Final Exam Flashcards
What is the 3 main purposes of job evaluation
- control wage costs
- create an equitable pay structure
- create perceptions of equity
What are the main steps in the job evaluation process
*determining Who conducts the job evaluations? HR usually, comp specialists
*Communicating the job evaluation process
*Applying job evaluation results (dealing with the people who are paid above the range vs people being paid below)
*Developing appeal/review mechanisms
*Updating job evaluations
What is job analysis? What are the main methods for conducting them?
A job analysis is the process of collecting information on a job to base the job description on
Main methods for conducting them are:
*Observation: best for jobs where activities can be easily observed and the work cycle is short
*Interviews: best to interview the supervisor and the employee
*Questionnaires: can be open ended where they ask the employee about the main duties of their job or close ended where the employee selects from a list of phrases that best describes the job
*Functional job analysis (most important one, focus on the task not what gets done, the NOC does this): tries to develop generic descriptions of jobs using a common set of job functions
What are the key steps in the job analysis process?
conduct a job analysis through the use of function job analysis, questionnaires, interviews and or observations to generate a job description then use both to determine the job specs
What are some pitfalls to job analysis
- analyzing the job holder instead of the actual job itself
-job descriptions can be subject to gender bias, especially in the language used to describe duties
-technical jargon needs to be translated into everyday language
-jobs are dynamic today, the job descriptions may become obsolete quickly
What are the 5 main types of job evaluation?
- ranking/paired comparison
- grading/classification
- factor comparison
- statistical/policy capturing
- point method
What is ranking and paired comparison method? What is the problem with this method?
ranking: asking a group of judges (usually HR or managers) to read a set of job descriptions and rank job according to their overall worth to the organization
paired comparison: a type of ranking where each job is compared to every other job, one pair at a time
main problem is the method provides no explicit basis for why jobs are ranked as they are which leaves the results of the plan open to inequity charges
what is the point method
it first identifies compensable factors and sub factors that are common to most jobs with varying degrees of proficiencies under each sub factor with a corresponding number of points for each proficiency. Then jobs are evaluated based on how proficient an incumbent would need to be on each of these sub factors. The points for each sub factor for a job are added together for a total score, then jobs are ranked based on their score to create a hierarchy of jobs.
What is the factor comparison method
assigns pay levels to jobs based on the extent to which they embody various job factors
What is the classification grading method
Establishes and defines general classes of job (like managerial, professional, technical) and then creates a series of grade descriptions for each class where each grade contains different levels of knowledge, skills, etc.
what is the statistical/policy capturing method
combines use of statistical methods and job questionnaires to derive job values based on prevailing external or internal pay rate
What are some of the key issues in managing the job evaluation process
- determining what to do with employees who are being paid above the max of the new pay range for their jobs
-determining how much to communicate about the job eval process to employees
-if the job eval committee is overruled a lot, they may become cynical about the role they are doing and not want to do it anymore
What are the key reasons for pay equity?
to identify jobs where there is gender inquiry in pay and to correct any inequities
What is the general process for conforming to pay equity legislation?
1.Determine what rules apply
2.Identify female and male job classes
3.Establish a person to conduct pay equity
4.Select a gender-neutral job comparison system
5.Collect job information
6.Compare jobs
7.Check for permissible differences
8.Adjust compensation
9.Communicate the results
10.Maintain pay equity
What are some purposes of job descriptions?
attracting and selecting employees
developing training programs
performance management
making sure all necessary organization activities are being done by someone
Why is problematic to use job descriptions in the job evaluation process?
