Ch 6: Creating Internally consistent compensation systems Flashcards
What are internally consistent compensation systems?
These systems clearly define the relative value of each job among all jobs within a company.
This ordered set of jobs creates the hierarchy
What are the 2 processes for creating internally consistent job structures?
Job analysis
Job evaluation- used to establish pay differentials within company
what are the compensable factors
Knowledge, skills, effort, responsibilities, work environment
What does a job analysis do?
An effective one identifies and defines job content (description, specification info- compensable factors)
what are workers requirements
KSAs needed to perform the job
Working conditions
Physical(hazardous materials, work equiptment) and social context(level of interaction with people, expected behaviours and attitudes)
What are the steps in the job analysis process?
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:
Reliable job analysis
yields similar results under similar conditions
Valid job analyses
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)
What do effective job descriptions generally explain?
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
Four sections of job descriptions
Job title- name of job
Job summary- done in 2-4 descriptive statements
Job duties- major work actitivites
Worker Specification- KSA
What is education vs knowledge vs skill vs ability?
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
Legal Considerations
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
What are the job analysis techniques
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
What are the 4 main compensable factors?
Skill (cognitive- based on ksas)
Effort- mental vs physical
Responsibility
Working Conditions- physical and social context
Job evaluation process
*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
What are the 2 categories of Job evaluations?
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.
What is the main job evaluation method? Give the 4 alternatives also
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
What are the 3 drawbacks of ranking systems
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
What are the 3 drawbacks of ranking systems
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
What are the seven steps of the point method
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
compensation professionals balance internal and market considerations with point method
results?
They convert point values into the market value of jobs through regression analysis,
a statistical technique
