Chapter 5 Flashcards
What is job evaluation?
> Job evaluation is the process of determining and quantifying the relative values of jobs in an organization.
What are some major decisions in job evaluation?
> Establish the purpose of the evaluation
Decide whether to use single or multiple plans
Choose among alternative approaches
Obtain involvement of relevant stakeholders
Evaluate the plan’s usefulness
How do job evaluations fit into the process of determining the internal structure?
> The process begins with job analysis, in which information on jobs is collected.
> Information collected can then be used to create job descriptions, which serve as input for job evaluation.
What are the two options for a business and work related internal structure?
1) Job based - jobs
2) Person-based - skills or competencies
What is the purpose of job evaluation?
1) Collect, summarize work content information (job analysis and job descriptions)
2) Determine what to value (job evaluation - classes or compensable factors)
3) Assess value (factor degrees and weighting)
4) Translate into structure (job-based structure)
A structure based on job content orders jobs based on what?
> orders jobs based on the skills required for the job, and the associated duties and responsibilities.
A structure based on job value orders jobs based on what?
> orders jobs based on the relative contribution of the skills, duties, and responsibilities of a job to the organization’s goals.
What can job value include?
> Job value may also include its value in the external market and/or its relationship to some other set of rates that have been agreed upon through collective bargaining or other negotiation process, or its relationship to government legislation (minimum wage).
What process is job evaluation a part of?
> Job evaluation is part of the process for establishing an internally-aligned pay structure
Job evaluation aligns with the organization’s strategy in what way?
> Job evaluation aligns with the organization’s strategy by including what it is about a work that adds value (i.e., contributes to pursuing the organization’s strategy and achieving its objectives).
What question does job evaluation answer?
Job evaluation helps answer the question: How does this job add value.
How does a job evaluation support workflow?
> The job evaluation process supports workflow by integrating each job’s pay with its relative contribution to the organization and by setting pay for new, unique, or changing jobs.
Job evaluation can reduce disputes and grievances over pay differences among jobs by doing what?
> establishing a workable, agreed-upon structure that reduces the role that chance, favouritism, and bias may play in setting pay.
How does a job evaluation motivate employee behaviour towards organization objectives?
> Job evaluation spells out for employees what it is about their work that the organization values, and how their jobs support the organization’s strategy and its success.
> Job evaluation can also help employees adapt to organization change by improving their understanding of what is valued in their new assignments and why that value may have changed.
> Job evaluation helps create the network of rewards (promotions, challenging work) that motivates employees.
Many employers design different evaluation plans for different types of work because of what?
> because they believe the work content is too diverse to be evaluated adequately by a single plan
What are the two most common types of job evaluation plans and what are the two most common methods?
> the most prominent examples are the Hay plan and the Position Analysis Questionnaire.
> Ranking, classification, and point method are the most common job evaluation methods
to be sure that all relevant aspects of work are included in the evaluation, an organization may start with what kind of job?
> start with a sample of benchmarked jobs
A benchmark job has the following characteristics:
> Its contents are well known and relatively stable over time.
> The job is common to a number of employers; that is, it is not unique to a particular employer.
> A reasonable proportion of the workforce is employed in this job.
Diversity in the work can be thought of in terms of what two components?
> Diversity in the work can be thought of in terms of depth (vertically) and breadth (horizontally).
Typically, a job evaluation plan is developed by using what?
> Typically, a job evaluation plan is developed using benchmark jobs, and then the plan is applied to the remaining non-benchmark jobs
The number of job evaluation plans used hinges on what aspect?
> The number of job evaluation plans used hinges on how detailed an evaluation is required to make pay decisions and how much it will cost.
What are the advantages and disadvantages to the ranking method?
> Fast, simple, easy to explain
> Cumbersome as number of jobs increases. Basis for comparisons not called out
What are the advantages and disadvantages to the classification method?
> Can group a wide range of work together in one system
> Descriptions may leave too much room for manipulation.
What are the advantages and disadvantages to the point method?
> Compensable factors call out basis for comparisons.
Compensable factors communicate what is valued.
> Can become bureaucratic and rule-bound
A survey conducted by WorldatWork, the association for compensation professionals, asked for the primary job evaluation method used in their organization What was the most common method?
> market pay rates was overwhelmingly chosen (68% to 74%, depending on the job level) as the primary method of job evaluation.
What is market pricing?
> In general, market pricing means directly matching as many of the organization’s jobs as possible to jobs described in the external pay surveys used by the organization.
What is ranking?
> Ranking simply orders the job descriptions from highest to lowest based on a global definition of relative value or contribution to the organization’s success.
> Ranking is the simplest, fastest method to understand and explain to employees, and the least expensive method, at least initially.
> However, it can create problems that require difficult and potentially expensive solutions, because it doesn’t tell employees specifically what in their jobs is important.
What are the two most common ways of ranking?
> alternation ranking and paired comparison
What is the alternation ranking and paired comparison?