because some firms don’t want to put the effort into developing or updating them
also because jobs are changing so frequently now its hard to stay up to date
what are 4 reasons for needing to re-evaluate jobs
- job itself changed
- change in strategy
- signs that current job eval system isn’t working
- legislative conditions require it
What are 3 main approaches to comparing female and male job classes
job to job: establishes pay equity by comparing a female job class to a male job class that is comparable in terms of job evaluation criteria (e.g similar number of points with the points method) and comparing both of their total compensation
proportional value method: establishes pay equity where no compactor male job class exists by creating a hypothetical male comparator job class based on other male job classes
proxy: only for public sector employees where employer selects another public sector employer that has complete pay equity procedures and collects information on the female job class in the proxy organization
what are permissible differences
pay differences between female and male job classes that are not considered inequitable because they stem from certain specified allowable circumstances such as seniority
describe the 5 main steps in designing a point system of job evaluation
1.identify key job characteristics aka compensable factors that can differentiate the value of various jobs
2. develop a measuring scale for each factor aka scale the factors
3. weight each factor according to the importance to the firm
4. apply the job evaluation system to every job to generate a total points amount for every job and creates a hierarchy of jobs
5. evaluate the hierarchy for reliability, validity and Markey fit
What are the 4 main categories of pitfalls in designing a point system
- inconsistent construct formation: problems with the factor and degree definitions
- factor overlaps: having factors with different names but mean the same thing therefore measuring the same thing twice
- hierarchal grounding: confuse the outcome with the process where some of the degree definitions for factors are set up so that jobs predicted to be higher on hierarchy end up set up to be scored higher
- gender bias: when a job receives a higher or lower evaluation than it should because the job incumbents are predominately from one gender
Explain what a base pay structure is and how to design a base pay structure
base pay structure is the structure of pay grades and pay ranges and the criteria to move along the pay ranges
steps to design a base pay structure:
1. establish pay grades (number of them, size of them)
- establish pay ranges (determine range midpoints and range spreads)
- determine how there will be movement through the pay range (3 most common criteria are experience, seniority and performance)
what are 4 things that typically. make up compensable factors
job inputs (education experience)
job outputs (consequences of mistakes)
job requirements (mental and physical efforts)
job conditions (hazards)
what are the 4 main categories of compensable factors that are usually universal and an example of each
skill (education, experience)
effort (mental and physical effort)
responsibility (consequences of error)
working conditions (hazards to safety)
what is reliability and validity and market fit
reliability is does the measuring instrument produce the same results consistently when applied to the same circumstances
validity is if the measuring instrument is actually measuring what we say it is
market fit is essentially tying the benchmarks job in the organization to market comparator jobs to determine approximately how much the number of points they received should equal in dollars
What is a market line
A regression line that relates job evaluation points to market pay (in dollars) for the benchmark jobs
what is the pay policy line
- adjusting the market line to match what you pay level strategy is e.g if you want to lead, lag or match the market
what is the correlation coefficient mean in regards to the point method
the degree of relatedness between the pay policy line and market line
If there is inconsistent construct formation, what 3 things is the point method failing at
factors ambiguously defined
inconsistent fact and degree definitions
inconsistent degree statement, meaning that 1 degree definition might not match the other ones
what is the difference between pay grades and pay ranges
pay grades are a grouping of jobs of similar value to the organization typically grouped by point totals
pay ranges are the max and min pay rates for jobs in a particular pay grade
what is 5 reasons for having pay grades
pay grades make it easier to justify and explain pay rates to employees
pay grades make it easier for employees to move across jobs that are in the same pay grade
recognizes that job eval is a subjective process and makes little sense to try to make very fine distinctions between jobs
simplifies the admin of the pay system by eliminating the need for separate rates and pay ranges for every job
more stability for pay system
what are 4 approaches to establishing pay grades
equal internal approach
equal increase approach
equal percentage approach
broad banding
what is the broad banding approach to establishing pay grades
- Practice of reducing the number of pay grades by creating large or “fat” grades, sometimes known as “bands”
what is the equal interval approach to establishing pay grades
- Method to establish pay grade widths, in which the points are spread equally for all pay grades
what is the equal increase approach to establishing pay grades
Method to establish pay grade sizes, in which each pay grade increases in width by a constant number of points form the preceding pay grade
what is the equal percentage approach to establishing pay grades
Method to establish pay grade sizes, in which each pay grade increases in width by an equal percentage from the preceding pay grade
When you are establishing the range midpoints, what are the intergrade differentials and intergrade differential percentages?
- Intergrade differentials
- Difference between the range midpoints of adjacent pay grades in a pay structure, expressed in dollars
- Intergrade differential percentage
Calculated by dividing the intergrade differential of each pay grade by the midpoint of the previous pay grade
what does just noticeable difference mean
what a pay raise should be to be effective, it the amount of pay increase necessary to be considered significant by employees receiving the increase
* Don’t want it to be too high of an increase, just noticeable
what is living wage?
