Module 4--Market Based Job Evaluation Flashcards
What are the two basic approaches to Job Evaluation?
Market data and job content.
The major difference between the two is emphasis. Regardless of which approach is taken, data collection and analysis is an important part of the process.
What is the Market data emphasis?
- Job descriptions are used to match survey data.
- Market data are analyzed and benchmark jobs are arranged into a hierarchy.
- Jobs with no market data are slotted using job content to determine relative worth.
- Problem areas are analyzed and discrepancies reconciled to develop the job worth hierarchy.
How are Executive and non-Executive Jobs evaluated using Marking Pricing?
- Market pricing is a tool used to determine the competitive market rate for a given job. The method of pricing base pay is essentially the same for both executive and non-executive jobs.
- When pricing executive jobs, however, determining competitive base pay is only the first step. The focus then shifts to pricing other elements of the executive compensation package,
which could include short-term and long-term incentives, perks and executive benefits. In many cases, looking at STI and LTI extends below the executive level. Especially in the U.S., candidates are looking at the competitiveness of the overall compensation package when making a decision whether to join an organization. - For both executive and non-executive jobs, the most frequently used method of job evaluation is the market data approach, based on market pricing of base pay.
What are the reasons to collect Market Data?
- Price jobs – Analyze pay competitiveness by collecting information on the going market rate for benchmark jobs in organizations with whom the organization competes for human resources.
- Analyze pay trends – Identify year-to-year movement of salaries and cash compensation in the labor market.
- Identify pay practices – Gather information on competitive compensation practices, programs, policies and procedures.
- Establish a job worth hierarchy – Use market rates for benchmark jobs to establish a market-based job worth hierarchy.
What are the Considerations in Data Collection – Data Collection Options?
■ Purchase published surveys
* There are thousands of published surveys available for purchase.
* Purchase price varies by survey scope, type of analysis and overall sophistication of the final product.
* Most survey providers give a substantial discount to survey participants.
■ Sponsor custom third-party survey
* A third party conducts the survey to meet your needs and specifications.
* The third party can be a professional association, graduate students from a local university or a consultant.
* In many cases, participants in a survey sponsored by an individual company pay nothing to receive a copy of the survey results.
■ Complimentary sources
* Trade and industry associations
* Internet sources
* Periodicals and publications
* Professional recruiters
What are some of the Decision Factors to use to decide which data collection option is the best to use?
■ Cost – Does the survey provide enough benefit to justify the expense?
■ Time – How much time will it take to gather survey data? How quickly must survey data be obtained and analyzed?
■ Reliability – Is the survey sponsor reputable? Has data been verified for accuracy?
■ Availability – Is current data available in time to meet the organization’s needs?
■ Data format – Is data formatted to provide specific information? Are data reported by industry, by geographic area, number of employees?
What is a Benchmark Job
■ A benchmark job is used for making pay comparisons to develop or validate a job worth hierarchy.
■ Benchmark jobs are internal jobs that can serve as market anchor points because they closely resemble jobs performed in other organizations or industries (at least 70% match of duties).
- Which of the following statements is most accurate regarding the market-based job evaluation method?
A. The relative value of jobs is determined primarily by the nature and level of work.
B. The emphasis for evaluating jobs is based on the internal value of the different jobs within the organization.
C. Jobs may be slotted using job content if there is insufficient market data.
C. Jobs may be slotted using job content if there is insufficient market data.
- Which of the following best describes the relevant labor markets in which organizations compete for employees?
A. They differ by job groups / levels.
B. They are limited to the local market of operations.
C. They are usually defined in terms of organization type (e.g., nonprofit, privately owned, corporation).
A. They differ by job groups / levels.
- What method is used most frequently to evaluate executive level positions?
A. Point-factor
B. Ranking
C. Paired-comparison
D. Market pricing
D. Market pricing