Exempt Pay Program Design. Position Evaluation is the foundation of Pay Program Design. Job Evaluation Process. Position Description Statement Job Responsibilities,KSA's and Qualifications Position Evaluation Job content and/or Market pay rate analysis Job Value $
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Position Evaluation is the
Pay Program Design
Job Evaluation Process
Position Description Statement
Job Responsibilities,KSA's and Qualifications
Job content and/or Market pay rate analysis
Job Value $
Pay rate & grade assignment
HAY and PURVES
NEMA - NMTA
EQUAL PAY ACT
Scope and Effect
Purpose of Contacts
Factor Evaluation System
It is normal practice to classify these factors into the three major categories below:
Defined by Equal Pay Act.
key job content and requirement attributes of a particular Universal factor defined more precisely.
Hay System Factors and sub factors example
Know How:This factor describes"Know-how is the sum total of knowledge and skill, however acquired, needed for acceptable performance." - Hay Group
Problem Solving:Problem solving is the original, self-starting thinking required by the job for analyzing, evaluating, creating, reasoning & arriving at and making conclusions.
Accountability:The opportunity a job has to bring about results and the importance of those results to the organization.
Freedom to Act
Jobs are classified into an existing grade structure hierarchy. Each level in the grade structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. To ensure equity in job grading and wage rates, a common set of job grading standards( Factors) and instructions are used to define each job classification.
The grade definitions standard (factors) and structure exists independent of the jobs. New jobs can be classified more easily.
Developing Classifications is time intensive.
The standard (factors) may have biases.
Some jobs may appear to fit within more than one grade/category.
Most organizations usually understand that they must offer market based competitive pay rates in order to attract and retain competent employees.
There are two basic methods to recognize market wage rates.
Pure Market Pricing Pay Survey
Market Pricing Guide Line Method
This approach permits the influences of internal equity to interact with existing market rates when determining the rate of pay for jobs of an organization.
requires costly software
Market Pricing Tools
College and University Professional Association (CUPA)- Current system.
Customized Salary Surveys of Peer Institutions Performed by HR
Salary data-on-demand software products including CUPA & Economic Research Institute
BLS Professional Occupation surveys
Point Factor Position Evaluation
Point factoring evaluation systems evaluate jobs against commonfactors ( Universal and sub factors). The job content of each position is evaluated against the selected factors and then represented as a numeric value. These values are then compared to a pre-defined salary structure (grades) to determine the appropriate pay range assignment.
Point Method Factors
A Point Factor Method uses a set of compensable factors to determine the value of jobs. Each factor has given numeric (point) values.Typically the compensable factors may include the major categories of:
Skill –ability, knowledge
Responsibilities – fiscal ,supervision
Ex $100,000 = 3000 total points divides as follows:
999 points for Responsibility
831 points for Skill
831 points for Effort-mental
399 points for Work Conditions
Point Factoring Methods
Statistically assigns position to a salary band.
Legally Defendable Factors
Requires consultant services or costly software for Regression Analysis to combine with market pricing.
The pay for each factor is based on rater judgments.
High training investment to develop a small team of job raters to manage the tool.
Costly implementation and maintenance.
Job Evaluation Steps
The Fox Lawson consultant report has recommended selection of a “simplified classification system” which uses “broadly defined classes”.
Step one is to select compensable factors.
Step two is select “simplified” classification system and job evaluation process using either compensable factors and/or market pricing.
Step three is to select benchmark jobs for evaluation.
Step four is to construct pay grades based on the evaluation of benchmark jobs.