- The minimum income necessary to help a work enjoy a decent standard of living
what are some things living wage meant to achieve
- allow working families to escape poverty;
- create healthy childhood development;
- encourage gender equality;
- lessen severe financial stress and allow for a minimum level of economic security; and
enable all individuals to partake in the social, cultural, and civic life of the community.
What does compensating differential mean and what are 4 things that pay is affected by
Means a higher comp level offered by an employer bc of undesirable aspects of the employment
seasonal employment
cost of living
poor working conditions
poor industry reputation
what are the 2 main sources of compensation data? and what are the main sources of each of these compensation surveys?
in house surveys and third part surveys
in house surveys:
informal surveys
formal surveys
third party surveys:
government agencies
industry groups
compensation consulting firms
free compensation data websites
what are the 4 steps for conducting a compensation survey
- identify the jobs to be surveyed
- determine the information to be collected about each job
- identify which employer are to be surveyed
- determine the method of data collection
What are market comparator firms and what are the 4 relevant things to look at when choosing a market comparator firm
a market comparator firm is a firm selected as a comparator when constructing a sample for market data
Competitors in the same labour market
Competitors in the same product/service market
Occupational grouping
Geographic scope of the market
what is key job matching
selecting jobs for a compensation survey that are well understood and then ask employers if they have those jobs and if they do to provide compensation information on those jobs
what are the 4 ways to collect data for a compensation survey
- Personal interviews
- Telephone interviews
- Questionnaires
Internet surveys
which of the 4 ways to collect data for a compensation survey provides the best quality information but is also the most expensive
interviews
which is the cheapest way to collect data for a compensation survey but also the least reliable
questionnaire
what are the 2 advantages of telephone interviews
cheaper than in person interviews
produce a higher quality of info than questionnaires bc you can clarify the survey questions and confirm the job actually matches the one you are surveying about
what is the advantage of internet surveys over mail in surveys
you can generate a response fasters and higher response rate
cost less and no change in data quality compared to mail in surveys
After you collect the data from employers for a compensation survey, you should have what info?
the minimum, maximum and midpoints of the pay ranges
the average base pay, performance pay and indirect pay
and the total compensation
how do you calculate inter quartile range
take the difference between the 75th and 25th percentile and divide it by the 25th percentile
how do you calculate the comparison-ratio?
dividing the mean base pay of all employees holding a particular job and dividing it by the midpoint of the base pay range
What are some limitations of compensation surveys
The data we collect might not fit all of jobs in the organization especially if the firm is organized differently from the norm
they were developed when compensation systems were simpler
bias in the sample of firms
they might omit important info
Identify and explain the 4 main reasons for conducting performance appraisals
administrative: for reasons such as dismissal, promotion or merit increases. Can also serve as document in case of litigation.
supervisory: to encourage supervisors to thing about their subordinates performance and communicate with them
developmental: used to provide useful feedback for employees so they know what they are doing right or wrong
symbolic: to make employees believe that management cares about employees performing well
explain the 2 main reasons why many performance appraisal systems fail to accurately measure employee performance
- the appraisal system itself doesn’t allow appraisers to evaluate employee performance
- The main objective of the appraiser is not to accurately measure performance and already have a desired outcome
identify the 8 different methods for appraising performance
ranking and forced distribution
BARS
Behavioural observation scales
objectives and results based systems
field review
continuous performance management
combination approach
graphic rating scale
identify the 5 possible sources of performance appraisals
superiors
peers
subordinates
self
customers
What is performance management
where the organization sets goals for individuals and groups, develops measures for goal achievement, encourages employees and offers them feedback and rewards goal achievement
what are the 2 different approaches you can use to link merit pay to performance appraisals
merit pay grid: A tool for allocating merit raises, based on the performance level of the employee and the pay range quartile in which they fall where employees in the lower quartiles receive a larger percentage increase
fixed increment method: dividing the pay range up into a certain number of increments for merit pay
what are the key design issues when developing an effective merit pay system
- defining the objectives of the merit pay system
- determining what the most appropriate performance measurement system is
- determining the frequency of appraisals
- determining how to link appraisals to pay
- determining how to provide feedback
- determining how to a achieve procedural justice
- determining how to train raters
- determining how the system will be evaluated
name 4 unintentional inaccuracies from the rater that can occur in performance appraisals
halo effect: when the appraisal of the employee is based on either one positive or negative characteristic they have and it cloud all the other characteristics
recency effect: where the rater bases the appraisal on what their performance has been like recently instead of over the whole period of time
