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Many Ways to Create Internal StructureMany Ways to Create Internal StructureBusiness and Work-Business and Work-

Related Internal StructureRelated Internal Structure

Person-based

Skill CompetenciesJob-based

Job analysisJob descriptions

Job evaluation: classes or compensable factors

Factor degrees and weighting

Job-based structure

PURPOSEPURPOSE

Collect, summarize work information

Determine what to value

Assess value

Translate into structure

(Chapter 5)(Chapter 5)

(Chapter 5)(Chapter 5)

(Chapter 5)(Chapter 5)

(Chapter 6)(Chapter 6) (Chapter 6)(Chapter 6)

(Chapter 4)(Chapter 4)

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Job EvaluationJob Evaluation

Process of systematically determining the Process of systematically determining the relativerelative worth of jobs to create a job structure for the worth of jobs to create a job structure for the organizationorganization

The evaluation is based on a combination of job The evaluation is based on a combination of job content, the skills required, the value to the content, the skills required, the value to the organization, its culture, and the external marketorganization, its culture, and the external market

This blending of internal and external market This blending of internal and external market forces is both the strength of and a challenge to forces is both the strength of and a challenge to job evaluationjob evaluation

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Key Decisions in Job Content Key Decisions in Job Content Evaluation Evaluation

Do we use a Single Plan or Multiple PlansDo we use a Single Plan or Multiple Plans Which Job Evaluation Method is bestWhich Job Evaluation Method is best Which Compensable Factors should be usedWhich Compensable Factors should be used How Many Factors are needed to provide a good job How Many Factors are needed to provide a good job

matchmatch How Many Points should be allowed per factorHow Many Points should be allowed per factor What is the Relative Weight of the FactorsWhat is the Relative Weight of the Factors How are Points Allocated Across Factors and DegreesHow are Points Allocated Across Factors and Degrees What Benchmark jobs (defined later) should be What Benchmark jobs (defined later) should be

EvaluatedEvaluated Who Evaluates the jobsWho Evaluates the jobs

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Job Evaluation MethodsJob Evaluation MethodsJob Ranking Job Ranking

Raters examine job description and arrange jobs Raters examine job description and arrange jobs according to value to companyaccording to value to company

Job Classification (stratification)Job Classification (stratification)Classes or grades are defined to describe a group of Classes or grades are defined to describe a group of

jobs that may or may not be in the same job familyjobs that may or may not be in the same job familyPoint Factor MethodPoint Factor Method

Numerical values are assigned to specific job Numerical values are assigned to specific job components with the sum of values providing a components with the sum of values providing a quantitative assessment of the job’s worth (example: quantitative assessment of the job’s worth (example: Hay Guide Chart-Profile Method)Hay Guide Chart-Profile Method)

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Comparison of Job Evaluation MethodsComparison of Job Evaluation Methods

Advantage Disadvantage

RankingRanking Fast, simple, easy to Fast, simple, easy to explain (is it really easy to explain (is it really easy to explain?)explain?)

Cumbersome as number Cumbersome as number of jobs increase. Basis of jobs increase. Basis for comparisons is not for comparisons is not defineddefined

ClassificationClassification Can group a wide range of Can group a wide range of work together in one work together in one systemsystem

Descriptions may leave Descriptions may leave too much room for too much room for manipulationmanipulation

Point FactorPoint Factor Compensable factors define Compensable factors define the basis for comparisonsthe basis for comparisons

Each factor communicates Each factor communicates what is valued to the what is valued to the organizationorganization

Can become Can become bureaucratic and rule-bureaucratic and rule-bound (is this a good bound (is this a good thing or a bad thing?)thing or a bad thing?)

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Common Characteristics of All Common Characteristics of All Benchmark JobsBenchmark Jobs

The job content is well-known, relatively stable, and The job content is well-known, relatively stable, and agreed upon across organizationsagreed upon across organizations

The supply and demand for these jobs continue to be The supply and demand for these jobs continue to be relatively stable and not subject to recent increasing or relatively stable and not subject to recent increasing or decreasing employment shiftsdecreasing employment shifts

These jobs are represented throughout the entire job These jobs are represented throughout the entire job structure being studiedstructure being studied

These jobs employ the majority of the work force across These jobs employ the majority of the work force across organizationsorganizations

Benchmark examples: Accountant, Engineer, Recruiter, Benchmark examples: Accountant, Engineer, Recruiter, Payroll Clerk, Punch Press Operator, etcPayroll Clerk, Punch Press Operator, etc

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Compensable (Universal) Factors -Compensable (Universal) Factors - A Definition A Definition

Compensable factorsCompensable factors - measurable qualities, - measurable qualities, features or requirements (attributes) that are features or requirements (attributes) that are common to many different kinds of jobs. They common to many different kinds of jobs. They are:are: qualities required to accomplish the jobqualities required to accomplish the job easy to describe and document easy to describe and document must be addressed in an acceptable manner if the job must be addressed in an acceptable manner if the job

is to be performed satisfactorilyis to be performed satisfactorily should yield consistently similar results, regardless of should yield consistently similar results, regardless of

the evaluatorthe evaluator

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Universal Compensable FactorsUniversal Compensable Factors Skill:Skill: the general education, experience, training and the general education, experience, training and

ability required to perform the job under consideration ability required to perform the job under consideration not those the incumbent employee may possessnot those the incumbent employee may possess

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What Makes Up Skill?What Makes Up Skill?

