization values, that

help it pursue its strategy and achieve its

objectives.

Exhibit 5.9: Compensable Factor Definition: Decision Making

STEP 2: DETERMINE COMPENSABLE FACTORS (CONT.)

• To be effective, compensable factors should be:– Based on strategy and values of organization

– Based on work performed • Documentation is important

– Acceptable to the stakeholders

– Adapting factors from existing plans• Skills, and effort required; responsibility, and working

conditions• NEMA, NMTA, Equal Pay Act (1963), and Steel plan

COMPENSABLE FACTORS - HOW MANY FACTORS?

– “Illusion of validity” - Belief that factors are capturing divergent aspects of a job and are both important

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

– “Accepted and doing the job” – 21 factor, 7 factors, 3 factors

– Research results Skills explain 90% or more of variance Three factors account for 98 - 99% of variance

Exhibit 5.10: Compensable Factor Definition: Multinational Responsibilities

Exhibit 5.11: Factors in Hay Plan

68© 2008 Hay Group. All Rights Reserved

Job Evaluation Manager (JEM)A powerful solution for managing an organizations job structure


The facts and figures

88Offices in 47 countries

2600Employees worldwide

7000International clients

$450mTurnover


How we organize our business

Building effective organizations

Leadership and talent

Reward services

Leadership

transformation

Capability

assessment

Talent

management Hay

Gro

up

Tra

nsf

orm

ing

Lea

rnin

g:

on

lin

e d

iag

no

stic

s Executive

rewards

Job

evaluation

Reward Information

Services

Reward

strategies

Hay Group Insight: employee and customer surveys

Performance

management

BEO solutions

Helping organizations workOur purpose

Our practice clusters

Our service lines


Who we work with

© 2007 Hay Group. All rights reserved.72 New Hampshire\2007\State of NH Report – Jan 2007.ppt

47 countries/88 cities

Established inPhiladelphia in 1943

2,370 employees

10,000+ clientsWorldwide

Introduction to Hay Group

© 2007 Hay Group. All rights reserved.73 New Hampshire\2007\State of NH Report – Jan 2007.ppt

State of Alabama State of Idaho State of Louisiana State of Minnesota Comm. of Kentucky State of Maine Comm. of Pennsylvania State of South Dakota

State of Mississippi State of New Mexico State of Oklahoma State of South Carolina State of Delaware State of Kansas Comm. of Massachusetts State of Oregon

Hay Group understands the issues associated with the development of a classification and compensation plan through the experience gained in working with a wide range of State Governments such as:

Introduction to Hay Group (cont’d)


About Hay Group

85

offices in

49 countries

around the world

2,600

consulting professionals

10,000clients

working with more than half

of the Fortune 500

10M

leadership assessments

and 14M

reward survey participants

$500Mannual

revenue

Hay Group partners with clients to achieve competitive advantage through talent.

HAY METHOD

The evaluation process generally begins with the highest valued compensable factor and proceeds in order to the lowest weighted factor.

HAY METHOD

KNOW-HOW PROBLEM SOLVING

ACCOUNTABILITY

KNOW-HOW

• To achieve the accountabilities of a job requires “Know-How”(or inputs), which is the sum total of every capability or skill, however acquired, needed for fully competent job performance.

• Know-How has three dimensions:

1. Technical/Specialized Skills: Depth and breadth of technical or specialized knowledge needed to achieve desired results.

2. Managerial Skills: The requirement to undertake managerial functions, such as planning and organizing staff or directing and controlling resources, to achieve business results over time.

3. Human Relations Skills: The interpersonal skills required for successful interaction with individuals and groups, inside and outside the organization.

PROBLEM-SOLVING

• The value of Know-How is in its application to achieve results. • “Problem Solving” (or throughputs) refers to the use of Know-How to identify,

delineate, and resolve problems. • We “think with what we know,” so Problem Solving is viewed as utilization of

Know-How, and has two dimensions:

1. Thinking Environment: The job’s context and the degree to which problems and solutions are defined.

2. Thinking Challenge: The nature of addressable problems and the difficulty in identifying solutions that add value.

• Problem Solving measures the requirement to use Know-How conceptually, analytically, and productively.

ACCOUNTABILITY

• Every job exists to add organizational value by delivering some set of results (or outputs). Accountability measures the type and level of value a job can add.

• In this sense, it is the job’s measured effect on an organization’s value chain. It has three dimensions:

1. Freedom to Act: The degree of empowerment to take action and the guidance provided to focus decision-making.

2. Scope: The business measure(s) the job is designed to positively impact.

3. Impact: The nature of the job’s influence on business results.

Exhibit 5.12: Hay Guide Chart – Profile Method of Job Evaluation

Job EvaluationTwo Point-Factor Methods

• Factor Evaluation System

Developed in 1977 by the Office

of Personnel Management for non-supervisory general schedule employees. It

incorporates many of the characteristics of the Lott,

Benge, and NEMA methods.

