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Chapt. 8 – Job Evaluation. Primary Goal of Job Evaluation: To develop the relative worth of all jobs to ensure fair and equitable pay treatment for all employees. The Systematic Process for Job Evaluation. Identifying a hierarchy of jobs by worth, using job evaluation methodology

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chapt 8 job evaluation
Chapt. 8 – Job Evaluation
  • Primary Goal of Job Evaluation:
    • To develop the relative worth of all jobs to ensure fair and equitable pay treatment for all employees
the systematic process for job evaluation
The Systematic Process for Job Evaluation
  • Identifying a hierarchy of jobs by worth, using job evaluation methodology
  • Investigating the marketplace to find out what other organizations are paying for comparable jobs
  • Combining job-worth data and market data in a manner that results in an organizational pay structure
why do we need a job evaluation program
Why Do We Need a Job Evaluation Program?
  • To establish an orderly, rational, systematic structure of jobs based on their net worth to company
  • To justify an existing pay rate structure or to develop one that provides for internal equity
  • To help set pay rates comparable to other organizations – external equity
To provide a rational basis for negotiation of pay rates when bargaining with a union
  • To identify career ladders and direction for employees interested in “moving up”
  • To comply with equal pay legislation
  • To develop a basis for merit or pay-for-performance programs
common methods of job evaluation
Common Methods of Job Evaluation
  • 1. Intraoccupational and interoccupational method of job classification
    • Steps:
      • Identify major occupations/families of occupations in the organization
      • Place each class of jobs within its respective occupation
      • Rank all classes within the occupation, producing a vertical array of classes with highest-ranked class at top of array
Select classes within each vertical array to become known as “benchmark” jobs
  • Array benchmark or key classes in different occupations
  • Place benchmark or key classes from different occupations that can be considered “comparable” on same horizontal level
2. Whole Job Ranking
    • Using a ranking method that allows comparison of one job to every other job
      • Deck-of-cards procedure
      • Paired-comparison ranking table
      • Alternate ranking procedure
problems with ranking
Problems with Ranking
  • 1. No real substantiation of how or why one job is ranked higher/lower than another one --- difficult for employees to accept
  • 2. No real way to tell relative value of jobs to each other
  • 3. Does not easily recognize changes in job content
  • 4. Easy for rater to actually be rating individual in jobs, instead of the job itself
3. Position (Job) Classification Method
    • Identify benchmark jobs at highest and lowest levels of pay, then fill in other jobs between these two points
    • Broadbanding --- tries to reduce the need to so narrowly define the job so that a number of progressively higher-paying jobs can be placed into a broader pay grade band
3. Market Pricing Approach
    • Using information from labor markets to determine appropriate pay rates for jobs
    • Generally, information is collected by contacting other employers and asking for pay rates for matching jobs
problems with market pricing
Problems with Market Pricing
  • 1. Difficult to define identical jobs in other organizations
  • 2. Total reward and compensation packages may be very different, thus misleading
  • 3. Pay survey data prone to many errors
  • 4. If labor market is broad, difficult to get representative sample data
5. Many competitors reluctant to provide compensation data
  • 6. If jobs are nonmarket-priced jobs, then slotting technique will not work and would be hard to explain/defend
compensable factors
Compensable Factors
  • Compensable factors are paid-for, measurable qualities, features, requirements or constructs that are common to many different kinds of jobs
universal compensable factors
Universal Compensable Factors
  • Skill – the experience, training, education, and ability required to perform a job under consideration
  • Effort – the measurement of the physical or mental exertion needed for job performance
  • Responsibility – extent to which employer depends on employee to perform job as expected
  • Working Conditions – physical surroundings and hazards of a job
  • Example – page 226 (Bass definition)
  • Factor – Skill
  • Subfactors:
    • Intelligence or mental requirements
    • Knowledge required
    • Motor or manual skill
    • Learning time
degrees levels
Degrees (Levels)
  • Degrees are used to identify quantitative differences for the subfactors
  • Examples of degrees
    • Minimal
    • Slight
    • Moderate
    • Average
    • Considerable
    • Broad
    • Extensive
weighting of compensable factors
Weighting of Compensable Factors
  • Normalizing Procedure – page 229
  • Other methods