Technical Know-howTechnical Know-howSpecialized KnowledgeSpecialized KnowledgeOrganizational AwarenessOrganizational AwarenessEducational LevelsEducational LevelsSpecialized TrainingSpecialized TrainingYears of Experience RequiredYears of Experience Required Interpersonal SkillsInterpersonal SkillsDegree of Supervisory SkillsDegree of Supervisory Skills

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EffortEffort

Effort:Effort: the measurement of the physical or the measurement of the physical or mental actions needed to perform a jobmental actions needed to perform a job Diversity of TasksDiversity of Tasks Complexity of TasksComplexity of Tasks Creativity of ThinkingCreativity of Thinking Analytical Problem SolvingAnalytical Problem Solving Physical Application of SkillsPhysical Application of Skills Degree of Assistance AvailableDegree of Assistance Available

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ResponsibilityResponsibility

Responsibility:Responsibility: the extent to which the employer depends on the employee to the extent to which the employer depends on the employee to perform the job as expected…with perform the job as expected…with emphasisemphasis on the importance of doing it every on the importance of doing it every dayday Decision-making AuthorityDecision-making Authority Scope of the organization under controlScope of the organization under control Scope of the organization impactedScope of the organization impacted Degree of integration of work with othersDegree of integration of work with others Impact of failure or risk of jobImpact of failure or risk of job Ability to perform tasks without supervisionAbility to perform tasks without supervision

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Working ConditionsWorking Conditions

Working Conditions:Working Conditions: the extent to which the the extent to which the employee encounters various hazards or extremes employee encounters various hazards or extremes in temperature, etc while performing the job in its in temperature, etc while performing the job in its physical surroundingsphysical surroundings Potential Hazards Inherent in JobPotential Hazards Inherent in Job Degree of Danger Which Can be Exposed to OthersDegree of Danger Which Can be Exposed to Others Impact of Specialized Motor or Concentration SkillsImpact of Specialized Motor or Concentration Skills Degree of Discomfort, Exposure, or Dirtiness in Doing Degree of Discomfort, Exposure, or Dirtiness in Doing

JobJob

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The Point Factor Plan Process The Point Factor Plan Process (1 of 2)(1 of 2)

Step One: Conduct Job AnalysisStep One: Conduct Job Analysis Gather a representative sample of benchmark jobs and Gather a representative sample of benchmark jobs and

use their content as the basis for defining compensable use their content as the basis for defining compensable factorsfactors

Step Two: Determine the Compensable Factors based Step Two: Determine the Compensable Factors based on:on:

The work performedThe work performed The organizations’ strategy and valuesThe organizations’ strategy and values The acceptability to those affected by the resulting pay The acceptability to those affected by the resulting pay

structurestructure

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The Point Factor Plan Process The Point Factor Plan Process (2 of 2)(2 of 2)

Step Three: Scale the FactorsStep Three: Scale the Factors Use examples (skills, tasks, behaviors) to define (anchor) Use examples (skills, tasks, behaviors) to define (anchor)

the scales (level) differencesthe scales (level) differences

Step Four: Weight each of the Factors According to Step Four: Weight each of the Factors According to Importance Within the OrganizationImportance Within the Organization

Can reflect judgment of organization leaders, committeeCan reflect judgment of organization leaders, committee Can reflect a negotiated structureCan reflect a negotiated structure Can reflect a market-based structureCan reflect a market-based structure

Step Five: Application of the Point Plan to Non-Step Five: Application of the Point Plan to Non-benchmark Jobsbenchmark Jobs

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Hay Point Factor System FactorsHay Point Factor System Factors Know-HowKnow-How

Practical, Specialized, &/or Technical Practical, Specialized, &/or Technical Management ScopeManagement Scope Human Relations InvolvementHuman Relations Involvement

Problem SolvingProblem Solving Thinking EnvironmentThinking Environment Thinking ChallengeThinking Challenge Thinking CreativityThinking Creativity

AccountabilityAccountability Freedom to ActFreedom to Act MagnitudeMagnitude ImpactImpact

a)a) Primary b) Shared c) Contributory d) RemotePrimary b) Shared c) Contributory d) Remote

Overview of the Point System for Overview of the Point System for ONE Particular OrganizationONE Particular Organization

Job Factor

Weight

1

2

3

4

5

1. Education 50% 100 200 300 400 500

2. Respon-sibility

30% 75 150 225 300

3. Physical effort

12% 24 48 72 96 120

4. Working conditions

8% 25 51 80

Degree of FactorDegree of Factor

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Who Should Be Involved in the Who Should Be Involved in the Decision Making?Decision Making?

The Design Process MattersThe Design Process Matters – without a – without a clear, clear, concise, easy to understand designconcise, easy to understand design, the plan will fail, the plan will fail

Appeals / Review Procedures are Critical for Appeals / Review Procedures are Critical for AcceptanceAcceptance – Without it, employees feel as if they – Without it, employees feel as if they have no voice in the processhave no voice in the process

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What is the Product of Job What is the Product of Job Evaluation…A Job HierarchyEvaluation…A Job Hierarchy

The key product is an ordered listing of jobs The key product is an ordered listing of jobs based on their based on their valuevalue to that particular to that particular organizationorganization

The hierarchy provides information about which The hierarchy provides information about which jobs are most and least valued, as well as jobs are most and least valued, as well as information about the relative difference between information about the relative difference between jobs jobs within a particular organizationwithin a particular organization