> The alternation ranking method orders job descriptions alternately at each extreme. Agreement is reached among evaluators on which jobs are the most and least valuable, then the next most and least valuable, and so on, until all jobs have been ordered.
> The paired comparison method uses a matrix to compare all possible pairs of jobs. When all comparisons have been completed, the job most frequently judged “more valuable” becomes the highest-ranked job, and so on.
What are the drawbacks to ranking?
> Nevertheless, ranking has drawbacks. The criteria on which the jobs are ranked are usually so poorly defined—if they are specified at all—that the evaluations become subjective opinions that are impossible to justify in strategic and work-related terms.
What is the classification method?
> a job evaluation method based on job class descriptions into which jobs are categorized
Wha are the drawbacks to classification?
> Writing class descriptions can be troublesome when jobs from several job families are covered by a single plan.
> Although greater specificity of the class definition improves the reliability of evaluation, it also limits the variety of jobs that can easily be classified.
What are the the three characteristics of point methods?
> Point methods have three common characteristics: (1) compensable factors, with (2) numerically scaled factor degrees, and (3) weights reflecting the relative importance of each factor.
Each job’s relative value, and hence its location in the pay structure, is determined by what in the point method system?
> is determined by the total points assigned to it.
What is the most common compensation method in Canada?
> Point plans are the most commonly used approach to establish pay structures in Canada due to pay equity legislation requirements that consider the four universal compensable factors: skill, effort, responsibility, and working conditions.
What are compensable factors?
> Compensable factors are defined on the basis of the strategic direction of the business and how the work contributes to that strategy.
Lists the six steps involved in the design of a point plan:
1) Conduct job analysis.
- A representative sample of benchmark jobs
- Compensable factor determination based on content of these jobs
2) Determine compensable factors.
- Based on the work performed (what is done)
- Based on strategy and values of the organization (what is valued)
- Acceptable to those affected by resulting pay structure (what is acceptable)
3) Scale the factors.
- Examples to anchor descriptions of each degree of the factor
4) Weight the factors according to importance, and assign -points to each job.
- Can reflect judgment of organization leaders, committee
- Can reflect a negotiated structure
- Can reflect a market-based structure
5) Communicate the plan: prepare manual and train users.
- Preparation of manual
- Training of users
6) Apply to non-benchmark jobs.
The four universal compensable factors required in pay equity legislation across Canada are:
> are skill, effort, responsibility, and working conditions
What is skill in terms of compensable factor? List common subfactors as well:
> Skill refers to the experience, training, ability, and education required to perform a job.
> Subfactors indicative of skill may include educational levels, years of experience required, technical knowledge, specialized knowledge or training, interpersonal skills, and many others.
What is effort in terms of compensable factor? List common subfactors as well:
> Effort refers to the physical, mental, or emotional exertion needed to do a job.
> Common subfactors include diversity of tasks, complexity of tasks, creativity of thinking, analytical problem solving, physical strength requirements, degree of assistance available, amount of emotion regulation required, and so on.
What is responsibility in terms of compensable factor? List common subfactors as well:
> Responsibility refers to the extent to which an employer depends on the employee to perform the job as expected, with emphasis on the importance of job obligation.
> Subfactors may include decision-making authority, degree of integration of work with others, ability to perform tasks without supervision, responsibility for financial (budgets) and human (number of employees reporting directly and indirectly to the position) resources, impact of failure or risk in the job, and others.
What is working conditions in terms of compensable factor? List common subfactors as well:
> The working conditions factor is intended to ensure that value is attached to the difficult or unhealthy aspects of the conditions in which the work is done.
> Subfactors can vary widely, but they often relate to hazards such as exposure to dangerous chemicals or stress and the physical surroundings of the job, such as cramped quarters or outdoor location.
To be useful, compensable factors should be:
- Based on the strategy and values of the organization.
- Based on the work performed.
- Acceptable to the stakeholders affected by the resulting pay structure.
The leadership of any organization is the best source of information on what?
> The leadership of any organization is the best source of information on the strategy and values of the organization, specifically where the business should be going and how it will get there.
Compensable factors reinforce what in the organization?
> Compensable factors reinforce the organization’s culture and values as well as its business direction and the nature of the work
Multinational responsibilities are defined in what terms?
> Multinational responsibilities are defined in terms of the type of responsibility (in developing policies and strategies, whether the role is assisting, leading, or having full responsibility, including approval authority), the percentage of time devoted to international issues, and the number of countries covered.
Can compensable factors be removed?
> Factors may also be eliminated if they no longer support the business strategy.
What does work related documentation support?
> Work-related documentation helps gain acceptance by employees and managers, is easier to understand, and can withstand a variety of challenges to the pay structure.
Acceptance of the compensable factors used to slot jobs into the pay structure may depend, at least in part, on what?
> Tradition
In Canada, the four Hay factors are:
> Know-how: the sum total of all knowledge and skill required to do the job competently.