central tendency error: the tendency to rate employees in the middle or average for everything
similarity effect: when the rater rates the employee higher is they are similar to the rater
describe ranking, paired comparison method and forced distribution along with 1 strength and weakness of it
ranking is where you rank the performance of all individuals who perform similar jobs from best to worst
strength: not complicated
weakness: highly subjective and hard to rank the middle performers
paired comparison: when you compare each employee with the other employees in the unit one at a time to come up with the rank order list
forced distribution: where supervisors have a certain percentage of employees they can place into different performance categories with a maximum number of employees in each category, forcing them to place employees into a category
describe BARS along with 1 strength and weakness of it
provides specific descriptions of behaviours for each point on the rating scale of each job aspect
strength: because the evaluation of the behaviour is so specific, it is easier for the manager to provide specific feedback
weakness: expensive to develop because you have to create specific behaviour descriptions for each job aspect for every job in the organization
describe behavioural observation scales along with 1 strength and weakness of it
this is where the manager rates the frequency of occurrence for different positive employee behaviours
strength: once you decide what behaviour to put in the scale, you don’t need to have specific definitions of each level because its just scored based on how often the manager observes that behaviour
weakness: the frequency of a given behaviour can be hard to judge because the manager can’t observe the employee 24/7
describe management by objectives along with 1 strength and weakness of it
where managers and employees meet to set employee goals and providing feedback on goal accomplishment
strength: employee input makes them more likely to want to achieve their goal
weakness: employees might set goals differently, some with larger goals and some smaller so if one employee doesn’t reach their large goal and another reaches their small it shouldn’t mean the performance is worse of the big goal setter
describe field review along with 1 strength and weakness of it
short period of direct observation of the job performance of the individual being rated
strength: provides the supervisor with a second opinion on employee performance which can reduce bias
weakness: only good to use when employee behaviour can be observed quickly
describe continuous performance management along with 1 strength and weakness of it
instead of meeting once or twice a year to talk about performance management you check in every 1 to 3 months with a one on one meeting with the manager
strength: more frequent feedback for employees and more holistic idea of their performance
weakness: requires complete overhaul of the performance management system
what is the graphic rating scale and 1 positive and negative thing about it
where managers use a numerical scale to rate employees on a series of characteristics
strength: simple for manager to complete
weakness: some of the characteristics are difficult for a supervisor to observe so they have to guess
what is 360 degree feedback and what is 1 advantage and disadvantage of using is
combines peer, subordinate and supervisor appraisal
advantage: more fair and accurate
disadvantage: complicated to set up
what is 720 degree feedback and what is 1 advantage and disadvantage of using is
designed to assess those in upper management positions
starts with 360 feedback but focuses more on ongoing development
define SMART goals
specific
measurable
achievable
relevant
timely
what are the 4 main types of gain sharing plans and 1 issue with gain sharing plans
- Scanlon plan: Creates mechanisms for employee participation in developing productivity improvements and shares the financial benefits of those improvements with the employee group tHat generated them
- Rucker plan: Similar to the Scanlon plan but that expresses labour costs as a percentage of value added
- Improshare: Focuses on labour hours per unit of output, and that does not usually include worker participation
- Family of measures plan: Uses a variety of independent measures to determine the extent to which a bonus payout is justified
one issue: deciding on how the company and the employees will split the profit made from the gain sharing
what are the 3 main types of goal-sharing plans and 1 issue in their design
- Single-goal: focuses attention on one key goal but might cause other behaviours to be neglected
- Multigoal: focuses on multiple goals
Financially funded: combine 2 sets of criteria where the total amount of goal-sharing money available is calculated based on company profit, and then the amount paid out is based on the achievement of the goal
issue in designing: determining which employee group is applies to
what are the main types of profit sharing and 1 issue in their design
- Current distribution
- Deferred profit sharing
Combination
issues: determining which employees should be eligible and how often they should be paid out
what are the main types of employee stock plans and 1 issue in their design
- Stock bonus: Employees receive company stock at no cost to themselves
- Share purchase: * Employees provide some kind of direct payment in return for company shares, usually at reduced price
Stock option: * Employees receive options to purchase company stock at a future time at a fixed price
phantom share plans: a plan where employees participate in the appreciation of company shares and any associated dividends without owning company shares, they essentially get a certain number of fake stocks that don’t give them ownership in the company but they receive the benefits of it like appreciation and dividends
issues: increases the proportion of the firm owned by employees
what are 5 types of non monetary reward plans and what are 2 issues in designing them
social reinforcers
merchandise awards
travel awards
symbolic awards
earned time off
what are share appreciation rights?
