Ch 6: Creating Internally consistent compensation systems

Question 1

What are internally consistent compensation systems?

Answer 1

These systems clearly define the relative value of each job among all jobs within a company.

This ordered set of jobs creates the hierarchy

Question 2

What are the 2 processes for creating internally consistent job structures?

Answer 2

Job analysis
Job evaluation- used to establish pay differentials within company

Question 3

what are the compensable factors

Answer 3

Knowledge, skills, effort, responsibilities, work environment

Question 4

What does a job analysis do?

Answer 4

An effective one identifies and defines job content (description, specification info- compensable factors)

Question 5

what are workers requirements

Answer 5

KSAs needed to perform the job

Question 6

Working conditions

Answer 6

Physical(hazardous materials, work equiptment) and social context(level of interaction with people, expected behaviours and attitudes)

Question 7

What are the steps in the job analysis process?

Answer 7

Determine the job analysis program- develop/established system

Select and train analysts- need knowledge in using statistical measures, analysing data, explicit written communication- study’s objectives, how the information will be used, methodology overviews,
and discussions and demonstrations of the information-gathering techniques. Also how to minimize ineffective job analyses- like getting as many incumbents as possible

Direct job analyst orientation- have analysts understand the context employees work in to understand influencing factors better. Also ned org info- org charts, a listing of job titles, classifications etc.

Conduct the study: data collection methods and sources of data

Common methods: Questionnaires and observations
Eg. How often you do this task, list any licences, permits, or certifications required to perform duties assigned

Observation requires job analysis to record perceptions they from while watching employees perform their jobs

Summarize the results: writing job descriptions:

Question 8

Reliable job analysis

Answer 8

yields similar results under similar conditions

Question 9

Valid job analyses

Answer 9

valid job analysis method accurately assesses each job’s duties

The best way to do this is to get descriptions for multiple sources (incumbent, supervisors, customers, analysts) and multiple methods (questionnaire, observation, interview)

Question 10

What do effective job descriptions generally explain?

Answer 10

What the employee must do
How to perform the job
Why- interms of its contribution to the functioning of the company

contacts and purpose of these contacts
supervisory responsibilities if any

KSA

Question 11

Four sections of job descriptions

Answer 11

Job title- name of job
Job summary- done in 2-4 descriptive statements
Job duties- major work actitivites
Worker Specification- KSA

Question 12

What is education vs knowledge vs skill vs ability?

Answer 12

Education: Formal training

Knowledge: Body of information applied directly to the performance of a function

Skill: observable competence from a learned psychomotor act.

Ability: Present competence to perform an observable behaviour or a behaviour that has results in an observable product

Question 13

Legal Considerations

Answer 13

Job analysis not required by law, but can show justification for pay differentials- should show that differences in pay are made based on legitimate factors- eg. Equal pay act- need to justify pay gaps between men and women who perform equal work

Also ADA and ADA 2008 ammendment- so long as diabled persons can do essential functions of the job with reasonable accommodation, they can’t discriminate against them by paying them less

Question 14

What are the job analysis techniques

Answer 14

Can use established techniques
Custom-made

Factors to consider:
Applicability- Some JA only apply to particular job families (like managerial), while some can be applied broadly

Cost- Some are available to the public at no cost

Question 15

What are the 4 main compensable factors?

Answer 15

Skill (cognitive- based on ksas)
Effort- mental vs physical
Responsibility
Working Conditions- physical and social context

Question 16

Job evaluation process

Answer 16

*Determining single versus multiple job evaluation techniques

*Choosing the job evaluation committee- done by HR- r&f employees, managers, supervisors, even labour union representatives

*Training employees to conduct job evaluations-train them to use the job evaluation criteria; should understand objectives of the process

*Documenting the job evaluation plan- Well-done documentation allows employees to understand how their jobs were evaluated and the outcome of the process. Good for legal processes

*Communicating with employees- formally communicate this- the process ad results- can use information sessions and memoranda

*Setting up the appeals process- Allow employees to appeal their evaluations and express their grievances. This reduces charges of illegal discrimination

Question 17

What are the 2 categories of Job evaluations?

Answer 17

Market-based evaluation- uses market data to establish job worth

Job-content evaluation- emphasises the company’s internal value system by establishing hierarchy of job worth based on strategy.

Question 18

What is the main job evaluation method? Give the 4 alternatives also

Answer 18

Point Method- quantitative valuation technique

Alternatives:
Simple ranking plans- Least important to most using single criteria (eg. job complexity, or centrality of job to company strategy)

Paired comparisons- Evaluation committees generate every possible pair and assign point for job with higher value, and no points for the lower value and sums up the points

Alternation ranking- using factor (like criticalness to company strategy) you list most important, followed by least important and so on

Classification plans- Place jobs into categories based on compensable factors- Public sector organizations uses this- like teacher: based on years of experience, knowledge, skill, pay is determined

Question 19

What are the 3 drawbacks of ranking systems

Answer 19

Relies purely on subjective data
Neither uses job descriptions nor JA
Do not incorporate objective scales that indicate how different in value one job is from another

Question 19

What are the 3 drawbacks of ranking systems

Answer 19

Relies purely on subjective data and criteria poorly defined. Eg. Job Complexity- can be
defined as level of education or as number of distinct tasks that the workers must perform daily.

Neither uses job descriptions nor JA

Do not incorporate objective scales that indicate how different in value one job is from another- Like if the supervisor fo a job is 2x worth more than assistant

Question 20

What are the seven steps of the point method

Answer 20

Select benchmark jobs- selected to develop factors, and uses their definitions to select jobs that represent the entire range of the job

Choose compensable factors based on benchmark jobs- have factors that adequately represent the scope of the job to be evaluated. Can break down factors into specific factors eg. Skill can include- knowledge, education, mental ability etc.

Define factor degrees- like have levels of specific factors

Determine the weight of each factor- determine the importance of the factor to the overall value of job. So like manufacturing job- skill would be of greatest importance

Determine point values for each compensable factor- Have max points overall - weight % x total points

Verify factor degrees and point values- see if what they have done- create the hierchy- see if that makes sense in the company’s context. Eg. sales should rank high in sales-oriented company

Evaluate all jobs

Question 21

compensation professionals balance internal and market considerations with point method
results?

Answer 21

They convert point values into the market value of jobs through regression analysis,
a statistical technique