• Hay Method

Dates back to the early 50's and is one of the most popular methods in use today. It is

particularly popular for evaluating executive,

managerial, and professional positions as well as nonexempt

clerical, blue collar, and technical jobs.

STEP 3: SCALE THE FACTORS

• Construct scales reflecting different degrees within each factor– Most factor scales consist of four to eight degrees

• Issue– Whether to make each degree equidistant from adjacent degrees

(interval scaling)

• Criteria for scaling factors

Ensure number of degrees is necessary to distinguish among jobs

Use understandable terminology

Anchor degree definitions with benchmark-job titles and/or work behaviors

Make it apparent how degree applies to job

Exhibit 5.13: Factor Scaling – National Metal Trades Association

STEP 4: WEIGHT THE FACTORS ACCORDING TO IMPORTANCE

• Different weights reflect differences in importance attached to each factor by the employer

• Determination of factor weights₋ Advisory committee allocates 100 percent of the value among

factors

• Select criterion pay structure– Committee members recommend the criterion pay structure– Statistical approach is termed policy capturing to differentiate it

from the committee a priori judgment approach– Weights also influence pay structure

Exhibit 5.14: Job Evaluation Form

Point range Daily range Job grade of key bank officials

500 - 600 300 – 400 1 Officer

600 – 700 400 – 500 2 Accountant

700 – 800 500 – 600 3 Manager I Scale

800 – 900 600 – 700 4 Manager II Scale

900 – 1000 700 – 800 5 Manager III Scale

1000 POINTS METHOD

AAIM National Position Evaluation Plan

1st Degree

Skill (40%)1. Knowledge2. Experience3. Initiative and IngenuityPhysical Effort (30%)4. Physical Demand5. Mental or Visual DemandResponsibility (20%)6. Equipment or Process7. Material or Product8. Safety of Others9. Work of OthersJob Conditions (10%)10. Working Conditions11. Hazards

142214

105

5555

105

Factor2nd

Degree

284428

2010

10101010

2010

3rd Degree

426642

3015

15151515

3015

4thDegree

568856

4020

20202020

4020

5thDegree

70110

70

5025

25252525

5025

Points Assigned to Factor Degrees

Position: Engineering ManagerGrade: 7

MAXIMUM FACTOR POINTS FACTOR JE Points

DEGREE LEVEL

FACTOR WEIGHTS

250 Communication & Interpersonal Skills 250 4 10%250 Education & Training 250 5 10%500 Problem Solving & Decision Making 400 4 20%500 Responsibility & Accountability 500 4 20%250 Specialized Knowledge & Application 200 4 10%250 Supervision & Leadership 250 4 10%125 Internal Impact 125 3 5%125 External Impact 75 1 5%125 Planning & Organizing 125 4 5%125 Innovation 90 2 5%

2500 2265 100%

ASSISTANT JUNIOR CONSULTANT

SENIOR CONSULTANT

PROJECT LEAD MANAGER

REQUIREMENTS Weight Rating Value Rating Value

Rating Value Rating Value Rating Value

Knowledge 2 2 4 4 8 8 16 6 12 4 8

Leadership 3 0 0 0 0 2 6 4 12 8 24

Budget Responsibility

1.5 0 0 0 0 0 0 4 6 10 15

Responsibility for Results

3 2 6 2 6 4 12 6 18 10 30

Cognitive Challenges

2 3 6 4 8 6 12 6 12 6 12

Mobility 1 2 2 7 7 7 7 8 8 5 5

Strategic Impact 2 2 4 1 2 2 4 3 6 8 16

JOB VALUE 22 31 57 74 110

JOB EVALUATION Example consulting company

STEP 5: COMMUNICATE THE 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• Includes appeals process for employees

– Employee acceptance is imperative• Communication

STEP 6: APPLY TO NON-BENCHMARK JOBS

• Final step involves applying plan to remaining jobs– Could involve both designers and/or employees trained in

applying the plan• Tool for managers and HR specialists once plan is developed

and accepted • Trained evaluators will evaluate new jobs or reevaluate jobs

whose work content has changed– May also be part of appeals process

STEP 7: DEVELOP ONLINE SOFTWARE SUPPORT

• Online job evaluation is widely used in larger organizations• Becomes part of a Total Compensation Service Center for

managers and HR generalists to use

OVERALL ABOUT THE JOB EVALUATION METHOD

METHOD WHAT FACT OF JOB IS

EVALUATED

HOW IS JOB EVALUATED

TYPES OF METHODS

MAJOR ADVANTAG

E

MAJOR DISADVANTAG

E

RANKING Whole job (Compensable factors are implicit)