- A plan under the stock bonus type of employee stock plan through which employees are awarded shares in their employer at no cost to themselves if the price of employer shares rises during a specified period
what are the 6 major types of employees benefits
mandatory benefits
retirement income
health benefits
pay for time not worked
employee services
miscellaneous
what are the 3 mandatory benefits
cpp
EI
workers comp
What are 3 types of retirement incomes benefits
- Defined benefit plans
- Provide retirement income based on a proportion of the employee’s pay at the time of retirement
- Defined contribution plans
- Provide retirement income based on the accrued value of employer and employee contributions to the plan
- Hybrid pension plans
- Combine elements of the defined benefit and defined contribution plans
What are the 5 types of health benefits
- Supplemental health insurance
- Disability insurance
- Life and accident insurance
- Dental insurance
- Health care spending accounts
What are the 6 types of pay for time not worked benefits
vacation
sick leave
supplemental unemployment benefits
parental leave
educational or sabbatical leave
severance pay
What are 7 examples of employee services
- Employee Assistance Programs (EAPs)
- Wellness and recreational
- Child care and Elder care
- Work/life balance
- Financial/legal services
- Food services
Outplacement services
What are the 3 types of benefit systems
- Fixed benefit systems: all employees are covered by a standard package of benefits
- Semi-flexible benefit systems: * Common approach starts with a “core” set of benefits, to which employees “add on” additional levels of coverage or additional benefit options at their own expense, using after-tax dollars
Flexible benefit systems: “Flexible credits” that employees can use to “purchase” the combination of benefits that best suits them with no fixed benefits
name 1 advantages and disadvantages of fixed versus flexible benefits plans and which circumstance would each be most appropriate
An advantage of the fixed benefit system is that it is simple to design with low admin costs. a disadvantage is that it doesn’t recognize differences among employees and what benefits they might need.
an advantage of flexible benefits is that it recognizes the diversity among employees and their needs at the workplace and also teaches the cost of benefits to the employees. a disadvantage is that its costly and timely to implement and employees may become confused easier
describe the 5 steps in designing a benefits system
- Determine the role of indirect pay
- Choose the process for plan design
- Identify the benefits system and benefits to be included
- Determine the structure of each benefit in terms of coverage, funding, eligibility and flexibility
- Develop procedures for administering, communicating, and evaluating
What are the 4 key issues in preparing to implement a compensation system
- Preparing the compensation budget
* 2. Planning for compensation administration
* 3. Planning for information technology
* 4. Organizing for compensation administration
what 4 things do you need to do to develop an implementation plan for a new compensation system
- Developing the plan for managing implementation
- Developing the training plan
- Developing the communications plan
- Developing the evaluation plan
what are the necessary steps for implementing a compensation system
- Step 1: Establish the implementation task forces
- Step 2: Put the infrastructure into place
- Step 3: Test the system
- Step 4: Conduct the training
- Step 5: Communicate information on the system
Step 6: Launch and adjust the system
what is the process for communication the compensation system
keeping managers informed to make sure everyone understands their role in operating the comp system and keeping employees informed so they understand the comp system
what are 3 main ways to evaluate the effectiveness of a compensation system
- Impact on compensation objectives
- Impact on compensation costs
- Impact on employee behaviours and attitudes
what circumstances may necessitate changes to the comp system
changes in external circumstances: legislation, labour market, competitive environment
changes in internal circumstances: managerial strategy, workforce, financial change
what issues should be considered when adapting the comp system
- Identifying what to adapt
- Adapting to financial crises
Adapting to labour shortages
