Job Evaluation

1
Job Evaluation

• Kenneth M. York
• School of Business Administration
• Oakland University

2
Job Evaluation

• The process of determining how much a job should
  be paid, balancing two goals
• Internal Equity Paying different jobs
  differently, based on what the job entails
• External Competitiveness Paying satisfactory
  performers what the market is paying

3
Job EvaluationThe Point Method

• Job Analysis to determine
• The tasks performed in a job
• The Job Description
• The knowledge, skills, and abilities needed to
  perform the job
• The Job Specification

4
Job EvaluationThe Point Method

• Example Software Engineer
• Job Description
• The Software Engineer designs, develops, tests
  and maintains one or more of our products or
  internal applications. The software engineer
  works as a member of an engineering team
  developing, designing, and maintaining one or
  more of our products or internal applications.
  This position reports to the appropriate Project
  Manager.
• Job Specification
• Bachelor's or undergraduate degree in Computer
  Science, Information Systems, Electrical
  Engineering or equivalent experience. Masters or
  graduate degree is desirable. Understand Intranet
  and Internet technologies http, firewall.

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Job EvaluationThe Point Method

• Develop a list of compensable factors
• A set of standards the organization uses to
  distinguish among jobs for pay purposes
• Examples of commonly used compensable factors
• Degree of responsibility, supervision
• Knowledge needed to perform the job
• Discretion in performing the job, independent
  judgment
• Job conditions
• Effort
• Hazard
• Consequence of error

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Job EvaluationThe Point Method

• Define the degrees of each factor
• Judgment and Decision Making This factor
  identifies the extent to which the job requires
  judgment and responsibility in the making of
  decisions.The importance of the decisions and the
  extent to which standard policies and procedures
  provide guidance in decision making will be
  considered.
• 1st Degree Work requires decision making
  involving the analysis of the facts of a
  situation and the determination of what actions
  should be taken within the limits of standard
  procedures only unusual or seldom recurring
  situations require referral. Judgment could
  affect the work of others or cause minor
  inconvenience. Typical errors are generally
  confined to a single team or phase of operations.

University of Wisconsin-Oshkosh
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Job EvaluationThe Point Method

• 3rd Degree In consultation with team members
  decide specific work projects to perform, and
  proceed to plan, coordinate, and commit resources
  required to accomplish work associates develop
  or establish procedures or policies. Judgment
  requires accuracy because errors could
  potentially result in inaccurate reports,
  incomplete or misleading information, unsound
  recommendations, or incorrect decisions.
  Consequences could adversely affect operations or
  services causing significant losses of time,
  resources and potentially have a long term impact
  on a team.
• 6th Degree Assists board in the development of
  policies, general procedures and corporate goals.
  Errors in judgment could jeopardize the viability
  of the company.

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Job EvaluationThe Point Method

• Create a matrix of points for the degrees of each
  factor
• Judgment and Decision Making
• 1st degree 50 points
• 2nd degree 100 points
• 3rd degree 225 points
• 4th degree 350 points
• 5th degree 500 points
• 6th degree 700 points
• Communication, Work Environment, Coaching,
  Innovation, Knowledge Education - Experience

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Job EvaluationThe Point Method
Factors - Degrees 1st 2nd 3rd 4th 5th 6th
Job Knowledge 25 100 175 250
Judgment Decision Making 10 33 55 78 100
Independent judgment 25 100 175 250
Accountability 20 65 110 155 200
Working conditions 5 20 35 50
Mental 15 42 69 96 123 150
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Job EvaluationThe Point Method

• Evaluate benchmark jobs to determine Job
  Evaluation Point Totals
• Benefits supervisor 700
• Training material development specialist 650
• Job evaluation specialist 460
• Compensation manager 920

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Job EvaluationThe Point Method

• Collect salary survey data on benchmark jobs
• Benefits supervisor 60,393
• Training material development specialist
  58,403
• Job evaluation specialist 43,155
• Compensation manager 79,958

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Job EvaluationThe Point Method

• Do a regression analysis to find the pay line for
  the benchmark jobs
• Dependent variable is salary survey data
• Independent variable is job evaluation point
  total
• Calculate salaries for benchmark and other jobs
  using the regression equation
• Salary 79.67JETotal 6101.09
• Example Compensation Director 79.671120
  6101.09 95,333