Jobs are subjectively ordered according to relative worth

Non-quantitative

Relatively quick and expensive

Entirely subjective

CLASSIFICATION Whole job Compare job to descriptions

Non-quantitative

Readily available and expensive

Cumbersome system

FACTOR COMPARISON

Compensable factors of job

Compare job to key jobs on scale of compensable factors

Quantitative Easy to use Hard to construct; inaccurate over time

POINT METHOD Compensable factors of job

Compare job to standardized description

Quantitative Accurate and overtime

May be costly

METHODS ADVANTAGES DISADVANTAGES

SIMPLE RANKING

• Simple and easy to understand• Best suited for small organization

• Not suitable for big organization

PAIRED COMPARISON

• Analytical and objective• Relative and valid as each job is

compared

• Difficult to understand• Same criteria to assess

all the jobs is questionable

• Time consuming and costly

CLASSIFICATION METHOD

• Cooperatively less subjective• Easy to understand• Takes into account all the factors• Effectively used for verity of jobs

• Oversimplifies sharp differences

• Job descriptions are vague and are not quantified

POINT METHOD

• Superior and widely used• Systematic• Reliable• Minimum of rating error

• Complex• Time consuming

ADVANTAGES & DISADVANTAGES OF THE JOB EVALUATION METHODS

•Rapid changes in demand, supply and technology

•Substantial differences between job factors and market factors

•Difficult to change initial stage wage fixation

•Doubts and fears

•Financial limitations

•Not exactly scientific difficulty in selecting compensable factors

LIMITATIONS OF JOB EVALUATION

THE FINAL RESULT: STRUCTURE

• The final result of the job analysis – job description – job evaluation process is a structure, a hierarchy of work

• Managerial, technical, manufacturing, and administrative

Exhibit 5.15: Resulting Internal Structures – Job, Skill, and Competency Based

SALARY INCREASE BUDGETS SHOW FEW SURPRISES FOR 2014

TOP 10 HIGHEST PAYING JOBS IN THE WORLD

SURGEONS

CHIEF EXECUTIVE OFFICERS

ENGINEERING MANAGERS

AIRLINE PILOTS

DENTISTS

1

2

3

4

5

(Kunad, 2013)

Cont..

LAWYERS

AIR TRAFFIC CONTROLLERS

COMPUTER & INFORMATION SYSTEMS’ MANAGERS

MARKETING MANAGERS

NATURAL SCIENCES

6

7

8

9

10

(Kunad, 2013)

TOP 5 BEST JOBSRANK BUSINESS

JOBSHEALTHCARE

JOBSSOCIAL

SERVICE JOBSTECHNOLOGY

JOBSCONSTRUCTION

JOBSCREATIVE

JOBS

1 Mkt Research Analyst

Dentist School Psychologist

Computer Systems Analyst

Cost Estimator Public Relations Specialist

2 Financial Advisor

Registered Nurse

Interpreter & Translator

Database Administrator

Construction Manager

Architect

3 Accountant Pharmacist Substance Abuse

Pathologist

Software Developer

Plumber Art Director

4 Compliance Officer

Physician Speech-language

Pathologist

Web Developer

Glazier -

5 Audit Clerk Physical Therapist

Landscaper & Groundskeeper

Computer Programmer

Cement Mason -

(US news, 2013)

AVERAGE AUSTRALIAN SALARY

Source: MyCareer job listings inclusive of wage

RANK SECTOR AVG. MIN

AVG. MAX

AVERAGE

AVERAGE AUSTRALIAN SALARY $85,415

1 ACCOUNTING $48,781 $156,307

$83,273

2 ADMIN/OFFICE SUPPORT $32,891 $96,180 $54,987

3 AUTOMOTIVE $31,946 $138,750

$64,905

4 BANKING & FINANCIAL SERVICES $45,263 $188,588

$86,602

5 COMMUNITY, SPORT & LEISURE $34,842 $120,562

$68,619

BEST PAYING SECTORS IN AUSTRALIA

RISKS AND CONSIDERATIONS OF JOB EVALUATION

POSSIBLE RISKS

Fears that salary costs will rise

Administrative/process costs rise

There is no fit with the strategic agenda

There are no positive benefits for stakeholders

The organization takes on too much

IMPLEMENTATION CONSIDERATIONS

CONCLUSION

Job evaluation is alive and well. Leading

organization use job evaluation as a source

of competitive advantage by improving

the organization’s ability to manage its investment in human

resources with greater credibility, discipline,

and fairness.

Job evaluation is not only about maintaining internal equity in the

compensation program. It facilitate

organizational clarity, building capability, and

establishing commitment through culture and rewards.

It is a critical management tool, extremely useful in

ensuring an organization’s

proper integration of strategy, culture, structure, process,

people, and rewards.

QUESTIONS