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McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
5-1
Evaluating Work: Job Evaluation
Chapter
5
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
5-2
1. Discuss the relationship between internal alignment, job analysis, job evaluation, and job structure.
2. Identify the major decisions involved in job evaluation.
3. Compare the advantages and disadvantages of the most common job evaluation methods.
4. Explain the six (6) steps in a point plan, the most commonly used job evaluation method.
5. Describe the key roles of managers, employees, and committees in the job evaluation process.
6. Understand the necessity of balancing tight control versus flexibility related to the use of techniques to achieve internal alignment.
Learning ObjectivesAfter discussing Chapter 5, students
should be able to:
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
5-3
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.
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Exhibit 5.1: Many Ways to Create Internal Structure
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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.
What Is Job Evaluation?
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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
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5-7Exhibit 5.2: Assumptions Underlying
Different Views of Job Evaluation
Aspect of Job Evaluation Assumption
Content has intrinsic value outside external market.
Stakeholders can reach consensus on relative value.
Value cannot be specified without external market.
Honing instruments will provide objective measures.
Puts face of rationality to a social / political process; establishes rules of the game and invites participation.
Assessment of job content
Assessment of relative value
External market link
Measurement
Negotiation
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5-8Exhibit 5.3: Determining an Internally
Aligned Job Structure
Internal alignment
Job analysis Job description Job evaluation Job structure
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
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
Work relationships within organization
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Major Decisions
Establish purposeSupports organization strategySupports work flowFair to employeesMotivates behavior toward
organization objectivesSingle vs. multiple plansChoose among methods
Exhibit 5.4: Comparison of Job Evaluation Methods
Obtain involvement of relevant stakeholdersEvaluate plan’s usefulness
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Exhibit 5.4: Benchmark Job
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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
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Exhibit 5.5: Comparison ofJob Evaluation Methods
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.
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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
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Exhibit 5.6: Paired Comparison Ranking
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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
ExamplesExhibit 5.7: Classifications
for Engineering Work
Exhibit 5.8: GeneralSchedule Descriptionsfor Federal Government
Classification Method
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Point Method
Three common characteristics of point methodsCompensable factorsFactor degrees numerically scaledWeights reflect relative
importance of each factorMost commonly used approach
to establish pay structures in U.S.Differ from other methods by making
explicit the criteria for evaluating jobs -- compensable factors
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1. Conduct job analysis
2. Determine compensable factors.
3. Scale the factors.
4. Weight the factors according to importance.
5. Communicate the plan, train users, prepare manual.
6. Apply to nonbenchmark jobs.
Designing a Point Plan:Six Steps
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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
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Step 2: Determine Compensable Factors
Compensable factors play a pivotal roleReflect how work adds value to organization
Example - Exhibit 5.9
Characteristics of compensable factorsBased on strategy and values of
organizationExhibit 5.10
Based on work performed
Acceptable to stakeholders affected by resulting pay structure
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Skill Effort
Responsibility
Working conditions
Generic Compensable Factors
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Generic Factor - Skill
Skill: Experience, training, ability, and education required to perform a job under consideration - not with skills an employee may possess
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Generic Factor - Skill
Technical know-how
Specialized knowledge
Organizational awareness
Educational levels
Specialized training
Years of experience required
Interpersonal skills
Degree of supervisory skills
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Generic Factor - Effort
Effort:
Measurement of
the physical or
mental exertion
needed for
performance of a
job
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Generic Factor - Effort
Diversity of tasks
Complexity of tasks
Creativity of thinking
Analytical problem solving
Physical application of skills
Degree of assistance available
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Generic Factor - Responsibility
Responsibility: Extent to which an employer depends on employee to perform job as expected, with emphasis on importance of job obligation
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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
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Working Conditions:
Hazards
Physical surroundingsof job
Generic Factor – Working Conditions
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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
Generic Factor – Working Conditions
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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
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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
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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 to
distinguish among jobs Use understandable terminology Anchor degree definitions with benchmark job
titles Make it apparent how degree applies to job
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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
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Exhibit 5.14: Job Evaluation Form
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Overview of the Point System
Job Factor Weight
1
2
3
4
5
1. Education 50% 100 200 300 400 500
2. Respons-ibility
30% 75 150 225 300
3. Physical effort
12% 24 48 72 96 120
4. Working conditions
8% 25 51 80
Degree of Factor
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Step 5: Communicate Plan and Train Users
Involves development of manual containing information to allow users to apply planDescribes job evaluation methodDefines compensable factorsProvides information to permit users to
distinguish varying degrees of each factor
Involves training users on total pay system
Include appeals process for employees
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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
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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 . . .”
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Final Result: Structure
OutcomeOrdered list of jobs based on
their value to organizationHierarchy of workStructure supporting a
policy of internal alignmentInformation provided by hierarchy
Which jobs are mostand least valued
Relative amount ofdifference between jobs
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5-39Exhibit 5.15: Resulting Internal Structures --
Job, Skill, and Competency Based
SupervisorsSupervisors
Project LeadersProject Leaders
ManagersManagers
Division GeneralManagers
Division GeneralManagers
Vice PresidentsVice Presidents
Job Evaluation
TechnicianTechnician Machinist ICoremakerMachinist ICoremaker Clerk / MessengerClerk / Messenger
ScientistScientist
Associate ScientistAssociate Scientist
Senior AssociateScientist
Senior AssociateScientist
Head / ChiefScientist
Head / ChiefScientist
Drill Press OperatorRough Grinder
Drill Press OperatorRough Grinder
Assembler IIAssembler II
Materials HandlerInspector II
Materials HandlerInspector II
PackerPacker
Assembler IInspector I
Assembler IInspector I
Word ProcessorWord Processor
AdministrativeSecretary
AdministrativeSecretary
Principal Adminis-trative Secretary
Principal Adminis-trative Secretary
AdministrativeAssistant
AdministrativeAssistant
Job Evaluation
Competency- Based
Skill– Based
Manufacturing Group
Administrative Group
Technical Group
Managerial Group
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5-40
Balancing Chaos and Control
Control Chaos
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