> Problem solving: refers to the nature and complexity of the issues and challenges that the job has to face.
> Accountability: refers to the measured impact that the job is designed to have on the success of the enterprise.
> Working conditions: assess the environment in which the job is performed.
What is the small numbers challenge and provide an example:
> Another challenge is called “small numbers.”If even one job in our set of benchmark jobs has a particular characteristic, we tend to include that factor in the job evaluation plan and use that factor for the entire work domain.
> A common example is unpleasant working conditions. If even one job is performed in unpleasant working conditions, it is tempting to make it a compensable factor and apply it to all jobs. Once a factor is part of the system, other workers are likely to say their jobs have it, too.
In one study, a 21-factor plan produced the same job structure that could have been generated using only 7 of the factors. Yet, the company decided to do what to the evaluation plan?
> Yet, the company decided to keep the 21-factor plan because it was “accepted and doing the job.”
Research as far back as the 1940s demonstrates that the skills dimension accounts for how much variance and what about the number of factors?
> Research as far back as the 1940s demonstrates that the skills dimension explains 90% or more of the variance in job evaluation results; three factors generally account for 98% to 99% of the variance.
Once the compensable factors are determined, what occurs?
> Once the compensable factors are determined, scales identifying and describing the different degrees within each factor (or subfactor) are constructed.
> Most factor scales consist of four to eight degrees.
A major problem in determining degrees is what?
> A major problem in determining degrees is whether to make each degree equidistant from the adjacent degrees (interval scaling) in terms of the number of points for each level or degree (assigned in the next step of the process).
The following criteria for scaling factors have been suggested:
(1) limit the degrees to the number necessary to distinguish between jobs,
(2) use understandable terminology,
(3) anchor degree definitions with benchmark job titles, and
(4) make it apparent how the degree applies to the job.
Once the degrees have been assigned, what can be determined?
> Once the degrees have been assigned, the factor weights can be determined.
Different factors weights reflect what?
> Different factors weights reflect differences in importance attached to each factor by the employer and may reflect the organization’s strategic objectives and priorities.
Contemporary job evaluation often supplements what?
> Contemporary job evaluation often supplements committee judgment regarding weights with statistical analysis
What is the statistical approach in comparison to policy capturing?
> The statistical approach is often labelled policy capturing to contrast it to the committee judgment approach.
Describe the Contemporary job evaluation method:
> The committee recommends the criterion pay structure they wish to duplicate with the point plan.
> The criterion structure may be the current rates paid for benchmark jobs, market rates for benchmark jobs, rates for predominantly male jobs (in an attempt to eliminate gender bias), or union-negotiated rates
> Once a criterion structure is agreed on, statistical modelling techniques such as regression analysis are used to determine the weight of each factor that will best reproduce the chosen structure.
Once the job evaluation plan is designed, what is prepared?
> Once the job evaluation plan is designed, a manual is prepared so that other people can apply the plan.
What does a manual describe?
> The manual describes the method, defines the compensable factors, and provides enough information to permit users to distinguish varying degrees of each factor.
The purpose of the manual is what? Is training or other processes required?
> The purpose of the manual is to allow users who were not involved in the plan’s development to apply the plan as its developers intended.
> Users will require training on how to apply the plan, and background information on how the plan fits into the organization’s total pay system. An appeals process may also be included so that employees who feel that their jobs are unfairly evaluated have some recourse.
The final step in the point plan process is to:
> is to apply the plan to the remaining jobs.
> Trained users, who might not have been involved in the plan’s development, can help evaluate the other jobs by applying the plan using the manual prepared for this purpose.
> Users may also require training and background information on the total pay system. If the policy-capturing approach is used, then an equation can be used to translate job evaluation points into salaries.
The final outcome of the job evaluation process is what?
> The final outcome of the job evaluation process is a job hierarchy based on the number of points assigned in the job evaluation process.
What is a common approach to the job evaluation method?
> A common approach is to use committees, task forces, or teams that include representatives from key operating functions, including non-managerial employees.
Research suggests that attending to the fairness of the design process and the approach chosen (job evaluation, skill/competency-based plan, and market pricing) rather than focusing solely on the results (the internal pay structure) is likely to do what?
> is likely to achieve employee and management commitment, trust, and acceptance of the results.
Once the evaluations are completed, approval by what group is required?
> approval by higher levels of management is usually required. An approval process helps ensure that any changes that result from evaluating work are consistent with the organization’s operations and directions.
The final result of the job analysis—job description—job evaluation process is what?
> is a job structure—a hierarchy of work.
> This hierarchy translates into practice the employer’s internal alignment policy.
Can Organizations have multiple structures?
Organizations commonly have multiple structures derived through multiple approaches that apply to different functional groups or units.
History suggests that when flexibility without guidelines exists, what results in the pay structures?
> chaotic and irrational pay rates frequently result.
