Chapt. 8

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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

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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

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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

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• 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

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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

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• 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

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• 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

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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

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• 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

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• 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

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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

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• 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

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Compensable Factors

• Compensable factors are paid-for, measurable
  qualities, features, requirements or constructs
  that are common to many different kinds of jobs

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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

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Subfactors

• Example page 226 (Bass definition)
• Factor Skill
• Subfactors
• Intelligence or mental requirements
• Knowledge required
• Motor or manual skill
• Learning time

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Degrees (Levels)

• Degrees are used to identify quantitative
  differences for the subfactors
• Examples of degrees
• Minimal
• Slight
• Moderate
• Average
• Considerable
• Broad
• Extensive

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Weighting of Compensable Factors

• Normalizing Procedure page 229
• Other methods